WPCY* qw°4JvT%Buv!*,Ls$&Q B!ʪP$2ud$IU"Ţَj19#ǭyRA0N}^U-91鷠;/YBOZbnfYBW^ /"5jK{mFb_oŚQiƍnک#ob!q{͟G;a4EBۗP"8b,)(/=g@ִtq =)ݚh-0ȞZLF"?]BƂh^YFfu;NIZPD w#v`w zsyV9Y$ךuijo7` jP¿DVI_|S[(`|dH*f".Sf. z?٩hˉOOg#Sq'GUYdnJ*UCBLnY % 0 0Y 0 0u 0 0 0/ 0r 07 0|  0 0 0 0 6b? 0" 0 0i 0= D+' AQRU:` 0C  0&' 0f'#1(()N*^ *w(*4,*@* mB*\  `*Times New RomanTT\  `*Times New RomanTTC\  P6QP\  `*Times New RomanTTXXP\  P6QXP\  `*Times New RomanTT&&J\  P6Q&P<6X9`("Courier NewTTTTXXx6X@DQX@<6X9`("Courier NewTTTTd6X@DQ@'  )IN THE CIRCUIT COURT FOR PRINCE GEORGE'S COUNTY, MARYLAND 2 (MD Court System(0MD Court System .   T! :Body Text I1Body Text I1            T! :Footnote TexFootnote Tex            T:Footnote Re1Footnote Ref        H&&4HyperlinkHyperlink            H&&4HypertextHypertext            P! 8Body Text 2Body Text 2            T! :Body Text InBody Text In            P 8Body Text 3Body Text 3  &&&W\  `*Times New RomanTTW        XXXW\  `*Times New RomanTTW  <8T .headerheader   (#        >4X` hp x (#>  P8page numberpage number        `:footnote reffootnote reference        h:Default ParaDefault Paragraph Font        H$ 4heading 2heading 2            H\Z 4heading 1heading 1  5+ ` hp x (#5         >4X` hp x (#>   X  'X$XX$XXX$  _WGCz h L p @X@EXLLXL    T$T$ T$T$    ! (#X!           ! X(#!    ?+ ` hp x (#X? (Y2 $ !,!X$XX$XXX$  ݃ Level 1 Level 2 Level 3 Level 4 Level 5(Y2 $ !,!X$XX$XXX$  (Y2 $ !,!X$XX$XXX$  ($    'dxdC<< c  "X$XX$XXX$  _    @    1  A  <6X9`("Courier NewTT($      !,!X$XX$XXX$  ?+ ` hp x (#X?      QXX$   1  !      ݀Cypres 6 QAQ 6 Asnearas(possible).Theruleofcypresisarulefortheconstructionofinstrumentsin z equity,bywhichtheintentionofthepartyiscarriedoutasnearasmaybe,whenitwouldbeimpossible j* orillegaltogiveitliteraleffect. 6 Q@Q 6 Black 6 QQ 6 sLawDictionary,FifthEdition.X$XQԀ QXX$6 QAQ 6 Thecypresapproachismost  frequentlyusedforthepurposeofdistributingtheresidueofaclasssettlementfund. 6 Q@Q 6 InreMicrosoft  AntitrustLitig.,185F.Supp.2d519,523(2002)citingPowellv.GeorgiaPacificCorp.,119F.3d703(8thCir.  J 1997);InreMotorsportsMerch.AntitrustLitig.,160F.Supp.2d1392(N.D.Ga.2001);Jonesv.Nat 6 QQ 6 l 0! Distillers,56F.Supp.2d355(S.D.N.Y1999). 6 QAQ 6 Ithasalsobeenutilizedasameansfordistributingthe ! entiretyofaclassfundwheretheproceedscannotbeeconomicallydistributedtoclassmembers. 6 Q@Q 6 Inre "N MicrosoftAntitrustLitig.,185F.Supp.2d519,523(2002)citingInreToys 6 QAQ 6 R 6 Q@Q 6 UsAntitrustLitig.,191 ># F.R.D.347(E.D.N.Y.2000);NewYorkv.ReebokInt 6 QQ 6 lLtd.,903F.Supp.532(S.D.N.Y.1995),aff 6 QQ 6 d,96 #  F.3d44(2dCir.1996);2HerbertB.Newberg&AlbaConte,NewbergonClassActions 6 Q'Q 6 1120(3ded. $\  1992);7BCharlesAlanWright,ArthurR.Miller&MaryK.Kane,FederalPracticeandProcedure 6 Q'Q 6  L%   1784,at84(2ded.1986). 6 Q@Q 6  %  X$XQ(2$ !,!X$XX$XXX$  $XXX$  0  3|x (>,$X$XX$XXX$HP LaserJet 5M,,,,0!T0 a0yweb0U !,!X$XX$XXX$  _X    INTHECIRCUITCOURTFORPRINCEGEORGE'SCOUNTY,MARYLAND @    &h%XX$&h%%&h      X$X%&hJACQUELINE_DOTSON_Ԁetal.     p : X  !    X$XXX$X$XXX$    <(  hp x (#X<0@..@..@..@..@..@..: `  0@..@..Plaintiffs@..@..@..: (  B+ ` hp x (# XB@..@..@..@..@..@..@..:   v.@..@..@..@..@..@..@..:@..CaseNo.CAL9921004  x    &h%XX$&h%%&h       `     h      p X$X%&h:    !    X$XXX$X$XXX$    6" hp x (#X60@..@..@..@..:  l  B+ ` hp x (#hXBBELLATLANTICMARYLAND,INC.etal.@..: t4  @..@..@..@..@..@..@..: <  @..@..@..Defendants@..@..@..:   ******************************************@..ConsolidatedWith      &h%XX$&h%%&h      X$X%&hFAUSTO_SCROCCO_Ԁetal. h      p : T    !    X$XXX$X$XXX$    @..@..@..@..@..@..@..: \  @..@..@..Plaintiffs@..@..@..: $  @..@..@..@..@..@..@..:@..CaseNo.CAL0009962   v.@..@..@..@..@..@..@..:  @..@..@..@..@..@..@..:  BELLATLANTICMARYLAND,INC.etal.@..: h @..@..@..@..@..@..@..: p0 @..@..@..Defendants@..@..@..: 8 ******************************************    ?+ ` hp x (#X?      & X  OPINIONANDORDEROFCOURT   P  _!     XX      'X  8 ` X@XXX$AX$XXX@Isuspecttherearegreatnumbersofcontractsthatmayberenderedusuriousby p themajorityopinion,andclassactionlawyerswillhavevastnewvistasto B explore.X@XXX$@X$XXX@ԀJ ` !` !  ` 6" ` p x (#X68 ` 0` !` !JudgeHoward_Chasanow_,Dissenting,United  ! CableTelevisionofBaltimoreLimited !l" Partnershipv.LouisBurchetal.,354Md.658, t"4# 694,732A.2d887,906(1999).<#$!! E+ ` hp x (#` XE          ` Aspredicted,classactionslawyershave,infact,beenroamingthisStateaspaladinsfor %T' theputativeclassesofoppressedlatefeepayers.Indeed,theyappeartobesurveyingvirtually $' ) everycommercialenterpriseinMarylandwhichmayfinancethepaymentforwhateverproduct (t"+ orservicetheysellinordertodetermineifthefinancingformulautilizedbytheindustryviolates D*$- the6%perannumcapthattheMarylandCourtofAppealssaysArticleIII,X@XXX$'X$XXX@Ԁ57oftheMaryland +%/ ConstitutionproscribesuniversallyinthisState.Followingthesedeterminations,itappearsthat x-8'1 _suitsonbehalfofnamedlatefeepayingcustomersarefiledbythoselawfirmsandlawyerswho @ specializeinthefilingandlitigatingofclassactionsuits.Thoselawsuitsareaccompaniedby  RequestsforClassCertificationofthosecustomerswhohaveand/orarepayingthoseusurious `  chargesandfees,albeit,ofnecessityinmostcasesforcomparativelysmallamountsvaryingfrom   $5.00to$50.00foreachcustomer.IntheCircuitCourtforPrinceGeorge'sCountyalone,in  @ additiontothecablecompanieswhichstartedtheclassactionballrolling,suchsuitshavebeen   filedagainst,amongothers,equipmentrentalcompanies,automobilefinancingcompanies,car `  dealers,telephonecompanies,utilities,tirecenters,healthcarecompanies,andhealthinsurance 0  companies.TheseunfoldinglegalscenariosrenderJudgeChasanowX@XXX$X$XXX@sDissentingOpinionin   Burchataminimumprescient,ifnotprophetic. d$  ` Moreimportantly,theissueJudgeChasanowX@XXX$X$XXX@sDissentraisesominouslyhoversoverthe  considerationbythisCourtoftheClassPlaintiffsX@XXX$X$XXX@ԀMotionforFinalApprovalofClassAction X Settlement,AwardofAttorneysX@XXX$X$XXX@ԀFeesandExpensestoClassCounselandEntryofFinal < Judgment,aswellastheObjectionstoStipulationofSettlementbyObjectingClassMembers  knownastheX@XXX$AX$XXX@BoydObjectors.X@XXX$@X$XXX@ԀThatissueiswhetherthisCourtandothercircuitcourtsin p0 Marylandwishtoencouragelawyers,whospecializeinclassactionlitigation,whethertheybe  ClassCounselintheinstantcaseoranylawyerswhospecializeinclassactionlitigation,to d  continuefilingclassactionsuitstorecoversmall,butfairamountsofcompensationforevery 4!" latefeepayingcustomerintheState.Incentivestodosoareprovidedbyawardingsubstantial "$ attorneyX@XXX$X$XXX@sfeesforfilingandlitigatingtheseclaims. T$&  ` ThisCourtismindfulthatthepurposeofaclassactionlawsuitistoX@XXX$AX$XXX@providea %( mechanismforlitigationofsmallclaimsthatnoindividualplaintiffwouldhavetheincentiveto '\!* bring.X@XXX$@X$XXX@ԀInReMicrosoftCorp.AntitrustLitigation,214F.R.D.371,378(2003).Nevertheless, ,)", thisCourtdoesnotbelievethatthispurposejustifieslitigationasaclassactionofeverysmall *$. claimthatanindividualplaintiffwouldotherwisenothaveanincentivetoassert.Thereis, `, &0 therefore,aseriousissuewhichperhapstheLegislatureortheJudiciarybyRuleshouldaddress -'2 astowhetherthemultitudeofcasesandensuinglargeamountsoftimeandmoneyallocatedto @ thecostsofthislitigationtocorrect,andperhapsdeter,theillegaloverchargingoflatefeesisthe  mostefficientwaytoensurefairnesstothosepersonswhohavepaidusuriouslatefees, `  particularlyinlightofthefactthatforthemostparttherecoveryisbetween$5.00and$50.00   percustomer.  @  ` TheseX@XXX$AX$XXX@latefeecasesX@XXX$@X$XXX@Ԁarenotlikeproductliability,securitiesfraud,orantitrustcases.   Neithertheindividualcitizens,whohavebeendamaged,northelargereconomyhavebeen t  substantiallyaffected.Therearenolifethreateningoreconomicallyimpoverishingdamages D  causedbythepaymentofusuriouslatecharges.    ` ItgoeswithoutsayingthatthecommercialenterprisesinMaryland,whoarethetargeted d$ defendantsinthesecases,includingBellAtlanticMaryland,Inc.intheinstantcase,shouldnot  feelfreetochargeconstitutionallyusuriouslatefees,norshouldtheybelegallyimmuneifthey D doso.Thereisnoquestionthattheyshouldbeheldaccountableforthispracticeoncethe  highestcourtinthisStatesaystheyhavebeenoperatingillegallyastheMarylandCourtof d AppealshasdoneinBurch.ThisCourtdoesnot,inanyway,condemnorevencriticizeClass 4 Counselinthiscaseoranyotherlawyersspecializinginclassactionlitigationforplayingonthe  fertilefieldplantedbytheJudiciary.Theyareentitledtoidentifyemergingandlucrativeareas T  ofpractice,includingthosegeneratedbyappellatecourtdecisions,andthenpursuethemaslegal  " entrepreneurs.But,particularlyinthisandothercases,thebenefitreceivedbytheaffected t"4$ individualsandbysocietyshouldbeweighedagainstthecostsofobtainingitbeforethelegal $& system,i.e.thecourtsprovidepowerfulincentivesintheformoflargeawardsofattorneyX@XXX$X$XXX@sfees %T( tofurtherfileandpursuelitigationoflatefeecases. 8' *  ` ThisCourt,intheinstantcase,hasweighedthepotentialbenefitsreceivedbythe (", individualandbusinesscustomersofBellAtlanticintheseconsolidatedcasesagainstthecosts, X*$. particularlytheproposedattorneysX@XXX$X$XXX@Ԁfees,andfoundthemdisproportionate.TheClassMotion +%0 forFinalApprovalofClassActionSettlement,AwardofAttorneysX@XXX$X$XXX@ԀFeesandExpensestoClass -L'2 CounselandEntryofFinalJudgmentwillthereforebedeniedforthereasonsthatfollow: @  `  9                   FACTS X  3         ` Thisconsolidatedcasebeganastwoclassactionsuitsfiledin1999andbroughtonbehalf (  ofcertainBellAtlanticMaryland,Inc.telephoneservicesubscriberswhowerechargedlatefees  x inviolationofArticleIII,X@XXX$'X$XXX@Ԁ57oftheMarylandConstitution.UnitedCableTelevisionof H   BaltimoreLimitedPartnershipv.LouisBurchetal.,354Md.658,732A.2d887(1999).The   PlaintiffsinDotsonconsistofaclassofindividualswhopurchasedBellAtlanticX@XXX$X$XXX@sresidential |<  telephoneservices.ThePlaintiffsinScroccoconsistofbusinessesthatpurchasedBell    AtlanticX@XXX$X$XXX@sservices.ThecaseswereconsolidatedonDecember12,2002bythisCourtX@XXX$X$XXX@sOrder p  asaresultofJointMotionforConsolidation,RecertificationandPreliminaryApprovalwithout T opposition.   ` ThePlaintiffsallegedthatBellAtlanticchargedlatepayingcustomersa$5.00monthly t4 feethatexceededthe6%perannumcapthatArticleIII,X@XXX$'X$XXX@Ԁ57oftheMarylandConstitution  placedoninterestratesthatarenotspecificallyauthorizedbystatute.ThePlaintiffsasserted h claimsforrestitutionofallillegallatefeespaid,plusprejudgmentinterest,andforthe 8 disgorgementofallprofitsthatBellAtlantichadrealizedasaresultofassessingtheselatefee  charges.ThePlaintiffsmovedforclasscertificationinNovember,1999.Theclassdefinition X ! wascertifiedbythisCourt(McKee,C.J.)onJanuary31,2000,andincludedX@XXX$AX$XXX@allpersons !# (excludingtheTrialCourtJudgeandmembersofhisorherimmediatefamily)whoarecurrent #L% and/orformerresidentialsubscribersoftelephoneservicesprovidedbyBellAtlanticMaryland, %' Inc.intheStateofMarylandwhohavepaidtoBellAtlanticMaryland,Inc.alatepayment &l ) chargethatexceedssixpercent(6%)perannum,andwhohavemadesuchpaymentswithinthe <(!+ applicablelimitationsperiod.X@XXX$@X$XXX@ )#-  ` InDecember1999,BellAtlanticmovedtodismissthePlaintiffsX@XXX$X$XXX@ԀAmendedComplaint p+0%/ onthegroundsthattheMarylandPublicServiceCommission(X@XXX$AX$XXX@PSCX@XXX$@X$XXX@)hadauthorizedthe -&1 subjectlatefees,thePlaintiffshadnotexhaustedtheiradministrativeremediesthroughthePSC, @ andtherefore,theclaimsforRestitutionandUnjustEnrichmentfailedtostateacauseofaction  asamatteroflaw.ThePlaintiffsfiledaSecondAmendedClassActionComplaintonDecember `  27,1999andmovedforsummaryjudgmentonJanuary31,2000.ByOrderofCourtMay16,   2000,theCourt(McKee,C.J.)grantedBellAtlanticX@XXX$X$XXX@sMotiontoDismissinpartbydismissing  @ thePlaintiffsX@XXX$X$XXX@ԀcauseofactionforRestitution,Count1,butallowedPlaintiffstogoforwardon $  CountII,theUnjustEnrichmenttheory.TheCourt(McKee,C.J.)onthatsamedatealsogranted   thePlaintiffsX@XXX$X$XXX@ԀMotionforSummaryJudgmentastoliabilityonlyonCountIIX@XXX$BX$XXX@ԀUnjust X  Enrichment.    ` OnJuly18,2000,BellAtlanticfiledaMotionforaStayofAllProceedingsonthe L groundsthattheMarylandCourtofAppealswasconsideringtheconstitutionalityofthe  provisionsofChapter59oftheActsof2000,whichretroactivelyauthorizedthelatefeesatissue l inthiscasefortheentireclassperiod.OnAugust9,2000,JudgeMcKeegrantedBellAtlanticX@XXX$X$XXX@s < MotiontoStayallproceedings.   ` OnAugust29,2002,inthecaseofDuav.ComcastCableofMaryland,Inc.,etal.,370 p0 Md.604,805A.2d1061(2002),theCourtofAppealsheldthattheretroactiveprovisionsofCh.  59and569violatedArticles19and24oftheMarylandDeclarationofRightsandArticleIII,X@XXX$'X$XXX@ P  40oftheMarylandConstitution.Thereafter,onSeptember17,2002,JudgeMcKeeliftedthe 4!" previouslyimposedStayoftheseproceedings. "$  ` OnDecember9,2002,theClassPlaintiffsandtheDefendantBellAtlanticsubmitteda T$& StipulationofSettlementtothisCourtandmovedforpreliminaryapproval.TheMaryland %( PublicServiceCommissionalsoaparty,whilepreviouslyonrecordtakingthepositionthatthe t'4!* CourtlackedjurisdictionoverthesubjectmatterasithadbeenpledintheComplaintinits )", currentform,neverthelessfilednooppositiontotheproposedsettlementonjurisdictional, *T$. procedural,orsubstantivegrounds,andlateratthehearingonMay5,2003,wherethisCourt $,%0 consideredthefinalapprovalofthesettlementstatedontherecordthatithadX@XXX$AX$XXX@noobjectionX@XXX$@X$XXX@ -t'2 totheCourtX@XXX$X$XXX@sapprovingthesettlement. @  ` OnDecember12,2002,theCourt(McKeeC.J.)grantedPreliminaryApprovalofthe  Settlement.NoticeswerethensentoutpursuanttothisCourtX@XXX$X$XXX@sOrder.OnApril11,2003, t 4 certainobjectingClassMembers,theX@XXX$AX$XXX@BoydObjectorsX@XXX$@X$XXX@,filedObjectionstoStipulationof   SettlementandonApril18,2003,filedaMotiontoIntervenewithAuthorities.  |  ` TheNoticeofClassCertification,ProposedSettlementandHearingwasmailedasa L   billinginserttoallofBellAtlanticX@XXX$X$XXX@scurrentcustomersbetweenFebruary3,2003andMarch   7,2003.TheNoticewaspublishedinasingleeditionofUSATodayonJanuary2,2003.The @  noticewasmadeavailableonawebsiteentitled       http://md.latefeesettlement.com/ ;Rerti      ݀fromDecember   22,2002untilJune21,2003.ThelawfirmofOX@XXX$X$XXX@Melveny&Meyerscreatedandmaintained ` thewebsiteinhouse.(PlaintiffX@XXX$X$XXX@sMotion,Exhibit5,AffidavitofIraH.Raphaelson,pg.2,X@XXX$&X$XXX@Ԁ8). D  ` Ofnote,allformsofthenoticecontainedthetypographicalerrorthattheoptoutdatewas x8 April11,2002,insteadof2003.TheWebsiteNoticewastheonlynoticeformwheretheerror  wascorrected.ThatwasdoneonFebruary19,2003,withthefollowingstatementX@XXX$AX$XXX@Theoptout X dateisApril11,2003(NOT2002).X@XXX$@X$XXX@Ԁ(PlaintiffX@XXX$X$XXX@sMotion,Exhibit5,AffidavitofIraH. < Raphaelson,pg.3,X@XXX$&X$XXX@10).    `         &    TheSettlementAgreement ss X #$  ' #W $d& Werti        &   ` TheSettlementAgreementsubmittedbycounselforthetwoclassesinthisconsolidated @ actionforapprovalbythisCourtinsubstanceproposestoreleaseallclaimsthatcouldhavebeen  assertedbyClassMembersthatariseoutoforrelatetothebillingandcollectionoflatefeesby `  BellAtlantic.Inexchangeforthereleasefromliability,areversionaryfundof$51,900,000is   reservedfromwhichclaimsproperlymadeanddocumentedbyClassMemberswillbepaid.  @ UnderOption(1),ClassmemberswhosubmittedaProofofClaimbyJune21,2003,would    receiveapaymentof$6.00fromBellAtlanticwithoutanyfurtherdocumentation.Former `  customerswouldreceiveacheckandcurrentcustomerswouldreceiveacredittotheirbill.The 0  SettlementalsoalternativelywouldpermitClassMemberstoclaimsixtypercent(60%)ofthe   latefeestheyactuallypaid,providedtheysubmitaClaimForm,aProofofPaymentintheform P ofeitheraswornstatementmadeunderthepenaltyofperjury,identifyingthetotalamountof  latefeespaidbetween1996and1999(forclaimsupto$50)ordocumentaryevidenceofpaid p0 latefeesforclaimsinexcessof$50.UndertheAgreement,BellAtlanticwouldreservetheright  toverifyallProofofClaimssubmitted.UnderthetermsofthisSettlementAgreement,Bell P AtlanticsX@XXX$X$XXX@ԀpotentialliabilitytoClassMembersiscappedat$51,900,000.Thereisnominimum   dollarvaluesetthatBellAtlanticisrequiredtopayoutindirectrelieftotheClassMembersor  inindirectreliefviaacypresfund.          1      ׀Rather,allunclaimedfundsrevertbacktoBellAtlantic. T  ЀEachoftheNamedPlaintiffswillreceiveanIncentiveAwardof$500,payablebycheck.  "  ` ThePlaintiffX@XXX$X$XXX@sClassCounselhaveaskedthisCourttoapproveanawardof$13Million t"4$ DollarsinAttorneysX@XXX$X$XXX@ԀFees,whichBellAtlantic,aspartoftheSettlementAgreement,hasagreed $& nottoopposeinconsiderationoftheotherprovisionsofthetotalAgreementbetweentheClass %|( andBellAtlantic.PlaintiffX@XXX$X$XXX@sClassCounselcontendsthatthe$13milliondollarsconstitutes L' !* approximately20%of$64,900,000,thetotalaward,includingAttorneysX@XXX$X$XXX@ԀFees,sequesteredby (", BellAtlanticunderthetermsofthisproposedsettlement.Thatcalculationismathematically *T$. correctand,inandofitself,notremarkable. $,%0  `  -t'2         & A    STANDARDSFORSETTLEMENTAPPROVAL ssmf @   ssf fRaph         ` MarylandRule2231(h)doesnotexpress,orevenreference,anystandardsagainstwhich `  acircuitcourtmaymeasure,andultimatelyapproveordisapprove,aproposedsettlement   agreementinaclassactionsuit.NorhavecircuitcourtsinMarylandhadanyexperienceorcases  @ todevelopsuchstandards,whichhavethenbeentestedbyappellatereview.ThisCourt   thereforemustlookforguidancetotheFederalCourts,particularlytheU.S.DistrictCourtfor `  theDistrictofMarylandtoassistitindecidingwhethertheSettlementAgreementintheinstant 0  caseisfair,adequateandreasonableunderthecircumstances'@Of    ` MarylandFederalDistrictCourtshavetakenanapproachwherefairnessandadequacy P areconsideredastwocategories.InInReMontgomeryCountyRealEstateAntitrustLitigation,  83F.R.D.305,316X@XXX$BX$XXX@317(D.Md.1979),JudgeStanleyBlairconductedabifurcatedanalysis p0 wherebyseparateinquiriesweremaderegardingfairnessandadequacy.Astofairness,Judge  Blairstated: d           8 `  X@XXX$AX$XXX@Thefactorstendingtorevealthefairnessofasettlementarethosewhich 4 indicatethepresenceorabsenceofcollusionamongtheparties.Becauseofthe  dangerofcounselX@XXX$X$XXX@scompromisingasuitforaninadequateamountforthesake  ofinsuringafee,thecourtisobligatedtoascertainthatthesettlementwas ` reachedasaresultofgoodfaithbargainingatarmX@XXX$X$XXX@slength.Thegoodfaithof h(  thepartiesisreflectedinsuchfactorsasthepostureofthecaseatthetime : ! settlementisproposed,theextentofdiscoverythathasbeenconducted,the !" circumstancessurroundingthenegotiationsandtheexperienceofcounsel.X@XXX$@X$XXX@Ԁ!#` !` ! ,B.` hp x (#%XB, (#XId.at315. d#$% ! ` (# !Asfortheadequacyelement,JudgeBlairenumeratedthefollowingfactors: ,$& B+ ` hp x (#` B8 ` X@XXX$AX$XXX@Inevaluatingtheadequacyofaproposedsettlement,thecourtmustweighthe $' likelihoodoftheplaintiffX@XXX$X$XXX@srecoveryonthemeritsagainsttheamountofferedin %( settlement.Thisnecessarilyrequiresthecourttomakeacarefulassessmentof &X ) allthefactsandathoroughanalysisoftheapplicablelaw.Itisnot,ofcourse, `' !* necessaryordesirabletotrythecasetodeterminewhetherasettlementis ((!+ adequatesincetheverypurposeofsettlementistoavoidthetrialofsharply (", disputedissuesandtodispensewithwastefullitigation.Inassessingadequacy )x#- oftheproposedsettlement,courtsshouldweightheamounttenderedtothe *@$. plaintiffsagainstsuchfactorsas(1)therelativestrengthoftheplaintiffX@XXX$X$XXX@scase H+%/ onthemerits;(2)theexistenceofanydifficultiesofprooforstrongdefensesthe ,%0 plaintiffsarelikelytoencounterifthecasegoestotrial;(3)theanticipated ,&1 durationandexpenseofadditionallitigation;(4)thesolvencyofthedefendants -j'2 andthelikelihoodofrecoveryonalitigatedjudgment;(5)thedegreeof @ oppositiontothesettlement.` !` !   Id.at315316. X lRaph           ! (#X!      B+ ` hp x (#(#B yRaph     XX     ` FederalcourtsinMarylandhavefollowedthebifurcatedapproachestablishedbyJudge (  Blair.SeeInreMidAtlanticToyotaAntitrustLitigation,564F.Supp.1379,1383(D.Md.1983),   InreJiffyLubeSecuritiesLitigation,927F.2d155,158159(D.Md.1991).Additionally,the  x ManualForComplexLitigation,ThirdX@XXX$'X$XXX@Ԁ30.42at238(1995)describestheroleofthecourt  @ duringsettlement: R             8 `  X@XXX$AX$XXX@Indeterminingwhetherasettlementshouldbeapproved,thecourtmust   decidewhetheritisfair,reasonable,andadequateunderthecircumstancesand   whethertheinterestsoftheclassasawholearebetterservedifthelitigationis t  resolvedbythesettlementratherthanpursued.Althoughsettlementisfavored, |<  courtreviewmustnotbeperfunctory;thedynamicsofclassactionsettlement D  mayleadthenegotiatingpartiesX@XXX$BX$XXX@ԀeventhosewiththebestintentionsX@XXX$BX$XXX@Ԁtogive    insufficientweighttotheinterestsofatleastsomeclassmembers.X@XXX$@X$XXX@Ԁ ` !` ! ,B.` hp x (#%XB, ` ThisCourtmaynotrewriteasettlementagreement,ifitisunacceptable.TheCourtmust x8 disproveit.Evansv.JeffD.,475U.S.717,727(1986).However,proponentsmayrevisetheir @ agreementtoovercomethecourtX@XXX$X$XXX@sobjectionsandresubmitit.Ifthechangesaresubstantial,  itmaybenecessarytobeginthenoticeandreviewprocessanew.ManualForComplex  Litigation,Third.X@XXX$'X$XXX@Ԁ23.14at172. b  ` ThiscourtfindstheSettlementAgreementunacceptableonseveralgroundsandwill t4 explainbelow. <     `   NOTICE     `    ` AlthoughrigidstandardsdonotgovernthecontentsofsettlementnoticetoClass X Members,Mullanev.CentralHanoverBank&TrustCo.,339U.S.306,314,94L.Ed.865,70 `  S.Ct.652,(1950),noticemust"fairlyapprisetheprospectivemembersoftheclassoftheterms (  oftheproposedsettlementandoftheoptionsthatareopentotheminconnectionwiththe   proceedings.X@XXX$@X$XXX@ԀInreMidAtlanticToyotaAntitrustLitigation,585F.Supp.1553,1563,(D.Md.  x 1984),citingGruninv.InternationalHouseofPancakes,513F.2d114,122,(8thCir.1975).  J ClassPlaintiffX@XXX$X$XXX@sCounselreportsthatthedirectmailnoticewassenttoapproximately2.5 R   millionhouseholdsandbusinesses,thatpublicationinUSATodayreachedanadditional2.2to $  2.5millionpersonsacrossthecountry,andthatnoticewasavailable24hoursadayonthe   X@XXX$AX$XXX@md.latefeesettlement.comX@XXX$@X$XXX@ԀWebsite.(ClassPlaintiffsX@XXX$X$XXX@ԀMotion,pg.30,citingExhibit5 t  AffidavitofIraH.Raphaelson).Additionally,ClassPlaintiffX@XXX$X$XXX@sCounselstatesthatonly2Class F  MemberschosetooptoutbytheApril11,2003deadline,andthesoleobjectionwasfiledbythe X  BoydObjectors.     ` ThisCourtX@XXX$X$XXX@sreservationsabouttheNoticeoftheProposedSettlementinthiscaseare   neitherdrivenbythemeansofdeliveringtheNoticeitselfnorthebythemethodthatthe z  MembersoftheClasshavetoutilizetoaccessit,i.e.theWebsite.Nordoesthenumberof B householdsandindividualswhoactuallysawtheNoticeconcernthisCourt.Rather,theCourtX@XXX$X$XXX@s J  refusaltoapprovethisSettlementresultsfromNoticeX@XXX$X$XXX@scontentandformat.   ` Specifically,theDirectMailNoticeitselfdidnotcontaininformationregardingthe$13  millioninAttorneysX@XXX$X$XXX@ԀFees.Instead,theDirectMailNoticecitedawebsiteaddresswherethe v informationregardingAttorneysX@XXX$X$XXX@ԀFeescouldbeobtained.Thisformatiscontrarytoguidance H providedinseveralcases,includingGoldenbergv.Marriott,33F.Supp.2d434(D.Md.1998). Z InGoldenberg,JudgeMessittestated: "   8 ` X@XXX$AX$XXX@Noticeofthepotentialextentofattorneysfeeawardsisdeemedessential  becauseitallowsclassmemberstodeterminethepossibleinfluenceofthe | feesonthesettlementandtomakeinformeddecisionsabouttheirrightto D challengethefeeaward.X@XXX$@X$XXX@ԀId.at441.L ` !` !  `   JudgeMessittealsonotedX@XXX$AX$XXX@Somecourts,infact,haveinvalidatedclassactionsettlements  becauseofclasscounselX@XXX$X$XXX@sfailuretonotifytheClassMembersofthepotentialextentoftheir x  feeaward.X@XXX$@X$XXX@ԀId.citingInreGeneralMotorsCorp.EngineInterchangeLitig.,594F.2d1106,  J! 1130(7thCir.1979);Piambinov.Bailey,610F.2d1306,1328(5thCir.1980). \!"  ` TheManualForComplexLitigation,ThirdX@XXX$'X$XXX@Ԁ30.212at228recommendsthat $"# noticeofaproposedsettlementshouldprovideinformationregardingattorneyX@XXX$X$XXX@sfees. "$ Moreover,thisCourttakesjudicialnoticeoftheUnitedStatesSupremeCourtX@XXX$X$XXX@srecentapproval #% ofanamendmenttotheFederalRulesofCivilProcedure,Rule23(e)Settlement,Voluntary $Z& Dismissal,orCompromise.TheamendmentisunderRule23(e)(2)andrequiresthatX@XXX$AX$XXX@The b%"' partiesseekingapprovalofsettlement,voluntarydismissalorcompromiseunderRule23(e)(1) 4&( mustfileastatementidentifyinganyagreementmadeinconnectionwiththeproposed & ) settlement,voluntarydismissalorcompromise.X@XXX$@X$XXX@Ԁ(U.S.SupremeCourtEndorsesPackageof '!* FederalRuleAmendments,71U.S.L.W.2615,2615(Apr.1,2003).UnlessCongressaltersthe (V"+ proposedrule,theamendedversionofRule23willtakeeffectDecember1,2003.Id. ^)#,  ` TheSupremeCourtX@XXX$X$XXX@sapprovalofthisamendmenthasbeendescribedasaX@XXX$AX$XXX@fortunateX@XXX$@X$XXX@ &*#- changeinlegalcommentaryonclearsailingagreements(addressedinfra),giventhatcurrently *$. thereisnorulerequiringthatsettlementnoticescontainingclearsailingagreementsincludethe +%/ informationonthecompensationthatwillbepaiddirectlytoclasscounsel.WilliamD. ,H&0 Henderson,X@XXX$AX$XXX@ClearSailingAgreements:ASpecialFormofCollusioninClassAction P-'1 Settlements,77Tul.L.Rev.813,815andn.5(2003).Thus,shouldtherulebeapprovedinits @ currentform,agreementsregardingattorneysfeeswillhavetobeidentifiedinastatement,even  iftheyareunaddressedinthenoticetotheclass,whichwasnotdoneinthiscase.   `   ATTORNEYSX@XXX$X$XXX@ԀFEES `     ` ThisCourtfindsitselfsquarelyinthemiddleoftheexplorationofoneoftheX@XXX$AX$XXX@new 2  vistasX@XXX$@X$XXX@ԀpredictedsoprescientlybyJudgeChasanowinUnitedCable.ThisCourtisnot,   however,withoutguidanceinthisnewterritory,sincethelastquartercenturyhasseenawealth   ofcommentaryfromcourtsandlegalcommentatorsregardingtheneedforjudicialscrutinyof  ^ attorneysX@XXX$X$XXX@Ԁfeeawardsintheclassactionenvironment. f &   ` AparticularconcerncitedbycourtsandcommentatorsalikeisthatX@XXX$AX$XXX@classactionswill 8  provelessbeneficialtoclassmembersthantotheirattorneys.X@XXX$@X$XXX@ԀWeinbergerv.GreatNorthern    NekoosaCorp.,925F.2d519,520(1stCir.1991)citingPiambinov.Bailey(PiambinoII),757   F.2d1112,114344(11thCir.1985),cert.denied.,476U.S.1169,106S.Ct.2889,90L.2dEd. d  976(1986). l,  Ѐ ` InsupportoftheirPetitionfor$13millioninAttorneysX@XXX$X$XXX@ԀFees,CounselforClass 4  Plaintiffsmakeextensiveargumentscitingtheirlonghardhoursandderringdointhehallowed   committeeroomsandcorridorsoftheGeneralAssemblyofMaryland,aswellasthebusy   courtroomsoftheCircuitCourtforBaltimoreCountyandthemoresolemnandimposing V courtroomoftheCourtofAppealsofMarylandwhilewagingaX@XXX$AX$XXX@hardfoughtbattleX@XXX$@X$XXX@Ԁagainstthe ^ forcesofevilX@XXX$AX$XXX@arrayedagainstX@XXX$@X$XXX@ԀtheminthebattleoverHouseBill251,Chapter59oftheActs 0 of2000.Indeed,thelevelofheroicsinthislitigation,describedbyClassCounselas,i.e.X@XXX$AX$XXX@hard  fought,X@XXX$@X$XXX@ԀX@XXX$AX$XXX@hotlyX@XXX$@X$XXX@ԀandX@XXX$AX$XXX@bitterlyX@XXX$@X$XXX@Ԁcontested,X@XXX$AX$XXX@fullcourtpress,X@XXX$@X$XXX@ԀandX@XXX$AX$XXX@surmountedmyriadnovel  questionsoflawandfact,X@XXX$@X$XXX@ԀrivalsthosecontainedinHomerX@XXX$X$XXX@sgreatclassicstheIliadandthe f Odyssey. x8  ` WithrespecttobasinganawardofAttorneysX@XXX$X$XXX@ԀFeesbasedonlobbyingworkon @ legislationbeingconsideredbytheGeneralAssembly,whilethisCourthasnodoubtthatthe  workcitedwasperformedandthehoursspentasclasscounselhasclaimed,Iamnotpersuaded  thatitwasdirected,orevenauthorized,byeithertheClassitselforeventhenamedMembersof b theClass.MarylandRuleofProfessionalConduct1.2.ScopeofRepresentation,provides:X@XXX$AX$XXX@(a) j* AlawyershallabidebytheclientX@XXX$X$XXX@sdecisionsconcerningtheobjectivesofrepresentation, < subjecttoparagraphs(c)(d)and(e),and,whenappropriate,shallconsultwiththeclientasto  themeansbywhichtheyaretobepursued.X@XXX$@X$XXX@ԀTherecordisdevoidofanyindicationthatClass   CounselconsultedorevencommunicatedwiththeNamedPlaintiffX@XXX$X$XXX@s,orinsomewaytheClass  h! itself,regardingtheirextensivelobbyingeffortsinAnnapolis. z!:"  ` ThisCourtisoftheopinionthatClassCounselX@XXX$X$XXX@sretentionofX@XXX$AX$XXX@twoprofessional B"# lobbyiststofighttheretroactivelegislationX@XXX$@X$XXX@Ԁ(ClassPlaintiffX@XXX$X$XXX@sMotion,pg.3)X@XXX$AX$XXX@onbehalfofthe #$ classX@XXX$@X$XXX@Ԁ(AffidavitofPaulD.Gleiberman,pg.7,at12.)wouldcertainlyhavebeenanappropriate #% issuetodiscussorinsomewaycommunicatewiththeClass,oratleastitsRepresentative $x& PlaintiffspursuanttoRule1.2.Iamalsonotpersuadedthatthislobbyingwasnotundertaken %@' primarilytopreservepotentialfeesearnedinthisandothercases,aswellasfuturefeeswhich H& ( mightbeearned,exploringthevistasJudgeChasanowforesawratherthantoprotectindividual ' ) recoveriesbyeachMemberoftheClassinthiscase,whichwouldlargelyrangebetween$6.00 '!* and$50.00perperson.ThisCourt,therefore,rejectsthislobbyingactivityasabasisfor (`"+ AttorneysX@XXX$X$XXX@ԀFeesoranenhancementthereofinthiscase. h)(#,  ` ClassCounselstatesthatunderthePercentageofFundTheoryortheLodestarMethod, :*#- crosscheckedagainstMarylandRule1.5(e),theirawardof$13millionisjustified.Class +$. Counselasserts,X@XXX$AX$XXX@Thestandardforreviewingapetitionforattorneysfeesintheclassaction +%/ contextwassettledbytheCourtofAppealsinUnitedCablev.Burch.X@XXX$@X$XXX@Ԁ(ClassPlaintiffX@XXX$X$XXX@s ,\&0 Motion,pg.60).However,nosuchX@XXX$AX$XXX@standardX@XXX$@X$XXX@Ԁwasannouncedandthelawonthissubjectwas n-.'1 notsettledbytheCourtofAppealsinUnitedCablev.Burch,354Md.658,732A.2d887 @ (1999).Rather,indiscussingtheissueofattorneyX@XXX$X$XXX@sfees,inBurch,theCourtofAppealsstated:  8 ` X@XXX$AX$XXX@ThereisnoneedinthepresentcaseforthisCourttomandateaparticular  methodology.Asthecircuitcourtdescribeditsprocess,itdeterminedtheaward l basicallyasapercentageofthefund,andthencheckedthatresultagainstthe t 4 factorsinModelruleofProfessionalConduct1.5(a).Thisisablendofthe <  approachesadvocatedbytheparties,andasamethodology,itwaswithinthe   discretionofthecircuitcourt.X@XXX$@X$XXX@ ` !` ! Id.at687. f &   ` TheCourtofAppealsinBurchthereforesimplyreiteratedwhatitandtheCourtof .  SpecialAppealshavenotedonprioroccasions,whichisthatacircuitcourthaswidediscretion   toconsiderClassCounselX@XXX$X$XXX@srequestforfeesbasedeitherontheLodestarMethod,Percentage ~  ofFundMethod,orablendofboth.Id.Atrialcourtenjoysalargemeasureofdiscretionin P  fixingthereasonablevalueoflegalservices.Headv.Head,66Md.App.655,669,505A.2d868 X  (1986).Thatamountwillnotbedisturbedunlessitisclearlyanabuseofdiscretion.Head,at    669.      (#XӀInFriolov.Frankel,373Md.501,515,819A.2d354,370(2003),JudgeWilner,writing p  foraunanimousCourtofAppeals,directedthatacircuitcourtwhenconsideringattorneys x8 feeswiththe: @   ?+ ` hp x (# ?8 `   ` X@XXX$AX$XXX@lodestarapproach,or,indeedanyother,wemustbemindfulofRule1.5ofthe  MarylandRulesofProfessionalConduct,whichalsorequiresthatalawyerX@XXX$X$XXX@sfee  bereasonableandwhichsetsourfactorstobeconsideredindeterminingthe l reasonablenessofthefee.Mostofthemareidenticalorsimilartothefactors t4 enumeratedinJohnsonv.GeorgiaHighwayExpressX@XXX$YX$XXX@whichtheHensleyCourt < indicatedwererelevanteveninalodestaranalysis.X@XXX$@X$XXX@Ԁ` !` ! 0 `   ` T$` T$ TheCourtnotedtheimportanceoftheRulebecauseX@XXX$AX$XXX@itputsalimitonwhatalawyermaycharge h hisorherownclient.X@XXX$@X$XXX@ԀId.at515.Thiscourttakesparticularjudicialnoticeofthefactorlisted z: inRule1.5(a)(4),X@XXX$AX$XXX@theamountinvolvedandtheresultsobtained,X@XXX$@X$XXX@Ԁwhichistobeconsideredin L  determiningthereasonablenessofanattorneysX@XXX$X$XXX@Ԁfee.InFriolo,theCourtofAppealsalsocited  theirconclusioninAttorneyGriev.ComX@XXX$X$XXX@nv.Korotki,318Md.646,665,569A.2d1224,1233  (1990)thatX@XXX$AX$XXX@itisgenerallyaviolationoftheruleforanattorneyX@XXX$X$XXX@sstakeintheresulttoexceed   theclientX@XXX$X$XXX@sstake.X@XXX$@X$XXX@Ԁ  T! y|!*         ` InorderforCounselforClassPlaintiffX@XXX$X$XXX@sfeenottoviolateRule1.5,ortheprohibition f!&" onanattorneyX@XXX$X$XXX@sstakeexceedingtheclientX@XXX$X$XXX@sstake,thiscourtwouldhavetoacceptClass 8"# CounselsassertionthatthetruesettlementvaluetotheclassoftheproposalbeforetheCourtis  #$ $64,900,000.00.ClassCounselarrivesatthisvaluationbyaddingthe$51,900,000.00settlement #% fundandthe$13,000,000.00awardofattorneysX@XXX$X$XXX@Ԁfeestogether,citingPetruzziX@XXX$X$XXX@sInc.v.Darling $Z& DelawareCompany,Inc.,983F.Supp.595,604(D.Pa.1996)forthepropositionthatX@XXX$AX$XXX@Evenif l%,' thefeesarepaiddirectlytotheattorneys,thosefeesarestillbestviewedasanaspectofthe >&( classX@XXX$X$XXX@Ԁrecovery.X@XXX$@X$XXX@ԀInfurthersupportoftheirtheory,Counselcitesahostofcases,manyfrom ' ) the9thCircuit,whichthiscourtdoesnotfindpersuasive.Counselstatesthattheyhavespent '!* X@XXX$AX$XXX@morethan12,000hoursofprofessionaltime(foranaggregatelodestarof$5,434,000).X@XXX$@X$XXX@Ԁ (`"+ CounselstatesX@XXX$AX$XXX@[t]imeisbothretrospectiveandprospective,includinganyfutureworkrequired r)2#, tobedonetosupportthissettlement.X@XXX$@X$XXX@ԀInaddition,thiscourtnotesthatthedescriptionoftime D*$- expendedandtheactivitiesofcounselinboththisMotionandintheAffidavitbyPaul +$. GleibermanisfartoogeneraltobaseapprovalofanawardusingtheLodestarMethod. +%/  ` ClassCounselalsorequestsaX@XXX$AX$XXX@riskmultiplierX@XXX$@X$XXX@Ԁof2.4undertheLodestarMethod.The ,f&0 useofriskenhancementsorriskmultipliersincommonfundcasesisunsettled.However,in x-8'1 Blumv.Stenson,465U.S.886,898,79L.Ed.2d891,104S.Ct.1541(1984),theUnitedStates @ SupremeCourtestablisheda"strongpresumption"thattheLodestarrepresentsthe"reasonable"  fee,andplacedtheburdenuponthefeeapplicantwhoseeksmorethanthatofshowingthatsuch  anadjustmentisnecessarytothedeterminationofareasonablefeeandinBurlingtonv.Dague, X 505U.S.557,120L.Ed.2d449,112S.Ct.2638(1992)invalidatedtheuseofmultipliersin `  Lodestarawardsunderfeeshiftingstatutes. (             ` Verysimplyput,thiscourtisnotpersuadedthatthevaluetotheClassis$64,900,000of   theSettlementproposedinthiscase,andtherefore,afeeof$13millioncannotbeapproved  x basedthereon.Instead,thisCourtholdsthatlikethesettlementvalueadvocatedbyClass  @ CounselinStrongv.Bellsouth,173F.R.D.167,172(W.D.La1997),the$64,900,000figureis H   X@XXX$AX$XXX@aphantom.X@XXX$@X$XXX@Ԁ    ` TheStrongcourtnotedthatwhileaLodestarequationisausefulstartingpoint,a   valuationoftheresultsachievedinaclassactionsettlementisessentialtoafinaldetermination j  ofattorneyX@XXX$X$XXX@sfees.Strong,173F.R.D.at172.InStrong,ClassCounselarguedthatthepotential r2  maximumvalueofthesettlementwas$66millionifallClassMemberseligibleforacredit D  returnedaclaimform.Id.However,whenallthesettlementclaimformswerereturnedbyClass    Members,theactualvalueofthecreditrequestsonlytotaled$1,718,594.40.Id.Thecourt   adjustedthevaluationto$2million,notingthatthereX@XXX$AX$XXX@mayhavebeenintangiblebenefitstothe \  class,X@XXX$@X$XXX@Ԁbutrefusedtoapprovetheadditionalrequestof$1.5millioninattorneysX@XXX$X$XXX@Ԁfees,stating, n. X@XXX$AX$XXX@Arequestfor$6millioninattorneysX@XXX$X$XXX@Ԁfeeswherecounselhasprovidednomorethan$2million @ inbenefitstotheclassisastonishing.Itisasaddaywhenlawyerstransmogrifyfromcounselors  intogrifters.Sufficeittosaythatwefindtherequestunreasonable.X@XXX$@X$XXX@ԀId.   ` ThisCourt,therefore,declinestoapproveaSettlementthatincludesanawardof l AttorneysX@XXX$X$XXX@ԀFeesbasedonphantomnumbersandcalculationsbasedthereon,includingapartial t4 foundationoflobbyinghoursfoundbythisCourttobenotclientdirectedorevenauthorized. F  ` Indisapprovingthesettlementasstructured,thiscourtrecommendsthesolutionfollowed  bynumerouscourtsfacedwithrequestsforattorneysX@XXX$X$XXX@Ԁfeebasedonestimatedvaluesofa ^ settlementfunds.Thepracticalsolutiontothisproblemistomakesurethefeeawardedis p0 appropriatetothevalueactuallyreceivedbytheClassMembers.Duhaimeetal.v.John 8 HancockMutualLifeInsuranceCompany,etal.,989F.Supp.375,378(1997),citingBowling  v.Pfizer,Inc.,922F.Supp.1261,128384(S.D.Ohio),affX@XXX$X$XXX@d,102F.3d777(6thCir.  1996)(holdingbacklargeproportionoffeeawarduntiladditionalX@XXX$AX$XXX@futureX@XXX$@X$XXX@Ԁbenefitstoclasswere Z  actuallypaidintoclassfund);Strongv.BellSouthTelecommunications,Inc.,173F.R.D.167, l ,! 172(W.D.La1997)(Denyingfeepetitioninitsentiretybecauseactualvalueofsettlementfund 4!" basedoncreditssoughtbyClassMemberswas$2million,whereasclasscounselhadestimated !# itsvalueat$64.5million);Voegev.Ackerman,70F.R.D.693,695(S.D.N.Y.1976)(plaintiffX@XXX$X$XXX@s "$ counselawardedsmallerfeethanrequestedbecauseshareholderparticipationinsettlementhad #V% beenminimalandactualfinancialbenefittothemwasX@XXX$AX$XXX@almostzeroX@XXX$@X$XXX@);Voegev.Ackerman,67 ^$& F.R.D.432,43637(S.D.N.Y.1975)(reservingfeedeterminationuntilallclaimsofshareholder 0%' entitledtoparticipateinsettlementhadbeenfilledandadjudgedbecauseextentofsettlementX@XXX$X$XXX@s %( benefittoclasscouldnotbedeterminedwithanydegreeofexactitudebeforehand.). & )  ` TheDuhaimecourtalsothoughtitofmomenttonotethatinsecuritiesclassactions, 'R!* CongresshasrequiredthatattorneyfeesX@XXX$AX$XXX@shallnotexceedareasonablepercentageoftheamount Z("+ ofanydamagesandprejudgmentinterestactuallypaidtotheclass.X@XXX$@X$XXX@ԀDuhaime,989F.Supp.at ,)", 379citing15U.S.C.X@XXX$'X$XXX@Ԁ78u4(6)(1997).Onemethodofensuringthatthefeeawardis )#- appropriatetotheactualvaluereceivedbyClassMembersisbyX@XXX$AX$XXX@stagingX@XXX$@X$XXX@Ԁthepaymentofthe *$. attorneysX@XXX$X$XXX@Ԁfeeaward.Duhaimeetal.v.JohnHancockMutualLifeInsuranceCompany,etal., +b%/ 989F.Supp.375,378(1997), t,4&0  ` ThisCourtagreeswiththereasoningofthecourtinDuhaime,thattheX@XXX$AX$XXX@proportionality <-&1 oftheattorneysX@XXX$X$XXX@Ԁfeeawardtothereliefactuallyaccruingtotheclassisanimportant .'2 considerationinassessingthereasonablenessofthefeeawardinthepresentcasebecauseitis @ thatrelationshipthatlitigantsinfuturecaseswilllooktoinstructuringtheirownarrangements  regardingattorneysX@XXX$X$XXX@Ԁfees.AnyfeeapprovedbythisCourtisnotonlyamatterofpublicrecord,  itbecomespartofthegreatbodyofourlaw.X@XXX$@X$XXX@ԀDuhaime,989F.Supp.at379. b  ` CitingBoeingCo.v.VanGemert,444U.S.472,100S.Ct.745(1980),ClassCounsel t 4 assertthatthevalueofthesettlementshouldnotbebasedontheclaimsactuallymadebecause <  evenifremainingfundsfromthesettlementrevertbacktotheDefendant,theClassMembers   aretheX@XXX$AX$XXX@equitableownersX@XXX$@X$XXX@Ԁoftheirrespectivesharesofrecovery,whetherornottheyasserttheir   right.Boeing,at481,482.CounselforClassPlaintiffX@XXX$X$XXX@salsocitetheEleventhCircuitcaseof  ^ Watersetal.v.InternationalPreciousMetalsCorporation,190F.3d1291(1999),certdenied, p 0  530U.S.1223(2000),forthepropositionthatX@XXX$AX$XXX@nocasehasheldthatadistrictcourtmust 8  consideronlytheactualpayoutindeterminingattorneysfees.X@XXX$@X$XXX@ԀWaters,190F.3dat1295.     ` Interestingly,CounselforClassPlaintiffsX@XXX$X$XXX@ԀoverlooktheConcurringOpinionofJustice   SandraDayOX@XXX$X$XXX@ConnorissuedwiththeSupremeCourtX@XXX$X$XXX@sdenialofthePetitionforWritof n  CertiorariinInternationalPreciousMetalsCorporation,etal.v.Watersetal.,530U.S.1223, @  120S.Ct.2237(2000).InherOpinion,JusticeOX@XXX$X$XXX@ConnordiscussedthecourtX@XXX$X$XXX@sdecisionin H  BoeingCo.v.VanGemert,444U.S.472(1980)toupholdtheawardofattorneyX@XXX$X$XXX@sfeeswhere   theawardwasbasedonthetotalfundmadeavailabletotheclass,ratherthantheamountactually   recovered.JusticeOX@XXX$X$XXX@ConnornotedthatinBoeing,theCourtdidnotaddressX@XXX$AX$XXX@whetherthere t mustbeatleastsomerationalconnectionbetweenthefeeawardandtheamountoftheactual F distributiontotheclass,X@XXX$@X$XXX@Ԁandcontinued: N 8 ` X@XXX$AX$XXX@TheapprovalofattorneyX@XXX$X$XXX@sfeesabsentanysuchinquirycouldhaveseveral   troublingconsequences.Arrangementssuchasthatatissueheredecoupleclass  counselX@XXX$X$XXX@sfinancialincentivesfromthoseoftheclass,increasingtheriskthatthe z actualdistributionwillbemisallocatedbetweenattorneyX@XXX$X$XXX@sfeesandthe L plaintiffX@XXX$X$XXX@srecovery.Theypotentiallyunderminetheunderlyingpurposesofclass ^ actionsbyprovidingdefendantswithapowerfulmeanstoenticingclasscounsel 0 tosettlelawsuitswhere,becauseofthevalueofeachclassmemberX@XXX$X$XXX@sindividual  claimissmallcomparedtothetransactionscostsinobtainingrecovery,theactual  distributiontotheclasswillinevitablybeminimal.X@XXX$@X$XXX@R` !` !   0 `  ` T$` T$   JusticeOX@XXX$X$XXX@ConnornotedthatthefederalCourtofAppealshavedifferedintheirapproachesto , thisproblem,comparingStrongv.BellsouthTelecommunications,Inc.,137F.3d844,852(5th   Cir.1998)(whereDistrictcourtdidnotabuseitsdiscretioninbasingtheattorneysX@XXX$X$XXX@Ԁfeeaward  ! ontheactualpayoutratherthanonthereversionaryfund)andWilliamsv.MGMPathe !X" CommunicationsCo.,129F.3d1026,1027(9thCir.1997)(wheretheDistrictCourtabusedits `" # discretioninbasingawardonactualdistributiontotheclass).Innotingthatsheagreedwiththe (#$ CourtX@XXX$X$XXX@sdenialofthewritofcertiorari,asthepetitionersappearedtohavewaivedtheissue, #% JusticeOX@XXX$X$XXX@Connorstated,X@XXX$AX$XXX@ԀIbelievethisissuewarrantstheCourtX@XXX$X$XXX@sattentionX@XXX$@X$XXX@ԀandX@XXX$AX$XXX@the $& importanceoftheissuecounselsinfavorofgrantingreviewinanappropriatecase.X@XXX$@X$XXX@ %T' InternationalPreciousMetalsCorporation,530U.S.at12241225. f&& (  ` Finally,theX@XXX$AX$XXX@vigilanceofthecourtisnotdiminishedbythelackofoppositiontothefee .' ) applicationbytheDefendantsX@XXX$@X$XXX@ԀGoldenberg,33F.Supp.2dat440,andtheneedforcareful (!* judicialreviewisnoteliminatedbythefactthatthefeeawarddoesnotcomeoutofthecommon ("+ fund.Rather,thiscourtisconcernedaboutthepresenceofwhatistermedaX@XXX$AX$XXX@clearsailingX@XXX$@X$XXX@ )Z#, agreementbetweenCounselforClassPlaintiffsandDefendantBellAtlantic. l*,$-  ` InWeinbergerv.GreatNorthernNekoosaCorp.,925F.2d519,520(1stCir.1991)the 4+$. UnitedStatesCourtofAppealsfortheFirstCircuitdefinedaX@XXX$AX$XXX@clearsailingX@XXX$@X$XXX@ԀagreementasX@XXX$AX$XXX@one +%/ wherethepartypayingthefeesagreesnottocontesttheamounttobeawardedbythefeesetting ,&0 courtsolongastheawardfallsbeneathanegotiatedceiling.X@XXX$@X$XXX@ԀInGreatNorthernNekoosa,the -V'1 U.S.CourtofAppealsfortheFirstCircuitnotedthatthepotentialforconflictexistsbetweena @ classanditsattorneyswhenboththecommonfundisreducedbytheattorneyfeeandwhenfees  arepaiddirectlytotheattorneys,becauseadangerexiststhatX@XXX$AX$XXX@lawyersmighturgeaclass  settlementatalowfigureoronalessthanoptimalbasisinexchangeforredcarpettreatment b onfees.X@XXX$@X$XXX@ԀGreatNorthernNekoosa,925F.2dat524(emphasisadded).(SeealsoInreGeneral j * MotorsCorp.PickupTruckFuelTankProds.Liab.Litig.,55F.3d768,81920(3dCir. <  1995)(recognizingthatevenwhenfeesdonotcomedirectlyfromthesettlementfund,judicial   scrutinyisrequiredbecauseX@XXX$AX$XXX@adefendantisinterestedonlyindisposingofthetotalclaim   assertedagainstit;X@XXX$YX$XXX@ԀallocationbetweentheclasspaymentandattorneyX@XXX$X$XXX@sfeesisoflittleorno  ^ interesttothedefense.X@XXX$@X$XXX@)(quotingPrandiniv.NationalTeaCo.,557F.2d1015,1020(3dCir. p 0  1977)). B   ` ThisCourtbelievesthatthisProposedSettlementAgreementintheinstantcasecontains,    andindeedmayresultfrom,justthekindofX@XXX$AX$XXX@clearsailingX@XXX$@X$XXX@ԀagreementthatcausedtheU.S.Court   ofAppealsfortheFirstCircuitinGreatNorthernNekoosaconcern.ThisCourtsharesthat d  concernandappliesittothecircumstancesofthiscaseastheyrelatetotherequestfor$13 l,  MillionDollarsinAttorneysX@XXX$X$XXX@ԀFees,aswellasthelackofclearNoticetotheClassoftheamount 4  andcertaintyofthosefeesand,therefore,byOrderfollowingthisOpinion,deniestheClass   PlaintiffsX@XXX$X$XXX@ԀMotionforFinalApprovalofClassActionSettlementAwardofAttorneysX@XXX$X$XXX@ԀFeesand   ExpensestoClassCounselandEntryofFinalJudgment. `  ` Indoingso,thisCourtdoesnotholdthattheactualtermsofthepaymentproposedinthis h( Agreement,i.e.thepaymentof$6.00fromBellAtlanticwithoutanyfurtherdocumentation,or 0 thereturnofsixtypercent(60%)ofthelatefeesactuallypaidwithfurtherdocumentation,are  eitherinadequateorunfair.Theyarenot.InthisCourtX@XXX$X$XXX@sopinion,theindividualandbusiness  MembersoftheClassesineachofthesecasesarefairlyandadequatelycompensatedfortheir R undeniablysmalllossesunderthetermsoftheProposedSettlement.ThisCourtalsodoesnot Z holdthatrequiringaclaimtobemadeinordertocollecteventhesmallrecoverythattheClass " Membersdeserve,byitselfcausesthisAgreementoranyotherSettlementtobeeitherunfairor  inadequate.Finally,thisCourtfindsnoevidencethattherewasconsciouscollusionbetweenthe r ClassPlaintiffsX@XXX$X$XXX@ԀCounselandtheDefendants.Indeed,thisCourtfindsthattheynotonlywere z: X@XXX$AX$XXX@armslength,X@XXX$@X$XXX@ԀbutuntiltheyrealizedtheconfluenceoftheirinterestswiththisAgreement,they L  werelockedinlengthyandattimeslegislativeandlitigationconflict.   ` No,thisCourtdeclinestoapprovethisSettlementAgreementinthiscaseforthereasons  cited,supra,improperformatofNoticeoftheAwardofAttorneysX@XXX$X$XXX@ԀFeesandtheAwardof n  AttorneysX@XXX$X$XXX@ԀFeesitselfbecausetodootherwisewouldmakearealitythepotentialcitedbyJustice  @! OX@XXX$X$XXX@ConnorinWatersetal.v.InternationalPreciousMetalsCorporationthat,unlesstheCourt R!" requiresthattheremustbearationalconnectionbetweenthefeeawardandtheamountofthe $"# actualdistributionoftheClass,theunderlyingpurposeofclassactionswillbeundermined. "$ InternationalPreciousMetalsCorporation,etal.v.Watersetal.,530U.S.1223,120S.Ct.2237 #t% (2000). |$<& }           ` ApurposeoftheclassactionlawsuitistoX@XXX$AX$XXX@provideamechanismforlitigationof D%' smallclaimsthatnoindividualplaintiffwouldhavetheincentivetobring.X@XXX$@X$XXX@ԀInreMicrosoft &( Corp.AntitrustLitig.,214F.R.D.371,378(2003).Thispurposeisunderminedbywhatthe & ) economicalRonaldCoasereferstoasX@XXX$AX$XXX@transactioncostsX@XXX$@X$XXX@ԀorX@XXX$AX$XXX@socialcosts,X@XXX$@X$XXX@Ԁiftheyare 'p!* disproportionatetothebenefitreceivedbysociety.AsCoasenotesinhisseminalworkX@XXX$AX$XXX@The (B"+ ProblemofSocialCost.X@XXX$@X$XXX@Ԁ3JournalofLawandEconomicsatp.2728(1960). T)#,           8 `  X@XXX$AX$XXX@Inaworldwheretherearecostsofrearrangingtherightsestablishedby &*#- thelegalsystem,thecourtsX@XXX$YX$XXX@Ԁare,ineffect,makingadecisionontheeconomic *$. problemanddetermininghowresourcesaretobeemployedX@XXX$YX$XXX@.TheCourtsare +%/ consciousofthisandtheyoftenmake,althoughnotinaveryexplicitfashion,a ,\&0 comparisonbetweenwhatwouldbegainedandwhatlostbypreventingactions d-$'1 whichhaveharmfuleffects.X@XXX$@X$XXX@@` !` ! ,B.` hp x (#%XB, ` Intheinstantcase,thisCourtwillspeakexplicitly.Thetransactioncostsoftheproposed  recovery,particularlythecomponentofthosecostswhichtotals$13MillionDollarsin b AttorneysX@XXX$X$XXX@ԀFees,forrestoringmoneysillegallychargedandcollectedasX@XXX$AX$XXX@latefeesX@XXX$@X$XXX@Ԁranging j * from$6.00to$50.00byBellAtlanticfromindividualandbusinesscustomersarenotjustified <  bythesmallbenefitreceivedbytheMembersoftheClassesofcustomersaffected,certainlynot   individuallynorthisCourtholdsevencollectively.Accordingly,itisthis12thdayofNovember,   2003,bytheCircuitCourtforPrinceGeorgeX@XXX$X$XXX@sCounty,Maryland,  T  ` ORDERED,thattheClassPlaintiffsX@XXX$X$XXX@ԀMotionforFinalApprovalofClassAction f &  Settlement,AwardofAttorneysX@XXX$X$XXX@ԀFeesandExpensestoClassCounsel,andEntryofFinal 8  JudgmentisherebyDENIED;anditisfurther     ` ORDERED,thatthisOpinionandOrderofCourtiswithoutprejudicetotherightofthe   partiesthroughcounseltoresubmitanAmendedProposedSettlementAgreementnot Z  inconsistentwiththisOpinionandOrderofCourt;anditisfurther b"   ` ORDERED,thattheOfficeofCalendarManagementsetafurtherSchedulingConference *  beforethisMemberoftheCourtattheearliestconvenienceoftheCourtandcounsel.    `     h      p _____/s/____________________ z   `     h      p JudgeStevenI.Platt B CopiessentbytheCourtto: J  F.PaulBland,Jr.,Esquire  MichaelJ.Quirk,Esquire b 1717MassachusettsAvenue,N.W.,Suite800 j* Washington,D.C.20036 2 BruceL.Marcus,Esquire  Marcus&Bonsib J CapitalOfficePark R 6411IvyLane,Suite116  Greenbelt,Maryland20770  IraH.Raphaelson,Esquire r2  BrianP.Brooks,Esquire : ! CharlesF.Connolly,Esquire !" OX@XXX$X$XXX@Melveny&Myers,LLP !# 55513thStreet,N.W. "\$ Washington,D.C.20004 d#$% SethD.Goldberg,Esquire $' JohnJ.Beins,Esquire %|( PaulGleiberman,Esquire &D ) 5335WisconsinAvenue,N.W. L' !* Suite910 (!+ Washington,D.C.20015 (", ConnieKratovilLavelle,Esquire l*,$. FrankKratovil,Esquire 4+$/ Kratovil&Kratovil +%0 P.O.Box522 ,&1 Stevensville,Maryland21666 -L'2 ЇSusanStevensMiller,Esquire @ ValerieGreen,Esquire  MarylandPublicServiceCommission  WilliamDonaldSchaefferTower X 6St.PaulStreet,16thFloor `  Baltimore,Maryland21202 (  KieronF.Quinn,Esquire  x RichardS.Gordon,Esquire  @ QuinnGordon&Wolf,LLP H   40WestChesapeakeAvenue,Suite408   Towson,Maryland212044803   PhilipS.Friedman,Esquire h(  FriedmanLawOffices,PLLC 0  2401PennsylvaniaAvenue,Suite410   Washington,D.C.20037   PhilipO.Foard,Esquire P Foard,Gisriel,OX@XXX$X$XXX@Brien&Ward,LLC  29WestSusquehannaAvenue,Suite302  Towson,Maryland21204 r ____/s/____________________________11/13/03_  SaraH.Baldwin   h     Date Z ExecutiveAdministrativeAide b" 0