final approval of class action settlement, certification of settlement classes, and approval of award

218 Pages·2017·4.82 MB·English

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UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT

LORI SANBORN, BDK ALLIANCE
LLC, IRON MAN LLC and STEPHANIE
SILVER, DAVID STEKETEE, No. 3:14-cv-01731 (SRU)
SUSANNA MIRKIN, BORIS MIRKIN,
ELIZABETH HEMBLING, PATRICIA
KULESA, STEWART CONNARD and
STEVEN LANDAU on behalf of
themselves and all others similarly situated,

Plaintiffs,

v.
June 11, 2018

VIRIDIAN ENERGY, INC. and

VIRIDIAN ENERGY PA, LLC,

Defendants.

DECLARATION OF ROBERT A. IZARD IN SUPPORT OF MOTION FOR
FINAL APPROVAL OF CLASS ACTION SETTLEMENT,
CERTIFICATION OF SETTLEMENT CLASSES,
AND APPROVAL OF AWARD OF ATTORNEYS’ FEES AND EXPENSES

I, Robert A. Izard, hereby declare as follows:
1. I am a partner at the law firm of Izard Kindall & Raabe LLP (“IKR”) and am
competent to declare the matters stated herein.
2. My firm represents plaintiffs Lori Sanborn, BDK Alliance LLC, Iron Man LLC,
Stephanie Silver and David Steketee in this consolidated putative class action lawsuit against
Viridian Energy, Inc. and its related entity defendants (“Viridian”). I submit this declaration in
support of Plaintiffs’ motion for final approval of class action settlement and related relief.
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History of the Litigation
3. Before bringing the Sanborn and Steketee actions, this firm exhaustively investigated
Plaintiffs’ claims and independently obtained copies of the relevant contractual terms and conditions,
as well as samples of Defendant’s marketing materials. Plaintiffs’ counsel also identified and
investigated the relevant energy markets.
4. Plaintiff Lori Sanborn filed a class action complaint against Viridian on
November 19, 2014, styled as Sanborn v. Viridian Energy, Inc., Civil Action No. 3:14-cv-01731
(the “Sanborn Action” or the “Action”), in the United States District Court for the District of
Connecticut. Viridian moved to dismiss the complaint and, on April 1, 2015, the Court granted
in part and denied in part the motion, and allowed Plaintiff Sanborn to amend her complaint.
5. On May 7, 2015, Plaintiff Sanborn, as well as Plaintiffs Iron Man, LLC,
Stephanie Silver, and BDK Alliance LLC filed an amended complaint; they subsequently filed a
second amended complaint on June 8, 2015. Viridian moved to dismiss the second amended
complaint, which the Court denied on August 18, 2015. Plaintiffs in the Sanborn Action also
filed motions for summary judgment, class certification, and for a prejudgment remedy.
6. On March 1, 2016, BDK Alliance LLC voluntarily dismissed its individual claims
against Viridian in the Sanborn action, but noted that it would remain a class member and may
seek its share of any recovery obtained by the class as a whole. BDK Alliance LLC thereafter
agreed to rejoin the litigation as a lead Plaintiff and class representative on behalf of “Above
Average Use” class members.
7. On April 22, 2015, Plaintiff David Steketee filed a class action complaint against
Viridian, styled as Steketee v. Viridian Energy, Inc., Civil Action No. 3:15-cv-00585 (the
“Steketee action”), in the United States District Court for the District of Connecticut. On August
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18, 2015, the Court granted Viridian’s motion to dismiss but permitted Plaintiff Steketee leave to
amend. Steketee filed an amended complaint on September 1, 2015, which Viridian moved to
dismiss. The Court denied that motion on December 2, 2015.
8. On July 10, 2015, Plaintiffs Susanna Mirkin and Boris Mirkin filed a class action
complaint against Viridian in the United States District Court for the District of Connecticut
styled as Mirkin, et al. v. Viridian Energy, Inc., Civil Action No. 3:15-cv-01057 (the “Mirkin
action”). Viridian moved to dismiss the complaint on September 14, 2015, but the Mirkin
Plaintiffs were granted leave to amend their complaint and did so on December 18, 2015.
Viridian moved to dismiss the amended complaint on January 8, 2016. The Court granted in part
and denied in part that motion on July 5, 2016.
9. On August 21, 2015, Elizabeth Hembling, Patricia Kulesa, and Stewart Connard
filed a class action complaint against Viridian Energy, LLC, et al., styled as Hembling, et al. v.
Viridian Energy, LLC, et al., Civil Action No. 3:15-cv-01258 (the “Hembling action”), in the
United States District Court for the District of Connecticut. Viridian moved to dismiss the
complaint on November 17, 2015. The Hembling Plaintiffs filed an amended complaint on
December 22, 2015. Viridian filed an answer to the amended complaint on January 5, 2016.
The Hembling Plaintiffs and Viridian filed a stipulation in the Hembling action on December 21,
2016 to stay that action pending a class certification determination in the Sanborn, Steketee,
and/or Mirkin actions; the Court stayed the Hembling action on December 22, 2016.

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10. On May 16, 2016, Steven Landau filed his class action complaint against Viridian
Energy PA LLC, styled as Landau v. Viridian Energy PA LLC, Civil Action No. 2:16-cv-02383
(the Landau action) in the United States District Court for the Eastern District of Pennsylvania.
Viridian moved to dismiss the complaint on July 13, 2016; the Eastern District of Pennsylvania
granted in part and denied in part Viridian’s motion on November 30, 2016. Subsequently,
Viridian moved to transfer the Landau action to the United States District Court for the District
of Connecticut or, in the alternative, to stay the litigation pending resolution of the Sanborn,
Steketee, Mirkin, and Hembling actions. On April 4, 2017, the Eastern District of Pennsylvania
denied Viridian’s motion to transfer the Landau action, but granted the motion to stay.
11. On February 10, 2017, Plaintiffs in the Sanborn, Steketee, and Mirkin actions filed
a Consolidated Class Action Complaint against Viridian Energy, Inc., consolidated in the action
styled as Sanborn v. Viridian Energy, Inc., Civil Action No. 3:14-cv-01731 (the “Consolidated
Complaint”).
12. On December 7, 2017, Plaintiffs Lori Sanborn, Iron Man LLC, and Stephanie
Silver, filed an Amended Consolidated Class Action Complaint (“AC”) in the Sanborn Action
for the purpose of joining in one action their claims as well as the claims of Plaintiffs David
Steketee, Susanna and Boris Mirkin, Elizabeth Hembling, Patricia Kulesa, Stewart Connard, and
Steven Landau.
13. The AC alleges, at its core, that Viridian and Plaintiffs entered into contracts that
permitted Viridian to charge a variable rate that fluctuated to reflect changes in the wholesale
energy market. Plaintiffs further claim that that the variable rates that Viridian charged them –
and other variable rate customers in each state in which Viridian does and has done business – in
fact were not tied to the wholesale price for energy. Instead, they allege that Viridian’s rates
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increased to match spikes in the underlying market price and remained at an elevated rate despite
the reduction in wholesale energy prices, resulting in excessive rates. The AC alleges that these
practices violated Viridian’s contract and the implied covenant of good faith and fair dealing and
the consumer protection acts in states throughout the country where Viridian sold variable rate
plans. Plaintiffs also assert causes of action for unjust enrichment and declaratory relief.
14. The Parties conducted extensive document and fact discovery through numerous
separate sets of interrogatories, requests for production, depositions, and third-party discovery.
Discovery included, among other things, review of more than 250,000 pages of documents and
native files produced by Viridian; hundreds of pages of documents produced by Plaintiffs;
depositions of a number of Plaintiffs; depositions of Viridian’s corporate representative
designees; and third-party discovery taken by both Plaintiffs and Viridian.
15. During the summer of 2016, Plaintiffs Sanborn, Silver, Iron Man LLC, Steketee,
Susanna and Boris Mirkin and Viridian held three (3) all-day mediation sessions with the Hon.
Shira Scheindlin, a former United States District Court judge for the Southern District of New
York. Counsel for Hembling, Connard and Kulesa participated in two of those sessions. While
the Parties reached agreement on many of the terms of a settlement during those mediation
sessions, they were unable to agree on certain terms concerning the structure and method of
calculation of settlement payments to Class Members.
16. The Parties, therefore, resumed the litigation, which included additional
conferences with the Court, and additional written discovery, document production, and
deposition testimony, and motion practice related to the Consolidated Complaint. Following
additional legal developments, including decisions in other putative class actions against energy
supply companies, in mid-2017, the Parties agreed to re-visit the possibility of a settlement and
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engaged in more than three (3) months of extensive negotiations toward a comprehensive
settlement of the Litigation. As part of the foregoing settlement negotiations, Viridian provided
Plaintiffs with a substantial amount of data regarding its variable rate customers. In early August
2017, the Parties agreed on the material terms of a comprehensive settlement, which were
memorialized in a written Memorandum of Understanding (“MOU”), signed by Plaintiffs’ and
Viridian’s counsel.
17. In the August 2017 MOU, Viridian agreed to the $18.5 million settlement amount
proposed at the 2016 mediation and abandoned its prior demand for a “flat rate” compensation
structure (as had been adopted in numerous other energy service company class action
settlements) and consented to Plaintiffs’ demand that individual recoveries would be calculated
based upon the actual, individual, month-to-month purchases made by each Class Member,
which provides a more favorable recovery to Class Members. The parties also agreed to a
maximum payment to Average Usage Class Members of $425 and for Above Average Usage
Class Members of $500, in recognition of Viridian’s mitigation argument (which the Court or
jury could ultimately have accepted) that individual Class Members bore at least some
responsibility for monitoring the electric rates they were paying as the months (and years)
progressed. Based upon Lead Class Counsel’s review of the underlying claimant data provided
by Viridian, these caps affect only 17,632 of the 364,184 total Class Members (or 5%). Viridian
also agreed to a minimum payment for all Class Members, ensuring that every Average Usage
Class Member would receive at least $5 and every Above Average Usage Class Member would
receive at least $10, even if their actual damages were lower. This floor benefits 338,920—or
93%—of Class Members. Finally, Plaintiffs’ Counsel agreed to seek only $4.5 million in fees,
costs and Plaintiff service awards—or approximately 24% of the total value of the Settlement—
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which is substantially lower than the 29% they had proposed in their August 2016 meditator-
brokered demand to Defendant.
18. Following execution of the MOU, Viridian provided Class Counsel with
substantial additional data to confirm the basis for its calculation of the consideration for Class
Members and the basis for representations by Viridian to Class Counsel prior to the execution of
the MOU concerning the methodology for calculating each Class Member’s settlement
consideration. Class Counsel confirmed the sufficiency of such information and reasonableness
of such methodology for settlement purposes only.
19. Plaintiffs and Class Counsel have conducted a thorough investigation of the law
and facts relating to the matters, and believe that their claims have merit, that the evidence
developed to date supports their claims, and that they meet the requirements for class
certification.
20. Despite their belief in the strengths of their case, Plaintiffs are mindful of the
problems of proof under, and possible defenses to, the claims in this matter, especially in light of
the potentially different understandings of the different pricing provisions contained in Viridian’s
contracts that consumers may have, and the fact that Viridian maintains that all or a significant
number of Class Members in both Classes were not overcharged and suffered no injury.
Plaintiffs further recognize and acknowledge the expense and length of time it would take to
prosecute this matter against Viridian through trial, post-trial proceedings and appeals. Counsel
for Plaintiffs have taken into account the uncertain outcome and risks of the litigation, the risk
that no class will be certified, the risk of a no-liability verdict, the risks of collection, as well as
the difficulties and delays inherent in such litigation and the likelihood of protracted appeals.
Despite these risks, and following extensive arms-length negotiations, the proposed Settlement
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confers certain and substantial benefits upon the Plaintiffs and Settlement Classes. Counsel for
Plaintiffs, therefore, have determined that the proposed Settlement, on behalf of Plaintiffs and the
Settlement Classes, is fair, reasonable, and adequate, and in the best interests of Plaintiffs and
each Settlement Class.
21. The formal Settlement Agreement was signed by all parties as of February 5,
2018. This Court granted preliminary approval of the Settlement on February 16, 2018,
certifying the Class for settlement purposes and authorizing the dissemination of Class notice.
Pursuant to the Preliminary Approval Order, the Parties worked with Settlement Administrator
Heffler Claims Group (“Heffler”) to provide notice to the Class.
22. On February 6, 2018, the parties submitted the Settlement Agreement (including a
proposed Notice plan) to the Court for preliminary approval. The Court held a telephonic
conference with the parties on February 7, 2017. During the conference, the Court specifically
requested that the parties amend the Notice so that objections were not to be filed with the Court.
See ECF No. 158. In addition, the Court expressed its opinion that the parties should consider
having the objection deadline before the date on which Plaintiffs filed their final approval
motion, so that Plaintiffs could respond to any objections in their final approval memorandum.
The parties accepted the Court’s suggestion and amended the Notices and schedule accordingly.
See generally Ex. A hereto (email chain between Class Counsel S. Klein and this Court’s judicial
clerk A. Pincus).
23. Based upon a spreadsheet provided by Heffler concerning the 17,171 claims that
have been fully processed and approved as of June 8, 2018, the average claimant will receive
approximately $70. Approximately 10,000 of the current 17,171 cash award claimants are
receiving the minimum $5 or $10 payments under the Settlement; approximately 1,300 Class
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Members are receiving between $30 and $100; approximately 1,600 are receiving between $100
and $300; and another 1,600 are receiving over $300. Approximately 165 Class Members are
receiving over $500 and up to $2,000, based on their enrollment in multiple Viridian accounts.
24. Plaintiffs Sanborn, Silver, BDK Alliance LLC, Iron Man LLC and Steketee have
actively prosecuted this case. Each cooperated with counsel in finalizing and/or reviewing the
various complaints filed during the history of this action and kept informed about the case as the
litigation progressed. Each responded to Defendant’s interrogatories and documents requests,
and all but BDK Alliance had their depositions taken. Each Plaintiff also approved the final
settlement terms and recommend that counsel accept it and submit it to the Court for approval.
Each spent many hours of his or her own time working with counsel on the case. Without their
active participation, the lawsuit could not have been prosecuted at all.
IKR’s Time, Lodestar and Expenses
25. Seth Klein and I were the attorneys primarily involved in the day-to-day
management and oversight of this litigation, although other firm attorneys were involved in its
successful prosecution and resolution. The firm’s experience, as well those of the attorneys most
closely involved in the litigation, are described in detail in the IKR Firm Resume attached as
Exhibit B.

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26. As of June 8, 2018, IKR attorneys and staff have spent 2,197.25 hours
prosecuting this case, including time devoted to investigating, drafting pleadings, engaging in
discovery and motion practice, reviewing documents, conducting and defending depositions,
retaining and consulting experts, negotiating and finally settling this case. IKR’s aggregate
lodestar is $1,739,618.75, broken down as follows:
Attorney Rate Hours Lodestar
Robert A. Izard 925 740.25 684,731.25
Mark P. Kindall 850 108.00 91,800.00
Craig A. Raabe 850 204.50 173,825.00
Seth R. Klein 750 953.50 715,125.00
Douglas P. Needham 550 53.50 29,425.00
Nicole A. Veno 350 69.25 24,237.50
Jennifer Decoteau Somers 300 68.25 20,475.00
(contract attorney)

Total 2,197.25 $1,739,618.75

27. The schedule shown in the preceding paragraph was prepared from
contemporaneous daily time records regularly prepared and maintained by IKR, which are
available at the request of the Court.
28. The hourly rates shown in paragraph 20 are the same as the regular current rates
charged for services in non-contingent hourly rate billing matters. In addition, numerous courts
throughout the country and in this state have accepted IKR’s rates as the basis for lodestar
calculations in other class actions in which we have served as counsel.

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