Case 2:14-cv-00578-JFC Document 50-1 Filed 10/02/15 Page 38 of 43

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
HOLLY YENCHA, individually and on
behalf of all others similarly situated,

Case No. 2:14-cv-00578-JFC

Plaintiff,

Honorable Joy Flowers Conti

v.
ZeoBIT LLC, a California limited liability
company,
Defendant.
DECLARATION OF RAFEY S. BALABANIAN
Pursuant to 28 U.S.C. § 1746, I hereby declare and state as follows:
1.

I am an attorney admitted to practice pro hac vice in the United States District

Court for the Western District of Pennsylvania. I am entering this declaration in support of
Plaintiff’s Motion and Memorandum of Law in Support of Motion for Final Approval of Class
Action Settlement. This declaration is based upon my personal knowledge unless otherwise
indicated. If called upon to testify as to the matters stated herein, I could and would competently
do so.
2.

I am a Partner and the General Counsel of the law firm Edelson PC, which has

been retained to represent the Settlement Class Representative in this matter, Holly Yencha. I,
along with my colleagues Benjamin H. Richman and Courtney C. Booth, have been appointed
Class Counsel in this matter.
The Settlement Warrants Final Approval
3.

The Settlement warrants final approval for a number of reasons, not the least of

which is the overwhelmingly positive reaction of the Settlement Class. Indeed, with more than

1

 Case 2:14-cv-00578-JFC Document 50-1 Filed 10/02/15 Page 39 of 43

78,000 claims submitted, the claims rate exceeds 15%, which in my experience is almost
unprecedented in consumer class actions such as this.
4.

The Settlement also warrants final approval because it avoids the lengthy,

expensive, and necessarily complex and risky continued litigation that would only serve to delay
relief to the Settlement Class.
5.

In particular, while we are confident in the strength of Plaintiff’s claims, there is a

definite risk in proceeding with litigation—as it relates to obtaining class certification and
establishing both liability and damages.
6.

First, and as it relates to class certification, the Court previously indicated (and we

agree) that securing class certification in this case—particularly with respect to Plaintiff’s fraud
claims (which she would reassert absent a settlement)—would be an uphill battle.
7.

Additionally, given the technical nature of the claims at issue, Plaintiff will have

to establish—and Defendant would contest—the alleged diminished functionality of a complex
software application. To do this, Plaintiff will be required to, inter alia, (i) obtain and review the
Software’s source code to analyze its underlying technology and algorithms, and (ii) take
deposition testimony of one or more witnesses who made decisions regarding the Software’s
design and marketing—a process that would likely involve an expensive and contentious battle
of the experts. And if Plaintiff reasserted her fraud claims, she would be required to establish that
ZeoBIT’s conduct was willful—i.e., that ZeoBIT intentionally designed its Software to
artificially exaggerate the number of problems present on a user’s computer—which could only
conclusively be established by reviewing the development notes for the Software and deposing
additional witnesses, many of whom may not even work for ZeoBIT anymore. Because many of
the relevant witnesses are likely located in Europe where the Software was developed, there

2

 Case 2:14-cv-00578-JFC Document 50-1 Filed 10/02/15 Page 40 of 43

would unquestionably be disputes over subpoena power and witness availability, creating
additional complexity and expense.
8.

As with liability, there is also a risk in terms of Plaintiff’s ability to establish

damages should the litigation continue. Indeed, Yencha has never contended that the Software
was completely worthless and that consumers should recoup the full purchase price they paid.
Rather, Plaintiff’s theory of the case is based on the Software’s allegedly diminished value, as
only certain of the advertised benefits could be performed as promised. Thus, rather than seek
recovery of the full purchase price, Yencha sought to recover only the amount that she and other
consumers overpaid for the Software. (See dkt. 1 ¶¶ 73, 81, 87.) Determining and establishing
the difference in value between the Software as promised and the Software as delivered would
undoubtedly be a complicated and uncertain enterprise.
9.

Additionally, though Plaintiff is confident that Class Counsel’s investigation into

the Software supports the existence of the alleged unfair and deceptive acts, ZeoBIT has at all
times denied these allegations and raised at least fifteen affirmative defenses that Plaintiff would
need to overcome. (See dkt. 44.) And no matter how the Court ultimately ruled, the losing party
would be likely to appeal, further raising the cost—in terms of both time and money—and
delaying any recovery to the Settlement Class.
10.

Finally, Settlement approval is also warranted because the Parties had sufficient

information to evaluate the merits and reasonableness of their proposed Agreement. Before this
lawsuit was even filed, my firm conducted an extensive investigation into the marketing and
functionality of the Software, including, but not limited to, consulting with our own in-house
computer forensic technicians to complete multiple rounds of forensic testing and comparing
their results with how the Software was advertised to perform. Attorneys at my firm also spoke

3

 Case Document 50-1 Filed 10/02/15 Page 41 of 43

with numerous consumers to understand their experiences in purchasing and using the Software,
and to also compare those against Defendant?s marketing materials and our own internal testing.

1 1. After the case was ?led, the Parties have also continuously explored the 
and weaknesses of their respective claims and defenses through informal discussion,
informational exchanges, and early neutral evaluation. That investigation, coupled with the
experience and industry knowledge gained through our lawsuits against Defendant?s industry
competitors, provided my ?rm an acute Imderstanding of Plaintist and the Settlement Class
Members? claims, Defendant?s asserted and likely defenses, and the other legal and factual issues
attendant with this litigation.

12. Similarly, Judge Infante?s assistance through the early neutral evaluation and
settlement process also ensured that the Parties were able to exchange, and had at their disposal,
suf?cient information from which to evaluate their claims and defenses and negotiate the
Settlement now before the Court.

Attachment

l3. Attached hereto as Exhibit 2-A is a true and accurate copy of Mr. Steven G.

Stegen?s letter dated September 3, 2015.

I declare rmder penalty of perjury that the foregoing is true and correct.
Executed this 2nd day of October 2015.

Rafev S. Balabanian