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1 SANFORD L. MICHELMAN (SBN 179702)


smichelman@mrllp.com
2 MICHELMAN & ROBINSON, LLP
10880 Wilshire Blvd., 19th Floor
3 Los Angeles, CA 90024
Telephone: (310) 564-2670
4 Facsimile: (310) 564-2671
5 MONA Z. HANNA (SBN 131439)
6 mhanna@mrllp.com
JENNIFER A. MAURI (SBN 276522)
7 jmauri@mrllp.com
MICHELMAN & ROBINSON, LLP
8 17901 Von Karman Avenue, 10th Floor
Irvine, CA 92614
9 Telephone: (714) 557-7990
Facsimile: (714) 557-7991
10
Attorneys for Plaintiffs
11 DAVID LOWERY, VICTOR KRUMMENACHER,
GREG LISHER, AND DAVID FARAGHER
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UNITED STATES DISTRICT COURT
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14 NORTHERN DISTRICT OF CALIFORNIA

15 DAVID LOWERY, VICTOR Case No.: 4:16-cv-01135-JSW


KRUMMENACHER, GREG LISHER, and
16 DAVID FARAGHER, individually and on Hon. Jeffrey S. White
behalf of themselves and all others similarly Hon. Jacqueline Scott Corley, Magistrate
17 situated,
18
Plaintiffs, PLAINTIFFS’ NOTICE OF MOTION AND
19 v. MOTION FOR PRELIMINARY
APPROVAL; MEMORANDUM OF
20 RHAPSODY INTERNATIONAL, INC. POINTS AND AUTHORITIES
21
Defendant.
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Complaint Filed: March 7, 2016
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1 TO THE COURT, ALL PARTIES AND THEIR ATTORNEYS OF RECORD:


2 PLEASE TAKE NOTICE that on March 22, 2019 at 9:00 a.m., or as soon thereafter as
3 the matter can be heard before the Honorable Jeffrey White, in Courtroom 5 (2nd Floor),
4 Northern District of California, located at the Oakland Courthouse, 1301 Clay Street, Oakland,
5 CA 94612, Plaintiffs David Lowery, Victor Krummenacher, Greg Lisher, and David Faragher
6 (collectively, “Plaintiffs”) will and hereby do move the Court pursuant to Federal Rule of Civil
7 Procedure 23 for an Order:
8 1. Preliminarily approving the Settlement Agreement between Plaintiffs and Rhapsody
9 International, Inc. (“Defendant” or “Rhapsody”), dated January 16, 2019, on the
10 grounds that its terms are sufficiently fair, reasonable, and adequate for notice to be
11 issued to the class;
12 2. Certifying the proposed settlement class for settlement purposes only, pursuant to
13 Federal Rule of Civil Procedure 23;
14 3. Approving the form and content of the proposed class notice and notice plan;
15 4. Approving the form and content of the claims form;
16 5. Setting the deadline for class members to object to the settlement, wherein said
17 deadline is sixty (60) days following preliminary approval;
18 6. Setting the deadline for class members to opt-out of the settlement, wherein said
19 deadline is sixty (60) days following preliminary approval;
20 7. Appointing Michelman and Robinson, LLP, to represent the class as class counsel;
21 8. Appointing Heffler Claims Group LLC as Settlement Administrator;
22 9. Scheduling a hearing regarding final approval of the proposed settlement, Class
23 Counsel's request for attorneys' fees and costs, and enhancement payments to the
24 named Plaintiffs on March 13, 2020; and
25 10. Granting such other and further relief as may be appropriate
26 This Motion is based on this Notice of Motion and Motion; the Memorandum of Points
27 and Authorities below; the Declaration of Mona Z. Hanna filed concurrently herewith; all
28

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1 supporting exhibits filed herewith; all other pleadings and papers filed in this action; and any
2 argument or evidence that may be presented at the hearing in this matter.
3
4 Dated: February 15, 2019 MICHELMAN & ROBINSON, LLP
5
6 By: /s/Mona Z. Hanna
Sanford L. Michelman
7
Mona Z. Hanna
8 Jennifer A. Mauri
Attorneys for Plaintiffs
9 and Proposed Class
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1 SUMMARY OF ARGUMENT
2 Pursuant to Federal Rule of Procedure Rule 23, Plaintiffs David Lowery, Victor
3 Krummenacher, Greg Lisher, and David Faragher (collectively, “Plaintiffs”) move this court for
4 an order preliminarily approving a proposed class action settlement agreement (“Settlement” or
5 “Agreement”) entered into by Plaintiffs and Rhapsody International, Inc. (“Defendant” or
6 “Rhapsody”).
7 As set forth in greater detail in Plaintiffs’ Memorandum, the Settlement Agreement
8 complies with the requirements of Fed. R. Civ. P. 23(a) and 23(b)(3). Specifically, (1) the
9 Settlement Class is sufficiently numerous and ascertainable; (2) class members share common
10 issues of law and fact; (3) Plaintiffs’ claims are typical of the class members’ claims’ and (4)
11 Plaintiffs and their counsel will adequately protect the class. Further, pursuant to Rule 23(b)(3),
12 common issues predominate over individual issues, and class action treatment is superior to tens
13 of thousands of individual actions.
14 Further, the Settlement Agreement is fair and within the range of reasonableness.
15 Specifically, the Settlement Agreement: (1) is the product of serious, informed, non-collusive
16 negotiations; (2) has no obvious deficiencies; (3) does not improperly grant preferential
17 treatment to class representatives or segments of the class; and (4) falls within the range of
18 possible approval.
19 Finally, the proposed Class Notice, Notice Plan, Claim Form, and Claims Administrator
20 are sufficient. Thus, approval of the instant motion is appropriate.
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1 TABLE OF CONTENTS
Page
2
3 I.  INTRODUCTION .............................................................................................................. 1 

4 II.  RELEVANT BACKGROUND FACTS ............................................................................. 1 

5 A.  The Instant Litigation.............................................................................................. 1 

6 B.  The Proposed Settlement Agreement...................................................................... 2 


7 III.  LEGAL STANDARD......................................................................................................... 3 
8 IV.  CERTIFICATION IS PROPER UNDER RULE 23. ......................................................... 4 
9 A.  Plaintiffs Satisfy Each of the Rule 23(a) Prerequisites ........................................... 4 
10 1.  The Settlement Class is Sufficiently Numerous and Ascertainable............ 5 
11 2.  Class Members Share Common Issues of Law and Fact ............................ 5 
12
3.  Plaintiffs' Claims are Typical of Class Members' Claims........................... 5 
13
4.  Plaintiffs and Their Counsel Will Adequately Represent the Class ........... 6 
14
B.  Plaintiffs Satisfy the Rule 23(b) Requirements ...................................................... 7 
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1.  Common Issues Predominate Over Individualized Issues .......................... 7 
16
2.  A Class Action Is Superior ......................................................................... 8 
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V.  THE SETTLEMENT SHOULD BE PRELIMINARILY APPROVED ............................ 8 
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A.  Settlement Is The Product Of Serious, Informed, Non-Collusive Negotiation ...... 9 
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B.  The Settlement Has No Obvious Deficiencies...................................................... 10 
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21 C.  There is No Unfair Preferential Treatment Of Any Class Member ...................... 10 

22 D.  The Terms of the Settlement Are Within the Range of Possible Approval .......... 11 

23 1.  There Are Substantial Risks Associated With Further Litigation ............ 11 

24 2.  Defendant’s Inability to Pay A Larger Settlement .................................... 12 

25 3.  The Settlement Provides Substantial Non-Monetary and


Monetary Value ........................................................................................ 13 
26
VI.  THE CLASS NOTICE, NOTICE PLAN, CLAIM FORM, AND CLASS
27 ADMINISTRATOR ARE SUFFICIENT. ........................................................................ 14 
28 VII.  CONCLUSION ................................................................................................................. 15

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1 TABLE OF AUTHORITIES
2 Page(s)
3 Cases
4 Churchill Village, L.L.C. v. General Elec. Co.,
5 361 F.3d 566 (9th Cir. 2004) .....................................................................................................4

6 Covillo v. Specialtys Cafe,


2014 WL 954516 (N.D. Cal. Mar. 6, 2014) .............................................................................11
7
Cruz v. Sky Chefs, Inc.,
8 2014 WL 2089938 (N.D. Cal., May 19, 2014) ..........................................................................5
9
Deaver v. Compass Bank,
10 2015 WL 4999953 (N.D. Cal. Aug. 21, 2015) ..........................................................3, 9, 10, 14
11 Ellis v. Costco Wholesale Corp.,
285 F.R.D. 492 (N.D.Cal. 2012) ................................................................................................5
12
13 In re Google Referrer Header Privacy Litig.,
87 F. Supp. 3d 1122 (N.D. Cal. 2015) .....................................................................................15
14
Hanlon v. Chrysler Corp.,
15 150 F.3d 1011 (9th Cir.1998) .......................................................................................... passim
16
Harris v. Vector Mktg. Corp.,
17 2011 WL 1627973 (N.D. Cal. Apr. 29, 2011) ...................................................................4, 8, 9
18 Harrison v. E.I DuPont De Nemours & Co.,
2018 WL 5291991 (N.D. Cal. Oct. 22, 2018)..........................................................................15
19
20 Hendricks v. StarKist Co,
2015 WL 4498083 (N.D. Cal. July 23, 2015) ......................................................................5, 10
21
Lundell v. Dell, Inc.,
22 2006 WL 3507938 (N.D. Cal. Dec. 5, 2006) ...........................................................................11
23
McClellan v. SFN Grp., Inc.,
24 2012 WL 2367905 (N.D. Cal. June 21, 2012) ...........................................................................9

25 Miller v. Ghirardelli Chocolate Co.,


2015 WL 758094 (N.D. Cal. Feb. 20, 2015) ...........................................................................11
26
27 Moore v. PetSmart, Inc.,
2014 WL 1927309 (N.D. Cal. May 14, 2014) ...........................................................................9
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1 In re Napster, Inc. Copyright Litig.,


2005 WL 1287611 (N.D. Cal. June 1, 2005) .............................................................................5
2
3 Nen Thio v. Genji, LLC,
14 F. Supp. 3d 1324 (N.D. Cal. 2014) .....................................................................................10
4
In re Netflix Privacy Litig.,
5 2013 WL 1120801 (N.D. Cal. Mar. 18, 2013) ...........................................................................9
6 Noll v. eBay, Inc.,
7 309 F.R.D. 593 (N.D. Cal. 2015) .............................................................................................11

8 Officers for Justice v. Civil Serv. Comm’n of S.F.,


688 F.2d 615 (9th Cir.1982) ................................................................................................4, 13
9
In re Omnivision Techs., Inc.,
10
559 F. Supp. 2d 1036 (N.D. Cal. 2008) ...................................................................................13
11
Rannis v. Recchia,
12 380 F. App’x 646 (9th Cir. 2010) ..............................................................................................5
13 Rinky Dink Inc v. Elec. Merch. Sys. Inc.,
14 2015 WL 11234156 (W.D. Wash. Dec. 11, 2015) ..................................................................12

15 Singer v. Becton Dickinson & Co.,


2010 WL 2196104 (S.D. Cal. June 1, 2010) ............................................................................14
16
Staton v. Boeing Co.,
17
327 F.3d 938 (9th Cir.2003) ......................................................................................................3
18
In re Tableware Antitrust Litig.,
19 484 F. Supp. 2d at 1080 ...........................................................................................................11
20 Vizcaino v. Microsoft Corp.,
21 290 F.3d 1043 (9th Cir. 2002) .................................................................................................14

22 Statutes

23 17 U.S.C. §504(c) ............................................................................................................................8

24 Other Authorities

25 Fed. R. Civ. P. 23 ................................................................................................................... passim

26 Fed. R. Civ. P. 23(a)(4) ....................................................................................................................6

27 Fed. R. Civ. P. 23(a) and 23(b)(3) ...........................................................................................4, 1, 4

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1 Fed. R. Civ. P. 23(b) ....................................................................................................................3, 7


2 Fed. R. Civ. P. 23(b)(1), (2) .............................................................................................................7
3 Fed. R. Civ. P. 23(b)(3)............................................................................................................4, 7, 8
4 Fed. R. Civ. P. 23(c)(2)(B) (i)–(vii) ...............................................................................................14
5 Fed. R. Civ. P. 23(c)(3) ..................................................................................................................14
6 Fed. R. Civ. P. 23(e) ........................................................................................................................3
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1 MEMORANDUM OF POINTS AND AUTHORITIES


2 I. INTRODUCTION
3 Pursuant to Federal Rule of Procedure Rule 23, Plaintiffs David Lowery, Victor
4 Krummenacher, Greg Lisher, and David Faragher (collectively, “Plaintiffs”) move for an order
5 preliminarily approving a proposed class action settlement agreement (“Settlement” or
6 “Agreement”) entered into by Plaintiffs and Rhapsody International, Inc. (“Defendant” or
7 “Rhapsody”). The Settlement follows three mediations, initial discovery and due diligence, and
8 an in-person settlement conference with Judge Corley (and multiple further telephonic
9 conferences). A copy of that Settlement Agreement is attached hereto as Exhibit A.
10 As set forth in greater detail below, the Settlement complies with the requirements of
11 Fed. R. Civ. P. 23(a) and 23(b)(3). Further, the Settlement is fair and within the range of
12 reasonableness. Finally, the proposed Class Notice, Notice Plan, and Claims Administrator are
13 sufficient. Thus, approval of the instant motion is appropriate. Accordingly, Plaintiffs seek an
14 order: (1) preliminarily approving the Settlement Agreement between Plaintiffs and Rhapsody
15 International, Inc. (“Defendant” or “Rhapsody”), dated January 16, 2019, on the grounds that its
16 terms are sufficiently fair, reasonable, and adequate for notice to be issued to the class; (2)
17 certifying the proposed settlement class for settlement purposes only, pursuant to Federal Rule of
18 Civil Procedure 23; (3) approving the form and content of the proposed class notice and notice
19 plan; (4) approving the form and content of the claims form; (5) setting the deadline for class
20 members to object to the settlement; (6) setting the deadline for class members to opt-out of the
21 settlement; (7) appointing Michelman and Robinson, LLP, to represent the class as class counsel;
22 (8) appointing Heffler Claims Group LLC as Settlement Administrator; and (9) scheduling a
23 hearing regarding final approval of the proposed settlement, Class Counsel's request for
24 attorneys' fees and costs, and enhancement payments to the named Plaintiffs.
25 II. RELEVANT BACKGROUND FACTS
26 A. The Instant Litigation
27 On March 7, 2016, Plaintiffs initiated a class action lawsuit against Rhapsody. Rhapsody
28 is an interactive music streaming service with millions of users. Plaintiffs alleged that Rhapsody

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1 violated copyright law by reproducing and distributing musical works on its service without
2 consent or license. The crux of Plaintiffs’ claim was that Rhapsody had not complied with
3 Section 115 of the Copyright Act which at the time required that Notices of Intent (“NOIs”) be
4 served on copyright holders or filed with the Copyright Office by a user within 30 days of the
5 work (songs) being made available to the public. Serving or filing an NOI resulted in a
6 compulsory license to the work that allows the user to pay statutory mechanical royalties.1
7 Plaintiffs assert that Rhapsody’s failure to obtain comply with the Copyright act resulted in
8 Rhapsody being liable for billions for statutory penalties.2
9 Between May 2016 and April 18, 2018, the parties attended three mediations and
10 engaged in numerous phone calls and email exchanges in an attempt to reach a settlement. The
11 parties agreed to the fundamental terms of the settlement in a Memorandum of Understanding
12 signed by the parties in May 2017. Various disputes interfered with completion of the settlement.
13 Accordingly, the parties attended a settlement conference with Judge Corley on October 11,
14 2018. Further progress was made, and a final settlement conference was held on January 15,
15 2019, wherein the parties agreed upon a written settlement agreement.
16 B. The Proposed Settlement Agreement
17 On January 16, 2019, the parties executed the Settlement. The following are summaries
18 of the key provisions3:
19  Rhapsody shall pay thirty-five dollars ($35.00) for each work that was played in its
entirety at least once on the Rhapsody Music Service in the U.S. between March 7, 2013
20 and February 15, 2019, wherein that work was registered with the U.S. Copyright Office
21 on or before certain dates (see Exhibit A at ¶30);

22  Rhapsody shall pay one dollar ($1.00) for each work that was played in its entirety at
least twenty four (24) times on the Rhapsody Music Service in the U.S. between March 7,
23
2013 and February 15, 2019, wherein that work was not registered with the U.S.
24 Copyright Office on or before certain dates (see id. at ¶31);

25
26
1
27 Only mechanical royalties are at issue in this lawsuit.
2
However, based on the factors discussed herein, including Rhapsody’s ability to pay a larger
28 settlement, the Settlement is extremely fair to the class members.
3
The terms of the Settlement Agreement are more detailed than as set forth herein, Thus, a
review of Exhibit A is required for a detailed understanding of the terms.
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1  This is a claims made settlement without a fund. The maximum total amount payable by
Rhapsody shall be capped at ten million dollars ($10,000,000) (see id. at ¶32);
2
3  If the total amount of eligible claims exceeds $10 million, the amount of payment per
work shall be reduced by a percentage corresponding to the percentage that the eligible
4 claims made that exceed $10 million (see id.);4
5
 Rhapsody shall institute an Artist Advisory Board (“AAB”), with an annual budget of not
6 less than thirty thousand dollars ($30,000), designed to advance the parties’ goals of
improving and protecting artists’ rights, promoting Rhapsody’s service as an artist-
7 friendly platform and thus growing its subscriber base, and providing compensation to
8 artists (see id. at ¶49); and

9  Rhapsody shall initiate an artist referral program (“ARP”) that will provide artists with a
ten dollar ($10) referral fee for each referral who becomes a Rhapsody paying subscriber
10 (see id. at ¶50).
11
III. LEGAL STANDARD
12
The Court's review of a proposed class action settlement is governed by Rule 23(e) of the
13
Federal Rules of Civil Procedure. That rule requires the Court “to determine whether a proposed
14
settlement is fundamentally fair, adequate, and reasonable.” Hanlon v. Chrysler Corp., 150 F.3d
15
1011, 1026 (9th Cir.1998) (citing Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th
16
Cir.1992)). “It is the settlement taken as a whole, rather than the individual component parts, that
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must be examined for overall fairness.” Id. (citing Officers for Justice v. Civil Serv. Comm'n of
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S.F., 688 F.2d 615, 628 (9th Cir.1982)). Where settlement is reached prior to class certification,
19
the Court “must peruse the proposed compromise to ratify both the propriety of class
20
certification for settlement purposes and the fairness of the settlement.” Staton v. Boeing Co.,
21
327 F.3d 938, 952 (9th Cir.2003); see also Deaver v. Compass Bank, 2015 WL 4999953, at *4
22
(N.D. Cal. Aug. 21, 2015) (citing Staton). In such circumstance, the propriety of class
23
certification is established if the class meets all of the requirements of Rule 23(a) and at least one
24
of the requirements of Rule 23(b). Hanlon, 150 F.3d 1011 at 1022. Fairness is established where
25
the settlement “(1) appears to be the product of serious, informed, non-collusive negotiations; (2)
26
27
4
28 Thus, the allocation plan as set forth in the Settlement provides for a set dollar amount to each
class member who submits a valid claim form; should that amount be greater than the agreed
upon cap, the dollar amount will be reduced proportionately.
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1 has no obvious deficiencies; (3) does not improperly grant preferential treatment to class
2 representatives or segments of the class; and (4) falls within the range of possible approval.”
3 Harris v. Vector Mktg. Corp., 2011 WL 1627973, at *7 (N.D. Cal. Apr. 29, 2011).
4 The approval of a proposed class action settlement is a matter of discretion for the trial
5 court. Churchill Village, L.L.C. v. General Elec. Co., 361 F.3d 566, 575 (9th Cir. 2004). To that
6 end, courts recognize that, as a matter of sound policy, settlements of disputed claims are
7 encouraged, and a settlement approval hearing should “not be turned into a trial or rehearsal for
8 trial on the merits.” Officers for Justice v. Civil Serv. Comm'n, 688 F.2d 615, 625 (9th Cir. 1982).
9 Courts must give “proper deference” to the settlement agreement, because “the court's intrusion
10 upon what is otherwise a private consensual agreement negotiated between the parties to a
11 lawsuit must be limited to the extent necessary to reach a reasoned judgment that the agreement
12 is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and
13 the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.” Hanlon, 150
14 F.3d at 1027 (quoting Officers for Justice, 688 F.2d at 625).
15 IV. CERTIFICATION IS PROPER UNDER RULE 23.
16 Pursuant to Fed. R. Civ. P. 23(a) and 23(b)(3), Plaintiffs propose that the Court certify the
17 following class for settlement purposes:
18 Owners of mechanical distribution and/or reproduction rights in Qualifying
Registered Works and Qualifying Unregistered Works that were first made
19 available or played on the Rhapsody music service in the United States during the
20 period from March 7, 2013 until February 15, 2019.

21 This definition is consistent with the class definition pled in the operative complaint, but expands
22 on that definition by including owners of mechanical distribution and/or reproduction rights in
23 unregistered works. (ECF No. 1 at ¶35). Also, as set forth below, such prerequisites are met.
24 A. Plaintiffs Satisfy Each of the Rule 23(a) Prerequisites
25 The four Rule 23(a) requirements are referred to as numerosity, commonality, typicality,
26 and adequacy of representation. Hanlon, 150 F.3d 1011 at 1019.
27
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1 1. The Settlement Class is Sufficiently Numerous and Ascertainable


2 The numerosity requirement mandates that the class be “so numerous that joinder of all
3 members is impracticable.” Fed.R.Civ.P. 23(a)(1). “In general, courts find the numerosity
4 requirement satisfied when a class includes at least 40 members.” Rannis v. Recchia, 380 F.
5 App'x 646, 651 (9th Cir. 2010). In addition, the class should be ascertainable—i.e., the “the class
6 can be ascertained by reference to objective criteria.” Hendricks v. StarKist Co, 2015 WL
7 4498083, at *4 (N.D. Cal. July 23, 2015). Here, Plaintiffs’ Counsel estimates that there are
8 upwards of two million class members5 within the proposed class, and thus, the class is both
9 sufficiently numerous and ascertainable. Cruz v. Sky Chefs, Inc., 2014 WL 2089938, at *5 (N.D.
10 Cal., May 19, 2014). Rhapsody believes that this estimate is too large based on, inter alia, a
11 settlement agreement between Rhapsody and the National Music Publishers Association
12 ("NMPA") that resolves the claims related to "98% of the works played on Rhapsody's service."
13 (ECF No. 81 at 5). However, even if this were the case,6 the remaining 2% is still over 150,000
14 works. Even if Rhapsody's contention were accurate, the class remains sufficiently numerous.
15 2. Class Members Share Common Issues of Law and Fact
16 “All questions of fact and law need not be common to satisfy the rule. The existence of
17 shared legal issues with divergent factual predicates is sufficient, as is a common core of salient
18 facts coupled with disparate legal remedies within the class.” Hanlon, 150 F.3d at 1019; Ellis v.
19 Costco Wholesale Corp., 285 F.R.D. 492, 506 (N.D.Cal. 2012). Here, the only cause of action is
20 for copyright infringement. Because Rhapsody failed to obtain licenses, it streamed unlicensed
21 works of all Class Members. Therefore, the lawfulness of Rhapsody’s conduct is a common
22 question for the Class. This is sufficient to meet the Rule 23(a)(2) requirements. In re Napster,
23 Inc. Copyright Litig., 2005 WL 1287611, at *3 (N.D. Cal. June 1, 2005).
24 3. Plaintiffs' Claims are Typical of Class Members' Claims
25 “[R]epresentative claims are ‘typical’ if they are reasonably co-extensive with those of
26 absent class members; they need not be substantially identical.” Id. Here, the named Plaintiffs
27
5
28 See Hanna Decl. at ¶2.
6
Plaintiffs' Counsel cannot confirm the accuracy of this because it is unaware of the specific
works included in the NMPA settlement.
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1 are typical of the class: all have been injured by Rhapsody’s failure to obtain licenses and pay
2 royalties for musical works it played on its service, and all assert the same claims and request the
3 same damages and/or penalties. Thus, Plaintiffs meet the Rule 23(a)(3) typicality requirement.
4 4. Plaintiffs and Their Counsel Will Adequately Represent the Class
5 Members of a class may sue as representatives on behalf of the class only if they “will
6 fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). “Resolution of
7 two questions determines legal adequacy: (1) do the named plaintiffs and their counsel have any
8 conflicts of interest with other class members, and (2) will the named plaintiffs and their counsel
9 prosecute the action vigorously on behalf of the class?” Hanlon, 150 F.3d at 1020. Here, neither
10 the Named Plaintiffs nor their counsel have any conflicts of interest with other class members.
11 Named Plaintiffs do not seek any different relief from the relief they seek on behalf of all other
12 class members. The Named Plaintiffs have shown they are familiar with the basis for the suit and
13 their responsibilities. Inter alia, David Lowery (Named Plaintiff) was actively involved in the
14 mediation/settlement efforts and attended several sessions (either via telephone or in person).
15 Plaintiffs' Counsel has also demonstrated their ability to zealously represent the interests
16 of the class by, inter alia, engaging in numerous rounds of discovery motions/letter briefs, three
17 mediations, settlement conferences with Judge Corley, and extensive phone conferences and
18 email correspondence. Further, Plaintiffs’ counsel flew to Rhapsody’s out-of-state headquarters
19 to inspect documents, even where the costs and attorneys’ fees incurred would not be
20 recoverable as part of the attorneys’ fees award in this action. Also, as further discussed in the
21 concurrently filed Hanna Declaration, Plaintiffs' Counsel (Michelman & Robinson, LLP or
22 M&R) has substantial experience litigating and settling complex class actions. (See Hanna Decl.
23 at ¶¶3-6; see also id. at Exhibit A (chart of details as to Plaintiffs’ counsels’ past comparable
24 class settlements)). M&R is nationally recognized due in part to the innovative work it has
25 performed on countless high-stakes state and federal class actions and complex matters over the
26 past years, across a broad spectrum of practice areas, including intellectual property. (Id.). In
27 defense of class actions, M&R has represented over 50 cases that all resolved positively for the
28 clients, and were handled efficiently and without issue for the parties, counsel, or court. (Id.).

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1 M&R has a well-established intellectual property and copyright practice, and regularly handled
2 matters involving copyrights and other digital rights in the music and entertainment industry.
3 (Id.). Moreover, M&R handles all stages of trademark and copyright prosecution in the U.S.
4 Patent and Trademark Office and U.S. Copyright Office. (Id.). In addition to the firm’s broad
5 litigation experience, the lead trial attorneys on this case have each been individually recognized
6 as leading practitioners in the areas of complex and class action litigation. (Id. at ¶4-5).
7 M&R will efficiently and effectively serve the putative class. It has dedicated attorneys
8 to this case who have worked together for years on dozens of high-stakes class action lawsuits,
9 and possesses the internal bench strength and in-house expertise necessary to handle the issues in
10 this action. (Id. at ¶6). With multiple offices across the U.S., M&R also possesses the
11 infrastructure and know-how to handle case-related activities regardless of where they occur.
12 (Id.). Accordingly, M&R has the capabilities, requisite knowledge, and experience to handle the
13 complexities and scale of the instant lawsuit in a manner that serves and protects the interests of
14 the putative class.
15 B. Plaintiffs Satisfy the Rule 23(b) Requirements
16 In addition to satisfying Rule 23(a), the parties seeking certification must also show that
17 the action is maintainable under Fed.R.Civ.P. 23(b)(1), (2) or (3). Hanlon, 150 F.3d at 1022.
18 Rule 23(b)(3) requires the Court to find that “questions of law or fact common to class members
19 predominate over any questions affecting only individual members” and “that a class action is
20 superior to other available methods for fairly and efficiently adjudicating the controversy.” Id.
21 1. Common Issues Predominate Over Individualized Issues
22 Questions of law or fact common to class members must predominate over any questions
23 affecting only individual members. Fed. R. Civ. P. 23(b)(3). “When common questions present a
24 significant aspect of the case and they can be resolved for all members of the class in a single
25 adjudication, there is clear justification for handling the dispute on a representative rather than on
26 an individual basis.” Id. at 1022 (citing 7A Charles Alan Wright, Arthur R. Miller & Mary Kay
27 Kane, Federal Practice & Procedure § 1778 (2d ed.1986)). Here, as set forth above, the question
28 of Rhapsody’s failure to obtain licenses and pay royalties for musical works that Rhapsody

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1 played on its service is common to all the members of the class, and thus, an adjudication as to
2 whether such failure was violative of the Copyright Act would resolve the claims for all the
3 members of the class.
4 2. A Class Action Is Superior
5 Class resolution must be “superior to other available methods for the fair and efficient
6 adjudication of the controversy.” Fed. R. Civ. P. 23(b)(3). Class certification is appropriate and
7 encouraged “whenever the actual interests of the parties can be served best by settling their
8 differences in a single action.” Hanlon, 150 F.3d at 1022. “From either a judicial or litigant
9 viewpoint, there is no advantage in individual members controlling the prosecution of separate
10 actions. There would be less litigation or settlement leverage, significantly reduced resources and
11 no greater prospect for recovery.” Id. at 1023. Here, a class action is the superior method because
12 a common legal question exists amongst all members of the class (i.e., whether Rhapsody’s
13 actions constitute copyright infringement), and thus, litigating this issue once is the most
14 efficient way of resolution. Also, litigating this issue on an individual basis would be costly and
15 such cost would outweigh the potential individual recovery: the royalties owed to the class
16 members for Rhapsody’s unlicensed use of their musical works is estimated to be less than $1.00
17 per class member (see ECF. No. 81 at p. 7:1-2) whose works are registered with the Copyright
18 Office, and zero for those that are not. Further, the statutory damages available for each class
19 member (per work) range from $7,500 - $35,000. 17 U.S.C. §504(c). Even an award at the
20 maximum end of that range would likely not cover the fees and costs for an individual lawsuit
21 (particularly in view of the disparity in size and resources between an individual and Rhapsody
22 (a multi-million dollar entity)). Thus, class treatment is superior.
23 V. THE SETTLEMENT SHOULD BE PRELIMINARILY APPROVED
24 “At the preliminary approval stage, the Court may grant preliminary approval of a
25 settlement and direct notice to the class if the settlement: (1) appears to be the product of serious,
26 informed, non-collusive negotiations; (2) has no obvious deficiencies; (3) does not improperly
27 grant preferential treatment to class representatives or segments of the class; and (4) falls within
28 the range of possible approval.” Harris v. Vector Mktg. Corp., 2011 WL 1627973, at *7 (N.D.

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1 Cal. Apr. 29, 2011). At this stage, “the settlement need only be potentially fair, as the Court will
2 make a final determination of its adequacy at the hearing on Final Approval, after such time as
3 any party has had a chance to object and/or opt out.” Id. “In conducting this evaluation, it is
4 neither for the court to reach any ultimate conclusions regarding the merits of the dispute, nor to
5 second guess the settlement terms.” McClellan v. SFN Grp., Inc., 2012 WL 2367905, at *2 (N.D.
6 Cal. June 21, 2012) (citing Officers for Justice, 688 F.2d at 625). Preliminary approval of the
7 class settlement is appropriate.7
8 A. Settlement Is The Product Of Serious, Informed, Non-Collusive Negotiation
9 The fairness and reasonableness of a settlement agreement is presumed where “that
10 agreement was the product of non-collusive, arms' length negotiations conducted by capable and
11 experienced counsel.” In re Netflix Privacy Litig., 2013 WL 1120801, at *4 (N.D. Cal. Mar. 18,
12 2013). Also, “[t]he use of a mediator and the presence of discovery ‘support the conclusion that
13 the Plaintiff was appropriately informed in negotiating a settlement.’” Deaver, 2015 WL
14 4999953 at *7 (quoting Villegas v. J.P. Morgan Chase & Co., 2012 WL 5878390, at *6 (N.D.
15 Cal. Nov. 21, 2012); Harris, 2011 WL 1627973, at *8. Here, the Settlement was the result of
16 extensive, arm’s length negotiations by counsel well versed in copyright and class action
17 litigation. The Settlement was vigorously negotiated and included three mediation sessions, two
18 settlement conferences with Magistrate Judge Corley, and numerous telephone calls and emails.
19 Further, the parties engaged in discovery (and related motions/letter briefing and hearings) for
20 the sole purpose of furthering settlement. Further, Plaintiffs’ counsel engaged in substantial due
21 diligence both before and throughout this case. Inter alia, Plaintiffs conducted discovery to
22 determine the number musical works likely to be implicated in this action (such efforts are
23 discussed in greater detail at paragraph 2 of the Hanna Declaration), and after key settlement
24 terms were reached, conducted discovery to confirm that Rhapsody’s assertions as to its financial
25 status were accurate. Lastly, there is no spectre of collusion here because the fees are separate
26 from the settlement cap, and the results for the class are exceptional. Moore v. PetSmart, Inc.,
27 2014 WL 1927309, at *4 (N.D. Cal. May 14, 2014). Thus, the Settlement is fair and reasonable.
28
7
Plaintiffs also believe that the settlement will be appropriate for final approval.
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1 B. The Settlement Has No Obvious Deficiencies


2 The Court next considers “whether there are obvious deficiencies in the Settlement
3 Agreement.” Deaver, 2015 WL 4999953, at *7. Here, there are no obvious deficiencies. The
4 scope of the release is not overly broad, as Class Members will release only those claims that
5 could arise from Rhapsody’s alleged infringement of their copyrights. Nen Thio v. Genji, LLC,
6 14 F. Supp. 3d 1324, 1334 (N.D. Cal. 2014). Indeed, the scope of the release is consistent with
7 the claim asserted in the operative complaint—a single claim for copyright infringement. (See
8 ECF. No. 1, generally). Further, as set forth herein, the Settlement confers tangible monetary
9 benefits to the class. Chao v. Aurora Loan Servs., LLC, No. C 10-3118 SBA, 2014 WL 4421308,
10 at *3 (N.D. Cal. Sept. 5, 2014). Yet further, this is a claims made settlement, and thus, there is no
11 issue of reverter. The amount of the award to each class member is set at $35.00 or $1.00,
12 respectively, depending on whether the infringed work was registered with the Copyright Office.
13 According to Rhapsody, the amount of royalties owed to the members of the class average less
14 than $1.00. (See ECF No. 81 at p. 7:1-2). Thus, these amounts provide substantial benefit to the
15 class members, and the class members have incentive to submit a claim.8
16 C. There is No Unfair Preferential Treatment Of Any Class Member
17 Under this factor, the court assesses “whether the Settlement Agreement provides
18 preferential treatment to any class member.” Hendricks v. StarKist Co, No. 13-CV-00729-HSG,
19 2015 WL 4498083, at *6 (N.D. Cal. July 23, 2015). Here, the recovery to class members is based
20 on the number of musical works included in the Settlement, not simply by number of class
21 members. If the cap is reached, the payment to class members will be reduced proportionally.
22 Thus, each Class Member is given equal treatment. Id.9
23
24 8
An attorneys' fees provision may also be preliminarily evaluated as part of this inquiry, subject
to final approval. Here, Plaintiffs' Counsel will apply for fees and costs via Motion to this Court
25 and, thus, the settlement is not contingent upon the Court approving Counsel's application, nor
26 will the award of attorneys’ fees reduce the amount of the settlement available to class members.
Thus, the settlement is fair. Nen Thio v. Genji, LLC, 14 F. Supp. 3d 1324, 1331 (N.D. Cal. 2014).
27 As set forth in the concurrently filed Hanna Declaration, Plaintiffs’ Counsel intends to seek an
attorneys’ fee award of at least $5,511,878 and costs of at least $85,214. (Hanna Decl. at ¶¶5-6).
9
28 In relation to this factor, the court may also preliminarily consider the propriety of agreed upon
class representative enhancements, but may defer the issue until final approval. Deaver, 2015
WL 4999953, at *8. As will be briefed in later papers, the agreed upon enhancement for each of
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1 D. The Terms of the Settlement Are Within the Range of Possible Approval
2 To determine if a settlement falls within the range of possible approval, the Court
3 primarily considers “plaintiff's expected recovery balanced against the value of the settlement
4 offer, in light of the risks of further litigation.” In re Tableware Antitrust Litig., 484 F. Supp. 2d
5 at 1080. “When determining the value of a settlement, courts consider both the monetary and
6 nonmonetary benefits that the settlement confers.” Miller v. Ghirardelli Chocolate Co., 2015 WL
7 758094, at *5 (N.D. Cal. Feb. 20, 2015) (citing Staton, 327 F.3d at 972–74). As set forth below,
8 several factors bear on the amount of the anticipated class recovery under the settlement.
9 1. There Are Substantial Risks Associated With Further Litigation
10 A careful risk/benefit analysis must inform Counsel's valuation of a class's claims.
11 Lundell v. Dell, Inc., 2006 WL 3507938, at *3 (N.D. Cal. Dec. 5, 2006). “Although each side
12 could be expected to champion the merits of its case if this matter were to proceed to trial, both
13 must also recognize the inherent uncertainty of litigation. Id. “Generally, unless the settlement is
14 clearly inadequate, its acceptance and approval are preferable to lengthy and expensive litigation
15 with uncertain results.” Noll v. eBay, Inc., 309 F.R.D. 593, 606 (N.D. Cal. 2015) (quoting Ching
16 v. Siemens Indus., Inc., 2014 WL 2926210, at *4 (N.D.Cal. June 27, 2014)). Here, the risks of
17 continued litigation are substantial. Had this case proceeded to litigation, Rhapsody would have
18 fought vigorously against Plaintiffs’ claims at every step of the case. Rhapsody filed a motion to
19 dismiss early on in the case which was taken off calendar pending settlement discussions. It
20 would have re-filed the motion had the case not settled. Further, Rhapsody has indicated that it
21 would have moved for Summary Judgement and vigorously opposed class certification. Thus,
22 litigating this action would have been lengthy and expensive. “Immediate receipt of money
23 through settlement, even if lower than what could potentially be achieved through ultimate
24 success on the merits, has value to a class, especially when compared to risky and costly
25 continued litigation.” Id. (quoting LaGarde v. Support.com, Inc., 2013 WL 1283325, at *4
26 (N.D.Cal. Mar. 26, 2013)).
27
28
the named Plaintiffs is $2,500, which is in line with awards in other cases in California. Covillo
v. Specialtys Cafe, 2014 WL 954516, at *8 (N.D. Cal. Mar. 6, 2014).
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1 In addition to the inherent risks of litigation, there is a substantial factor specifically


2 applicable to this case: the recent passage of the Music Modernization Act ("MMA"). The MMA
3 was enacted into law on October 11, 2018, and set limits on liability for entities who did not
4 acquire mechanical license in accordance with the prior statutory scheme. Specifically, for any
5 copyright owner that commences a copyright infringement action "on or after January 1, 2018,
6 against a digital musical provider", for "activities prior to the license availability date" be limited
7 to a "sole and exclusive remedy" of royalties. (H.R. 1551(d)(10)). The "license availability date"
8 is January 1, 2021. (See H.R. 1551(e)(15)). The instant action is not affected by the MMA's
9 limits on liability. However, assuming arguendo, if this action were to continue and class
10 certification were not granted (although Plaintiffs strongly believe that such certification would
11 occur) then only the four named plaintiffs would have the ability to seek statutory damages from
12 Rhapsody. The remaining putative class members would be barred from seeking statutory
13 damages (the bulk of the liability) and would be left to seek royalties only—which Rhapsody
14 asserts are less than $1.00 on average (See ECF No. 81 at p. 7:1-2).
15 2. Defendant’s Inability to Pay A Larger Settlement
16 Although Plaintiffs believe Rhapsody faced substantial potential liability here,10 the
17 Settlement Agreement sets a $10,000,000 cap. (See Exh. A at ¶ 32.) This amount is reasonable
18 because of Rhapsody’s financial reality. The parties have engaged in discovery as to Rhapsody’s
19 financial status, and Plaintiffs’ Counsel is satisfied that Rhapsody’s financial status cannot
20 support any larger settlement amount than the parties have agreed to.11 It is highly unlikely that
21 Rhapsody could pay a judgment beyond $10,000,000 and thus, a larger settlement would likely
22 go unpaid. Accordingly, this factor weighs in favor of preliminary approval. (Rinky Dink Inc v.
23 Elec. Merch. Sys. Inc., 2015 WL 11234156, at *5 (W.D. Wash. Dec. 11, 2015). Further, the
24
10
Based on data provided by Rhapsody, Plaintiffs have estimated that Rhapsody’s liability is in
25 the range of $846,174,000 (applying even the lowest statutory damage rate (i.e., $750 per
26 infringed work)) to $33,846,960,000 (applying the high end of the statutory damage rate (i.e.,
$30,000 per infringed work)). Even if Rhapsody's assertion that "98%" of the works at issue in
27 this lawsuit were resolved by the NMPA settlement, statutory damages still range from
$16,923,480 to $676,939,200.
11
28 Plaintiffs’ Counsel has reached this position based on representations by Rhapsody and on
review of certain of Rhapsody’s financial documents (a list of which is attached to the Settlement
Agreement as Exhibit D.)
12
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1 Settlement Agreement provides safeguards in the event that Rhapsody’s representations as to its
2 financial status are inaccurate: in such an event, the cap increases up to $20,000,000.
3 3. The Settlement Provides Substantial Non-Monetary and Monetary Value
4 With the risks of further litigation and Rhapsody’s ability to pay in mind, the next step of
5 this analysis is the evaluation of the non-monetary and monetary terms of the Settlement. With
6 respect to monetary value, “[i]t is well-settled law that a cash settlement amounting to only a
7 fraction of the potential recovery will not per se render the settlement inadequate or unfair.”
8 Officers for Justice, 688 F.2d at 628. This is due, in large part, to the potential pitfalls of further
9 litigation. In re Omnivision Techs., Inc., 559 F. Supp. 2d 1036, 1042 (N.D. Cal. 2008). Thus, the
10 monetary value of the settlement need not meet any particular percentage threshold of the overall
11 potential value of the case. Id. Here, the parties agreed to a claims made settlement with a cap of
12 $10 million (which may increase up to $20,000,000 in the event that Rhapsody’s financial
13 representations were inaccurate). The $10 million cap is not “per se inadequate or unfair” given
14 the limitations outlined above. Officers for Justice, 688 F.2d at 628. As a result of the Settlement,
15 the class members will receive monetary compensation, including artists who had unregistered
16 works that would not have been entitled to royalties. Indeed—over the span of just three years,
17 Rhapsody streamed over 7.7 million songs at least once that were “unmatched” to the
18 songwriter—meaning that Rhapsody was unable to identify the mechanical rightsholder to obtain
19 a license, and/or pay out the royalties for the distribution and reproduction of those works.
20 Through the Settlement, this situation will be rectified. Under the terms of the settlement, the
21 rights holder for each Qualified Registered Work will receive $35.00, and the rights holder for
22 each Qualified Unregistered Work will receive $1.00 (subject to proportional reduction is the cap
23 is reached). This is a substantial monetary award compared to the "less than $1.00" amount of
24 royalties which Rhapsody contends are owed. (See ECF No. 81 at p. 7:1-2). Although this
25 amount is less than the amount of statutory damages that each class member could potentially
26 receive, as explained above, there are substantial risks in further litigation, and thus, the cash
27 settlement amounts to class members are both adequate and fair. Further, the Artist Advisory
28 Board will have an annual budget of not less than $30,000, which, as discussed above, will be

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1 used to promote artists’ rights and improve Rhapsody’s business practices as they relate to
2 rightsholders. As such, this Settlement provides an incalculable benefit to the current members of
3 the putative class, and to future copyright holders whose music Rhapsody will stream.
4 Here, the non-monetary aspects of this Settlement are also valuable. It provides practical
5 and on-going benefits to Class Members, which strongly supports preliminary approval. Vizcaino
6 v. Microsoft Corp., 290 F.3d 1043, 1049 (9th Cir. 2002); Singer v. Becton Dickinson & Co.,
7 2010 WL 2196104, at *5 (S.D. Cal. June 1, 2010). Rhapsody will institute an Artist Advisory
8 Board that, inter alia, will work with Rhapsody to implement procedures to support artists’
9 rights. This is an incalculable benefit. Ultimately, after considering the monetary and non-
10 monetary terms of the settlement, and after assessing the substantial risks of further litigation,
11 Plaintiffs' Counsel, drawing on decades of experience litigating cases like this one, and with the
12 input of two mediators and Magistrate Judge Corley, determined that the Agreement is fair and
13 reasonable and constitutes a positive result for the class in this case.
14 VI. THE CLASS NOTICE, NOTICE PLAN, CLAIM FORM, AND CLASS
15 ADMINISTRATOR ARE SUFFICIENT.
16 Class Notice must clearly and concisely state in plain, easily understood language: the
17 nature of the action; the definition of the class certified; the class claims, issues, or defenses; that
18 a class member may enter an appearance through an attorney if the member so desires; that the
19 court will exclude from the class any member who requests exclusion; the time and manner for
20 requesting exclusion; and the binding effect of a class judgment on members under Rule
21 23(c)(3). Fed.R.Civ.P. 23(c)(2)(B) (i)–(vii). “Notice is satisfactory if it generally describes the
22 terms of the settlement in sufficient detail to alert those with adverse viewpoints to investigate
23 and to come forward and be heard.” Deaver, 2015 WL 4999953, at *10 (citing Churchill, 361
24 F.3d at 575). Here, the proposed Class Notices are attached as Exhibits B and C to the
25 concurrently filed Declaration of Jeanne C. Finegan (“Finegan Declaration”) and satisfies each
26 of the above requirements. Additionally, the Proposed Notice Program is sufficient. (See Finegan
27 Decl. at ¶¶13-35). The proposed notice program includes multiple components, including print
28 publication, targeted online banners, social media, and a website. (Finegan Decl. at ¶14). As

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1 explained herein, the Class likely contains thousands of members with unknown identities and/or
2 addresses, and thus, individual notice is not practical. When that is the case, publication or some
3 similar mechanism can be sufficient to provide notice to the individuals that will be bound by the
4 class action judgment. In re Google Referrer Header Privacy Litig., 87 F. Supp. 3d 1122, 1129
5 (N.D. Cal. 2015), aff'd, 869 F.3d 737 (9th Cir. 2017); Harrison v. E.I DuPont De Nemours &
6 Co., 2018 WL 5291991, at *2 (N.D. Cal. Oct. 22, 2018).
7 Rhapsody undertook the selection of the claims administrator, and details as to that
8 selection are described in the concurrently filed Declaration of Patrick Burns (Burns Decl. ¶¶3-
9 5). Rhapsody selected Heffler Claims Group LLC as the claims administrator. (Id. at ¶5).
10 Plaintiffs’ Counsel has reviewed the qualifications of the Heffler Claims Group LLC (as set forth
11 in the Finegan Decl. at ¶¶5-12) and believes it to be well qualified to handle the claims
12 administration. Finally, a copy of the proposed claim form is attached as Exhibit E to the Finegan
13 Declaration and should be approved.
14 VII. CONCLUSION
15 Based on the foregoing, Plaintiffs’ respectfully request that the Court grant the instant
16 motion.
17
18 Dated: February 15, 2019 MICHELMAN & ROBINSON, LLP
19
20 By: /s/Mona Z. Hanna
Sanford L. Michelman
21
Mona Z. Hanna
22 Jennifer A. Mauri
Attorneys for Plaintiffs
23 and Proposed Class
24
25
26
27
28

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