Post on 05-Oct-2020
transcript
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
CYNTHIA WEST, KRISTINE
HOLLANDER, JENNIFER ZIMMERMAN,
MARY ROMAN, MARIE ESPOSITO, and
MICHELLE BALLON, individually and on
behalf of all others similarly situated,
Plaintiffs,
v.
ACT II JEWELRY, LLC, a Delaware limited
liability corporation d/b/a lia sophia, and
VICTOR K. KIAM, III,
Defendants.
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
Case No. 1:15-cv-05569
Judge Samuel Der-Yeghiayan
PLAINTIFFS’ MEMORANDUM IN SUPPORT OF MOTION FOR
PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT
Submitted by:
Joseph J. Siprut
jsiprut@siprut.com
Todd L. McLawhorn
tmclawhorn@siprut.com
Ke Liu
kliu@siprut.com
SIPRUT PC
17 N. State Street
Suite 1600
Chicago, Illinois 60602
Phone: 312.236.0000
Fax: 312.878.1342
Counsel for Plaintiffs and
the Proposed Settlement Classes
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 1 of 37 PageID #:754
-i-
TABLE OF CONTENTS
TABLE OF AUTHORITIES .......................................................................................................... ii
EXHIBIT LIST .............................................................................................................................. vi
INTRODUCTION ...........................................................................................................................1
BACKGROUND .............................................................................................................................3
THE PROPOSED SETTLEMENT .................................................................................................6
A. Certification of the Proposed Settlement Classes ..........................................................6
B. Class Relief ....................................................................................................................7
C. Class Notice ...................................................................................................................9
D. Incentive Awards to Class Representatives .................................................................11
E. Attorneys’ Fees and Expenses .....................................................................................11
ARGUMENT .................................................................................................................................12
I. The Proposed Settlement is Fair and should be Preliminarily Approved ....................12
A. Strength of the Case Balanced Against the Settlement ....................................12
B. The Risk, Expense, & Complexity of the Case ...............................................15
C. The Opinion of Counsel ...................................................................................16
D. The Extent of Discovery ..................................................................................17
E. The Presence of Governmental Participants ....................................................17
II. The Settlement Classes should be Provisionally Certified ..........................................18
A. Numerosity – Federal Rule of Civil Procedure 23(a)(1) .................................18
B. Commonality/Predominance –
Federal Rule of Civil Procedure 23(a)(2) and 23(b)(3) ...................................20
C. Typicality – Federal Rule of Civil Procedure 23(a)(3) ....................................23
D. Adequacy of Representation – Federal Rule of Civil Procedure 23(a)(4) .......24
E. Superiority – Federal Rule of Civil Procedure 23(b)(3) ..................................25
III. The Form and Method of Service of Class Notice should be Approved .....................26
IV. The Court should Schedule a Hearing for Final Settlement Approval ........................28
CONCLUSION ............................................................................................................................29
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 2 of 37 PageID #:755
-ii-
TABLE OF AUTHORITIES
Cases
A & L Indus., Inc. v. P. Cipollini, Inc.,
No. 12-7598, 2014 WL 906180 (D.N.J. Mar. 7, 2014) .................................................... 28
Amchem Prods. Inc. v. Windsor,
521 U.S. 591 (1997) .............................................................................................. 18, 25, 26
Armstrong v. Bd. of Sch. Dirs. of the City of Milwaukee,
616 F.2d 305 (7th Cir. 1980) ............................................................................................ 12
Arnold Chapman & Paldo Sign & Display Co. v. Wagener Equities Inc.,
747 F.3d 489 (7th Cir. 2014) ............................................................................................ 19
Butler v. Sears, Roebuck & Co.,
727 F.3d 796 (7th Cir. 2013) ............................................................................................ 22
Carnegie v. Household Int’l, Inc.,
376 F.3d 656 (7th Cir. 2004) ............................................................................................ 25
Donovan v. Estate of Fitzsimmons,
778 F.2d 298 (7th Cir. 1985) ............................................................................................ 13
Eisen v. Carlisle & Jacquelin,
417 U.S. 156 (1974) .................................................................................................... 26, 27
Fletcher v. ZLB Behring LLC,
245 F.R.D. 328 (N.D. Ill. 2006) ........................................................................................ 22
Gehrich v. Chase Bank USA, N.A.,
No. 12 C 5510, 2016 WL 806549 (N.D. Ill. Mar. 2, 2016) ........................................ 16, 19
Gomez v. Ill. State Bd. of Educ.,
117 F.R.D. 394 (N.D. Ill. 1987) ........................................................................................ 24
Hedges v. Earth Inc.,
No. 14-cv-9858, 2015 WL 10853985 (N.D. Ill. Oct. 14, 2015) ....................................... 28
Hinman v. M & M Rental Ctr., Inc.,
545 F. Supp. 2d 802 (N.D. Ill. 2008) ................................................................................ 24
In re AT & T Mobility Wireless Data Servs. Sales Litig.,
270 F.R.D. 330 (N.D. Ill. 2010) .................................................................................. 13, 27
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 3 of 37 PageID #:756
-iii-
In re AT & T Mobility Wireless Data Servs. Sales Tax Litig.,
789 F. Supp. 2d 935 (N.D. Ill. 2011) ................................................................................ 28
In re Capital One Tel. Consumer Protection Act Litig.,
80 F. Supp. 3d 781 (N.D. Ill. 2015) .................................................................................. 28
In re Dairy Farmers of Am., Inc. Cheese Antitrust Litig.,
No. 09-cv-03690, 2014 WL 1017515 (N.D. Ill. Mar. 17, 2014) ...................................... 28
In re Nat’l Collegiate Athletic Ass. Student-Athlete Concussion Injury Litig.,
314 F.R.D. 580 (N.D. Ill. 2016) ........................................................................................ 28
In re Neopharm, Inc. Secs. Litig.,
225 F.R.D. 563 (N.D. Ill. 2004) ........................................................................................ 23
Ira Holtzman, C.P.A. v. Turza,
728 F.3d 682 (7th Cir. 2013) ............................................................................................ 22
Isby v. Bayh,
75 F.3d 1191 (7th Cir. 1996) ............................................................................................ 12
Kessler v. Am. Resorts Int’l,
No. 05 C 5944, 2007 WL 4105204 (N.D. Ill. Nov. 14, 2007) .......................................... 12
Kolinek v. Walgreen Co.,
311 F.R.D. 483 (N.D. Ill. 2015) ........................................................................................ 16
Marcial v. Coronet Ins. Co.,
880 F.2d 954 (7th Cir. 1989) ............................................................................................ 19
Maxwell v. Arrow Fin. Servs., LLC,
No. 03 C 1995, 2004 WL 719278 (N.D. Ill. Mar. 31, 2004) ............................................ 19
Mullins v. Direct Digital, LLC,
795 F.3d 654 (7th Cir. 2015) ............................................................................................ 25
Nicaj v. Shoe Carnival, Inc.,
135 S. Ct. 1429 (2015) ...................................................................................................... 11
Patterson v. Gen. Motors Corp.,
631 F.2d 476 (7th Cir. 1980) ............................................................................................ 20
Pope v. Harvard Banchares, Inc.,
240 F.R.D. 383 (N.D. Ill. 2006) ........................................................................................ 19
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 4 of 37 PageID #:757
-iv-
Radmanovich v. Combined Ins. Co. of Am.,
216 F.R.D. 424 (N.D. Ill. 2003) ........................................................................................ 23
Redman v. RadioShack Corp.,
768 F.3d 622 (7th Cir. 2014) ............................................................................................ 11
Rosario v. Livaditis,
963 F.2d 1013 (7th Cir. 1992) .......................................................................................... 20
Scholes v. Stone, McGuire, & Benjamin,
143 F.R.D. 181 (N.D. Ill. 1992) ........................................................................................ 20
Schulte v. Fifth Third Bank,
805 F. Supp. 2d 560 (N.D. Ill. 2011) .......................................................................... 16, 17
Shestopal v. Follett Higher Education Grp., Inc.,
No. 15-cv-8980, Dkt. No. 54 (N.D. Ill. Nov. 17, 2016) ................................................... 28
Smith v. Nike Retail Servs., Inc.,
234 F.R.D. 648 (N.D. Ill. 2006) ........................................................................................ 18
Swanson v. Am. Consumer Indus., Inc.,
415 F.2d 1326 (7th Cir. 1969) .......................................................................................... 19
Synfuel Techs, Inc. v. DHL Express (USA), Inc.,
463 F.3d 646 (7th Cir. 2006) ............................................................................................ 12
Szabo v. Bridgeport Machines, Inc.,
249 F.3d 672 (7th Cir. 2001) ............................................................................................ 18
Wal-Mart Stores, Inc. v. Dukes,
131 S. Ct. 2541 (2011) ...................................................................................................... 20
Whitten v. ARS Nat’l Servs. Inc.,
No. 00 C 6080, 2001 WL 1143238 (N.D. Ill. Sept. 27, 2001) .......................................... 20
Williams v. Chartwell Fin. Serv., Ltd.,
204 F.3d 748 (7th Cir. 2000) ............................................................................................ 18
Wong v. Accretive Health, Inc.,
773 F.3d 859 (7th Cir. 2014) ............................................................................................ 12
Statutes and Rules
28 U.S.C. § 1715 ........................................................................................................................... 17
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 5 of 37 PageID #:758
-v-
Fed. R. Civ. P. 23 ................................................................................................................... passim
Other Authorities
Alba Conte & Herbert B. Newberg, NEWBERG ON CLASS ACTIONS (4th ed. 2002) .............. 19, 26
MANUAL FOR COMPLEX LITIGATION (4th ed. 2004) ............................................................... 18, 28
EXHIBIT LIST
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 6 of 37 PageID #:759
-vi-
Settlement Agreement ......................................................................................................... Exhibit 1
Claim Form ...............................................................................................................Exhibit 1-A
Email Notice ............................................................................................................. Exhibit 1-B
Postcard Notice ......................................................................................................... Exhibit 1-C
Long Form Web Notice ............................................................................................Exhibit 1-D
Social Media Notice .................................................................................................. Exhibit 1-E
Publication Notice Description ................................................................................. Exhibit 1-F
Proposed Preliminary Approval Order .....................................................................Exhibit 1-G
Declaration of Todd L. McLawhorn ................................................................................... Exhibit 2
Siprut PC Firm Resume ............................................................................................Exhibit 2-A
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 7 of 37 PageID #:760
-1-
Pursuant to Fed. R. Civ. P. 23, Plaintiffs Cynthia West (“West”), Kristine Hollander
(“Hollander”), Jennifer Zimmerman (“Zimmerman”), Mary Roman (“Roman”), Marie Esposito
(“Esposito”), and Michelle Ballon (“Ballon”) (collectively, the “Plaintiffs”), by their counsel,
respectfully submit the following Memorandum In Support Of Motion For Preliminary Approval
Of Class Action Settlement, and move for an Order: (1) preliminarily approving the Agreement1
as being fair, reasonable, and adequate; (2) preliminarily approving the form, manner, and
content of the Class Notice; (3) setting the date and time of the Final Approval for no earlier than
180 days from the date preliminary approval is granted; (4) provisionally certifying the proposed
Settlement Classes under Rule 23 of the Federal Rules of Civil Procedure for settlement purposes
only; (5) provisionally appointing Plaintiffs as representatives of the Classes; and (6)
provisionally appointing Joseph J. Siprut, Todd L. McLawhorn and Siprut PC as Class Counsel.
INTRODUCTION
Defendants Act II Jewelry, LLC (“Act II”) and Victor K. Kiam, III (“Victor Kiam”)
(collectively, the “Defendants”) and Plaintiffs have entered into a Settlement Agreement (the
“Settlement Agreement” or “Settlement” or “Agreement”) in the above-referenced matter
(attached hereto as Exhibit 1). The Settlement Agreement—a product of over two years of
litigation, extensive discovery, and four mediations—settles the dispute relating to Plaintiffs’
claims of Defendants’ breach of contract, violation of the Illinois Consumer Fraud and Deceptive
Practices Act (“ICFA”), fraud and unjust enrichment.
The cornerstone of the Settlement is the substantial, concrete monetary relief it provides
for Settlement Class Members. The relief achieved by the Settlement is an “all-in,” non-
reversionary, common fund in the amount of $6,700,000—cash (the “Settlement Fund”). All
1 Unless otherwise stated herein, capitalized terms shall have the same meaning as
provided in the Parties’ Settlement Agreement, attached hereto as Exhibit 1.
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 8 of 37 PageID #:761
-2-
Class Members who submit an Approved Claim will be paid cash out of the Settlement Fund.
The Settlement encompasses three Settlement Classes, all of which will receive monetary
payments as detailed infra. The Settlement provides that the best practicable notice be provided
to Class Members, and calls for the designation of a reputable and competent professional
Settlement Administrator, Heffler Claims Group LLC, to disseminate notice of and administer
the Settlement.
The Parties reached the Settlement after voluminous discovery and four mediations,
including two separate sessions with the respected and experienced JAMS mediator, the Hon.
James F. Holderman (Ret.). Defendants raised a number of potential defenses to Plaintiffs’
substantive claims and arguments in opposition to Plaintiffs’ request for class certification.
While Plaintiffs believe that, if litigation were to continue, they could overcome Defendants’
asserted defenses, Plaintiffs nevertheless recognize the risk to them and, more importantly, the
Classes if Plaintiffs were unsuccessful. Plaintiffs also recognize the significant risk concerning
collectability of any judgment, given that Defendant Act II in early 2015 terminated its direct
selling business and entered into an asset foreclosure with a creditor to whom Act II still owes an
eight figure debt.
In sum, although both sides believe their respective positions in the action are
meritorious, they have concluded that, due to the uncertainties and expense of protracted
litigation, it is in the best interest of Plaintiffs, the putative Classes, and Defendants to resolve
this action on the terms provided in the attached Agreement. Accordingly, and for reasons further
detailed below, Plaintiffs and Class Counsel request that this Court enter an order preliminarily
approving this Settlement.
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 9 of 37 PageID #:762
-3-
BACKGROUND
Act II did business as lia sophia, and sold costume jewelry to consumers through a party
planning method that utilized sales advisors who sold jewelry at parties hosted for that purpose,
similar to the method used by Avon and Tupperware. Act II generally sold its full-price jewelry
with a lifetime replacement guarantee. On December 1, 2014, Act II announced that it would
wind down its direct sales business, including fulfillment of claims under the lifetime
replacement guarantee, by the end of the year.
On June 23, 2015, Plaintiffs West and Hollander brought a putative class action against
Act II, Kiam Equities Corporation (“Kiam Equities”), Victor K. Kiam, III, and Elena Kiam, in
the United States District Court for the Northern District of Illinois (the “Court”), case number
15-cv-5569. (Dkt. No. 1.) Plaintiffs West and Hollander alleged causes of action of breach of
contract, violation of the Illinois Consumer Fraud Act, common law fraud, and unjust enrichment
against these Defendants for purportedly revoking the lifetime warranties on their jewelry, and
for purportedly making material misrepresentations or omissions to its sales advisors by inducing
them to continue working as sales advisors, which included the purchase of supplies and jewelry
from the Defendants, even though the Defendants knew the sales advisors would not be able to
recoup those expenditures because Defendants had planned to close the business at least six
months prior to making the announcement. (Id. at ¶¶72-128.)
On October 19, 2015, the Parties held a mediation with Retired District Judge James F.
Holderman in Chicago, Illinois. (Declaration of Todd L. McLawhorn (“McLawhorn Decl.”),
attached hereto as Exhibit 2, ¶5.) Prior to the mediation, the Parties engaged in limited discovery
and exchanged written mediation statements summarizing their respective positions concerning
the factual and legal issues in the litigation. (Id.) This mediation did not result in settlement. (Id.)
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 10 of 37 PageID #:763
-4-
Following the mediation, the Defendants moved to dismiss the complaint on multiple
grounds. (Dkt. No. 35.) After full briefing before the Court, on March 18, 2016, the Court denied
Act II’s motion but granted the remaining Defendants’ motion, dismissing Kiam Equities
Corporation, Victor Kiam, and Elena Kiam from the Litigation (Dkt. No. 58). Act II filed an
answer denying all material allegations, along with affirmative defenses, including that the
claims were barred by the statute of limitations. (Dkt. No. 34.)
Between April 2016 and April 2017, the Parties engaged in multiple rounds of written
and electronic discovery regarding the claims and defenses in this litigation. (McLawhorn Decl.
¶7.) Although the parties produced and analyzed a substantial number of documents, discovery
in the case was significantly complicated by the wind-down of Act II’s active business. For
example, much of the data regarding Act II’s business transactions records are contained in two
large databases that exist only as SQL back-ends with no front-end user interface due to a
business dispute with an information technology vendor and that vendor’s subsequent
bankruptcy. Nevertheless, discovery was extensive, as it involved: (a) review of approximately
12,267 pages of documents produced by Plaintiffs; (b) review of 20,111 pages of documents
produced by Act II; (c) review of approximately 345 pages of documents produced by Victor
Kiam; (d) review of approximately 6 pages of documents produced by Kiam Equities; (e) review
of approximately 203 pages of documents produced by Elena Kiam; (f) review of approximately
963 pages of documents produced by additional third parties in addition to computer media
provided by those third parties; (g) the preparation for taking and/or defending the depositions of
approximately ten fact witnesses from Act II and various third-parties; and (h) the preparation for
taking and/or defending the depositions of the six Class Representatives. (Id.)
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 11 of 37 PageID #:764
-5-
While discovery was ongoing, on November 30, 2016, Plaintiffs filed their First
Amended Class Action Complaint (the “First Amended Complaint”), alleging claims for breach
of contract, violation of the ICFA, fraud and unjust enrichment. (Dkt. No. 75.) Plaintiffs West
and Hollander, now joined by Plaintiffs Zimmerman, Roman, Esposito, and Ballon, sought to
represent three classes: (a) all individuals who purchased jewelry from Act II; (b) all individuals
who sold jewelry for Act II; and (c) all individuals who joined Act II as sales advisors in 2014
and who purchased initial starter kits after May 31, 2014. (Id. at ¶¶130-132.) Plaintiffs’ First
Amended Complaint also re-named Victor Kiam as a co-Defendant. (Dkt. No. 75.) On December
20, 2016, Defendants filed their Answer to Plaintiffs’ First Amended Complaint and denied all
material allegations. (Dkt. No. 77.)
Following the filing of the First Amended Complaint, the Parties continued to engage in
discovery. In the spring of 2017, Defendants deposed three of the Class Representatives.
(McLawhorn Decl. ¶9.) Following those depositions, the Parties resumed settlement discussions
and engaged in three separate, extensive mediations over the course of approximately four
months. (Id. at ¶10.) As a result of those continued discussions and mediations, on July 17, 2017,
during a mediation before Judge Holderman (the fourth mediation in this litigation), the Parties
agreed to a settlement in principal. (Id.) A Settlement Term Sheet was subsequently executed on
August 1, 2017. (Id.)
During August and September 2017, the Parties worked extensively with the proposed
Settlement Administrator, Heffler Claims Group LLC, to analyze confirmatory class data in
order to: (a) finalize the terms of the Settlement; and (b) structure a notice plan consistent with
Fed. R. Civ. P. 23(c)(2)(B). (Id. at ¶11.) In September 2017, after several exchanges of drafts and
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 12 of 37 PageID #:765
-6-
edits, and numerous conference calls, the Parties agreed to the form and content of the
Settlement Agreement. (Id.)
THE PROPOSED SETTLEMENT
The proposed Settlement provides the following:
A. Certification of the Proposed Settlement Classes.
Plaintiffs request that the Court, for the purposes of settlement, certify three Settlement
Classes defined as:
1. Customer Class – All individuals in the United States who
purchased jewelry from Defendant Act II Jewelry, LLC between
June 23, 2011, and December 1, 2014.
2. Sales Advisor Class – All individuals in the United States who
sold at least $250 of jewelry for Defendant Act II Jewelry, LLC
between January 1, 2014, and August 17, 2014.
3. New Sales Advisor Class – All individuals in the United States
who purchased initial starter kits from Defendant Act II Jewelry,
LLC between August 1, 2014, and December 1, 2014.
Specifically excluded from all three Classes are the following
persons: (a) Defendants and their respective affiliates; (b) Class
Counsel and their immediate family members; and (c) the judges
who have presided over this litigation and their immediate family
members.
Based on analysis of the discovery and confirmatory data provided by Defendants, the
Customer Class is estimated to contain approximately 4.0 million individuals, the Sales Advisor
Class is estimated to contain approximately 19,069 individuals, and the New Sales Advisor Class
is estimated to contain approximately 2,709 individuals. (McLawhorn Decl. ¶12.) The Sales
Advisor Class definition uses August 17, 2014, as a cut-off because reliable sales data from after
that date is not reasonably accessible by the parties.
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 13 of 37 PageID #:766
-7-
B. Class Relief.
The Settlement establishes an all-in, non-reversionary Settlement Fund of $6,700,000
cash, to provide relief for the Class Members as well as pay for settlement administration
expenses, Class Counsel’s attorneys’ fees and costs, and Plaintiffs’ incentive awards. First, the
Settlement Fund will be used to pay for settlement administration expenses, which, based on the
Settlement Administrator’s analysis of the confirmatory class data provided by Defendants, are
estimated to be $1,300,000 (resulting in a remaining $5,400,000, the “Net Settlement Fund”).
Class Counsel then intends to seek an attorneys’ fees award not exceeding one-third of the Net
Settlement Fund (approximately $1,800,000), and incentive awards for the Class Representatives
ranging from $2,500 to $7,500, totaling approximately $25,000. This results in an estimated fund
of $3,575,000 cash to provide relief for the Classes (the “Class Fund”).
The Settlement establishes the following relief for Class Members:
Customer Class. Fifty-seven percent (57%) of the Class Fund
(approximately $2,037,750) is allocated to the Customer Class. Each
Customer Class Member who submits a Valid Claim form shall be placed
in one of three “Tiers” depending on the amount of jewelry they purchased
from Act II between June 23, 2011, and December 1, 2014.
Each Customer Class Member who submits a Valid Claim form and
purchased less than $100 of jewelry will be placed into Tier One and will
receive the same amount as each other Customer Class Member in Tier
One – i.e. a pro rata distribution. Each Customer Class Member who
submits a Valid Claim form and purchased between $100 and $299.99 of
jewelry will be placed into Tier Two and will receive double the amount
received by each Customer Class Member in Tier One. Each Customer
Class Member who submits a Valid Claim form and purchased $300 or
more in jewelry will be placed into Tier Three and will receive triple the
amount received by each Customer Class Member in Tier One.
The entire amount allocated to the Customer Class will be distributed to
the Customer Class. The final cash payment to Customer Class Members
will depend on the total number of Valid Claims filed by the Customer
Class. The proposed Settlement Administrator has analyzed Act II’s
records and estimates the following recoveries based on claims rate:
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 14 of 37 PageID #:767
-8-
Customer Class
Claims Rate
Estimated
Recovery
(Tier One)
Estimated
Recovery
(Tier Two)
Estimated
Recovery
(Tier Three)
1% $40.09 $80.18 $120.27
3% $13.36 $26.72 $40.08
5% $8.01 $16.02 $24.03
Customer Class Members who receive direct notice (via email or mail)
will be informed of which Tier the Settlement Administrator has
designated their claim to fall in. The Settlement Administrator shall
implement a method in the online claims process through which Customer
Class Members may challenge their Tier designation and submit evidence
to the Settlement Administrator thereof (e.g. receipts).
Sales Advisor Class. Thirty-eight percent (38%) of the Class Fund
(approximately $1,358,500) is allocated to the Sales Advisor Class. Each
Sales Advisor Class Member who submits a Valid Claim form shall
receive a share of the amount allocated to the Sales Advisor Class
proportional to the amount of sales made by that Sales Advisor Class
Member between January 1, 2014, and August 17, 2014.
The entire amount allocated to the Sales Advisor Class will be allocated to
the Sales Advisor Class. The final cash payment to Sales Advisor Class
Members will depend on the total number of Valid Claims filed by the
Sales Advisor Class. The proposed Settlement Administrator has analyzed
Act II’s records and estimates the following recoveries based on claims
rate:
Sales Advisor Class Claims Rate Estimated Recovery
10% 20.04% of the Member’s 2014 Sales
15% 13.36% of the Member’s 2014 Sales
25% 8.02% of the Member’s 2014 Sales
New Sales Advisor Class. Five percent (5%) of the Class Fund
(approximately $178,750) is allocated to the New Sales Advisor Class.
Each New Sales Advisor Class Member who submits a Valid Claim form
shall receive a full reimbursement for the cost of his or her initial starter
kit, which ranged from $99 to $149.
In the event the number of Valid Claims for New Sales Advisor Class
Members exhausts the amount allocated to the New Sales Advisor Class,
each New Sales Advisor who submits a Valid Claim will have his or her
benefit reduced proportionally so that the total benefit to the New Sales
Advisor Class does not exceed five percent (5%) of the Class Fund. In the
event that there is money remaining in the New Sales Advisor Class Fund
after payment of benefits to all New Sales Advisor Class Members who
submit Valid Claims, the remainder shall be reallocated back to the Class
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 15 of 37 PageID #:768
-9-
Fund and distributed to the Customer Class and the Sales Advisor Class in
the same proportion as other funds distributed to those Classes, as
described above.
No Reversion. No amount of the Settlement Fund shall revert back to
Defendants. Settlement Class Members’ uncashed checks shall be
awarded to a cy pres recipient.
The Settlement is thus designed to afford relief to as many Class members as possible.
C. Class Notice.
Subject to the Court granting preliminary approval of the Settlement, the Settlement
Administrator will provide the Class with notice of the proposed Settlement by the following
methods:
Direct Notice Via Electronic Mail. Within forty (40) days after entry of
the Preliminary Approval Order, the Settlement Administrator shall, for all
Settlement Class Members for whom the Settlement Administrator is able
to determine an email address based on transaction records provided by
Defendant Act II, disseminate direct notice by email in the first instance,
in the form of Exhibit B to the Settlement Agreement.
Direct Notice Via U.S. Mail. Within fifty-five (55) days after entry of the
Preliminary Approval Order, the Settlement Administrator shall, for all
Settlement Class Members for whom the Settlement Administrator is
unable to determine an email address, and for all Settlement Class
Members for whom email notice is sent that is returned, disseminate direct
notice by U.S. mail, in form of Exhibit C to the Settlement Agreement.
The mailing addresses provided on the Notice List shall be run through a
National Change of Address database prior to being mailed. The postage
rate selected for the mailing of the Notice shall provide for notification of
forwarding addresses. If the Notice is returned by the Postal Service with a
forwarding address or other error that can be ascertained and corrected,
then the Settlement Administrator shall re-send the Notice to the new
address within five (5) business days.
Notice Via Settlement Website. Within forty (40) days after entry of the
Preliminary Approval Order, the Settlement Administrator shall create a
Settlement Website where notice, in the form of Exhibit D to the
Settlement Agreement, shall be posted and on which Settlement Class
Members may submit claims.
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 16 of 37 PageID #:769
-10-
Notice Via Social Media. Within forty (40) days after entry of the
Preliminary Approval Order, Defendants shall post notice of the
Settlement on the lia sophia outlet and lia sophia Facebook pages, in the
form of Exhibit E to the Settlement Agreement.
Notice Via Publication. Within forty (40) days after entry of the
Preliminary Approval Order, the Settlement Administrator shall
implement a highly targeted online search and social media outreach effort
to serve over 3,000,000 impressions via Internet banners, as well as issue a
press release to over 7,000 news outlets and journalists, as described in
Exhibit F to the Settlement Agreement.
Toll-Free Phone Line. Within forty (40) days after entry of the
Preliminary Approval Order, the Settlement Administrator shall establish
a phone line with touch-tone and interactive voice response for individuals
to learn more about the Settlement.
CAFA Notice. Pursuant to 28 U.S.C. § 1715, not later than ten (10) days
after the Agreement is filed with the Court, Defendants shall serve upon
the Attorneys General of each U.S. State in which there are members of
the Class, the Attorney General of the United States, and other required
government officials, notice of the proposed settlement, which shall
include: (1) a copy of the most recent complaint and all materials filed
with the complaint or notice of how to electronically access such
materials; (2) notice of all scheduled judicial hearings in the Action; (3) all
proposed forms of Notice to the Settlement Class; and (4) a copy of this
Agreement. To the extent known, the Defendants shall serve upon the
above-referenced government official the names of Class Members who
reside in each respective state and the share of the claims of such members
to the entire settlement, or if not feasible, a reasonable estimate of the
number of Class Members residing in each state and the estimated
proportionate share of the claims of such members to the entire
Agreement. The costs of conducting CAFA Notice shall not be deducted
from the Settlement Fund. Defendants are responsible for paying the costs
of CAFA Notice separate and apart from the Settlement Fund.
In order to receive a Cash Award described above, the Settlement Class Member must
submit a Claim Form within ninety (90) days after the Notice Date. Class Members may submit
their claims via mail or online at the Settlement Website. Class Members who wish to either opt-
out of or object to the Settlement, must do so in accordance with the Agreement within ninety
(90) days after the Notice Date. Within sixty (60) days of the Effective Date, or at another time
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 17 of 37 PageID #:770
-11-
as the Court directs, the Settlement Administrator shall cause distribution of Cash Awards to the
Settlement Class Members who submit Approved Claims.
D. Incentive Awards to Class Representatives.
Subject to Court approval, the Class Representatives will request Incentive Awards
ranging from $2,500 to $7,500, in recognition of their contributions to the Settlement Class and
the risk they incurred in commencing the action, both financial and otherwise. The Court does
not need to award or otherwise rule on Plaintiffs’ Incentive Awards at this time. Class Counsel
will file a motion for the Incentive Awards, pursuant to the schedule in the Preliminary Approval
Order, and will support the request for the awards in detail.
E. Attorneys’ Fees and Expenses.
Class Counsel will request fees and expenses in the amount of one-third of the Net
Settlement Fund (approximately $1,800,000). Importantly, however, this is not a provision of the
Settlement. There is no agreement on attorneys’ fees—i.e., no “clear-sailing” provision—
consistent with recent Seventh Circuit jurisprudence. Redman v. RadioShack Corp., 768 F.3d
622, 637 (7th Cir. 2014) (“Clear-sailing clauses have not been held to be unlawful per se, but at
least in a case such as this, involving a non-cash settlement award to the class, such a clause
should be subjected to intense critical scrutiny by the district court[.]”), cert. denied sub nom.
Nicaj v. Shoe Carnival, Inc., 135 S. Ct. 1429 (2015). Of course, this Settlement is a common
fund, cash settlement and, hence, “intense critical scrutiny” is not warranted. In any event, the
Court does not need to award or otherwise rule on Class Counsel’s fees at this time. Class
Counsel will file a motion for attorneys’ fees separately, pursuant to the schedule in the
Preliminary Approval Order, and will support the request for fees in detail.
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 18 of 37 PageID #:771
-12-
ARGUMENT
I. The Proposed Settlement is Fair and should be Preliminarily Approved.
Both judicial and public policies strongly favor the settlement of class action litigation.
Isby v. Bayh, 75 F.3d 1191, 1199 (7th Cir. 1996) (“We also consider the facts ‘in the light most
favorable to the settlement.’”); Armstrong v. Bd. of Sch. Dirs. of the City of Milwaukee, 616 F.2d
305, 312 (7th Cir. 1980) (“It is axiomatic that the federal courts look with great favor upon the
voluntary resolution of litigation through settlement.”). Although the standards to be applied at
the preliminary approval stage “are ultimately questions for the fairness hearing that comes after
a court finds that a proposed settlement is within approval range, a more summary version of the
same inquiry takes place at the preliminary phase.” Kessler v. Am. Resorts Int’l, No. 05 C 5944,
2007 WL 4105204, at *5 (N.D. Ill. Nov. 14, 2007). The factors considered at this stage include:
“(1) the strength of the case for plaintiffs on the merits, balanced against the extent of settlement
offer; (2) the complexity, length, and expense of further litigation; (3) the amount of opposition
to the settlement; (4) the reaction of members of the class to the settlement; (5) the opinion of
competent counsel; and (6) stage of the proceedings and the amount of discovery completed.”
Wong v. Accretive Health, Inc., 773 F.3d 859, 863 (7th Cir. 2014).2
A. Strength of the Case Balanced Against the Settlement.
“The most important factor relevant to the fairness of a class action settlement is the
strength of the plaintiff’s case on the merits balanced against the amount offered in the
settlement.” Wong, 773 F.3d at 864; Synfuel Techs, Inc. v. DHL Express (USA), Inc., 463 F.3d
646, 653 (7th Cir. 2006). However, “courts should refrain from resolving the merits of the
controversy or making a precise determination of the parties’ respective legal rights.” In re AT &
2 Until notice is provided, there is not an opportunity for Class Members to react to the
Settlement. Hence, factors “(3)” and “(4)” are not analyzed below.
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 19 of 37 PageID #:772
-13-
T Mobility Wireless Data Servs. Sales Litig., 270 F.R.D. 330, 346 (N.D. Ill. 2010) (internal
quotations omitted). Moreover, “[b]ecause the essence of settlement is compromise, courts
should not reject a settlement solely because it does not provide a complete victory to the
plaintiffs.” Id. (internal quotations omitted) Rather, the integral part of the Court’s strength-
versus-merits evaluation is “a consideration of the various risks and costs that accompany
continuation of the litigation.” Donovan v. Estate of Fitzsimmons, 778 F.2d 298, 309 (7th Cir.
1985).
Plaintiffs Hollander and Ballon allege that Defendants breached their contracts, violated
the ICFA, committed common law fraud, and were unjustly enriched by failing to honor their
promise of lifetime warranties on the jewelry they sold and by unilaterally repudiating the terms
of the lifetime replacement guarantee, even though Defendants knew they would not honor the
lifetime guarantee upon closure of their business. (Dkt. No. 75, ¶¶140-171.) Plaintiffs Hollander
and Ballon therefore claim that they, and the Customer Class, have sustained damages through
the diminished value of the jewelry they purchased. (Id.)
Plaintiffs West, Esposito, and Roman allege that Defendants violated the ICFA,
committed common law fraud, and were unjustly enriched by continuing to encourage their Sales
Advisors to purchase jewelry from Act II, by assuring their Sales Advisors that they would never
bypass them and sell directly to the customers, and by taking their Sales Advisors’ customer
information and using it to compete against them. (Id. at ¶¶172-194.) Plaintiffs West, Esposito,
and Roman therefore claim that they, and the Sales Advisor Class, have sustained damages
through their reliance on Defendants’ statements in continuing to work and purchase jewelry and
supplies as Act II Sales Advisors. (Id.)
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 20 of 37 PageID #:773
-14-
Plaintiff Zimmerman alleges that Defendants violated the ICFA and committed common
law fraud by encouraging New Sales Advisors to purchase initial starter kits, even though
Defendants knew the New Sales Advisors would never recoup their expenditures because Act II
was going to close its business. (Id. at ¶¶195-209.) Plaintiff Zimmerman therefore claims that
she, and the New Sales Advisor Class, have sustained damages through their reliance on
Defendants’ statements in purchasing their initial starter kits and by Defendants’ abrupt closure
of business. (Id.)
Defendants deny liability and assert several defenses that would defeat Plaintiffs’ claims
on both substantive and procedural grounds. With respect to the Customers, Defendants contend
that the lifetime warranty was expressly limited only to manufacturers’ defects, that breach of
contract claims are not actionable under the ICFA, that most Customers – including the named
Plaintiffs – had no breach of warranty claim because they never attempted to return their jewelry,
and that determining whether each customer tried and failed to return jewelry with a
manufacturer’s defect is an individualized question not suitable for class treatment. With respect
to the Sales Advisors and New Sales Advisors, Defendants contend that the Advisors expressly
waived their right to participate in class actions pursuant to the terms of their contracts, that Sale
Advisors had no right to continue as sales advisors after their agreements were terminated, that
Sales Advisor claims were defeated by their contracts, that Act II had a right to contact its own
customers, that the Sales Advisors were not the procuring cause of any online sales, and that the
Sales Advisors’ alleged injuries had no connection to their theory of liability. Defendants further
contend that any alleged statements made to the Customers or Advisors were true (or believed to
be true) at the time they were made, that reliance on any allegedly fraudulent statements cannot
be demonstrated on a classwide basis, and that reliance on any allegedly fraudulent statements
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 21 of 37 PageID #:774
-15-
did not cause any actual injury. One of the factors to be considered as to the fairness of a class
action settlement is a defendant’s willingness and ability to mount just such a vigorous defense,
as it demonstrates that the class may not have recovered all (or any) of what it sought at trial.
As explained above, the Settlement allows Class Members to receive direct monetary
relief depending on the claims-rate of each class. If 3% of Customer Class Members submit valid
claim forms, each of those claimants will receive approximately $13 to $40, depending on the
amount of jewelry purchased, to offset the alleged diminished value of their jewelry from the
alleged repudiation of the lifetime guarantee. Similarly, if 15% of Sales Advisor Class Members
submit valid claim forms, each of those claimants will receive payments totaling approximately
13% of their sales of Act II jewelry in 2014, to offset their alleged injuries incurred due to
Defendants’ misappropriation of their customer contacts. Finally, members of the New Sales
Advisor Class will receive relief in the amount of the full cost of the initial starter kits they
purchased, which ranged from $99 to $149. While Plaintiffs believe that their claims are strong,
Plaintiffs are also aware of the inherent risks and costs of continuing with complex litigation of
this nature. If Defendants were to prevail on their asserted defenses, Class Members, including
Plaintiffs, would receive no relief at all. Given this possibility, the Settlement Agreement is a
meaningful achievement. Accordingly, the Settlement provides a tangible benefit to all those
affected by Defendants’ repudiation of the lifetime guarantee and sudden closure of business.
B. The Risk, Expense, & Complexity of the Case.
Due to the nature of Plaintiffs’ case, trial will require the collection of evidence and
witness testimony from across the country. Both Parties would examine a number of Act II’s
current and former employees, as well as the employees and agents of Act II’s affiliates and
other third-parties. Defendants intend to assert several defenses that they contend bar Plaintiffs’
claim in whole or in part, which Plaintiffs would necessarily attempt to rebut. The uncertainty as
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 22 of 37 PageID #:775
-16-
to whether these defenses apply in this case creates substantial risk for both sides. Plaintiffs and
proposed Class Counsel also recognize that the expense, duration, and complexity of protracted
litigation would be substantial, and would require further briefing on numerous substantive
issues, evidentiary hearings, further discovery, and the gathering of witnesses. In addition,
Defendant Act II has subsequently closed, and has few, if any, assets available to satisfy a
judgment.
C. The Opinion of Counsel.
“The opinion of competent counsel is relevant to the question whether a settlement is fair,
reasonable, and adequate under Rule 23.” Schulte v. Fifth Third Bank, 805 F. Supp. 2d 560, 586-
87 (N.D. Ill. 2011). Here, Class Counsel has extensive experience in consumer class actions and
complex litigation. (McLawhorn Decl. ¶15.) See Gehrich v. Chase Bank USA, N.A., No. 12 C
5510, 2016 WL 806549, at *9 (N.D. Ill. Mar. 2, 2016) (“Class Counsel are experienced []
litigators and strongly support the settlement. . . . this factor (whatever its weight) favors
approval.”); Kolinek v. Walgreen Co., 311 F.R.D. 483, 495 (N.D. Ill. 2015) (“Class counsel in
this case are highly experienced class action litigators who strongly support the proposed
settlement. This factor weighs in favor of approval.”).
Based upon proposed Class Counsel’s analysis of the information obtained from
Defendants during discovery and the four mediation sessions, the Settlement Agreement
represents a significant recovery for the Settlement Classes, especially when weighed against
Defendants’ anticipated defenses and the inherent risks of litigation. Class Counsel believes that
the Settlement is beneficial to the Settlement Classes and meets the class-certification
requirements of Rule 23. (McLawhorn Decl. ¶17.)
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 23 of 37 PageID #:776
-17-
D. The Extent of Discovery.
Based upon discovery conducted by the Parties, Plaintiffs believe they possess the
evidence needed to evaluate the strengths and weaknesses of the case. Extensive discovery has
taken place in this litigation. As explained supra, the Parties have reviewed tens of thousands of
pages of documents, including those produced by various third parties. (Id. at ¶7.) In addition,
the Parties have prepared for the taking and/or defending the depositions of approximately ten
fact witnesses from Act II, the six Class Representatives, and various third-parties. (Id.) Three of
the Class Representatives were deposed. (Id. at ¶14.) In sum, counsel for each party has
sufficient information to assess the strengths, weaknesses, and likely expense of taking this case
to trial.
While the Parties have both formally and informally exchanged information critical to
evaluating the strength of Plaintiffs’ contentions (and Defendants’ defenses), the amount of
discovery taken is not a prerequisite to a class action settlement. Courts have noted that, “the
label of ‘discovery’ [either formal or informal] is not what matters. Instead, the pertinent inquiry
is what facts and information have been provided.” Schulte, 805 F. Supp. 2d at 587 (internal
citation omitted). Here, information more than sufficient to make a reasonable and informed
decision has been procured, meaning that there was a reasonable, informed basis to evaluate the
Settlement.
E. The Presence of Governmental Participants.
Although there is no governmental entity participating in this matter as of this time, full
and complete notice is being provided to all appropriate state and federal authorities. Defendants
will provide such notice which will include all appropriate information and documents required
by the Class Action Fairness Act, 28 U.S.C. § 1715(b).
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 24 of 37 PageID #:777
-18-
II. The Settlement Classes should be Provisionally Certified.
Before preliminary approval of a class action settlement can be granted, the Court must
determine that the proposed class is appropriate for certification. Amchem Prods. Inc. v. Windsor,
521 U.S. 591, 620 (1997); MANUAL FOR COMPLEX LITIGATION § 21.632 (4th ed. 2004). Federal
Rule of Civil Procedure 23(a) provides that a class may be certified if (i) the class is so numerous
that joinder of all members is impractical, (ii) there are questions of law or fact common to the
class, (iii) the claims or defenses of the representative parties are typical of those of the class, and
(iv) the representative parties will fairly and adequately protect the interests of the class. Fed. R.
Civ. P. 23(a); Williams v. Chartwell Fin. Serv., Ltd., 204 F.3d 748, 760 (7th Cir. 2000).
Once the requirements of Rule 23(a) have been met, the proposed class must then satisfy
at least one of the three subsections of Rule 23(b). Amchem, 521 U.S. at 614. In this case,
Plaintiffs seek certification of the Classes under Rule 23(b)(3), which requires that (i) the
questions of law or fact common to all class members predominate over issues affecting only
individual members, and (ii) the maintenance of a class action be superior to other available
methods for the fair and efficient adjudication of the controversy. Id. at 615; Szabo v. Bridgeport
Machines, Inc., 249 F.3d 672, 676 (7th Cir. 2001).
As discussed further below, the proposed Classes meet each of the requirements of Rules
23(a) and (b), and therefore, certification is appropriate.
A. Numerosity — Federal Rule of Civil Procedure 23(a)(1).
Rule 23(a)’s first requirement, numerosity, is satisfied where “the class is so numerous
that joinder of all members is impractical.” Fed. R. Civ. P. 23(a)(1). There is neither a specific
number required to satisfy this requirement, nor is a plaintiff required to state the exact number
of potential class members. Smith v. Nike Retail Servs., Inc., 234 F.R.D. 648, 659 (N.D. Ill.
2006) (“[A] plaintiff need not identify each class member or even provide an exact number of
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 25 of 37 PageID #:778
-19-
class members to satisfy that element.”) (citing Marcial v. Coronet Ins. Co., 880 F.2d 954 (7th
Cir. 1989)); Alba Conte & Herbert B. Newberg, NEWBERG ON CLASS ACTIONS § 7.20, 66 (4th
ed. 2002). Instead, courts are permitted “to make common-sense assumptions that support a
finding of numerosity.” Maxwell v. Arrow Fin. Servs., LLC, No. 03 C 1995, 2004 WL 719278, at
*2 (N.D. Ill. Mar. 31, 2004).
“[A] class can be certified without determination of its size, so long as it’s reasonable to
believe it large enough to make joinder impracticable and thus justify a class action suit.” Arnold
Chapman & Paldo Sign & Display Co. v. Wagener Equities Inc., 747 F.3d 489, 492 (7th Cir.
2014). “Although no magic number exists for satisfying the numerosity requirement, the Seventh
Circuit has held that ‘[e]ven if the class were limited to 40 [members] … that is a sufficiently
large group to satisfy Rule 23(a) where the individual members of the class are widely scattered
and their holdings are generally too small to warrant undertaking individual actions.’” Gehrich,
2016 WL 806549, at *4 (quoting Swanson v. Am. Consumer Indus., Inc., 415 F.2d 1326, 1333 n.
9 (7th Cir. 1969)); Pope v. Harvard Banchares, Inc., 240 F.R.D. 383, 387 (N.D. Ill. 2006)
(granting class certification, distinguishing that “impracticable” does not mean “impossible,” but
rather extremely difficult and inconvenient).
The Settlement Agreement comprises three Classes. There are approximately 4.0 million
individuals in the Customer Class, 19,069 individuals in the Sales Advisor Class, and 2,709
individuals in the New Sales Advisor Class. (McLawhorn Decl. ¶12.) Accordingly, the Classes
easily satisfy the numerosity requirement. See NEWBERG ON CLASS ACTIONS § 3:5, 243-46 (4th
ed. 2002) (“Class actions under the amended Rule 23 have frequently involved classes
numbering in the hundreds, or thousands . . . In such cases, the impracticability of bringing all
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 26 of 37 PageID #:779
-20-
class members before the court has been obvious, and the Rule 23(a)(1) requirement has been
easily met.”).
B. Commonality/Predominance —
Federal Rule of Civil Procedure 23(a)(2) and 23(b)(3).
The commonality element requires that “there are questions of law or fact common to the
class.” Fed. R. Civ. P. 23(a)(2). Courts recognize that there may be factual differences between
class members, but “factual variations among class members’ claims” do not themselves “defeat
the certification of a class.” Rosario v. Livaditis, 963 F.2d 1013, 1017 (7th Cir. 1992) (citing
Patterson v. Gen. Motors Corp., 631 F.2d 476, 481 (7th Cir. 1980), cert. denied, 451 U.S. 914
(1980)), cert. denied, 506 U.S. 1051 (1993). In fact, the threshold for commonality is not high.
Scholes v. Stone, McGuire, & Benjamin, 143 F.R.D. 181, 185 (N.D. Ill. 1992) (granting class
certification, characterizing the commonality requirement as “a low hurdle” easily surmounted).
Rather, commonality exists if a common nucleus of operative fact exists, even if as to one
question of law or fact. Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011)
(“[C]ommonality requires that the claims of the class simply “depend upon a common contention
. . . of such a nature that it is capable of class-wide resolution – which means that determination
of its truth or falsity will resolve an issue that is central to the validity of each one of the claims
in one stroke.”); Whitten v. ARS Nat’l Servs. Inc., No. 00 C 6080, 2001 WL 1143238, *3 (N.D.
Ill. Sept. 27, 2001) (commonality is often found where “Defendants have engaged in
standardized conduct toward the members of the proposed class”).
The Settlement Classes share common questions of fact and law that predominate over
issues affecting only individual Settlement Class Members. Those common factual and legal
issues include:
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 27 of 37 PageID #:780
-21-
The Customer Class
a. Whether Defendant Act II offered a lifetime replacement guarantee
on its jewelry;
b. Whether Defendant Act II breached the contract of the terms of its
sale with those customers that purchased products with lifetime
replacement guarantees;
c. Whether Defendant Act II continued to sell jewelry with a lifetime
replacement guarantee while planning to close and repudiate the
guarantee; and
d. Whether Plaintiffs Hollander, Ballon, and the Customer Class,
have been injured by Defendants’ conduct, and the proper measure
of their losses as a result of those injuries.
The Sales Advisor Class
a. Whether Defendants sold supplies and jewelry to their Sales
Advisors, and encouraged their Sales Advisors to purchase
supplies and jewelry, while planning to close and subsequently
precluded the Sales Advisors from recouping those expenditures;
b. Whether Defendants actively concealed the fact that they were
closing from their Sales Advisors;
c. Whether Defendants unfairly usurped the customer networks
developed by their Sales Advisors by firing these Sales Advisors
upon closing the business, and then directly soliciting those same
customers; and
d. Whether Plaintiffs West, Esposito, Roman, and the Sales Advisor
Class, have been injured by Defendants’ conduct, and the proper
measure of their losses as a result of those injuries.
The New Sales Advisor Class
a. Whether Defendants sold initial starter kits to New Sales Advisors,
and encouraged New Sales Advisors to purchase initial starter kits,
while planning to close and subsequently precluded the New Sales
Advisors from recouping those expenditures;
b. Whether Defendants actively concealed the fact that they were
closing from the New Sales Advisors; and
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 28 of 37 PageID #:781
-22-
c. Whether Plaintiff Zimmerman and the New Sales Advisor Class
have been injured by Defendants’ conduct, and the proper measure
of their losses as a result of those injuries.
Additionally, Rule 23(b)(3) provides that a class action may be maintained where the
questions of law and fact common to members of the proposed class predominate over any
questions affecting only individual members. Fed. R. Civ. P. 23(b)(3); Fletcher v. ZLB Behring
LLC, 245 F.R.D. 328, 331-32 (N.D. Ill. 2006). “Predominance . . . is a question of efficiency.”
Butler v. Sears, Roebuck & Co., 727 F.3d 796, 800 (7th Cir. 2013). A class action is the more
efficient procedure for determining liability and damages in a case such as this, where “loss, and
the statutory remedy, are the same for all recipients[.]” Ira Holtzman, C.P.A. v. Turza, 728 F.3d
682, 684 (7th Cir. 2013) reh’g denied (Sept. 24, 2013), cert. denied, 134 S. Ct. 1318 (2014).
In this case, common questions predominate for the Settlement Class because
Defendants’ alleged unlawful conduct presents common questions with regard to all proposed
Settlement Class Members. Holtzman, 728 F.3d at 684. Defendants’ alleged unlawful conduct –
its sale of jewelry with lifetime warranties to the Customer Class, and its sale of supplies and
jewelry to the Sales Advisor Class and the New Sales Advisor Class – presents common
questions with regard to Defendants’ intentions with regard to closing down its business.
Defendants’ liability depends on whether Defendants sold the jewelry and supplies despite
knowing that: (a) customers would not be able to utilize the lifetime guarantee; and (b) sales
advisors would not be able to recoup their expenditures. Thus, in the context of the proposed
class-wide settlement, the predominance requirement is satisfied because liability and damages
would have been decided predominantly, if not entirely, based on common evidence of
Defendants’ conduct.
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 29 of 37 PageID #:782
-23-
C. Typicality — Federal Rule of Civil Procedure 23(a)(3).
Rule 23 also requires that a plaintiff’s claims be typical of other class members’ claims.
Fed. R. Civ. P. 23(a)(3). The typicality requirement is closely related to the commonality
requirement and is satisfied if the plaintiff’s claims arise from “the same event or practice or
course of conduct that gives rise to the claims of other class members and . . . are based on the
same legal theory.” Radmanovich v. Combined Ins. Co. of Am., 216 F.R.D. 424, 432 (N.D. Ill.
2003) (internal quotations omitted). The existence of factual differences will not preclude a
finding of typicality. Id. “Typicality does not mean identical, and the typicality requirement is
liberally construed.” In re Neopharm, Inc. Secs. Litig., 225 F.R.D. 563, 566 (N.D. Ill. 2004)
(citation omitted).
Here, Plaintiffs Hollander, Ballon and the Customer Class allege that they purchased
jewelry from Act II that was accompanied by a lifetime guarantee. (Dkt. No. 75, ¶¶95-101)
Plaintiffs Hollander, Ballon, and the Customer Class allege that they were similarly injured by
Act II when Act II later unilaterally revoked the lifetime guarantee. (Id.) Therefore, Plaintiffs
Hollander and Ballon’s claims are typical of those of the Customer Class.
Similarly, Plaintiffs West, Esposito, Roman and the Sales Advisor Class allege that they
worked as Sales Advisors for Act II, and continued to purchase jewelry and supplies from Act II
based on Defendants’ representations and omissions that Act II was doing business as usual and
had no plans to close. (Id. at ¶¶102-121.) Plaintiffs West, Esposito, Roman, and the Sales
Advisor Class were similarly harmed by Defendant Act II when it suddenly ceased operations
and usurped their customer lists. (Id.) Therefore, Plaintiffs West, Esposito, and Roman’s claims
are typical of those of the Sales Advisor Class.
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 30 of 37 PageID #:783
-24-
Finally, Plaintiff Zimmerman and the New Sales Advisor Class allege that they
purchased initial starter kits from Act II based on Defendants’ representations and omissions that
Act II had no plans to close. (Id. at ¶¶122-129.) Plaintiff Zimmerman and the New Sales Advisor
Class were similarly harmed by Defendant Act II when it suddenly ceased operations. (Id.)
Therefore, Plaintiff Zimmerman’s claims are typical of those of the New Sales Advisor Class.
Accordingly, the claims of each Class Representative is typical of the Class she seeks to
represent. Moreover, there are no defenses that pertain to Plaintiffs that would not also pertain to
their respective Settlement Classes. Accordingly, Plaintiffs’ claims are typical of the other Class
members’ claims.
D. Adequacy of Representation — Federal Rule of Civil Procedure 23(a)(4).
The final Rule 23(a) prerequisite requires that a proposed class representative “fairly and
adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). To satisfy the adequacy
requirement, class representatives must establish that: (1) their claims are not in conflict with
those of the proposed class; (2) they have sufficient interests in the outcome of the case; and (3)
they are represented by experienced, competent counsel. Hinman v. M & M Rental Ctr., Inc., 545
F. Supp. 2d 802, 807 (N.D. Ill. 2008). Furthermore, proposed class counsel must be competent
and have the resources necessary to sustain the complex litigation necessitated by class claims; it
is persuasive evidence that proposed class counsel have been found adequate in prior cases.
Gomez v. Ill. State Bd. of Educ., 117 F.R.D. 394, 401 (N.D. Ill. 1987) (finding class counsel was
adequate and stating if “attorneys have been found to be adequate in the past, it is persuasive
evidence that they will be adequate again.”).
Here, Plaintiffs’ interests are consonant with the interests of the Settlement Classes—
obtaining relief from Defendants for their alleged unlawful conduct in revoking the lifetime
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 31 of 37 PageID #:784
-25-
guarantees on their products and suddenly shutting down operations precluding sales advisors
from recouping their expenditures. Plaintiffs have no interests antagonistic to the interests of the
other Settlement Class Members. (McLawhorn Decl. ¶16.) Moreover, Plaintiffs’ counsel are well
respected members of the legal community, have regularly engaged in major complex litigation,
and have significant experience in consumer class actions involving similar issues, scope, and
complexity. (Id. ¶15; Siprut Firm Resume (attached as Exhibit A to the McLawhorn Decl.).)
Accordingly, Plaintiffs and their counsel would adequately represent the proposed Class.
E. Superiority — Federal Rule of Civil Procedure 23(b)(3).
In addition to satisfying Rule 23(a), a plaintiff seeking certification must satisfy one of
the provisions of Rule 23(b). Rule 23(b)(3) provides that matters pertinent to a finding of
superiority include: “(A) the interest of members of the class in individually controlling the
prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning
the controversy already commenced by or against members of the class; (C) the desirability or
undesirability of concentrating the litigation of the claims in the particular forum; and (D) the
difficulties likely to be encountered in the management of a class action.” Fed. R. Civ. P.
23(b)(3). When settling a class action, Plaintiffs do not have to prove manageability under Rule
23(b)(3) as if the case were being fully litigated because settlement may “eliminate all the thorny
issues that the court would have to resolve if the parties fought out the case.” Carnegie v.
Household Int’l, Inc., 376 F.3d 656, 660 (7th Cir. 2004) (citing Amchem, 521 U.S. at 620).
The burden and expense of individual prosecution of the litigation necessitated by
Defendants’ actions makes a class action superior to other available methods of resolution.
Absent a class action, it would be difficult, if not impossible, for individual members of the Class
to obtain effective relief. See Mullins v. Direct Digital, LLC, 795 F.3d 654, 658 (7th Cir. 2015)
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 32 of 37 PageID #:785
-26-
(“[I]n cases involving relatively low-cost goods or services . . . the class device is often essential
‘to overcome the problem that small recoveries do not provide the incentive for any individual to
bring a solo action prosecuting his or her rights.’”) (quoting Amchem, 521 U.S. at 617).
III. The Form and Method of Service of Class Notice should be Approved.
“When the parties reach a settlement agreement before a class determination and seek to
stipulate that the settlement will have class wide scope, a class notice must be sent to provide
absent class members with certain basic information so that they have an opportunity to consider
the terms of the settlement.” NEWBERG ON CLASS ACTIONS, § 11:30, p. 11-62-11-63 (4th ed.
2002). The substance of the notice must describe, in plain language, the nature of the action, the
definition of the certified class, and the class claims and defenses at issue. See Fed. R. Civ. P.
23(c)(2)(B). The notice must also explain that class members may enter an appearance through
counsel if desired, may request to be excluded from the class, and that a class judgment shall
have a binding effect on all class members. Id. Additionally, dissemination of the notice must
comport with both Rule 23 and due process, which require that a class receive “the best notice
practicable under the circumstances, including individual notice to all members who can be
identified through reasonable effort.” Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 173 (1974).
The proposed notice plan in this case satisfies Rule 23’s notice requirements as well as due
process considerations, and provides:
a. A brief summary of the claims alleged in the action;
b. An explanation of the proposed terms of the Settlement, the amount the
Settlement Class members are entitled to receive under the Settlement
Agreement, and the method by which Settlement Class members can
claim their Settlement benefit;
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 33 of 37 PageID #:786
-27-
c. An explanation of the right to opt out of and/or object to the Settlement
within given time-frames and subject to certain requirements;
d. An explanation that members of the Settlement Class who do not opt out
will be bound by the proposed Settlement and judgment and will have
released their claims;
e. An explanation that members of the Settlement Class who do not opt out
will be represented by proposed Class Counsel; and
f. An identification of Class Counsel and a means for making inquiries
thereof.
Federal courts authorize service of class notice by a variety of reliable means. In this
regard, “[t]here is no statutory or due process requirement that all class members receive actual
notice by mail or other means; rather, ‘individual notice must be provided to those Class
members who are identifiable through reasonable effort.’” Eisen, 417 U.S. at 175-76.
In this case, the Settlement provides for direct notice via electronic mail and U.S. Mail, as
well as via publication through social media, internet banners, and a press release, and a detailed
settlement website. These notice procedures were determined and agreed to during settlement
negotiations, after the Settlement Administrator analyzed Defendants’ records and determined
the best practical means of effecting notice on the Classes. (McLawhorn Decl. ¶11.)
Courts in this District routinely find the methods of notice proposed in this case to be
reasonably calculated to reach class members by the best means practicable. See In re AT & T
Mobility Wireless Data Servs. Sales Litig., 270 F.R.D. at 351-53 (granting approval of notice
plan that consisted of notice on class members’ monthly bill, via text message, electronic mail,
and U.S. mail, and via print publication); In re AT & T Mobility Wireless Data Servs. Sales Tax
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 34 of 37 PageID #:787
-28-
Litig., 789 F. Supp. 2d 935, 968 (N.D. Ill. 2011) (same); In re Nat’l Collegiate Athletic Ass.
Student-Athlete Concussion Injury Litig., 314 F.R.D. 580, 603 (N.D. Ill. 2016) (granting
approval of notice plan that consisted of both direct and publication notice); In re Dairy Farmers
of Am., Inc. Cheese Antitrust Litig., No. 09-cv-03690, 2014 WL 1017515, at *2 (N.D. Ill. Mar.
17, 2014) (granting approval of notice plan that consisted of mail notice and publication notice);
Hedges v. Earth Inc., No. 14-cv-9858, 2015 WL 10853985, at *2 (N.D. Ill. Oct. 14, 2015)
(same); In re Capital One Tel. Consumer Protection Act Litig., 80 F. Supp. 3d 781, 786 (N.D. Ill.
2015) (granting approval of notice plan that consisted of mail, e-mail, and internet publication
notice); Shestopal v. Follett Higher Education Grp., Inc., No. 15-cv-8980, Dkt. No. 54 (N.D. Ill.
Nov. 17, 2016) (granting approval of notice plan that consisted of mail, e-mail, print and internet
publication notice); see also A & L Indus., Inc. v. P. Cipollini, Inc., No. 12-7598, 2014 WL
906180, at *1 (D.N.J. Mar. 7, 2014) (rejecting arguments that notice had to be served in
accordance with Rule 5(b); “Rule 23(c) should supersede because Rule 23(c) addresses class
notice specifically, whereas Rule 5 addresses service generally.”). Accordingly, this notice plan
should be approved.
IV. The Court should Schedule a Hearing for Final Settlement Approval.
Following notice to the Class, a Fairness Hearing is to be held on the proposed
Settlement. MANUAL FOR COMPLEX LITIGATION § 21.633. Accordingly, Plaintiffs, by proposed
Class Counsel, respectfully request that the Court schedule a hearing on final approval of the
Settlement to be held no earlier than 180 days after entry of the Preliminary Approval Order. The
hearing on the final settlement approval should be scheduled now so that the date can be
disclosed in the class notice. After receiving final approval, the Parties request that the Court
enter a final order approving the Settlement.
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 35 of 37 PageID #:788
-29-
CONCLUSION
Based upon the foregoing, and because the proposed Settlement is fair, reasonable, and
advantageous to the proposed Class, Plaintiffs respectfully request that the Court enter an Order:
A. Preliminarily approving the Settlement as being fair, reasonable, and
adequate;
B. Preliminarily approving the form, manner, and content of the Class
Notice;
C. Setting the date and time of the Final Approval Hearing to be held no
earlier than 180 days after entry of the Preliminary Approval Order;
D. Provisionally certifying the proposed Classes under Rule 23 of the Federal
Rules of Civil Procedure for settlement purposes only;
E. Appointing Plaintiffs as Class Representatives;
F. Appointing Joseph J. Siprut, Todd L. McLawhorn, and Siprut PC as Class
Counsel; and
G. Such other and further relief the Court deems just and proper.
Dated: November 21, 2017 Respectfully submitted,
By: s/ Todd L. McLawhorn
Joseph J. Siprut
jsiprut@siprut.com
Todd L. McLawhorn
tmclawhorn@siprut.com
Ke Liu
kliu@siprut.com
SIPRUT PC
17 N. State Street
Suite 1600
Chicago, Illinois 60602
Phone: 312.236.0000
Fax: 312.878.1342
Counsel for Plaintiffs and
the Proposed Settlement Classes
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 36 of 37 PageID #:789
CERTIFICATE OF SERVICE
The undersigned, an attorney, hereby certifies that a true and correct copy of the
foregoing Plaintiffs’ Memorandum In Support Of Motion For Preliminary Approval Of
Class Action Settlement was filed this 21st day of November 2017 via the electronic filing
system of the United States District Court for the Northern District of Illinois, which will
automatically serve all counsel of record.
s/ Todd L. McLawhorn
Case: 1:15-cv-05569 Document #: 94 Filed: 11/21/17 Page 37 of 37 PageID #:790
Exhibit 1
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 1 of 77 PageID #:791
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION
CYNTHIA WEST, KRISTINE HOLLANDER, JENNIFER ZIMMERMAN, MARY ROMAN, MARIE ESPOSITO, and MICHELLE BALLON, individually and on behalf of all others similarly situated, Plaintiffs, v. ACT II JEWELRY, LLC, a Delaware limited liability corporation d/b/a lia sophia, and VICTOR K. KIAM, III, Defendants.
) ) ) ) ) ) ) ) ) ) ) ) ) ) )
Case No. 1:15-cv-05569
Judge Samuel Der-Yeghiayan
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release (“Agreement) is entered into between and
among the following parties (the “Parties”), by and through their respective counsel: (a)
Plaintiffs Cynthia West, Kristine Hollander, Jennifer Zimmerman, Mary Roman, Marie Esposito,
and Michelle Ballon as Class Representatives on behalf of themselves and as representatives of
the respective Settlement Classes (as hereinafter defined) (collectively “Plaintiffs”) and (b)
Defendants Act II Jewelry, LLC f/k/a lia sophia (“Act II”) and Victor K. Kiam, III (“Victor
Kiam”) (collectively “Defendants”). This Agreement is intended by the Parties to fully, finally
and forever resolve, discharge and settle all the claims specified below, subject to approval by
the Court and the settlement terms set forth below. Capitalized terms have the meaning ascribed
to them in Section II of this Agreement.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 2 of 77 PageID #:792
Page 2 of 37
I. RECITALS.
A. On June 23, 2015, Plaintiffs West and Hollander filed a putative class action
complaint against Act II, Kiam Equities Corporation, Victor Kiam, and Elena Kiam in the United
States District Court for the Northern District of Illinois, No. 1:15-cv-05569, alleging claims for
breach of contract, violation of the Illinois Consumer Fraud and Deceptive Practices Act
(“ICFA”), fraud and unjust enrichment. Plaintiffs West and Hollander sought to represent two
classes: (1) all purchasers of Act II’s jewelry; and (2) all individuals who sold jewelry for Act II.
B. On October 19, 2015, the Parties held a mediation with Retired District Judge
James F. Holderman in Chicago, Illinois. Prior to the mediation, the Parties engaged in limited
discovery and exchanged written mediation statements summarizing their respective positions
concerning the factual and legal issues in the Litigation. The mediation did not result in
settlement.
C. Act II denied all liability and moved to dismiss the complaint in part on multiple
grounds. Kiam Equities Corporation, Victor Kiam, and Elena Kiam also denied all liability and
moved to dismiss the claims against them in full. After full briefing before the Court, on March
18, 2016, the Court denied Act II’s motion but granted the remaining Defendants’ motion,
dismissing Kiam Equities Corporation, Victor Kiam, and Elena Kiam from the Litigation.
D. Between April 2016 and April 2017, the Parties engaged in multiple rounds of
written and electronic discovery regarding the claims and defenses in the Litigation, including:
(i) the review of approximately 12,267 pages of documents produced by Plaintiffs; (ii) the
review of approximately 20,111 pages of documents produced by Act II; (iii) the review of
approximately 345 pages produced by Victor Kiam; (iv) the review of approximately 6 pages
produced by Kiam Equities Corporation; (v) the review of approximately 203 pages produced by
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 3 of 77 PageID #:793
Page 3 of 37
Elena Kiam; (vi) the review of approximately 963 pages of documents produced by additional
third-party witnesses in addition to computer media provided by those third parties; (vii) the
preparation for taking and/or defending the depositions of approximately ten fact witnesses from
Act II and various third-parties; and (viii) the preparation for taking and/or defending the
depositions of the six Class Representatives.
E. In the meantime, while discovery was ongoing, on November 30, 2016, Plaintiffs
filed the First Amended Class Action Complaint against Act II and Victor Kiam, alleging claims
for breach of contract, violation of the ICFA, fraud and unjust enrichment. Plaintiffs West and
Hollander were joined by Plaintiffs Ballon, Esposito, Roman and Zimmerman. Plaintiffs sought
to represent three classes: (1) all purchasers of Act II jewelry; (2) all individuals who sold
jewelry for Act II; and (3) all individuals who joined Act II as sales advisors on or after May 31,
2014. Defendants denied all liability and filed an answer on December 20, 2016.
F. Following the filing of the First Amended Complaint, the Parties continued to
engage in discovery, and the Defendants took the depositions of three of the Class
Representatives in the spring of 2017. Following those depositions, the parties resumed
settlement discussions and engaged in extensive mediation and settlement discussions over the
course of approximately four months, including two separate mediations administered by Jill
Sperber of Sperber Dispute Resolution (based in California) and an additional mediation session
conducted by Judge Holderman.
G. As a result of those continued discussions and mediations, culminating with the
mediation before Judge Holderman on July 17, 2017, the Parties agreed to a settlement in
principle that would resolve all claims asserted in the Litigation. The parties subsequently
exchanged drafts of a Settlement Term Sheet, and executed same on August 1, 2017.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 4 of 77 PageID #:794
Page 4 of 37
H. Class Counsel has concluded, after extensive discovery and investigation of the
facts relating to the Litigation, including third-party discovery, and consideration of Defendants’
legal and factual defenses, that it is in the best interests of the Class Representatives and the
Settlement Classes to enter into the Agreement to avoid the uncertainties, burdens and risk of
litigation, and to obtain the substantial benefits provided by the Agreement. Further, Class
Counsel has concluded that the Agreement is fair, reasonable, adequate and in the best interests
of all putative members of the Settlement Classes.
I. Defendants deny and continue to deny any wrongdoing and damages, and further
deny that the Litigation may be maintained as a class action except for settlement purposes.
Nonetheless, without admitting or conceding liability or damages, Defendants have agreed to
settle the Litigation on the terms and conditions set forth in this Agreement to avoid the
substantial expense, burden, and disruption of continued litigation and to avoid the risks and
uncertainty inherent in any litigation.
J. The Parties desire to compromise and settle the Released Claims with prejudice.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
promises set forth below, and subject to the preliminary and final approval of the Court pursuant
to Fed. R. Civ. P. 23(e), the Parties agree as follows:
II. DEFINITIONS.
A. “Agreement” or “Settlement Agreement” means this Settlement Agreement and
Release, including all exhibits hereto.
B. “Attorneys’ Fee Award” means the total award of attorneys’ fees, costs and
expenses sought by Class Counsel and/or allowed by the Court.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 5 of 77 PageID #:795
Page 5 of 37
C. “CAFA Notice” means the notice of this Settlement to be served upon State and
Federal authorities as required by the Class Action Fairness Act of 2005, 28 U.S.C. § 1715.
D. “Cash Award” means the payment to each Class Member who submits a Valid
Claim.
E. “Claim Deadline” means the date by which all Claim Forms must be postmarked
or received to be considered timely and shall be set as a date no later than ninety (90) days after
the Notice Date. The Claim Deadline shall be clearly set forth in the Preliminary Approval Order
as well as in the Notice and the Claim Form.
F. “Claim Form” means a document in the form of Exhibit A attached hereto, as
approved by the Court, to be submitted by Settlement Class Members in order to receive a Cash
Award.
G. “Class Fund” means the Net Settlement Fund less the amounts paid for the
Attorneys’ Fee Award and the Incentive Awards.
H. “Class Counsel” means Joseph J. Siprut and Todd L. McLawhorn of Siprut PC.
I. “Class Representatives” means Cynthia West, Kristine Hollander, Jennifer
Zimmerman, Mary Roman, Marie Esposito and Michelle Ballon.
J. “Court” means the United States District Court for the Northern District of
Illinois.
K. “Customer Class” is defined in Section III.
L. “Customer Class Member” means those persons that fall within the definition of
the Customer Class who have not submitted a valid Opt-Out request.
M. “Defense Counsel” means Eric L. Samore, Albert M. Bower, and Ronald D.
Balfour of SmithAmundsen, LLC.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 6 of 77 PageID #:796
Page 6 of 37
N. “Effective Date” means the date defined in Section XII.
O. “Fairness Hearing” means the hearing to be conducted by the Court under Fed. R.
Civ. P. 23(e) to consider the fairness, reasonableness and adequacy of this Agreement.
P. “Final Order and Judgment” means the Order entered by the Court granting the
Motion for Final Approval of the Settlement and entering judgment.
Q. “Incentive Award” means the amount awarded, if any, to the individual Class
Representatives.
R. “Litigation” means the action captioned West v. Act II Jewelry, LLC, No. 1:15-cv-
05569 (N.D. Ill.).
S. “Net Settlement Fund” means the Settlement Fund less the amounts paid for
Settlement Administration Expenses.
T. “New Sales Advisor Class” is defined in Section III.
U. “New Sales Advisor Class Member” means those persons that fall within the
definition of the New Sales Advisor Class who have not submitted a valid Opt-Out request.
V. “Notice” means the notice of this proposed Settlement Agreement and Final
Approval Hearing, which is to be sent to the Settlement Class substantially in the manner set
forth in this Agreement and is consistent with the requirements of Due Process and Federal Rule
of Civil Procedure 23.
W. “Notice Date” means the first day on which the Settlement Administrator begins
disseminating the Notice.
X. “Notice Plan” means the plan for notifying Settlement Class Members of the
Settlement.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 7 of 77 PageID #:797
Page 7 of 37
Y. “Opt-Out” means a member of the Settlement Class who properly and timely
submits a request for exclusion from the Settlement in accordance with the Preliminary Approval
Order.
Z. “Opt-Out List” means the list compiled by the Settlement Administrator
identifying those who properly and timely submit a request for exclusion and become Opt-Outs.
AA. “Opt-Out and Objection Deadline” means, respectively, the dates, to be set by the
Court, by which a request for exclusion must be filed with the Settlement Administrator in order
for a Settlement Class Member to be excluded from the Settlement Class, and the date by which
Settlement Class Members must file objections, if any, to the Settlement.
BB. “Parties” means the Plaintiffs and the Settlement Class on the one hand, and
Defendants, on the other hand.
CC. “Person” means without limitation, any individual, corporation, partnership,
limited partnership, limited liability company, association, joint stock company, estate, legal
representative, trust, unincorporated association, government or any political subdivision or
agency thereof, and any business or legal entity and their spouses, heirs, predecessors,
successors, representatives, or assigns. The definition of “Person” is not intended to include any
governmental agencies or governmental actors, including, without limitation, any state Attorney
General’s office.
DD. “Plaintiffs” means the Class Representatives and the Settlement Class.
EE. “Preliminary Approval Date” means the date the Preliminary Approval Order is
entered by the Court.
FF. “Preliminary Approval Order” means the proposed order preliminarily approving
the Settlement Agreement and directing notice thereof to the Settlement Class, to be submitted to
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 8 of 77 PageID #:798
Page 8 of 37
the Court in conjunction with Plaintiffs’ motion for preliminary approval of the Settlement
Agreement. The Preliminary Approval Order shall be in form and substance the same as
attached as Exhibit G.
GG. “Release” means the release and discharge, as of the Effective Date, by the Class
Representatives and all Settlement Class Members (and their respective successors, assigns and
insurers) of the Released Persons of and from all Released Claims and shall include the
agreement and commitment by the Class Representatives and all Settlement Class Members (and
their respective successors, assigns and insurers) to not now or hereafter initiate, maintain or
assert against the Released Persons or any of them any and all causes of action, claims, rights,
demands, actions, claims for damages, equitable, legal or administrative relief, interest, demands
or rights, including without limitation, claims for damages of any kind, including those in excess
of actual damages, whether based on federal, state or local law, statute, ordinance, regulation,
contract, common law or any other sources that have been, could have been, may be or could be
alleged or asserted now or in the future by the Class Representatives or any Settlement Class
Members (and their respective successors, assigns and insurers) against the Released Persons or
any of them in this Litigation or in any other court action or before any administrative body
(including any regulatory entity or organization), tribunal, arbitration panel or other adjudicating
body arising out of or related to the Released Claims, with the exception of any claims by the
Class Representatives or Settlement Class Members in connection with their work for
Adornable.U, or the contemplation of working for Adornable.U.
HH. “Released Claims” means any and all claims, actions, causes of action, rights,
demands, suits, debts, liens, contracts, agreements, offsets or liabilities, including but not limited
to tort claims, negligence claims, claims for breach of contract, breach of the duty of good faith
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 9 of 77 PageID #:799
Page 9 of 37
and fair dealing, breach of statutory duties, actual or constructive fraud, misrepresentations,
fraudulent inducement, statutory and consumer fraud, breach of fiduciary duty, unfair business or
trade practices, false advertising, restitution, rescission, and any other claims, whether known or
unknown, whether asserted or unasserted in the Litigation, which the Class Representatives or
any Settlement Class Member had, now have or may in the future have with respect to any
conduct, acts, omissions, facts, matters, transactions or oral or written statements or occurrences
on or prior to the date of this Agreement arising from or relating to Act II’s business or the
operation thereof, including the sale of merchandise, the replacement or non-replacement of
jewelry, the use of customer information, and the enrollment of Sales Advisors, with the
exception that “Released Claims” does not include any claims by the Class Representatives or
Settlement Class Members, either on an individual or class basis, in connection with their work
for Adornable.U, or the contemplation of working for Adornable.U.
II. “Released Persons” means Act II Jewelry, LLC, Victor K. Kiam, III, Elena Kiam,
Kiam Equities Corporation, and their parents, subsidiaries, affiliates, controlled companies,
officers, directors, managers, shareholders, members, partners, owners, employees, predecessors,
successors, assigns, agents, insurers, and attorneys. For avoidance of doubt, “Released Persons”
includes Mackinac Partners, Keith Maib, and Matthew Beresh in their individual capacities and
as officers of Act II Jewelry, LLC.
JJ. “Releasing Persons” means the Class Representatives on behalf of themselves and
all Settlement Class Members, each Settlement Class Member, and the respective heirs,
administrators, representatives, attorneys, agents, partners, successors, insurers and assigns of
each Class Representative and Settlement Class Member.
KK. “Sales Advisor Class” is defined in Section III.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 10 of 77 PageID #:800
Page 10 of 37
LL. “Sales Advisor Class Member” means those persons that fall within the definition
of the Sales Advisor Class who have not submitted a valid Opt-Out request.
MM. “Settlement” means the settlement contemplated by this Settlement Agreement.
NN. “Settlement Administration Expenses” means the expenses incurred by the
Settlement Administrator in providing Notice and processing Claim Forms.
OO. “Settlement Administrator” means the independent professional service company
selected by the Parties to oversee the distribution of Notice as well as the processing and
payment of claims to Settlement Class Members as set forth in the Settlement Agreement. The
Parties have agreed that Heffler Claims Group will serve as Settlement Administrator, subject to
the Court’s approval.
PP. “Settlement Class” or “Settlement Classes” means all Persons who fall within any
of the Customer Class, Sales Advisor Class, or New Sales Advisor Class.
QQ. “Settlement Class Member” means those persons that fall within the definition of
the Customer Class, Sales Advisor Class, and/or New Sales Advisor Class, who have not
submitted a valid Opt-Out request.
RR. “Settlement Fund” means a non-reversionary common fund of $6.7 million
established by Defendants to pay all expenses relating to the Settlement, including: (a) Cash
Awards; (b) Settlement Administration Expenses; (c) the Attorneys’ Fee Award; and (d)
Incentive Awards.
SS. “Settlement Website” means the website administered by the Settlement
Administrator on which Settlement Class Members may submit Claim Forms and review
information about the Settlement, including this Agreement, the First Amended Complaint,
Defendants’ Answer, the Notice and the Claim Form.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 11 of 77 PageID #:801
Page 11 of 37
TT. “Unknown Claims” means claims that could have been raised in the Litigation
and that the Class Members or any or all other Persons and entities whose claims are being
released, or any of them, do not know or suspect to exist, which, if known by him, her or it,
might affect his, her or its agreement to release the Released Parties or the Released Claims or
might affect his, her or its decision to agree, object or not to object to the Settlement. Upon the
Effective Date, Class Members and all other Persons and entities whose claims are being
released shall be deemed to have, and shall have, expressly waived and relinquished, to the
fullest extent permitted by law, the provisions, rights and benefits of § 1542 of the California
Civil Code, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. Upon the Effective Date, Class Members and all other Persons and entities whose claims
are being released, also shall be deemed to have, and shall have, waived any and all provisions,
rights and benefits conferred by any law of any state or territory of the United States, or principle
of common law, or the law of any jurisdiction outside of the United States, which is similar,
comparable or equivalent to § 1542 of the California Civil Code. Class Members acknowledge
that they may discover facts in addition to or different from those that they now know or believe
to be true with respect to the subject matter of this release, but that it is their intention to finally
and forever to settle and release the Released Claims, notwithstanding any Unknown Claims they
may have, as that term is defined in this Paragraph.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 12 of 77 PageID #:802
Page 12 of 37
UU. “Valid Claim” means a claim submitted by a Settlement Class Member that is (a)
submitted timely and in accordance with the directions on the Claim Form, (b) fully completed
and (c) signed by the Settlement Class Member.
III. PRELIMINARY CERTIFICATION OF SETTLEMENT CLASSES.
A. Pursuant to Fed. R. Civ. P. 23(b)(3), the Parties stipulate to certification, for
settlement purposes only, of the following three Settlement Classes:
1. All individuals who purchased jewelry from Act II Jewelry, LLC between
June 23, 2011 and December 1, 2014 (“Customer Class”). The Customer Class is
estimated to contain approximately 4 million individuals.
2. All individuals who sold at least $250 of jewelry for Act II between
January 1, 2014, and August 17, 2014 (“Sales Advisor Class”). The Sales Advisor Class
is estimated to contain approximately 19,069 individuals.
3. All individuals who purchased initial starter kits from Act II between
August 1, 2014 and December 1, 2014 (“New Sales Advisor Class”). The New Sales
Advisor Class is estimated to contain approximately 2,709 individuals.
Specifically excluded from the Customer Class, Sales Advisor Class, and New Sales
Advisor Class are the following persons: (a) Defendants and their respective affiliates, (b)
Class Counsel and their immediate family members; and (c) the judges who have presided
over this Litigation and their immediate family members.
B. The Parties agree that some individuals may be members of more than one
Settlement Class. Such individuals may obtain the relief available for each class of which they
are members.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 13 of 77 PageID #:803
Page 13 of 37
C. Solely for the purpose of implementing this Settlement Agreement and
effectuating the Settlement, the Parties stipulate to the Court entering an order preliminarily
certifying the Customer Class, Sales Advisor Class, and New Sales Advisor Class, appointing
Plaintiffs as representatives of the respective Classes, and appointing the following as Class
Counsel:
Joseph J. Siprut jsiprut@siprut.com Todd L. McLawhorn tmclawhorn@siprut.com SIPRUT PC 17 North State Street, Suite 1600 Chicago, Illinois 60602 Phone: 312.236.0000 Fax: 312.878.1342
D. Solely for purposes of implementing the Settlement Agreement, the Parties
stipulate to the Court entering an order preliminarily finding that Plaintiffs and Class Counsel are
adequate representatives of the Settlement Class.
E. In the event that the Settlement Agreement is terminated pursuant to its terms or is
not granted final approval by the Court, or such approval is reversed, vacated, or modified in any
material respect by the Court or by any other court, the certification of the Settlement Class shall
be deemed vacated and the Litigation shall proceed as if the Settlement Class had not been
certified, and the Defendants reserve all rights to challenge certification of any class for trial
purposes.
IV. BENEFITS TO SETTLEMENT CLASS MEMBERS.
A. Pursuant to the terms and conditions set forth below, Defendants agree to pay a
Settlement Fund of $6.7 million, which will be used to pay all Settlement costs, including
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 14 of 77 PageID #:804
Page 14 of 37
without limitation Cash Awards, Settlement Administration Expenses, Attorneys’ Fee Award
and Incentive Awards. Defendants need not segregate funds or otherwise create special accounts
to hold the Settlement Fund and will not relinquish control of any money until payments are due.
Defendants’ and their insurers’ maximum liability pursuant to this Settlement shall be the
amount of the Settlement Fund.
B. The Settlement Fund shall be allocated as follows:
1. Settlement Administration Expenses. The amount of $1.3 million will be
allocated from the Settlement Fund to Settlement Administration Expenses
incurred by the Settlement Claims Administrator, Heffler Claims Group.
2. Net Settlement Fund. The amount remaining ($5.4 million) after deducting
the Settlement Administration Expenses from the Settlement Fund shall be
the Net Settlement Fund.
3. Attorneys’ Fee Award and Incentive Awards. Class Counsel will seek a
one-third Attorneys’ Fee Award from the Net Settlement Fund. Class
Counsel will also seek Incentive Awards for the Class Representatives
from the Net Settlement Fund.
4. Class Fund. The amount remaining from the Net Settlement Fund after
deducting the Attorneys’ Fee Award and the Incentive Awards shall be the
Class Fund.
5. The Class Fund will be paid to the Settlement Class, as follows:
a. Customer Class. Fifty-seven percent (57%) of the Class Fund will
be allocated to the Customer Class. Each Customer Class Member
who submits a Valid Claim form shall receive a share of the
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 15 of 77 PageID #:805
Page 15 of 37
amount allocated to the Customer Class based on the total dollar
value of their purchases between June 23, 2011, and December 1,
2014, as reflected in Act II’s records. Each Customer Class
Member who submits a Valid Claim and purchased less than $100
in jewelry from Act II between June 23, 2011, and December 1,
2014 will be deemed to be in “Tier One” of the Customer Class
and will receive the same amount as each other member of Tier
One; each Customer Class Member who submits a Valid Claim
and purchased $100-$299.99 in jewelry from Act II between June
23, 2011, and December 1, 2014 will be deemed to be in “Tier
Two” of the Customer Class and will receive double the amount
received by each member of Tier One; each Customer Class
Member who submits a Valid Claim and purchased $300 or more
in jewelry from Act II between June 23, 2011, and December 1,
2014 will be deemed to be in “Tier Three” of the Customer Class
and will receive triple the amount received by each member of Tier
One. The amount received by each Customer Class Member will
be dependent upon how many Valid Claims are submitted, and the
entire amount allocated to the Customer Class will be distributed to
the Customer Class.
b. Sales Advisor Class. Thirty-eight percent (38%) of the Class Fund
will be allocated to the Sales Advisor Class. Each Sales Advisor
who submits a Valid Claim shall receive a share of the amount
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 16 of 77 PageID #:806
Page 16 of 37
allocated to the Sales Advisor Class based on the amount of sales
made by that Sales Advisor between January 1, 2014 and August
17, 2014 as reflected in Act II’s records, i.e., those Sales Advisors
who submit a Valid Claim will receive an amount in proportion to
the dollar value of their sales during that time period. The entire
amount allocated to the Sales Advisor Class will be distributed to
the Sales Advisor Class.
c. New Sales Advisor Class. Five percent (5%) of the Class Fund will
be allocated to the New Sales Advisor Class. Each New Sales
Advisor Class Member who submits a Valid Claim shall receive
the amount paid by that New Sales Advisor for her initial starter
kit, which ranged from $99 to $149. In the event the number of
Valid Claims for New Sales Advisors exhausts the amount
allocated to the New Sales Advisor Class, each New Sales Advisor
who submits a Valid Claim will have his or her Cash Award
reduced proportionally so that the total amount of Cash Awards
paid to New Sales Advisors will not exceed five percent (5%) of
the Class Fund. In the event that there is money remaining for the
New Sales Advisor Class after the payment of Cash Awards to all
New Sales Advisors who submit Valid Claims, the remainder shall
be added back to the Class Fund and distributed to the Customer
Class and Sales Advisor Class in the same proportion as funds
distributed per the preceding two paragraphs.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 17 of 77 PageID #:807
Page 17 of 37
C. Tax Withholding. Within fourteen (14) days after the Effective Date, or such other
date the Court may set, the Settlement Administrator shall send to each Class Member who
submitted a Valid Claim a W-9, if the Cash Award to that Class Member exceeds $599. If the
Class Member does not postmark a valid W-9 to the Settlement Administrator within thirty (30)
days, the Settlement Administrator shall take any action necessary to comply with the rules and
regulations of the Internal Revenue Service, including, but not limited to, deducting from the
Cash Award a tax withholding.
D. Issuance Of Checks. Within sixty (60) days after the Effective Date, or such other
date as the Court may set, the Settlement Administrator shall pay from the Settlement Fund all
Valid Claims by check and mail them to the claimants via first-class mail. All payments issued to
Settlement Class Members via check will state on the face of the check that the check will expire
and become null and void unless cashed within ninety (90) days after the date of issuance. To the
extent that a check issued to a Settlement Class Member is not cashed within ninety (90) days
after the date of issuance, the check will be void. Fourteen (14) days before the date on which the
checks become void, the Settlement Administrator may contact Settlement Class Members who
have not cashed their checks in order to urge them to do so and, if requested by the Settlement
Class Member, may issue a new check.
E. Cy Pres. Sixty (60) days after the final date to cash a check, the Settlement
Administrator shall report to the Parties the number of uncashed checks and their total value.
Subject to Court approval, if there are any uncashed checks, such funds will be awarded to a cy
pres recipient selected by Class Counsel in consultation with Defense Counsel.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 18 of 77 PageID #:808
Page 18 of 37
V. RELEASES. A. The obligations incurred pursuant to this Settlement Agreement shall be a full and
final disposition of the Action and any and all Released Claims and Unknown Claims, as against
all Released Parties for the Settlement Class.
B. Upon the Effective Date, the Releasing Parties, and each of them, shall be deemed
to have, and by operation of the Final Approval Order shall have, fully, finally, and forever
released, relinquished and discharged all Released Claims and Unknown Claims against the
Released Parties, and each of them.
VI. NOTICE TO THE CLASS. A. Upon issuance of Preliminary Approval of this Agreement, the Settlement
Administrator shall disseminate Notice to the Settlement Classes. Such Notice shall comport
with due process and be effectuated pursuant to a Notice Plan. All Settlement Administration
Expenses shall be paid from the Settlement Fund.
B. The following is the Notice Plan contemplated by the Parties and the Settlement
Administrator, subject to approval by the Court.
1. Direct Notice Via Email. For all Settlement Class Members for whom the
Settlement Administrator is able to determine an email address based on transaction
records provided by Act II, direct notice shall be made by email in the first instance, in
the form of Exhibit B.
2. Direct Notice Via U.S. Mail. For all Settlement Class Members for whom
the Settlement Administrator is unable to determine an email address, and for all
Settlement Class Members for whom email notice is sent that is returned, notice shall be
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 19 of 77 PageID #:809
Page 19 of 37
by direct mail, in the form of Exhibit C, provided that the Settlement Administrator is
able to determine a valid mailing address for those individuals based on transaction
records provided by Act II. For those Settlement Class Members without any valid email
or mailing address that the Settlement Administrator can determine from the transaction
records provided by Act II, the notice described in subsubsections 3 through 5 below
shall be deemed sufficient.
3. Notice Via Settlement Website. The Settlement Administrator will create a
Settlement Website where Notice, in the form of Exhibit D, shall be posted and on which
Settlement Class Members may submit claims.
4. Notice Via Social Media. Defendants shall post notice of the Settlement on
the lia sophia outlet and lia sophia Facebook pages, in the form of Exhibit E.
5. Notice Via Publication. The Settlement Administrator shall create a
publication notice plan designed to reach a reasonable portion of Settlement Class
Members. A description of the process to be used by the Settlement Administrator is
attached as Exhibit F.
6. Toll-Free Phone Line. Within thirty (30) days after Preliminary Approval,
the Settlement Administrator shall establish a phone line with touch-tone and interactive
voice responses for individuals to learn more about the Settlement.
7. CAFA Notice. Pursuant to 28 U.S.C. § 1715, not later than ten (10) days
after the Agreement is filed with the Court, Defendants shall serve upon the Attorneys
General of each U.S. State in which there are members of the Class, the Attorney General
of the United States, and other required government officials, notice of the proposed
settlement, which shall include: (1) a copy of the most recent complaint and all materials
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 20 of 77 PageID #:810
Page 20 of 37
filed with the complaint or notice of how to electronically access such materials; (2)
notice of all scheduled judicial hearings in the Action; (3) all proposed forms of Notice to
the Settlement Class; and (4) a copy of this Agreement. To the extent known, the
Defendants shall serve upon the above-referenced government official the names of Class
Members who reside in each respective state and the share of the claims of such members
to the entire settlement, or if not feasible, a reasonable estimate of the number of Class
Members residing in each state and the estimated proportionate share of the claims of
such members to the entire Agreement. The costs of conducting CAFA Notice shall not
be deducted from the Settlement Fund. Defendants are responsible for paying the costs of
CAFA Notice separate and apart from the Settlement Fund.
C. The Notice shall advise the Settlement Class of their rights, including the right to
be excluded from, comment upon, and/or object to the Settlement Agreement or its terms. The
Notice shall specify that any objection to this Settlement Agreement, and any papers submitted
in support of said objection, shall be received by the Court at the Final Approval Hearing, only
if, on or before the Opt-Out And Objection Deadline approved by the Court and specified in the
Notice, the Person making an objection shall file notice of his or her intention to do so and at the
same time: (a) file copies of such papers he or she proposes to submit at the Final Approval
Hearing with the Clerk of the Court; (b) that any objection made by a Settlement Class Member
represented by counsel must be filed through the Court’s CM/ECF system; and (c) send copies of
such papers via mail, hand, or overnight delivery service to both Class Counsel and Defendants’
Counsel.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 21 of 77 PageID #:811
Page 21 of 37
VII. OBJECTIONS AND OPT-OUTS.
A. Any Settlement Class Member who intends to object must do so on or before the
Opt-Out And Objection Deadline. To be valid, any objections must be appropriately filed with
the Court no later than the Opt-Out And Objection Deadline, or alternatively they must be mailed
to the Court at the address below and postmarked no later than the Opt-Out And Objection
Deadline.
Clerk of Court United States District Court for the Northern District of Illinois 219 South Dearborn Street Chicago, Illinois 60604 Attention: “West v. Act II Jewelry, LLC Case No. 15-cv-05569”
A copy of the objection must also be mailed to the Settlement Administrator at a mailing address
that the Settlement Administrator will establish to receive requests for exclusion or objections,
Claim Forms, and any other communications relating to this Settlement.
B. The Settlement Class Member must include in any such objection the name,
address, telephone number of the Person objecting and, if represented by counsel, of his or her
counsel. An objecting Settlement Class Member must state, specifically and in writing, all
objections and the basis for any such objections, and provide a statement of whether he or she
intends to appear at the Final Approval Hearing, either with or without counsel. Any Settlement
Class Member who fails to timely file and serve a written objection and notice of his or her intent
to appear at the Final Approval Hearing pursuant to this Paragraph, as detailed in the Class
Notice, shall not be permitted to object to the approval of the Settlement at the Final Approval
Hearing and shall be foreclosed from seeking any review of the Settlement or the terms of the
Agreement by appeal or other means.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 22 of 77 PageID #:812
Page 22 of 37
C. Any Person who objects to the Settlement may be subject to discovery, including
a deposition, by order of the Court. The Parties will work together to respond to any objections
raised to the Settlement.
D. Any payments made from the Settlement Fund to Persons objecting to the
Settlement must receive prior Court approval.
E. A member of the Settlement Class may request to be excluded from the
Settlement Class in writing by a request postmarked on or before the Opt-Out And Objection
Deadline approved by the Court and specified in the Notice. In order to exercise the right to be
excluded, a member of the Settlement Class must timely send a written request for exclusion to
the Settlement Administrator providing his/her name and address, a signature, the name and
docket number of the case, and a statement that he/she wishes to be excluded from the
Settlement Class. A request to be excluded that does not include all of the foregoing information,
or that is sent to an address other than that designated in the Class Notice, or that is not
postmarked within the time specified shall be invalid and the Persons or entities serving such a
request shall be members of the Settlement Class and shall be bound as Settlement Class
Members by the Agreement, if approved. Any member of the Settlement Class who elects to be
excluded shall not: (a) be bound by any orders or the Final Judgment; (b) be entitled to relief
under this Settlement Agreement; (c) gain any rights by virtue of this Settlement Agreement; or
(d) be entitled to object to any aspect of this Settlement Agreement. The request for exclusion
must be personally signed by the Person requesting exclusion. So called “mass” or “class” opt-
outs shall not be allowed. To be valid, a request for exclusion must be postmarked or received by
the date specified in the Notice. A member of the Settlement Class who requests to be excluded
from the Settlement Class cannot also object to the Settlement Agreement. If more than 0.1% of
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 23 of 77 PageID #:813
Page 23 of 37
the Settlement Class Members request to be excluded from the Settlement Class, Defendants
shall have the right to terminate this Settlement Agreement by providing written notice of the
election to do so (“Termination Notice”) to Plaintiffs within twenty (20) days of being notified
that more than 0.1% of Settlement Members requested to be excluded.
VIII. CLAIMS PROCESS.
A. The Class Notice shall provide information regarding the filing of Claim Forms.
Claim Forms shall be available from the Settlement Administrator and on the Settlement
Website.
B. To file a Valid Claim, Settlement Class Members must (i) complete a Claim
Form, in the form of Exhibit A, providing all of the information required by the Claim Form,
including a signature; and (ii) return the completed and signed Claim Form and related
documents, if any, to the Settlement Administrator on or before the Claim Deadline. Customer
Class Members may, but are not required to, include receipts with their respective Claim Forms
in the event they wish to challenge the Tier designation which will be provided to them as part of
the Notice program. Only Settlement Class Members who submit Valid Claims shall be entitled
to a Cash Award.
C. The Settlement Administrator shall be responsible for reviewing all claims to
determine their validity. Any claim that is not substantially in compliance with the instructions
on the Claim Form or the terms of this Settlement Agreement or is postmarked or submitted
electronically later than the Claim Deadline shall be rejected. Following the Claim Deadline, the
Settlement Administrator shall provide a report of all accepted, rejected, or reclassified claims to
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 24 of 77 PageID #:814
Page 24 of 37
Defense Counsel and Class Counsel, who shall have at least thirty (30) days to engage in the
following process:
1. If Class Counsel do not agree with the rejection or reclassification of a claim,
they shall bring it to the attention of Defense Counsel, and the Parties shall meet
and confer and attempt, in good faith, to resolve any dispute regarding the
rejected claim. Following their meet and confer, if the Parties do not reach
agreement, the Parties will provide the Settlement Administrator with their
positions regarding the disputed claim. The Settlement Administrator, after
considering the positions of the Parties and, if appropriate, seeking any
additional information from the Settlement Class Member, will make the final
decision in its sole discretion.
2. If Defense Counsel do not agree with the acceptance or reclassification of a
claim, they shall bring it to the attention of Class Counsel, and the Parties shall
meet and confer and attempt, in good faith, to resolve any dispute regarding the
accepted or reclassified claim. Defense Counsel may object to submitted claims
on the basis of lateness, insufficient information provided by the claimant, and
indicia of fraud. Following their meet and confer, if the Parties do not reach
agreement, the Parties will provide the Settlement Administrator with their
positions regarding the disputed claim. The Settlement Administrator, after
considering the positions of the Parties and, if appropriate, seeking any
additional information from the Settlement Class Member, will make the final
decision in its sole discretion.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 25 of 77 PageID #:815
Page 25 of 37
D. In the event that any Claim Forms are defective, incomplete, inaccurate or
evidence fraud, the Settlement Administrator may reject those Claim Forms without seeking
additional information or providing an opportunity to cure the defect.
IX. PRELIMINARY APPROVAL ORDER AND FINAL APPROVAL ORDER.
A. Promptly after the execution of this Settlement Agreement, Class Counsel shall
submit this Agreement together with its Exhibits to the Court and shall move the Court for
Preliminary Approval of the settlement set forth in this Agreement, certification of the
Settlement Class for settlement purposes only, appointment of Class Counsel and the Class
Representative, and entry of a Preliminary Approval Order. Among other things, the Preliminary
Approval Order shall set deadlines for submissions of Claim Forms, opt outs and objections, set
a Final Approval Hearing date, and approve the Notice and Claim Form for dissemination in
accordance with the Notice Plan, substantially in the form of Exhibits A through E hereto.
B. At the time of the submission of this Settlement Agreement to the Court as
described above, Class Counsel and Defendant’s Counsel shall request that, after Notice is given,
the Court hold a Final Approval Hearing and approve the settlement of the Action as set forth
herein.
C. After Notice is given, the Parties shall request and obtain from the Court a Final
Approval Order. The Final Approval Order will (among other things):
1. find that the Court has personal jurisdiction over all Settlement Class Members
and that the Court has subject matter jurisdiction to approve the Settlement
Agreement, including Exhibits A through G thereto;
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 26 of 77 PageID #:816
Page 26 of 37
2. approve the Settlement Agreement and the proposed settlement as fair,
reasonable and adequate as to, and in the best interests of, the Settlement Class
Members; direct the Parties and their counsel to implement and consummate the
Settlement Agreement according to its terms and provisions; and declare the
Settlement Agreement to be binding on, and have res judicata and preclusive
effect in all pending and future lawsuits or other proceedings maintained by or
on behalf of Plaintiff and all other Settlement Class Members, Releasing Parties,
and their heirs, executors and administrators, successors and assigns;
3. find that the Notice and the Notice Plan implemented pursuant to the Settlement
Agreement: (i) constitute the best practicable notice under the circumstances;
(ii) constitute notice that is reasonably calculated, under the circumstances, to
apprise Settlement Class Members of the pendency of the Litigation, their right
to object to or exclude themselves from the proposed Agreement and to appear
at the Final Approval Hearing; (iii) are reasonable and constitute due, adequate
and sufficient notice to all Persons entitled to receive notice; and (iv) meet all
applicable requirements of the Federal Rules of Civil Procedure, the Due
Process Clause of the United States Constitution and the rules of the Court;
4. find that the Class Representatives and Class Counsel adequately represented
the Settlement Class for purposes of entering into and implementing the
Agreement;
5. dismiss the Litigation (including all individual claims and Settlement Class
claims presented thereby) on the merits and with prejudice, without fees or costs
to any party except as provided in the Settlement Agreement;
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 27 of 77 PageID #:817
Page 27 of 37
6. incorporate the Releases set forth in Paragraph V, above, make the Releases
effective as of the date of the Final Approval Order, and forever discharge the
Released Parties as set forth herein;
7. permanently bar and enjoin all Settlement Class Members who have not been
properly excluded from the Settlement Class from filing, commencing,
prosecuting, intervening in, or participating (as class members or otherwise) in,
any lawsuit or other action in any jurisdiction based on the Released Claims;
8. authorize the Parties, without further approval from the Court, to agree to and
adopt such amendments, modifications and expansions of the Settlement
Agreement and its implementing documents (including Exhibits A through G to
this Agreement) as: (i) shall be consistent in all material respects with the Final
Judgment; or (ii) do not limit the rights of Settlement Class Members;
9. without affecting the finality of the Final Approval Order for purposes of
appeal, retain jurisdiction as to all matters relating to administration,
consummation, enforcement and interpretation of the Settlement Agreement and
the Final Approval Order, and for any other necessary purpose; and
10. incorporate any other provisions, as the Court deems necessary and just.
X. TERMINATION OR CANCELLATION OF SETTLEMENT.
A. Either Party may terminate the Settlement, by providing notice (“Termination
Notice”) to all other Parties within twenty (20) days of any of the following events: (i) the
Court’s refusal to grant preliminary approval of the Settlement as written; (ii) the Court’s refusal
to grant final approval of the Settlement as written; (iii) the reversal or substantial modification
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 28 of 77 PageID #:818
Page 28 of 37
of the Court’s order granting preliminary or final approval; (iv) a material alteration by the Court
of any of the terms of the Settlement Agreement; or (v) the timely opt out of more than 0.1% of
Settlement Class Members.
B. If, for any reason, this Agreement is terminated or fails to become effective, then
the Settlement shall be null and void, and no stipulation, representation or assertion of fact made
in the Settlement may be used by any Party. The Parties shall, to the fullest extent possible, be
returned to their respective positions in the Litigation as of the date of this Agreement.
XI. ATTORNEYS’ FEE AWARD; INCENTIVE AWARDS.
A. At least fourteen (14) days prior to the Opt-Out And Objection Deadline, Class
Counsel will file its petition for the Attorneys’ Fee Award and Incentive Awards for the Class
Representatives for their efforts in prosecuting this case and achieving a meaningful benefit for
the Class. Subject to Court approval, the Attorneys’ Fee Award and Incentive Awards shall be
paid from the Settlement Fund. Class Counsel intends to seek Incentive Awards for the Class
Representatives ranging from $2,500 to $7,500.
XII. EFFECTIVE DATE AND FINALITY OF SETTLEMENT.
A. The Settlement provided for in this Agreement shall be final and unconditional on
the date immediately upon which the last of the following events and conditions have been
satisfied or waived, such date to be the “Effective Date”:
1. This Agreement has been fully executed by all Parties and their counsel;
2. The Court enters the Preliminary Approval Order;
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 29 of 77 PageID #:819
Page 29 of 37
3. The Notice Administrator causes the Notice to be served in accordance
with the Preliminary Approval Order;
4. The Court issues the Final Order and Judgment;
5. All appeal periods have expired or been resolved as set forth below:
a. If no appeal is taken from a court order or a judgment, the date after
the time to appeal therefrom has expired; or
b. If any appeal is taken from a court order or judgment, the date after all
appeals therefrom, including petitions for rehearing or reargument,
petitions for rehearing en banc, and petitions for certiorari or any other
form of review, have been finally disposed of, such that the time to
appeal therefrom has expired, in a manner resulting in an affirmance
without material modification of the relevant order or judgment.
XIII. NOTICES.
A. All Notices to Class Counsel and Defense Counsel required by the Agreement
shall be made in writing and communicated by email and United States mail to the following
addresses:
To Class Counsel To Defense Counsel
Todd L. McLawhorn Eric L. Samore tmclawhorn@siprut.com esamore@salawus.com SIPRUT PC SmithAmundsen, LLC 17 North State Street 150 N. Michigan Suite 1600 Suite 3300 Chicago, Illinois 60602 Chicago, Illinois 60601
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 30 of 77 PageID #:820
Page 30 of 37
B. The notice recipients and addresses designated in this Section may be changed by
written designation.
C. Upon the request of any Party, the Parties agree to promptly provide each other
with copies of comments, objections, requests for exclusion or other documents or filings
received as a result of the Notice.
XIV. NO ADMISSION OF LIABILITY
A. Defendants’ Denial of Wrongdoing. This Agreement reflects the Parties’
compromise and settlement of the disputed claims. Defendants do not admit any liability or
wrongdoing. The Settlement and its provisions, and all related drafts, communications and
discussions, cannot be construed as or deemed to be evidence of an admission or concession by
Defendant of any wrongdoing.
B. Inadmissibility. This Agreement (whether approved or not approved, revoked, or
made ineffective for any reason) and any proceedings or discussions related to this Agreement
are inadmissible as evidence of any liability or wrongdoing whatsoever in any Court or tribunal
in any state, territory, or jurisdiction. Further, neither this Agreement, the settlement
contemplated by it, nor any proceedings taken under it, will be construed or offered or received
into evidence as an admission, concession or presumption that class certification is appropriate,
except to the extent necessary to consummate this Agreement and the binding effect of the
Approval Order.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 31 of 77 PageID #:821
Page 31 of 37
XV. MISCELLANEOUS PROVISIONS.
A. Court Approval. Promptly after the execution of this Settlement Agreement,
Plaintiffs’ Counsel shall submit this Agreement to the Court, with the support of Defendants, and
shall move the Court for Approval of the Settlement set forth in this Agreement, certification of
the Class for settlement purposes only, appointment of Class Counsel and the Class
Representatives, and entry of an Preliminary Approval Order in the form attached as Exhibit G.
The Parties (a) acknowledge that it is their intent to consummate this Settlement Agreement; and
(b) agree, subject to their legal obligations, to cooperate to the extent reasonably necessary to
effectuate and implement all terms and conditions of this Agreement and to exercise their
reasonable best efforts to accomplish the foregoing terms and conditions of this Agreement. The
Parties agree to cooperate with one another in seeking Court approval of the Settlement
Agreement and promptly to agree upon and execute all such other documentation as may be
reasonably required to obtain approval of the Agreement.
B. No Reversion to Defendants. No amount of the Settlement Fund shall revert back
to Defendants. Settlement Class Members’ uncashed checks shall be awarded to a cy pres
recipient.
C. Voluntary Agreement. The Parties executed this Agreement voluntarily of the
Party’s own free will and without threat, force, fraud, duress, undue influence or coercion of any
kind.
D. Binding on Successors. This Agreement binds and benefits the Parties’ respective
successors, assigns, legatees, heirs, and personal representatives.
E. Parties Represented by Counsel. The Parties acknowledge that: (a) they have been
represented by independent counsel of their own choosing during the negotiation of this
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 32 of 77 PageID #:822
Page 32 of 37
Settlement and the preparation of this Agreement; (b) they have read this Agreement and are
fully aware of its contents; and (c) their respective counsel fully explained to them the
Agreement and its legal effect.
F. Authorization. Each Party warrants and represents that there are no liens or claims
of lien or assignments, in law or equity, against any of the claims or causes of action released by
this Agreement and, further, that each Party is fully entitled and duly authorized to give this
complete and final release and discharge.
G. Entire Agreement. This Agreement and attached exhibits contain the entire
agreement between the Parties and constitute the complete, final, and exclusive embodiment of
their agreement with respect to the Litigation. This Agreement is executed without reliance on
any promise, representation, or warranty by any Party or any Party’s representative other than
those expressly set forth in this Agreement.
H. Construction and Interpretation. Neither Party nor any of the Parties’ respective
attorneys will be deemed the drafter of this Agreement for purposes of interpreting any provision
in this Agreement in any judicial or other proceeding that may arise between them. This
Agreement has been, and must be construed to have been, drafted by all the Parties to it, so that
any rule that construes ambiguities against the drafter will have no force or affect.
I. Headings. The various headings used in this Agreement are solely for the Parties’
convenience and may not be used to interpret this Agreement. The headings do not define, limit,
extend, or describe the Parties’ intent or the scope of this Agreement.
J. Exhibits. The exhibits to this Agreement are integral parts of the Agreement and
Settlement and are incorporated into this Agreement as though fully set forth in the Agreement.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 33 of 77 PageID #:823
Page 33 of 37
K. Modifications and Amendments. No amendment, change, or modification to this
Agreement will be valid unless in writing signed by the Parties or their counsel.
L. Governing Law. This Agreement is governed by Illinois law and must be
interpreted under Illinois law and without regard to conflict of laws principles.
M. Further Assurances. The Parties must execute and deliver any additional papers,
documents and other assurances, and must do any other acts reasonably necessary, to perform
their obligations under this Agreement and to carry out this Agreement’s expressed intent.
N. Agreement Constitutes a Complete Defense. To the extent permitted by law, this
Agreement may be pled as a full and complete defense to any action, suit, or other proceedings
that may be instituted, prosecuted or attempted against the Released Parties contrary to this
Agreement.
O. Execution Date. This Agreement is deemed executed on the date the Agreement is
signed by all of the undersigned.
P. Counterparts. This Agreement may be executed in counterparts, each of which
constitutes an original, but all of which together constitutes one and the same instrument. Several
signature pages may be collected and annexed to one or more documents to form a complete
counterpart. Photocopies, PDFs, or facsimiles of executed copies of this Agreement may be
treated as originals.
Q. Recitals. The Recitals are incorporated by this reference and are part of the
Agreement.
R. Severability. If any provision of this Settlement is declared by the Court to be
invalid, void, or unenforceable, the remaining provisions of this Settlement will continue in full
force and effect, unless the provision declared to be invalid, void, or unenforceable is material, at
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 34 of 77 PageID #:824
Page 34 of 37
which point the Parties shall attempt to renegotiate the Settlement or, if that proves unavailing,
either Party can terminate the Settlement Agreement without prejudice to any Party.
S. No Conflict Intended. Any inconsistency between this Agreement and the
attached exhibits will be resolved in favor of this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 35 of 77 PageID #:825
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 36 of 77 PageID #:826
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 37 of 77 PageID #:827
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 38 of 77 PageID #:828
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 39 of 77 PageID #:829
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 40 of 77 PageID #:830
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 41 of 77 PageID #:831
Page 36 of 37
Plaintiff Mary Roman
_____________________
Signature _____________________ Date
Plaintiff Marie Esposito
_____________________
Signature _____________________ Date
Plaintiff Michelle Ballon
_____________________
Signature _____________________ Date
11/02/2017
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 42 of 77 PageID #:832
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 43 of 77 PageID #:833
Page 37 of 37
EXHIBIT LIST
Claim Form ......................................................................................................................... A
E-Mail Notice...................................................................................................................... B
Postcard Notice ................................................................................................................... C
Settlement Website Detailed Notice ................................................................................... D
Social Media Notice ............................................................................................................ E
Publication Notice Description ........................................................................................... F
Preliminary Approval Order ............................................................................................... G
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 44 of 77 PageID #:834
Exhibit A
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 45 of 77 PageID #:835
CLAIM FORM
West, et al. v. Act II Jewelry, LLC f/k/a lia sophia, et al., No. 15-CV-05569 (N.D. Ill.)
SUBMIT BY [Claim Deadline]
ONLINE AT [WEBSITE URL]
OR MAIL TO:
[SETTLEMENT ADMINISTRATOR’S ADDRESS]
If you received Notice, select the Settlement Class(es) you are part of as noted on the email or postcard Notice you
received:
□ Customer Class – Tier X.
□ Sales Advisor Class
□ New Sales Advisor Class
Enter your Claim Filing ID found on the email or postcard Notice you received:
___ ___ ___ ___ ___ ___ ___ ___
If you are part of the Customer Class and would like to challenge the Settlement Administrator’s Tier
designation of your claim, you may do so during the online claim submission process at [Website URL]. You
may, but are not required to, include receipts with your claim.
Claimant information:
_______________________________ ___________________________________ First name Last Name
Street address
__________________________________ ___ ___ ___ ___ ___ ___ ___ City State Zip code
________________________________@________.________ Email address
___ ___ ___ - ___ ___ ___ - ___ ___ ___ ___ Phone number
Under penalty of perjury, I certify that I am a member of the above Settlement Classes and Tiers as defined in
the Notice available on the website [Website URL]. I also certify that this is the only claim I am submitting in
connection with this case.
________________________________ ________________________
Signature Dated (mm/dd/yyyy)
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 46 of 77 PageID #:836
Exhibit B
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 47 of 77 PageID #:837
From: Heffler Claims Group LLC
To: [Name]
Subject: Legal Notice
You Could Be Eligible to Receive a Payment from a Class Action Settlement
if you Purchased or Sold Jewelry from Act II Jewelry, LLC Formerly Known As lia sophia.
Name
This is only a summary of the information related to the Settlement. For detailed information, about the
Settlement, your rights, and the benefits that may be available to you, visit: www________.com
A Settlement has been reached in a lawsuit alleging that Act II Jewelry, LLC f/k/a lia sophia (“Act II”)
breached its promise to provide a lifetime warranty, and that Act II harmed its sales advisors by
misappropriating their customer information and making false statements to those sales advisors
concerning the closing of its business. Act II denies these allegations and denies any wrongdoing. The
Court has not decided who is right.
Act II’s records show that you may be a Class Member of one or more of the following Settlement
Classes which include all individuals in the United States who: Customer Class – purchased jewelry from
Act II between June 23, 2011, and December 1, 2014; Sales Advisor Class – sold at least $250 of jewelry
for Act II between January 1, 2014, and August 17, 2014; New Sales Advisor Class – purchased initial
starter kits from Act II between August 1, 2014, and December 1, 2014. In total, the classes contain
approximately 4.0 million members. If the settlement is approved, a settlement fund of $6.7 million
dollars will be created for distribution among those Class Members who submit Valid Claims, attorneys’
fees, incentive awards, and settlement administration expenses.
To get a payment you must submit a claim online or by mail using this unique identifier: [Claim ID]
by [Claim Deadline]. Customer and Sales Advisor Class Members’ cash payments will depend on the
total number of Valid Claims filed. New Sales Advisor Class Members will receive a full reimbursement
of the amount paid for his or her initial starter kit, which ranged from $99 to $149, subject to a cap on
total recovery for the class.
Your Other Options. If you do not want to be legally bound by the Settlement’s terms or you want to
pursue your own case against Act II, you must Opt Out of the Settlement by [Opt Out Deadline], but
you will not get a payment from the Settlement. If you do not Opt Out, you may Object to the Settlement
by [Objection Deadline]. The detailed notice available on the Settlement Website explains how to Opt
Out or Object.
The Court will hold a Hearing on [Final Approval Hearing Date] to consider whether to approve the
Settlement and a request for attorneys’ fees of up to one third of the $6.7 million Settlement Fund after
settlement administration expenses (approximately $1,800,000) and incentive awards of $2,500-$7,500 to
the Class Representatives. The Motion for Fees will be posted on the website after it is filed. You may
appear at the hearing, at your own expense, but you don't have to. For more information, call or visit the
website.
[Website URL] [Settlement Administrator Phone Number]
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 48 of 77 PageID #:838
Exhibit C
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 49 of 77 PageID #:839
FRONT
Important Court-Ordered Legal Notice [Postage Prepaid]
CLAIMS ADMINISTRATOR
ADDRESS LINE 1
ADDRESS LINE 2
ADDRESS LINE 3
You Could Be Eligible to Receive a Payment from a Class Action Settlement
if you Purchased or Sold Jewelry from Act II Jewelry, LLC Formerly Known As lia sophia.
Name
Address
City State Zip
This is only a summary of the information related to the Settlement. For detailed information, about the Settlement, your
rights, and the benefits that may be available to you, visit: www________.com
BACK
A Settlement has been reached in a lawsuit alleging that Act II Jewelry, LLC f/k/a lia sophia (“Act II”) breached its promise to
provide a lifetime warranty, and that Act II harmed its sales advisors by misappropriating their customer information and
making false statements to those sales advisors concerning the closing of its business. Act II denies these allegations and denies
any wrongdoing. The Court has not decided who is right.
Act II’s records show that you may be a Class Member of one or more of the following Settlement Classes which include
all individuals in the United States who: Customer Class – purchased jewelry from Act II between June 23, 2011, and
December 1, 2014; Sales Advisor Class – sold at least $250 of jewelry for Act II between January 1, 2014, and August 17,
2014; New Sales Advisor Class – purchased initial starter kits from Act II between August 1, 2014, and December 1, 2014. In
total, the classes contain approximately 4.0 million members. If the settlement is approved, a settlement fund of $6.7 million
dollars will be created for distribution among those Class Members who submit Valid Claims, attorneys’ fees, incentive
awards, and settlement administration expenses.
To get a payment you must submit a claim online or by mail using this unique identifier: [Claim ID] by [Claim Deadline].
Customer and Sales Advisor Class Members’ cash payments will depend on the total number of Valid Claims filed. New Sales
Advisor Class Members will receive a full reimbursement of the amount paid for his or her initial starter kit, which ranged
from $99 to $149, subject to a cap on total recovery for the class.
Your Other Options. If you do not want to be legally bound by the Settlement’s terms or you want to pursue your own case
against Act II, you must Opt Out of the Settlement by [Opt Out Deadline], but you will not get a payment from the
Settlement. If you do not Opt Out, you may Object to the Settlement by [Objection Deadline]. The detailed notice available
on the Settlement Website explains how to Opt Out or Object.
The Court will hold a Hearing on [Final Approval Hearing Date] to consider whether to approve the Settlement and a request
for attorneys’ fees of up to one third of the $6.7 million Settlement Fund after settlement administration expenses
(approximately $1,800,000) and incentive awards of $2,500-$7,500 to the Class Representatives. The Motion for Fees will be
posted on the website after it is filed. You may appear at the hearing, at your own expense, but you don't have to. For more
information, call or visit the website.
[Website URL] [Settlement Administrator Phone Number]
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 50 of 77 PageID #:840
Exhibit D
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 51 of 77 PageID #:841
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
CYNTHIA WEST, KRISTINE
HOLLANDER, JENNIFER ZIMMERMAN,
MARY ROMAN, MARIE ESPOSITO, and
MICHELLE BALLON, individually and on
behalf of all others similarly situated,
Plaintiffs,
v.
ACT II JEWELRY, LLC, a Delaware limited
liability corporation d/b/a lia sophia, and
VICTOR K. KIAM, III,
Defendants.
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
Case No. 1:15-cv-05569
Judge Samuel Der-Yeghiayan
NOTICE OF SETTLEMENT
If you purchased jewelry or initial starter kits from, or sold jewelry for,
Act II Jewelry, LLC f/k/a lia sophia, you may benefit from this class action settlement.
A Federal court authorized this notice. This is not a solicitation from a lawyer.
THIS IS A NOTICE OF A SETTLEMENT OF A CLASS ACTION LAWSUIT.
THIS IS NOT A NOTICE OF A LAWSUIT AGAINST YOU.
YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT
SUBMIT A CLAIM BY
[Claim Deadline]
If you submit a Claim Form, available on www._______com, by
[Claim Deadline], your Claim Form will be considered for a Cash
Award.
EXCLUDE YOURSELF
FROM THE
SETTLEMENT BY
[Opt Out Deadline]
You will receive no benefits, but you will retain your legal claims
against the Defendants.
OBJECT BY
[Objection Deadline]
Write to the Court about why you do, or do not, like the settlement.
You must remain in the Settlement Class(es) to object to the
Settlement.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 52 of 77 PageID #:842
GO TO A HEARING ON
[Hearing Date] Ask to speak in Court about the fairness of the settlement.
1. What is this lawsuit about?
This lawsuit claims that Defendant Act II Jewelry, LLC f/k/a lia sophia (“Act II”) breached its
promise to its customers to provide a lifetime warranty for the jewelry sold by its sales advisors.
The lawsuit further alleges that Act II harmed its sales advisors by misappropriating their
customer information, and making misstatements to those sales advisors concerning the closing
of its business. Act II denies the allegations in the lawsuit and denies any wrongdoing. The Court
has not decided who is right.
2. Why did I get this notice?
You are receiving a notice because Act II’s records show that you: (a) purchased jewelry from
Act II; (b) sold jewelry from Act II; and/or (c) purchased initial starter kits from Act II, within
the definitions of the Settlement Classes listed in Question 5 below.
3. Why is this a class action?
In a class action, one or more people called Class Representatives (in this case, Plaintiffs Cynthia
West, Kristine Hollander, Jennifer Zimmerman, Mary Roman, Marie Esposito, and Michelle
Ballon), sue on behalf of a group or groups (or a “Class” or “Classes”) of people who have
similar claims. In this case, those claims are related to Act II’s revocation of lifetime warranties
on its jewelry and alleged misrepresentations or omissions to its sales advisors.
4. Why is there a settlement?
To avoid the cost, risk, and delay of litigation, the Parties reached a settlement agreement as to
Plaintiffs’ and the Classes’ claims.
5. How do I know if I am a part of the settlement?
For settlement purposes, the Court has certified three Classes consisting of all people who meet
the following definitions:
1. Customer Class – All individuals in the United States who purchased jewelry from
Act II between June 23, 2011, and December 1, 2014. Class Counsel estimates that,
based on Act II’s records, there are approximately 4 million people in the Customer
Class.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 53 of 77 PageID #:843
2. Sales Advisor Class – All individuals in the United States who sold at least $250 of
jewelry for Act II between January 1, 2014, and August 17, 2014. Class Counsel
estimates that, based on Act II’s records, there are approximately 19,069 people in the
Sales Advisor Class.
3. New Sales Advisor Class – All individuals in the United States who purchased initial
starter kits from Act II between August 1, 2014, and December 1, 2014. Class
Counsel estimates that, based on Act II’s records, there are approximately 2,709
people in the New Sales Advisor Class.
Specifically excluded from the Customer Class, Sales Advisor Class, and New Sales Advisor
Class are the following persons: (a) Defendants and their respective affiliates, (b) Class Counsel
and their immediate family members; and (c) the judges who have presided over this Litigation
and their immediate family members.
YOUR BENEFITS UNDER THE SETTLEMENT
6. What can I get from the settlement?
A Settlement Fund of $6,700,000 has been established to pay valid claims, attorneys’ fees,
service awards, costs, expenses and settlement administration. After deduction of settlement
administration expenses ($1,300,000), attorneys’ fees and expenses (approximately $1,800,000),
and service awards to the Class Representatives (approximately $25,000), a Class Fund of
approximately $3,575,000 will be established to pay valid claims. The attorneys’ fees award and
the service awards are subject to Court approval.
If you submit a Valid Claim form, which is available on this website, by [Claim Deadline], you
will be entitled to a monetary benefit depending on the Class(es) you belong to. Only one Claim
is allowed per Class Member. You may qualify to be a member of more than one Class and may
apply to receive a benefit for each Class you qualify for on the same Claim Form.
Customer Class Members
Fifty-seven percent (57%) of the Class Fund will be allocated to the Customer Class. Customer
Class Members who submit Valid Claims will receive a share of this allocation depending on the
total dollar value of that Customer Class Member’s purchases from Act II between June 23,
2011, and December 1, 2014, as reflected in Act II’s records.
Tier One: Each Customer Class Member who submits a Valid Claim and purchased less
than $100 in jewelry from Act II during this time period will be deemed to be in “Tier
One” of the Customer Class.
Tier Two: Each Customer Class Member who submits a Valid Claim and purchased
between $100 to $299.99 in jewelry from Act II during this time period will be deemed to
be in “Tier Two” of the Customer Class. A Tier Two Customer Class Member will
receive double the amount received by each Customer Class Member in Tier One.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 54 of 77 PageID #:844
Tier Three: Each Customer Class Member who submits a Valid Claim and purchased
$300 or more in jewelry from Act II during this time period will be deemed to be in “Tier
Three” of the Customer Class. A Tier Three Customer Class Member will receive triple
the amount received by each Customer Class Member in Tier One.
The final cash payment amount to Customer Class Members will depend on the total number of
Valid Claims filed by the Customer Class. Below is a chart that estimates what each Customer
Class Member may receive based on the percentage of Customer Class Members submitting
Valid Claims:
Percentage of Claiming
Class Members
Estimated Settlement
Payment (Tier One)
Estimated Settlement
Payment (Tier Two)
Estimated Settlement
Payment (Tier Three)
1% $40.09 $80.18 $120.27
3% $13.36 $26.72 $40.08
5% $8.01 $16.02 $24.03
These numbers are estimates only. The exact amount that Customer Class Members receive will
depend on the percentage of Customer Class Members who submit Valid Claim forms. That
percentage is still unknown; it could be less than 1% or more than 5%.
Sales Advisor Class Members
Thirty-eight percent (38%) of the Class Fund will be allocated to the Sales Advisor Class. Sales
Advisor Class Members who submit Valid Claims will receive a share of this allocation
proportional to the amount of sales made by that Sales Advisor Class Member between January
1, 2014, and August 17, 2014 as reflected in Act II’s records (“Your 2014 Sales”). You may find
Your 2014 Sales on the online claim form associated with your claim identifier provided on the
Notice you received or from the Settlement Administrator. The final cash payment amount to
Sales Advisor Class Members will depend on the total number of Valid Claims filed by the Sales
Advisor Class. Below is a chart that estimates what each Sales Advisor Class Member may
receive based on the percentage of Sales Advisor Class Members submitting Valid Claims:
Percentage of Claiming Class Members Estimated Settlement Payment
10% 20.04% of Your 2014 Sales
15% 13.36% of Your 2014 Sales
25% 8.02% of Your 2014 Sales
These numbers are estimates only. The exact amount that Sales Advisor Class Members receive
will depend on the percentage of Act II’s sales from January 1, 2014, through August 17, 2014,
made by Sales Advisor Class Members who submit Valid Claim forms. That percentage is still
unknown, it could be less than 10% or more than 25%.
New Sales Advisor Class Members
Five percent (5%) of the Class Fund will be allocated to the New Sales Advisor Class. New Sales
Advisor Class Members who submit Valid Claims will receive a full reimbursement of the
amount paid by that New Sales Advisor for his or her initial starter kit, which ranged from $99 to
$149. In the event the number of Valid Claims for New Sales Advisors exhausts the amount
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 55 of 77 PageID #:845
allocated to the New Sales Advisor Class, each New Sales Advisor who submits a Valid Claim
will have his or her Cash Award reduced proportionally so that the total amount of Cash Awards
paid to New Sales Advisors will not exceed five percent (5%) of the Class Fund. In the event that
there is money remaining for the New Sales Advisor Class after payment of Cash Awards to all
New Sales Advisor Class Members who submit Valid Claims, the remainder shall be added back
to the Class Fund and distributed to the Customer Class and Sales Advisor Class in the same
proportion as described above.
7. When will I receive these benefits?
You will receive these benefits approximately 90 days after the Court enters a Final Approval
Order. This estimate is premised on the assumption that no objections are received and no appeal
is filed.
8. I want to be a part of the settlement. What do I do?
You must submit a claim form, available on this website, either: (1) online at [Website URL]; or
by mail to West, et al. v. Act II Jewelry, LLC, et al. Settlement Administrator, [Settlement
Administrator Address]. You must submit your claim form so it is postmarked by [Claim
Deadline, or file your form online by <<date>> at 11:59 pm Central Time. If your claim form is
approved, you will receive a Cash Award. There can only be one Cash Award per Class
Member. If you do not submit a Valid Claim form, you will not be considered for a Cash Award.
Depending on the value of your Cash Award, you may be asked to fill-out a W-9 for tax
reporting reasons. The W-9 will be mailed to you along with a letter containing further
instructions. If you do not complete a W-9 when requested, your Cash Award may be subject to
automatic backup tax withholding.
9. What am I giving up if I remain in the settlement?
By staying in the Class(es), all of the Court’s orders will apply to you, and you give Defendants
and their affiliates a “release.” A release means you cannot sue or be part of any other lawsuit
against Defendants and their affiliates about the claims or issues in this lawsuit.
10. How much will the Class Representatives receive?
The Plaintiffs, Cynthia West, Kristine Hollander, Jennifer Zimmerman, Mary Roman, Marie
Esposito, and Michelle Ballon, will each receive payments ranging from $2,500 to $7,500 for
their services as Class Representatives. These payments are subject to the Court’s Approval.
EXCLUDING YOURSELF FROM THE SETTLEMENT
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 56 of 77 PageID #:846
If you do not want to remain in the settlement, but you want to keep your legal claims against
Defendants, then you must take steps to exclude yourself from this settlement.
11. How do I get out of the settlement?
To exclude yourself from the settlement, you must send a letter by mail stating that you want to
be excluded from West, et al. v. Act II Jewelry, LLC, et al., Case No. 1:15-cv-5569 (N.D. Ill.). Be
sure to include your name, address, telephone number, and your signature. You must mail your
exclusion request so that it is postmarked no later than [Opt-Out Date], to:
[Settlement administrator’s address]
12. If I exclude myself, do I still receive benefits from this settlement?
No, you will not receive anything resulting from the settlement, but you will have the right to sue
Defendants over the claims raised in this case, either on your own or as a part of a different
lawsuit. If you exclude yourself, the time you have in which to file your own lawsuit (called the
“statute of limitations”) will begin to run again. You will have the same amount of time to file
the suit that you had when this case was filed.
THE LAWYERS REPRESENTING YOU
13. Do I have a lawyer in this case?
The Court has appointed the law firm of Siprut PC to serve as Class Counsel. You will not be
charged for these lawyers; however, they will receive a payment from the Settlement in an
amount to be determined by the Court on a later date. If you want to be represented by your own
lawyer, you may hire one at your own expense.
14. How will the lawyers be paid?
Class Counsel will be paid reasonable attorneys’ fee and costs from the Settlement Fund. Class
Counsel will seek an Attorneys’ Fee Award of one-third of the Net Settlement Fund after the
deduction of settlement administration expenses.
CLASS COUNSEL’S VIEWS ABOUT THE SETTLEMENT 15. Is this a fair settlement?
Class Counsel believes the settlement is fair. Plaintiffs claim Act II violated the Illinois
Consumer Fraud Act and committed breach of contract and fraud by revoking the lifetime
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 57 of 77 PageID #:847
warranties on its jewelry and by making material misrepresentations or omissions to its sales
advisors. Therefore, Plaintiffs claim that: (a) those who purchased jewelry from Act II – i.e. the
Customer Class – have sustained damages through the diminished value of the jewelry they
purchased; and (b) those who continued to work and purchase jewelry, supplies, and initial
starter kits from Act II – i.e. the Sales Advisor Class and the New Sales Advisor Class – have
sustained damages through their reliance on Act II’s statements.
The Settlement Fund of $6,700,000 will be used to provide direct monetary benefits to Class
Members who submit Valid Claims, as illustrated in Question 6 above. Given the inherent risks
and costs of continuing with complex litigation of this nature, Class Counsel believes this
settlement is a meaningful achievement.
16. What is the Defendants’ view of this settlement?
The Defendants deny any wrongdoing or liability in this lawsuit. However, the Defendants desire
to settle the claims of the Classes to avoid the expense, burden, and uncertainty of further
litigation, and to put to rest all claims and issues in this lawsuit.
OBJECTING TO THE SETTLEMENT
You can tell the Court that you do not agree with the settlement or some part of it.
17. How do I tell the Court that I do not like the Settlement?
If you are a member of one or more of the three Settlement Classes, you can object to the
Settlement. In order to object to the Settlement, you must send a written objection (such as a
letter or legal brief) stating that you object and the reasons why you think the Court should not
approve the Settlement. Your objection must be personally signed by you and include: (1) your
name, address, telephone number; (2) a sentence stating under penalty of perjury that you are a
member of one or more of the Settlement Classes; (3) the name and number of the case: West, et
al. v. Act II Jewelry, LLC, et al., Case No. 1:15-cv-5569 (N.D. Ill.); (4) the factual basis and legal
grounds for your objection to the Settlement; (5) the identity of any witnesses whom you may
call to testify at the Final Approval Hearing; and (6) copies of any exhibits you may seek to offer
into evidence at the Final Approval Hearing. Your written objection must indicate whether your
lawyer(s) intend to appear at the Final Approval Hearing. If you have a lawyer, your lawyer who
intends to appear at the Final Approval Hearing also must enter a written Notice of Appearance of
Counsel with the Clerk of the Court no later than [Objection Deadline], and must include the full
caption and case number of each previous class action case in which that counsel has represented
an objector. You must also file your objection so that it is postmarked no later than [Objection
Deadline] to:
Clerk of the Court
United States District Court for the Northern District of Illinois
219 South Dearborn Street, Chicago IL 60604
Attention: “West, et al. v. Act II Jewelry, LLC, et al., Case No. 1:15-cv-5569”
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 58 of 77 PageID #:848
You must also send a copy of your objection postmarked no later than [Objection Deadline] to:
[Settlement administrator’s address]
THE FINAL APPROVAL HEARING
The Court will hold a hearing to decide whether to approve the settlement. You may attend if
you wish, but you are not required to do so.
18. Where and when is the final approval hearing?
The Court will hold a hearing on [Final Approval Hearing Date] in Courtroom 1903 of the
Everett McKinley Dirksen United States Courthouse, 219 South Dearborn Street, Chicago, IL
60604. The purpose of the hearing will be for the Court to determine whether the proposed
settlement is fair, reasonable, and adequate and in the best interests of the Classes and to
determine the appropriate amount of compensation for Class Counsel and Plaintiffs. At that
hearing, the Court will be available to hear any objections and arguments concerning the fairness
of the proposed settlement.
YOU ARE NOT REQUIRED TO ATTEND THIS HEARING TO BENEFIT FROM THIS
SETTLEMENT. The hearing may be postponed to a later date without notice.
GETTING MORE INFORMATION – CONTACT:
Visit: [Website URL]
Class Counsel, Todd L. McLawhorn of Siprut PC, at
17 N. State Street, Suite 1600, Chicago, IL 60602;
Telephone: (312) 236-0000;
Facsimile: (312) 878-1342;
E-Mail: reception@siprut.com
DO NOT ADDRESS ANY QUESTIONS ABOUT THE SETTLEMENT OR
THE LITIGATION TO THE CLERK OF THE COURT OR TO THE JUDGE.
They are not permitted to answer your questions.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 59 of 77 PageID #:849
Exhibit E
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 60 of 77 PageID #:850
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 61 of 77 PageID #:851
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 62 of 77 PageID #:852
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 63 of 77 PageID #:853
Exhibit F
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 64 of 77 PageID #:854
EXHIBIT F
Publication Notice Description
The Notice program will be supplemented through a highly targeted online search and social media
outreach effort, serving over 3,000,000 impressions across Google, Facebook and Instagram.
Online ads will appear in Google Search results based on users’ keyword or phrase searches, e.g.,
Lia Sophia, Lia Sophia Outlet, Lia Sophia Necklace, Lia Sophia jewelry, Lia Sophia rings, Lia
Sophia earrings, etc. Further, a custom audience list will be created using known class member
email data to match to Google user accounts. When those users are signed in to their Google
account, they can view the ads via Google Search, YouTube, and Gmail, based on their relevant
keyword or phrase search queries.
A similar custom audience approach will be employed on Facebook and Instagram. Users whose
email addresses or phone numbers match Facebook or Instagram accounts will be served ads in
their newsfeeds. Ads will be served to over 200,000 Facebook users who like or follow Lia Sophia
on Facebook and over 4,000 followers of Lia Sophia on Instagram.
To increase visibility and social engagement, the notice program will target those who have hash
tagged relevant topics, e.g., #liasophia, #liasophiajewelry, #liasophiaadvisor, #liasophiaparty,
etc. A hashtag is a social media label for content that helps others who are interested in a certain
topic, quickly find content on that same topic. Anyone sharing content on a relevant topic can add
the hashtag label to a message. Others searching for that topic can search for that label to find
other messages on that same social media platform.
The Notice program will include a press release issued to over 7,000 news outlets and journalists
over PR Newswire’s US1 national distribution.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 65 of 77 PageID #:855
Exhibit G
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 66 of 77 PageID #:856
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
CYNTHIA WEST, KRISTINE
HOLLANDER, JENNIFER ZIMMERMAN,
MARY ROMAN, MARIE ESPOSITO, and
MICHELLE BALLON, individually and on
behalf of all others similarly situated,
Plaintiffs,
v.
ACT II JEWELRY, LLC, a Delaware limited
liability corporation d/b/a lia sophia, and
VICTOR K. KIAM, III,
Defendants.
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
Case No. 1:15-cv-05569
Judge Samuel Der-Yeghiayan
[PROPOSED] PRELIMINARY APPROVAL ORDER
Having fully considered Plaintiffs’ Motion For Preliminary Approval Of Class Action
Settlement (the “Motion”), the parties’ arguments and submissions concerning the Motion, and
the applicable facts and law, the Court hereby finds and orders as follows:
1. Except as otherwise provided below, all capitalized terms used in this Preliminary
Approval Order shall have the meanings and/or definitions given them in the Class Action
Settlement Agreement (“Agreement”), attached to the Motion as Exhibit 1.
2. The Court preliminarily approves the Agreement subject to the Final Approval
Hearing, the purpose of which will be to decide whether to grant final approval to the Settlement
Agreement reached by the Parties (the “Settlement”). The Court finds that the Agreement, the
Settlement set forth therein, and all exhibits attached thereto are (a) fair, reasonable, and
adequate, (b) entered into in good faith, (c) free of collusion to the detriment of the Settlement
Class and (d) within the range of possible judicial approval to warrant sending notice of West, et
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 67 of 77 PageID #:857
-2-
al. v. Act II Jewelry, LLC, et al., Case No. 1:15-cv-5569 (N.D. Ill.) (the “Litigation”) and the
proposed Settlement to the Settlement Classes and to hold a full hearing on the proposed
Settlement.
3. For settlement purposes only, conditioned upon final certification of the proposed
class and upon Final Judgment, the Court finds that the Litigation may be maintained on behalf
of the following classes:
(a) Customer Class – All individuals in the United States who
purchased jewelry from Act II between June 23, 2011, and
December 1, 2014.
(b) Sales Advisor Class – All individuals in the United States
who sold at least $250 of jewelry for Act II between
January 1, 2014, and August 17, 2014.
(c) New Sales Advisor Class – All individuals in the United
States who purchased initial starter kits from Act II
between August 1, 2014, and December 1, 2014.
Specifically excluded from the Customer Class, Sales Advisor
Class, and New Sales Advisor Class are the following persons: (a)
Defendants and their respective affiliates, (b) Class Counsel and
their immediate family members; and (c) the judges who have
presided over this Litigation and their immediate family members.
4. The Court recognizes that Defendants Act II Jewelry, LLC and Victor K. Kiam,
III (collectively, “Defendants”) reserve all of their defenses and objections against and rights to
oppose any request for class certification in the event that the proposed Settlement does not
become Final for any reason. Defendants also reserve all of their defenses to the merits of the
claims asserted in the event the Settlement does not become Final for any reason.
5. For settlement purposes only, the Court preliminarily appoints: (a) Plaintiffs
Kristine Hollander and Michelle Ballon as representatives of the Customer Class; (b) Plaintiffs
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 68 of 77 PageID #:858
-3-
Cynthia West, Marie Esposito, and Mary Roman as representatives of the Sales Advisor Class;
and (c) Plaintiff Jennifer Zimmerman as representative of the New Sales Advisor Class.
6. For settlement purposes only, the Court preliminarily appoints the following
attorneys to act as Class Counsel for the Settlement Class:
Joseph J. Siprut
jsiprut@siprut.com
Todd L. McLawhorn
tmclawhorn@siprut.com
SIPRUT PC
17 North State Street
Suite 1600
Chicago, Illinois 60602
7. The Court appoints Heffler Claims Group LLC as the Settlement Administrator.
The Settlement Administrator will be an agent of the Court and will be subject to the Court’s
supervision and direction as circumstances may require.
8. Notice shall be first provided to the Settlement Class within 40 (forty) days after
entry of this Order (the “Notice Date”). Notice shall be in a form substantially the same as the
Notice Plan provided in the Agreement, including any modification thereto.
9. The Court finds that the Notice and Notice Plan meet the requirements of Rule 23
of the Federal Rules of Civil Procedure and due process, constitute the best notice practicable
under the circumstances, and constitute due and sufficient notice to all potential members of the
Settlement Classes. The Notice is reasonably calculated, under the circumstance, to apprise the
Settlement Classes: (a) of the pendency of the Litigation; (b) of their right to exclude themselves
from the Settlement Class and the proposed Settlement; (c) that any judgment, whether favorable
or not, will bind all members of the Settlement Class who do not request exclusion; and (d) that
any member of the Settlement Class who does not request exclusion may object to the
Settlement, the request for attorneys’ fees and costs and/or the service award and, if he or she
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 69 of 77 PageID #:859
-4-
desires, enter an appearance personally or through counsel. The Court further finds that the
notices are written in plain English and are readily understandable by members of the Settlement
Class.
10. The Court approves the Claim Form in substantially the same form as the Claim
Form attached to the Motion as Exhibit 1-A. Any member of the Settlement Class who wishes to
receive benefits under the Agreement must sign and return a complete and timely Claim Form in
compliance with the process set forth in the Agreement, and such Claim Form shall be
postmarked or submitted online no later than ninety (90) days after the Notice Date (the “Claim
Deadline”). Any Settlement Class Member who does not submit a complete and timely Claim
Form in compliance with the Agreement shall not be entitled to any benefits under the
Settlement, but nonetheless shall be barred by the release provisions of the Agreement and the
Final Judgment and shall be deemed to have released the Released Parties from the Released
Claims.
11. Any member of the Settlement Classes who wishes to opt out or exclude himself
or herself from the Settlement must submit an appropriate, timely request for exclusion sent to
the Settlement Administrator at the address on the Notice and to be postmarked no later than
ninety (90) days after the Notice is first transmitted to the Settlement Classes (the “Opt-Out And
Objection Deadline”). The opt-out request must (a) identify the Settlement Class member by full
name, address, and phone number; and (b) state that he or she wishes to be excluded from the
Settlement. A timely and valid request to opt out of the Settlement shall preclude the person
opting out from participating in the proposed Settlement and he or she will be unaffected by the
Agreement. The Settlement Administrator shall compile a list of all members of the Settlement
Class who properly and timely submit an opt-out request (the “Exclusion List”).
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 70 of 77 PageID #:860
-5-
12. Any member of the Settlement Classes who does not submit a timely and valid
written request for exclusion shall be bound by all subsequent proceedings, orders and judgments
in this Litigation, regardless of whether he or she currently is, or subsequently becomes, a
plaintiff in any other lawsuit, arbitration or other proceeding against any of the Released Parties
asserting any of the Released Claims.
13. The Settlement Administrator shall provide the Opt-Out List to Class Counsel and
Defendants’ Counsel no later than fourteen (14) days after the Opt-Out and Objection Deadline,
and shall file the Opt-Out List along with an affidavit attesting to the completeness and accuracy
thereof with the Court no later than seven (7) days before the Final Approval Hearing.
14. Any member of the Settlement Classes who does not properly and timely submit
an opt-out request and who wishes to object to the fairness, reasonableness or adequacy of the
Agreement or the proposed Settlement or who wishes to object to the award of attorneys’ fees
and expenses or Plaintiffs’ service awards may file with the Court and serve on Class Counsel
and Defendants’ Counsel, postmarked no later than the Opt-Out and Objection Deadline, a
written statement of the objection signed by the Settlement Class Member containing all of the
following information:
(a) A caption or title that identifies it as “Objection to Class Settlement in West, et al.
v. Act II Jewelry, LLC, et al. (Case No. 15-cv-5569)”;
(b) The objector’s full name, address, email address, telephone number, and his or her
counsel’s name, address, email address, and telephone number;
(c) A written statement stating under penalty of perjury that the objector is a member
of one or more of the Settlement Classes;
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 71 of 77 PageID #:861
-6-
(d) A written statement detailing each objection, the facts supporting them, the legal
basis on which they are based, and the relief requested;
(e) A written statement detailing whether he or she intends to appear at the Final
Approval Hearing, either with or without counsel;
(f) A list of witnesses the objector may call to testify at the Final Approval Hearing;
and
(g) Copies of any exhibits the objector may offer into evidence at the Final Approval
Hearing.
15. Any objections must be appropriately filed with the Court no later than the Opt-
Out And Objection Deadline, or alternatively they must be mailed to the Court at the address
below and postmarked no later than the Opt-Out And Objection Deadline.
Clerk of Court
United States District Court for the Northern District of Illinois
219 South Dearborn Street
Chicago, Illinois 60604
Attention: “West, et al. v. Act II Jewelry, LLC, et al., Case No. 1:15-cv-5569”
A copy of the objection, postmarked no later than the Opt-Out And Objection Deadline, must
also be mailed to the Settlement Administrator at the post office box described in Paragraph 22.
16. No person shall be heard and no paper or brief submitted by any objector shall be
received or considered by the Court unless such person has filed with the Clerk of Court and
timely mailed to the Settlement Administrator, as provided above, the concise written statement
of objections as described above, together with copies of any supporting materials, papers or
briefs. Any Settlement Class Member who does not file a written objection in the time and
manner described above shall be: (a) deemed to have waived and forfeited any objections to the
proposed Settlement; (b) foreclosed from raising any objection to the proposed Settlement at the
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 72 of 77 PageID #:862
-7-
Final Approval Hearing; (c) bound by all of the terms of the Agreement and by all proceedings,
orders and judgments by the Court; and (d) foreclosed from seeking any adjudication or review
of the Settlement by appeal or otherwise.
17. The Court, within its discretion and at the request of Class Counsel or
Defendants’ Counsel, may order the deposition of any Settlement Class Member who objects to
the fairness, reasonableness or adequacy of the Agreement or the proposed Settlement (or any
witness identified in the written objection or notice of appearance) prior to the Final Approval
Hearing. If the objecting Settlement Class Member fails to appear for any such deposition
ordered by the Court, the objection will not be considered by the Court. If any witness fails to
appear for deposition, that witness’s testimony will not be considered by the Court. Any
Settlement Class Member who fails to comply with the orders of the Court or the provisions of
the Agreement regarding objections shall waive and forfeit any and all rights he or she may have
to appear separately and/or object, and shall be bound by all the terms of the Agreement and by
all proceedings, orders, and judgments in this Litigation.
18. Any objecting Settlement Class Member who intends to appear at the Final
Approval Hearing, either with or without counsel, must also file a notice of intention to appear
with the Court postmarked no later than the Opt-Out And Objection Deadline, which notice shall
be filed with, or mailed to, the Clerk of the Court, with a copy to the Settlement Administrator,
as set forth above.
(a) If the objecting Settlement Class Member intends to appear at the Final Approval
Hearing through counsel, he or she must also identify any attorney(s) representing
the objector who will appear at the Final Approval Hearing and include the
attorney’s name, address, phone number, e-mail address, state bar(s) to which
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 73 of 77 PageID #:863
-8-
counsel is admitted and a list identifying all objections such counsel has filed to
class action settlements from January 1, 2013 to the present, the results of each
objection, including any Court opinions ruling on the objections, and any
sanctions by a Court in connection with filing an objection. Any attorney hired by
a Settlement Class Member for the purpose of objecting to the Agreement or to
the proposed Settlement or to the attorneys’ fees and expenses will be at the
Settlement Class Member’s own expense.
(b) If the objecting Settlement Class Member intends to request the Court allow the
Class Member to call witnesses at the Final Approval Hearing, the objecting Class
Member must provide a list of any such witnesses together with a brief summary
of each witness’s expected testimony no later than the Opt-Out And Objection
Deadline. If a witness is not identified in the notice of appearance, such witness
shall not be permitted to object or appear at the Final Approval Hearing.
19. If any objection is deemed frivolous, the Court may award appropriate costs and
fees to Class Counsel and/or Defendants’ Counsel.
20. No payments shall be made from the Settlement Fund for the purpose of
withdrawing a person’s objection to the Settlement without prior Court approval.
21. Any Settlement Class Member who wishes to receive benefits under the
Agreement must not exclude himself or herself from the Settlement.
22. The Settlement Administrator will establish a post office box to be used for
receiving requests for exclusion or objections and any other communications relating to this
Settlement.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 74 of 77 PageID #:864
-9-
23. The Court preliminarily enjoins all members of the Settlement Classes unless and
until they have timely excluded themselves from the Settlement from: (a) filing, commencing,
prosecuting, intervening in or participating as plaintiff, claimant or class member in any other
lawsuit or administrative, regulatory, arbitration or other proceeding in any jurisdiction based on,
relating to or arising out of the claims and causes of action or the facts and circumstances giving
rise to the Litigation and/or the Released Claims; (b) filing, commencing or prosecuting a lawsuit
or administrative, regulatory, arbitration or other proceeding as a class action on behalf of any
members of the Settlement Classes who have not timely excluded themselves (including by
seeking to amend a pending complaint to include class allegations or seeking class certification
in a pending action), based on, relating to or arising out of the claims and causes of action or the
facts and circumstances giving rise to the Litigation or the Released Claims; and (c) attempting
to effect opt-outs of a class of individuals in any lawsuit or administrative, regulatory, arbitration
or other proceeding based on, relating to or arising out of the claims and causes of action or the
facts and circumstances giving rise to the Litigation or the Released Claims. This Agreement is
not intended to prevent Settlement Class Members from participating in any action or
investigation initiated by a state or federal agency.
24. A hearing to determine (a) whether the Settlement Class should be finally
certified pursuant to Rule 23 of the Federal Rules of Civil Procedure, and (b) whether the
proposed Settlement is fair, reasonable and adequate (the “Final Approval Hearing”), shall be
conducted in the United States Courthouse, United States District Court for the Northern District
of Illinois, Eastern Division, Everett McKinley Dirksen United States Courthouse, 219 South
Dearborn Street, Chicago, Illinois, 60604, Courtroom 1903, commencing on __________, 2018,
at _________.
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 75 of 77 PageID #:865
-10-
25. The Court may reschedule the Final Approval Hearing without further written
notice. If the Final Approval Hearing is rescheduled from the currently scheduled date,
information regarding a rescheduled Final Approval Hearing will be posted on the Court’s
docket.
26. Papers in support of the final approval of the Settlement shall be filed with the
Court no later than seven (7) days before the Final Approval Hearing, and shall include: (a)
responses to objections; (b) a declaration from the Settlement Administrator attesting to
completion of Notice and the number and identity of Settlement Class Members who filed
requests to be excluded from the Settlement and objections to the Settlement.
27. An application of Class Counsel for an award of fees, expenses, and Plaintiffs’
incentive awards shall be filed with the Court no later than fourteen (14) days before the Opt-Out
And Objection Deadline.
28. All discovery and other pre-trial proceedings in this Litigation are stayed and
suspended pending the Final Approval Hearing, except such actions as may be necessary to
implement the Agreement and this Order.
29. Defendants shall file proof of compliance with the notice requirements of The
Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. §1715(b), no later than seven (7) days
before the Final Approval Hearing. The Court finds that Defendants may satisfy the notice
requirements of CAFA by delivering an appropriate notice of this Settlement to the United States
Attorney General and the Attorneys General of the 50 states.
30. This Order shall become null and void, and shall be without prejudice to the rights
of the Parties, all of whom shall be restored to their respective positions existing immediately
before this Court entered this Order, if: (a) the proposed Settlement is not finally approved by the
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 76 of 77 PageID #:866
-11-
Court, or does not become Final, pursuant to the terms of the Agreement; or (b) the proposed
Settlement is terminated in accordance with the Agreement or does not become effective as
required by the terms of the Agreement for any other reason. In any such event, the proposed
Settlement and Agreement shall become null and void and be of no further force and effect, and
neither the Agreement nor the Court’s orders, including this Order, shall be used or referred to
for any purpose whatsoever.
31. Neither the Agreement, nor any of its terms or provisions, nor any of its exhibits,
nor any of the negotiations or proceedings connected with it, nor this Order shall be construed as
an admission or concession by any Defendant of the truth of any of the allegations in the
Litigation, or of any liability, fault, or wrongdoing of any kind, or of the appropriateness of the
certification of the Settlement Class for purposes other than for settlement. This Order shall not
be construed or used as an admission, concession or declaration by or against any of the
Released Parties of any fault, wrongdoing, breach, or liability.
32. The terms and provisions of the Agreement may be amended by agreement of the
Parties in writing and approval of the Court without further notice to the Settlement Class, if
such changes are consistent with this Order and do not limit the rights of the Settlement Class.
IT IS SO ORDERED:
November ______, 2017
The Honorable Samuel Der-Yeghiayan,
United States District Court Judge,
Northern District Of Illinois, Eastern Division
Case: 1:15-cv-05569 Document #: 94-1 Filed: 11/21/17 Page 77 of 77 PageID #:867
Exhibit 2
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 1 of 22 PageID #:868
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
CYNTHIA WEST, KRISTINE
HOLLANDER, JENNIFER ZIMMERMAN,
MARY ROMAN, MARIE ESPOSITO, and
MICHELLE BALLON, individually and on
behalf of all others similarly situated,
Plaintiffs,
v.
ACT II JEWELRY, LLC, a Delaware limited
liability corporation d/b/a lia sophia, and
VICTOR K. KIAM, III,
Defendants.
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
Case No. 1:15-cv-05569
Judge Samuel Der-Yeghiayan
DECLARATION OF TODD L. MCLAWHORN
I, Todd L. McLawhorn, declare:
1. I am over the age of eighteen and am fully competent to make this declaration. I
make this declaration based upon personal knowledge unless otherwise indicated.
2. I am admitted to practice in the State of Illinois and in the United States District
Court for the Northern District of Illinois, the Seventh Circuit Court of Appeals, and other
federal district courts. I am one of the attorneys for Plaintiffs Cynthia West, Kristine Hollander,
Jennifer Zimmerman, Mary Roman, Marie Esposito, and Michelle Ballon (“Plaintiffs”) and lead
counsel for the Settlement Classes herein. I make this declaration in support of Plaintiffs’ Motion
For Preliminary Approval Of Class Action Settlement (the “Motion”). If called as a witness, I
would and could testify to the following:
3. I am a partner of the law firm Siprut PC (herein “Siprut PC” or “Class Counsel”).
I have personally been involved in the entirety of the prosecution of this class action lawsuit (the
“Litigation”).
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 2 of 22 PageID #:869
-2-
4. On June 23, 2015, Plaintiffs West and Hollander brought a putative class action
against Act II Jewelry, LLC (“Act II”), Kiam Equities Corporation (“Kiam Equities”), Victor K.
Kiam, III (“Victor Kiam”), and Elena Kiam, alleging causes of action of breach of contract,
violation of the Illinois Consumer Fraud Act (“ICFA”), common law fraud, and unjust
enrichment against these Defendants for purportedly revoking the lifetime warranties on their
jewelry, and for purportedly making material misrepresentations or omissions to its sales
advisors by inducing them to continue working as sales advisors (which included the sales
advisors’ purchase of supplies and jewelry from the Defendants), even though the Defendants
knew the sales advisors would not be able to recoup those expenditures because Defendants had
planned to close the business at least six months prior to making the announcement. (Dkt. No. 1.)
5. On October 19, 2015, the Parties held a mediation with Retired District Judge
James F. Holderman. Prior to the mediation, the Parties engaged in limited discovery and
exchanged written mediation statements summarizing their respective positions concerning the
factual and legal issues in the Litigation. This mediation did not result in settlement.
6. Following the mediation, on November 24, 2015, the Defendants filed their
Answer to Plaintiffs’ complaint, denying all liability. (Dkt. No. 34.) On the same day, the
Defendants also moved to dismiss the complaint on multiple grounds. (Dkt. No. 35.) On March
18, 2016, the Court denied in part, and granted in part, the Defendants’ motion, dismissing Kiam
Equities, Victor Kiam, and Elena Kiam from the litigation. (Dkt. No. 58.)
7. Between April 2016 and April 2017, the Parties engaged in multiple rounds of
extensive written and electronic discovery. During discovery, the Parties: (a) reviewed
approximately 12,267 pages of documents produced by Plaintiffs; (b) reviewed approximately
20,111 pages of documents produced by Act II; (c) reviewed approximately 345 pages of
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 3 of 22 PageID #:870
-3-
documents produced by Victor Kiam; (d) reviewed approximately 6 pages of documents
produced by Kiam Equities; (e) reviewed approximately 203 pages of documents produced by
Elena Kiam; (f) reviewed approximately 963 pages of documents produced by additional third
parties in addition to computer media provided by those third parties; (g) prepared for the taking
and/or defending of approximately ten fact witnesses from Act II and various third-parties; and
(h) prepared for the taking and/or defending of the depositions of the six Class Representatives.
8. While discovery was ongoing, on November 30, 2016, Plaintiffs filed their First
Amended Class Action Complaint (the “First Amended Complaint”), alleging claims for breach
of contract, violation of the ICFA, fraud and unjust enrichment. (Dkt. No. 75.) Plaintiffs West
and Hollander, now joined by Plaintiffs Zimmerman, Roman, Esposito, and Ballon, sought to
represent three classes: (a) all individuals who purchased jewelry from Act II; (b) all individuals
who sold jewelry for Act II; and (c) all individuals who joined Act II as sales advisors in 2014
and who purchased initial starter kits after May 31, 2014. (Id. at ¶¶130-132.) Due to evidence
uncovered during discovery, Plaintiffs’ First Amended Complaint also re-added Victor Kiam as
co-Defendant. (Dkt. No. 75.) On December 20, 2016, Defendants filed their Answer to
Plaintiffs’ First Amended Complaint and denied all liability. (Dkt. No. 77.)
9. Following the filing of the First Amended Complaint, the Parties continued to
engage in discovery. In the spring of 2017, Defendants deposed three of the Class
Representatives.
10. Following those depositions, the Parties engaged in settlement discussions and
took part in three separate, extensive mediations over the course of approximately four months.
On July 17, 2017, the Parties held a mediation before Judge Holderman (the fourth mediation in
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 4 of 22 PageID #:871
-4-
the Litigation), during which the Parties agreed to a settlement in principal. A Settlement Term
Sheet was subsequently executed on August 1, 2017.
11. During August and September 2017, the Parties worked extensively with the
proposed Settlement Administrator, Heffler Claims Group LLC, to analyze Act II’s records in
order to: (a) finalize the terms of the settlement; and (b) structure a notice plan consistent with
Fed. R. Civ. P. 23(c)(2)(B). In September 2017, after several exchanges of drafts and edits, and
numerous conference calls, the Parties agreed to the form and content of the settlement.
12. After analyzing Act II’s records, based on the Class definitions proposed in the
Settlement Agreement and in Plaintiffs’ Motion, Class Counsel estimates that there are
approximately 4.0 million individuals in the Customer Class, 19,069 individuals in the Sales
Advisor Class, and 2,709 individuals in the New Sales Advisor Class.
13. The benefit obtained for the Settlement Classes is $6,700,000 cash, minus the
costs of settlement administration, Class Counsel’s proposed attorneys’ fees, and Plaintiffs’
incentive awards.
14. Plaintiffs have contributed substantially to this litigation and have invested
considerable time, at their own expense, to do so. Plaintiffs aided Class Counsel’s investigation
of the claims and made significant contributions during discovery, including producing
approximately 12,267 pages of documentation. In addition, Plaintiffs Hollander, West, and
Zimmerman were deposed by Defendants.
15. I have substantial experience in complex business litigation and class actions. My
Firm, Siprut PC, substantially concentrates its practice in the prosecution of class actions. My
Firm’s resume is attached as Exhibit A hereto.
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 5 of 22 PageID #:872
-5-
16. Throughout this litigation, my Firm has diligently prosecuted this matter,
dedicating substantial resources to the investigation and litigation of the claims at issue, and has
successfully negotiated the settlement of this matter to the benefit of the proposed Classes.
Neither my firm nor the Plaintiffs have any interests antagonistic to the interests of the other
Class members.
17. Plaintiffs and Class Counsel believe that the claims asserted against Defendants in
this Litigation have merit. However, Plaintiffs and Class Counsel recognize and acknowledge the
expense and length of continued proceedings necessary to prosecute the litigation against
Defendants through trial and appeals. Plaintiffs and Class Counsel have also taken into account
the uncertainty and risk of any litigation, especially in complex actions such as this Litigation, as
well as the difficulties and delays inherent in such litigation. This Litigation involves complex
class issues, which would involve protracted and risky litigation if not settled, especially given
the fact that Act II has closed. Moreover, in the event of any judgment against Defendants, an
appeal could postpone any recovery for several years.
18. Accordingly, Plaintiffs and Class Counsel believe that there is substantial benefit
to the Classes of receiving a cash award from Defendants.
19. The Settlement Agreement, and the terms thereof, was reached after rigorous
advocacy and extensive negotiations, in which I directly participated. Plaintiffs and Class
Counsel believe that the terms set forth in the Settlement Agreement confer substantial benefits
upon the proposed Classes, and is a fair, reasonable, and adequate resolution of the Class’ claims
against Defendants. As such, the Settlement is entitled to a good-faith determination and I
respectfully submit that this Court should enter the proposed Preliminary Approval Order and,
ultimately, the Final Order and Judgment, approving this proposed Settlement in all respects.
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 6 of 22 PageID #:873
-6-
I declare under penalty of perjury under the laws of the State of Illinois that the foregoing
is true and correct.
Executed on November 21, 2017 at Chicago, Illinois.
s/ Todd L. McLawhorn
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 7 of 22 PageID #:874
Exhibit A
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 8 of 22 PageID #:875
-1-
SIPRUT PC FIRM RESUME
Siprut PC is a commercial litigation firm based in Chicago, with additional offices in San
Diego, Boston, and Colorado Springs. The firm focuses its practice exclusively on complex
litigation and pre-litigation counseling, encompassing a wide variety of areas and issues. The
firm’s primary litigation groups include plaintiffs’ class action litigation (with an emphasis on
consumer law issues); qui tam and whistleblower litigation; intellectual property and patent
litigation; and business litigation.
Siprut PC and its attorneys have repeatedly been appointed as lead counsel in federal and
state class action lawsuits across the country, and have recovered hundreds of millions of dollars
for its clients. The firm has been prominently featured in the mainstream media for its successes
and advocacy on behalf of consumers nationwide, and our attorneys are frequently invited to
speak at seminars on consumer protection and class action issues.
CLASS ACTION AND CONSUMER LITIGATION
Siprut PC is an established leader in the class action arena. The firm has been recognized
for its “high-stakes, high-profile cases against large defendants.” Siprut PC was named to the
National Law Journal “Hot List” of Plaintiffs’ law firms in 2016, one of only 12 law firms in the
United States to receive this distinction.
As federal courts have further recognized in appointing the firm and its attorneys as lead
counsel in some of the most prominent class cases in the country, Siprut PC has “substantial
class action experience [and has served] as lead counsel” in myriad class litigation. In re
National Collegiate Athletic Association Student-Athlete Concussion Injury Litigation, Case No.
MDL 13-cv-9116 (N.D. IL). The firm’s recent settlements and leadership appointments include
the following:
Jones v. Wal-Mart Stores, Inc. et al. (Case No. 14-cv-06305-LDW-ARL, E.D.N.Y.):
Appointed co-lead counsel in nationwide class action relating to millions of
contaminated baby wipes manufactured by Nutek and sold to consumers nationwide.
Motion for preliminary approval of class-wide settlement granted.
Korolshteyn v. Costco Wholesale Corporation (Case No. 3:15-cv-00709, S.D. CA):
Appointed co-lead counsel in nationwide class action relating to Costco’s ginko
biloba supplements.
Mullins v. Direct Digital LLC (Case No. 15-1776, N.D. IL): Appointed co-lead
counsel in nationwide class action relating to Direct Digital's Instaflex joint health
supplements. $4.5 Million cash settlement granted final approval.
Mednick v. Precor Inc. (Case No. 1:14-cv-03624, N.D. IL): Appointed co-lead
counsel in nationwide class action against Precor relating to Precor treadmills
purporting to measure heart rate.
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 9 of 22 PageID #:876
-2-
Douglas v. Western Union Company (Case No. 14-cv-01741, N.D. IL): Appointed
lead counsel in nationwide class action asserting claims under the Telephone
Consumer Protection Act. Motion for preliminary approval of $8.5 Million cash
settlement granted.
Chimeno-Buzzi v. Hollister Co. et al. (Case No. 14-cv-23120-MGC, S.D. FL.):
Appointed co-lead counsel in nationwide class action asserting claims under the
Telephone Consumer Protection Act. $10 Million cash settlement granted final
approval.
In re Southwest Airlines Voucher Litigation (Case No. 11-cv-8176, N.D. IL):
Appointed lead counsel in nationwide class action relating to Southwest’s unilateral
cancellation of drink vouchers paid for by business select travelers. Settlement valued
at $29 Million granted final approval, and then affirmed by the Seventh Circuit on
appeal.
In re Energizer Sunscreen Litigation, (Case No. 13-cv-00131, N.D. IL): Appointed
lead counsel in nationwide class action relating to defective sunscreen nozzles
manufactured by Energizer. Settlement valued up to $200 Million granted final
approval.
In re National Collegiate Athletic Association Student-Athlete Concussion Injury
Litigation (Case No. MDL 13-cv-9116, N.D. IL): Appointed co-lead counsel in
consolidated MDL litigation against the NCAA on behalf of current and former
collegiate athletes related to concussions and head injuries. Landmark settlement of
$75 million cash and injunctive relief granted preliminary approval.
Illinois Nut & Candy Home of Fantasia Confections, LLC v. Grubhub, Inc., et al.
(Case No. 14-cv-00949, N.D. IL): Appointed lead counsel in nationwide class action
relating to unsolicited facsimile transmissions by Grubhub, in violation of the
Telephone Consumer Protection Act. Settlement of $2 million granted final approval.
Padilla v. DISH Network LLC (Case No. 12-cv-07350, N.D. IL): Appointed lead
counsel in nationwide class action relating to statutory violations of the Satellite
Home Viewer Extension and Reauthorization Act of 2004 (“SHVERA”). Landmark
settlement providing class-wide injunctive relief – the first class settlement under
SHVERA ever – granted final approval.
Knoch v. Intuit., Inc. (Case No. 15-cv-03650, N.D. Cal.): Appointed to Executive
Committee of consolidated data breach class litigation against Intuit.
Lewert v. P.F. Chang’s China Bistro (Case No. 14-cv-04787, N.D. IL): Appointed
co-lead counsel in nationwide class action relating to a security breach exposing the
personal information of hundreds of thousands of consumers nationwide.
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 10 of 22 PageID #:877
-3-
WHISTLEBLOWER AND FALSE CLAIMS ACT LITIGATION
Siprut PC attorneys have led litigation resulting in settlements in excess of $100 million,
and we are actively prosecuting numerous False Claims Act lawsuits:
U.S. ex rel. Robinson v. Northrop-Grumman Corp. (Case No. 89-cv-6111, N.D. IL):
Qui tam action brought against Northrop-Grumman for fraud in connection with the
B-1 bomber, the B-2 “Stealth” bomber, and the F-15 fighter. Sixteen years after the
case was filed, it was settled prior to trial for a total recovery of $135 million.
U. S. ex rel. Morgan v. Bank of America, et al., Case No. 16-CV-3425, N.D. IL):
Currently pending, the suit alleges mortgage fraud by the four largest financial
institutions which service mortgages – Bank of America, Citibank, Wells Fargo, and
JP Morgan – and billions of dollars in damages.
U.S. ex rel. Solomon v. Lockheed Martin Corp. (Case No. 3:12-DV-4495-D, N.D.
TX): Currently pending, the case seeks more than $100 million in damages for fraud
in connection with the F-35 Joint Strike Fighter, the most expensive weapons
program ever.
U.S. ex rel. Kotwica v. Roundy’s, et al. (Case No. 15 C 5168, N.D. IL): Currently
pending on behalf of the federal government and the States of Illinois, Minnesota, and
Wisconsin, the suit alleges that Roundy’s operated an illegal coupon kickback
scheme.
BUSINESS LITIGATION __________________
Siprut PC attorneys have substantial experience with emergency injunctive relief
proceedings (representing both plaintiffs and defendants), restrictive covenant litigation, and
large commercial contract disputes. Firm partners have contributed to the following matters:
NewSub Magazine Servs. LLC v Heartland Direct, Inc. (Case No. 02-C-4949, N.D.
IL): Pierced an entity's corporate veil to obtain a seven figure judgment against
related corporations and individuals.
In re Estate of Edith-Marie Appleton (Case No. 00-P-103, Cook County, IL):
Successfully defended an estate, throughout a three-week jury trial, from a claim
brought by Florida State University involving a $2,000,001 alleged charitable
pledge.
Edison Mission Energy v Mirant Corp (Case No. 02-CC-0059, Orange County,
CA.): Defended and settled $750 million breach of contract case involving the
purchase of a foreign power facility.
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 11 of 22 PageID #:878
-4-
Johnson v. Sample & Cross Capital Mgmt. (Case No. 07-L-929, Lake County, IL):
Secured dismissal with prejudice of counts brought against a hedge fund by eleven
investors in three separate actions.
American Insurance v. Ingram (Cook Co., IL): Obtained preliminary and permanent
injunctions against former employee who opened competing business and used
previous employer’s confidential information.
Veal v. James and 7-Eleven (Cook Co., IL): Obtained judgment following bench
trial in favor of employee accused of wrongful conduct.
Des Plaines Office Equipment Co. v. Nicolin et al. (Cook Co. IL): Represented
hiring company and former employee in lawsuit brought by prior employer to enjoin
employee from working. Successfully opposed motions for TRO, preliminary and
permanent injunctions.
In re Confidential Arbitration (JAMS Chicago, IL): Following week-long trial
before retired federal judge, successfully defended breach of fiduciary duty and
shareholder dilution claims in excess of $7 million.
In re Confidential Arbitration (AAA St. Louis, MO): Following trial before a three-
member arbitration panel, recently obtained a $1.7 million award, including recovery
of all attorneys' fees and costs. Claims arose from purchase of multiple nursing home
facilities.
Delaware Superior Court and Illinois Chancery Court Litigation. Defended
industrial equipment company in case brought by hedge fund investor
concerning hedge fund's investment in $75 million secured lending loan facility.
Trilegiant v. Sitel Corporation (S.D.N.Y.). Represented Trilegiant in breach of
contract action seeking $34 million in liquidated damages from vendor.
Confidential purchase price adjustment arbitration (AAA Chicago). Represented
plastics manufacturer in arbitration. The Panel found in Client’s favor on claims for
breach of asset purchase agreement entered into as part of reverse spin-off
transaction and public offering.
Advertising Arbitration (AAA Chicago). Arbitrated dispute on behalf of
professional sports team relating to advertising sales and contracts; obtained
favorable result.
Confidential arbitration for aviation company (ICC Chicago). Represented aviation
manufacturer in contract dispute arising from purchase of company. Following
evidentiary hearings, obtained arbitration award in favor of client.
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 12 of 22 PageID #:879
-5-
ANTITRUST, UNFAIR COMPETITION, AND RICO LITIGATION
Siprut PC attorneys have substantial experience handling antitrust and unfair competition
litigation, including RICO claims, against some of the largest corporations in the world.
Representative litigation includes:
Woolsey v. JP Morgan Chase & Co. (S.D. Cal.): Represented putative class alleging
JP Morgan Chase manipulated the price for electricity within the California
electricity market through a series of deceptive bidding strategies, resulting in higher
prices to consumers.
In re Sulfuric Acid (N.D. IL): Represented sulfuric acid manufacturer in putative
nationwide class action pending in federal court in Chicago and indirect purchaser
class action pending in California state court. Plaintiff alleged industry-wide scheme
to constrain the supply and inflate the price of sulfuric acid. After eight years of
litigation, obtained summary judgment on all direct purchaser claims, which was
subsequently affirmed by the Seventh Circuit.
In re Credit Swaps Default Litigation (N.D. IL): Represented financial services
company in putative class action alleging defendants conspired to restrict
competition in the market for credit default swaps by monopolizing the sell-side of
the CDS market and thereby maintaining anti-competitively wide bid-ask spreads.
Rasterex Holdings v Research in Motion, et al (Fulton Co., GA): Represented RIM
and co-defendants in trade secret dispute. Plaintiff alleged RIM misappropriated
trade secrets and incorporated them into RIM’s Blackberry handheld device.
Following summary judgment motions, obtained settlement on eve of trial.
Safelite Glass Corp. (E.D. TX): Obtained summary judgment on behalf of all
defendants, and then won affirmance by U.S. Court of Appeals for the Fifth Circuit,
defeating all claims in Stewart Glass & Mirror, Inc. v. USA GLAS Corp., a suit by
Texas plaintiffs against national corporate competitors asserting conspiracy and
monopolization in violation of federal antitrust laws.
CIVIL RIGHTS AND CONSTITUTIONAL CLAIMS
Siprut PC attorneys have handled landmark, high-impact civil rights and constitutional
claims against municipalities, state and government entities, and corporate employers.
Representative litigation includes:
Doe II and Doe III , Does IV-VIII (N.D. IL): Representing female victims of sexual
assault for claims of civil rights and equal protection violations against The City of
Harvey.
Green v. Village of Winnetka (Cook Co. IL): Representing putative class of
Winnetka property owners who allege Village is violating the Illinois constitution by
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 13 of 22 PageID #:880
-6-
charging utility fees to fund a $42 million stormwater project that includes an eight
mile tunnel to Lake Michigan.
People Who Care v. Rockford Board of Education (Case No. 89-cv-20168, N.D. IL)
Represented African American and Hispanic students in desegregation and
educational equity class action lawsuit against one of the largest school districts in
Illinois. Proved liability across most areas of school operations, including special
education, school building conditions, transportation, and student assignment.
Secured multi-year, comprehensive court-ordered remedies. Represented plaintiffs
throughout 10 years of remedies implementation.
Johnson v. Board of Education of Champaign Unit School District (Case No. 00-cv-
1349, C.D. IL) Represented African American and Hispanic students in race
discrimination and desegregation class action lawsuit. Secured comprehensive
settlement affecting many areas of school district operations, including climate and
discipline, upper level courses, student assignment, special education, and gifted
programs. Represented plaintiff class throughout seven years of settlement
monitoring.
McFadden v. Board. of Education School District U-46 (Case No. 05-cv-0760, N.D.
IL) Represented minority students in educational equity suit against second largest
school district in Illinois. Defendant found liable for intentionally segregating
Hispanic students into separate gifted program.
Ramirez v. Ceisel Masonry (N.D. IL): Represented Hispanic laborers who alleged
they were being discriminated against on the job because of their race. Obtained
favorable settlement on behalf of all plaintiffs.
PATENT LITIGATION ________________________
Siprut PC and its attorneys have successfully represented public companies, mid-size
businesses, small companies, and individuals in their patent disputes all over the United States.
We have litigated cases in a variety of technological fields, including the life sciences (DNA
amplification, screening, and sequencing), computer science (cloud computing, optical character
recognition, and genome sequencing), and orthopedic fields (dental and hip implants). Siprut PC
has recovered millions of dollars for our clients against some of the largest and most aggressive
companies in the country.
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 14 of 22 PageID #:881
-7-
ATTORNEYS
JOSEPH SIPRUT is the founder and managing partner of Siprut PC. He has repeatedly
been named a “Super Lawyer” and “Leading Lawyer” in Illinois for Class Action Litigation, was
named to America’s Top 100 Attorneys, was named one of the “Top 100” in the country by the
National Trial Lawyers Association, and holds an AV Preeminent rating by Martindale Hubble,
the highest possible peer review rating. He has been called a “fearless game-changer in class
actions” by the Chicago Daily Law Bulletin. Mr. Siprut was previously named one of the Top 40
attorneys in Illinois under the age of 40, and was also named one of the “Top 40 Under 40” in
the country by the National Trial Lawyers Association. Mr. Siprut was also selected for
membership in the Multi-Million Dollar Advocates forum, one of the most prestigious groups of
trial lawyers in the United States. Membership is limited to attorneys who have won million and
multi-million dollar verdicts and settlements, and fewer than 1% of U.S. lawyers are members.
Mr. Siprut has appeared in dozens of publications and television and radio broadcasts
worldwide, including CBS Radio, NPR, ESPN, Bloomberg Law, Law360, the Chicago Tribune,
and more. He has been deemed by the media as the “Friend of the Frequent Fliers” for his
successful litigation crusades against the airline industry on behalf of airline customers, as well
as a “Leading Sports Reformer” for his advocacy to combat the problem of concussions and head
injuries in college sports.
Mr. Siprut frequently speaks at national class action and consumer litigation seminars. He
has substantial first-chair trial experience, and previously served as an Adjunct Professor at
Northwestern University School of Law in the Trial Advocacy program. He is also a frequent
author and speaker, having published over 25 articles in the nation's leading law reviews and
legal journals on topics including the right of privacy, copyright litigation, and contract doctrine,
as well as litigation strategy and tactics. He was appointed as a member of the Illinois ARDC
Hearing Board, and is also a member of the Advisory Board for the Fair Contracts Project, an
initiative focused on counteracting the implications of fine print in standard form consumer
contracts.
Mr. Siprut is a graduate of Northwestern University School of Law, where he served as
the Managing Editor of the Northwestern Law Review and was selected to represent
Northwestern in national competition as a member of its National Moot Court team. He was also
awarded the Institute for Humane Studies Fellowship, a national fellowship competition for law
and graduate study.
Prior to founding Siprut PC, Mr. Siprut spent his career practicing at some of the top
corporate litigation firms in the country. Mr. Siprut has been recognized by the Law in Public
Service Committee of the ABA for his dedication to pro bono work. He is admitted to practice in
Illinois, the United States District Court for the Northern District of Illinois (including its Trial
Bar), the Seventh Circuit Court of Appeals, the Eleventh Circuit Court of Appeals, and the
United States Supreme Court. For over five years, Mr. Siprut served as an arbitrator in the Cook
County Arbitration Program.
* * *
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 15 of 22 PageID #:882
-8-
TODD MCLAWHORN is a partner at Siprut PC. He has over twenty years of commercial
litigation trial experience, most of that with three of the country's largest law firms. He has tried
cases and appeared before courts in a variety of jurisdictions, literally spanning the country from
coast to coast. Mr. McLawhorn has significant experience with complex business litigation,
including matters involving contracts, consumer fraud allegations, shareholder disputes and
valuations, commercial real estate, trade secret issues, deceptive trade practices claims, antitrust
issues, and merger and acquisition issues. He has represented assorted clients in a wide array
of industries, including those in the financial services, banking, health care, computer hardware
and software, membership services, manufacturing and professional sports fields. In addition,
Mr. McLawhorn has devoted a substantial portion of his practice to class action litigation,
particularly with respect to antitrust and consumer fraud claims.
Mr. McLawhorn recently received an AV Preeminent Rating, the highest possible rating,
in the Martindale-Hubbell Peer Review Ratings Program. Mr. McLawhorn was previously
recognized by The Chicago Law Bulletin and The Chicago Lawyer as one of the Top 40 lawyers
under 40 in Illinois. He has contributed to several publications, most recently as a Contributor to
the World Banks Group Doing Business 2015, and to various bar association publications. He
has also provided significant pro bono representation, including assisting individuals who flee
their home countries and seek political asylum in the United States, and helping individuals
involved in the Illinois Chancery Court's Foreclosure Mediation Program, in an effort to help
homeowners who are in foreclosure retain their homes.
In addition to being admitted to practice in New York and Illinois, Mr. McLawhorn is
also admitted to practice before the United States Courts of Appeals for the Seventh Circuit,
Federal Circuit, Fifth Circuit, and Eleventh Circuit, as well as the United States District Courts
for the Northern District of Illinois (Trial Bar), Southern District of Illinois, Central District of
Illinois, Southern District of New York, Eastern District of Michigan, Eastern District of
Wisconsin, and Western District of Wisconsin. He is also a member of the American Bar
Association, and is part of the Antitrust, Business Law, and Litigation Sections. As part of the
Litigation Section, he is also a member of the Class Action and Derivatives Suit Committee, the
Commercial and Business Litigation Committee, and the Intellectual Property Committee. Closer
to home, Mr. McLawhorn is a longtime member of the Chicago Bar Association and the Illinois
State Bar Association. In connection with the Chicago Bar Association, he is a member of the
Antitrust, Class Action, and Consumer Law Committees.
Mr. McLawhorn received his law degree, with honors, from the University of North
Carolina at Chapel HIL At the University of North Carolina, he was on both Law Review and
the Holderness Moot Court Bench. Prior to attending law school, Mr. McLawhorn graduated
from East Carolina University, magna cum laude, in three years with a Bachelor of Arts in
Psychology. In 2011 Mr. McLawhorn was elected to the District 101 Board of Education, and
serves on the Building, Finance, and Legislative Committees. He is a former President and
Board Member of the Village Club of Western Springs, a social and service organization. He is
also actively involved in coaching and supporting his children's sports teams, and has served on
various boards in connection with those activities.
* * *
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 16 of 22 PageID #:883
-9-
RICHARD L. MILLER II is a partner at Siprut PC. Richard was previously in-house
counsel at a private equity firm and, before that, a partner at Novack and Macey LLP, where he
specialized in commercial litigation. While there, Richard advised clients and litigated disputes
involving real estate, insurance coverage, creditors’ rights, products liability, licenses, trademark,
employment contract and corporate veil piercing claims, among others.
Richard is an Adjunct Professor at Northwestern University School of Law where he has
served as a Trial Advocacy instructor since 2005 and Advanced Trial Advocacy instructor since
2013. He has been an American Arbitration Association arbitrator since 2010 and, prior to that,
was an arbitrator for the Cook County Mandatory Arbitration Program for two years.
Richard served as a prosecutor for Champaign County, Illinois for two years. He litigated
approximately 50 jury trials, as well as innumerable bench trials. He prosecuted four murder
cases, two of which went to trial, resulting in sentences of 45 and 55 years.
Richard was named one of the “40 Illinois Attorneys Under 40 To Watch” and a
“Leading Lawyer” by the Law Bulletin Publishing Company, publishers of the Chicago Lawyer
and Chicago Daily Law Bulletin. Chicago Magazine has repeatedly recognized Richard as a
"Super Lawyer," “Rising Star” and one of the Top Young Commercial Litigation Attorneys in
Illinois.
Richard has published articles appearing in the Illinois Bar Journal on Class Actions,
Expert Testimony, Emergency Temporary Restraining Orders, The Wage Payment Act, and
Spoliation Claims. He has also served as an author for the Illinois Institute of Continuing Legal
Education (IICLE) for many years, authoring guides for practitioners on: Pleading Under the
Federal Rules, Federal Motion Practice, Deposition Taking, Preparing for Trial, and Preserving
the Record During Trial. Richard has lectured at webinars for ICLE on Motion Practice,
Negotiating Settlements and Cross Examinations, as well as for the Chicago Bar Association on
Class Actions.
Richard served as the President of the University of Illinois College of Law Alumni
Board. He is a member of the Illinois State Bar Association, the American Bar Association, the
Chicago Bar Association and the University Club of Chicago.
* * *
BRUCE HOWARD is a partner at Siprut PC. He was named National Trial Lawyer of the
Year Finalist by the Trial Lawyers for Public Justice, and was named a “Super Lawyer” in
Illinois for Class Action Litigation, Securities Litigation, and ERISA Class Action Litigation. He
was also named as a one of the Top Attorneys in Illinois by Chicago Magazine.
Mr. Howard has over thirty years of commercial litigation trial experience. Mr. Howard
has significant experience with complex business litigation, including matters involving antitrust
issues, shareholder fraud and corporate derivative class action claims, ERISA class actions
claims, mass tort issues, trademark matters, deceptive trade practices issues, insurance defense
matters, actions under the Racketeer Influenced and Corrupt Organizations Act, issues arising
under the Anticybersquatting Consumer Protection Act, and whistle blower actions under the
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 17 of 22 PageID #:884
-10-
False Claims Act. He was also appointed as a Special Assistant Attorney General for the State of
Illinois for purposes of prosecuting eminent domain matters. In addition to having devoted a
substantial portion of his career to antitrust and securities fraud matters, for the last twenty years,
Mr. Howard has devoted a substantial portion of his practice to whistle blower actions for
Medicare, Medicaid, Homeland Security, and defense contractor fraud.
Mr. Howard’s notable cases include: Ohio-Sealy Mattress Mfg. Co. v. Sealy, Inc., an
antitrust action in which he was involved in several Seventh Circuit appeals and litigation work-
up, resulting in a $77 million jury verdict; Morse v. Abbott Laboratories, Inc., a securities fraud
class action which resulted in a $15.3 million jury verdict; In re Chicago Flood Litigation, in
which he had a prominent role in the work-up of the case, which settled for more than $25
million; Tyco International, Inc., a consolidated securities fraud class action that was jointly
settled as part of a $3.2 billion global settlement – the third largest class action recovery ever;
Robinson v. Northrop Corporation, a whistle blower action which, after 16 years of litigation,
settled prior to trial for $134 million – the largest recovery in a False Claims Act case in this
region at the time.
Mr. Howard received his law degree from Washington & Lee University School of Law.
* * *
STEWART WELTMAN is Of Counsel at Siprut PC. Mr. Weltman has been a lead and trial
counsel in numerous complex litigation matters for both plaintiffs and defendants, ranging from
antitrust, accounting malpractice, legal malpractice, securities fraud, patent issues, contract
actions, and consumer fraud. In addition to his antitrust experience, Mr. Weltman also acted as
lead attorney or lead counsel in several securities fraud matters. He was the lead attorney for his
client Pacific Life Insurance Company in its individual action brought against various
underwriter defendants arising out of the WorldCom frauds. Prior to joining Siprut PC, Mr.
Siprut was a partner with a mid-sized firm in Chicago and an Antitrust and Securities litigation
partner with a Washington D.C.-based litigation boutique.
He is currently co-lead counsel in numerous consumer fraud class actions involving a
wide range of products ranging from glucosamine/chondroitin supplements, vitamin E
supplements, ginko biloba, homeopathic remedies, CoQ10 products, HGH secretalogues, and
other supplements.
* * *
MICHAEL BEHN is Of Counsel at Siprut PC. Mr. Behn is an experienced trial lawyer and
former federal prosecutor who specializes in the civil prosecution of fraud. He founded the
Chicago law firm Behn & Wyetzner, which for years was one of the premier False Claims Act
and whistleblower litigation boutiques in the United States. Mr. Behn primarily represents
citizens who have reported fraud against the government under the qui tam provisions of the
state and federal False Claims Acts.
Mr. Behn was named the first whistleblowers’ “Lawyer of the Year” by the nationwide
organization Taxpayers Against Fraud. The group commended Mr. Behn’s “tenacity,
management skills and dedication” in his representation of relators under the False Claims Act.
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 18 of 22 PageID #:885
-11-
He has also been repeatedly recognized as both a “Super Lawyer” and a “Leading Lawyer” in
Illinois. In a profile of his practice, the Chicago Daily Law Reporter described Mr. Behn as
“exceptionally able to prosecute highly complex financial frauds,” and quoted one judge as
praising him for having “skills not common among litigators.”
Among his many successes, Mr. Behn represented the relator pharmacist in recovering
over $120 million in multi-state Medicaid fraud settlements of drug switching allegations against
Walgreens, CVS and Omnicare (the nation’s largest pharmacy serving nursing homes). In
another settlement handled by Mr. Behn, Northrop Grumman Corp. paid $134 million to resolve
a fraud case involving the B-2 “Stealth” bomber and other military programs. For that case, Mr.
Behn, with his colleagues, was nominated as “Trial Lawyer of the Year” by the Trial Lawyers
for Public Justice. Mr. Behn also served as relator’s counsel in case alleging that Johnson &
Johnson paid kickbacks to influence drug selections in nursing homes, which settled for $149
million.
Mr. Behn also has a record of achievements in prosecuting securities fraud. Recently, Mr.
Behn represented a billion-dollar pension fund and the class of investors in a securities fraud suit
involving the V-22 “Osprey” aircraft. That case was settled for $7 million. Other major cases
have included the felony conviction of the vice-chairman of a New York futures exchange, the
largest securities fraud settlement in Chicago history ($220 million), and a major securities fraud
case involving the merger of a telecommunications company ($239 million).
Mr. Behn is a recognized national expert on the False Claims Act. He has frequently
lectured on the False Claims Act and other topics to prosecutors, investigators, auditors and
others at the invitation of the U.S. Department of Defense, the U.S. Department of Health and
Human Services, the U.S Department of State, the U.S. Department of Justice, the Institute of
Internal Auditors, the Chicago Bar Association and many other groups. He has been quoted in
the New York Times, the Wall Street Journal, the Washington Post, the Chicago Tribune, the
Chicago Sun Times, and in other news media concerning his cases and the False Claims Act.
Before entering private practice, Mr. Behn served as a fraud prosecutor with the U.S.
Attorney’s Office for the Southern District of New York, as a Trial Attorney with the
Commodity Futures Trading Commission, and as a Judicial Clerk in the U.S. District Court for
the District of Vermont.
Mr. Behn holds a J.D. from Northeastern University School of Law (in Boston) and an
A.B. from Dartmouth College.
* * *
LINDA WYETZNER is Of Counsel at Siprut PC. She co-founded Behn & Wyetzner, one of
the premier False Claims Act and whistleblower litigation boutiques in the United States. She is
a seasoned trial lawyer and negotiator, currently specializing in representing citizens who have
reported fraud under the qui tam provisions of the federal and state False Claims Acts. Ms.
Wyetzner was a lead attorney in three groundbreaking pharmaceutical qui tam cases against
Omnicare, CVS and Walgreens. Ms. Wyetzner has substantial experience with false claims act
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 19 of 22 PageID #:886
-12-
cases involving fraud in a diverse range of fields including fraud in the pharmaceutical,
healthcare, telecommunications and defense contracting industries as well as NIH grant fraud.
Ms. Wyetzner also has over twenty years of experience representing employees in
disputes with their employers. As House Counsel to the Screen Actors Guild and the American
Federation of Television and Radio Artists in Chicago, Linda represented Chicago’s broadcast
journalists and disc jockeys in negotiating collective bargaining agreements and other litigation
matters involving major television networks and radio stations.
* * *
RICHARD WILSON is an attorney at Siprut PC. His practice is focused on complex
commercial and class action litigation, with an emphasis on consumer protection. Mr. Wilson’s
practice also encompasses whistleblower actions for Medicare and Medicaid under the False
Claims Act. Mr. Wilson graduated magna cum laude from Chicago-Kent College of Law, where
he served as Executive Articles Editor of the Chicago-Kent Law Review and was elected to the
Order of the Coif. While at Chicago-Kent, Mr. Wilson earned three CALI Awards for achieving
the highest grade in his class, and was named a Kent Legal Scholar. Prior to joining Siprut PC,
Mr. Wilson externed with the United States Court of Appeals for the Seventh Circuit and with
the Circuit Court of Cook County, Chancery Division.
* * *
KE LIU is an attorney at Siprut PC. His practice is focused principally on class-action
litigation, with an emphasis on consumer protection and technology issues. Mr. Liu is licensed to
practice in the State of Illinois and the U.S. District Court for the Northern District of Illinois.
Mr. Liu graduated cum laude from the University of Illinois College of Law in 2015,
where he served as Associate Editor of the University of Illinois Journal of Law, Technology &
Policy. While at the University of Illinois, Mr. Liu received honors and high honors awards in
Legal Research, Legal Writing, and Appellate Advocacy.
Prior to joining Siprut PC, Mr. Liu worked as a law clerk at the City of Chicago
Department of Business Affairs and Consumer Protection, where he regulated Chicago
businesses and prosecuted hundreds of consumer fraud cases. Mr. Liu also externed for the
Honorable Judge Alfred J. Paul, Circuit Court of Cook County, County Division
* * *
MICHAEL CHANG is an attorney at Siprut PC. His practice is focused on commercial
litigation, with an emphasis on information technology infrastructure.
Mr. Chang earned his J.D. from the University of Illinois College of Law, where he
graduated magna cum laude. While at the College of Law, Mr. Chang was selected to the
national team for the Philip C. Jessup International Law Moot Court Competition, and was a
participant in the Jessup Midwest Regional Competition. He additionally received a Pro Bono
Notation upon graduation, in recognition of 60 hours of pro bono legal service. Mr. Chang
received his B.S. in Management Information Systems from the University of Arizona.
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 20 of 22 PageID #:887
-13-
Prior to joining the firm, Mr. Chang prosecuted child support enforcement cases at the
Champaign County State’s Attorney Office for two years as an intern. He also prosecuted cases
as an extern for a specialized drug task force at the Cobb County District Attorney’s Office in
Marietta, Georgia. Mr. Chang served as a judicial extern for the Twelfth Judicial Circuit of
Illinois.
* * *
NATASHA SINGH is an attorney at Siprut PC. Her practice is focused principally on
complex commercial and class action litigation, with an emphasis on consumer protection. Ms.
Singh is licensed to practice in the State of Illinois.
Prior to joining Siprut PC, Ms. Singh worked as a law clerk at a class action firm where
she assisted in all aspects of the litigation process for a broad range of complex litigation matters,
including consumer fraud, invasion of privacy, false advertising, and contract disputes. Ms.
Singh also externed with the Circuit Court of Cook County.
After receiving her B.A. from Boston University, Ms. Singh worked as a legal assistant at
a corporate law firm in New York City. Ms. Singh graduated from the University of Illinois
College of Law in 2016. While at the University of Illinois, Ms. Singh received honors and high
honors awards in Legal Research and Appellate Advocacy.
* * *
MITCHEL OLSON is Of Counsel at Siprut PC. He has a law degree from Stanford Law
School and a medical degree from the University of California, and is licensed to practice both
law and medicine.
Dr. Olson has successfully litigated hundreds of cases involving defective medical
devices, faulty drugs, and negligent medical practice. He has obtained millions of dollars in
recoveries for clients who had “metal on metal” hip implants that caused metal poisoning and
joint breakdown, anesthetic pumps that destroyed shoulder joints in young athletes, breast
implants that leaked silicon and caused scar tissue and systemic immune reactions, and surgical
stapling devices that misfired, resulting in catastrophic complications. He has represented other
clients who took gastric reflux drugs that caused heart arrhythmias and sudden death, a pain
medication that resulted in an epidemic of prescription drug addicts, and recalled diet drugs that
caused heart attacks.
Dr. Olson has recovered millions of dollars on behalf of clients catastrophically injured
by medical negligence, including a six year old girl who lost her legs and arms after an
emergency room physician told the child’s mother that she was “overly concerned” and sent the
child home without treatment, and a man who became a paraplegic after a resident
anesthesiologist at a university hospital failed to monitor fluids being administered, resulting in a
50 lb. weight gain during surgery and heart failure. He obtained a 31 million dollar verdict for a
baby badly brain damaged as a result of an obstetrician’s unwillingness to see the bleeding
mother when called during the night, even though California limits pain and suffering damages
in medical malpractice cases to $250,000. Dr. Olson has also successfully prosecuted claims
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 21 of 22 PageID #:888
-14-
against insurance companies for their bad faith refusal to pay for medical services and attorneys
who committed legal malpractice.
While the majority of Dr. Olson’s practice has been devoted to representing people
injured in the health care system, he has also handled class action lawsuits on behalf of victims
of predatory mortgage lending, California retail electrical consumers who overpaid for electricity
because of market manipulation, gender discrimination by a national brokerage firm, and
purchasers of cell phones overcharged for sales taxes. Dr. Olson has consulted in litigation
involving the oil industry’s use of “fracking,” which can contaminate ground water with
radioactive isotopes and other chemicals.
Dr. Olson holds a AV Preeminent Rating, the highest possible rating, in the Martindale-
Hubbell Peer Review Ratings Program, and has been recognized as a Top Lawyer in San Diego,
California, where his office is located.
* * *
MICHAEL OBERNESSER is Of Counsel at Siprut PC. Michael graduated magna cum laude
from Xavier University in Cincinnati, Ohio with a Bachelor's Degree in Philosophy in 1998.
After graduation, Michael went on to receive his Juris Doctor at the Northwestern University
School of Law in Chicago, Illinois in 2001. While attending Northwestern, Michael was a
member of the Bluhm Legal Clinic, where he represented clients accused of a wide variety of
criminal offenses, including drug and gun possession, assault and battery, and murder. After
graduation, Michael went to work for some of the largest law firms in the nation, including
Morgan, Lewis & Bockius LLP, and Howrey LLC, where he litigated complex matters on behalf
of his clients.
* * *
ALEXANDER SHAPOVAL is Of Counsel at Siprut PC, and heads the Firm's Boston office.
His practice encompasses all manner of civil litigation, including class actions and personal
injury litigation. Alexander is an experienced trial lawyer, with substantial first-chair jury trial
experience. Alexander is a graduate of the Massachusetts School of Law. He is admitted to
practice in Massachusetts and the United States District Court for the District of Massachusetts.
4821-5129-8057, v. 1
Case: 1:15-cv-05569 Document #: 94-2 Filed: 11/21/17 Page 22 of 22 PageID #:889