Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 1 of 35 1 The Honorable Ronald B. Leighton 2 3 4 5 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA 6 7 8 9 CHERYL KATER and SUZIE KELLY, individually and on behalf of all others similarly situated, Plaintiffs, 10 11 12 13 14 v. CHURCHILL DOWNS INCORPORATED, a Kentucky corporation, and BIG FISH GAMES, INC., a Washington corporation. No. 15-cv-00612-RBL PLAINTIFFS’ UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AGREEMENT Noting Date: July 24, 2020 Defendants. 15 16 17 18 MANASA THIMMEGOWDA, individually and on behalf of all others similarly situated, Plaintiff, 19 20 21 22 23 24 25 26 27 v. BIG FISH GAMES, INC., a Washington corporation; ARISTOCRAT TECHNOLOGIES INC., a Nevada corporation; ARISTOCRAT LEISURE LIMITED, an Australian corporation; and CHURCHILL DOWNS INCORPORATED, a Kentucky corporation, No. 19-cv-00199-RBL PLAINTIFF’S UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AGREEMENT Noting Date: July 24, 2020 Defendants. Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - i T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 2 of 35 1 TABLE OF CONTENTS 2 INTRODUCTION......................................................................................................................... 1 3 BACKGROUND ........................................................................................................................... 2 4 A. Plaintiffs’ Allegations. ............................................................................................ 2 5 B. Relevant Litigation History. .................................................................................. 3 6 C. Defendants Efforts to Change Washington Gambling Law. .............................. 5 7 D. The Parties Mediate and Reach a Settlement. ..................................................... 7 8 THE TERMS OF THE SETTLEMENT AGREEMENT ......................................................... 8 9 A. Settlement Class Definition .................................................................................. 8 10 B. Monetary Benefits ................................................................................................. 8 11 C. Prospective Relief .................................................................................................. 9 12 D. Release .................................................................................................................... 9 13 E. Class Notice............................................................................................................ 9 14 F. Incentive Award Requests .................................................................................. 10 15 G. Attorneys’ Fees and Expense Requests ............................................................. 10 16 17 18 ARGUMENT ............................................................................................................................... 10 I. The Proposed Class Should Be Certified. ..................................................................... 10 A. The Proposed Class Meets the Requirements of Rule 23. ............................... 11 19 1. The Proposed Settlement Class is Sufficiently Numerous. ................... 11 20 2. Settlement Class Members Share Common Questions of Law and Fact. .................................................................................... 11 21 3. Plaintiffs’ Claims are Typical of Settlement Class Members’ Claims. .................................................................................. 13 22 23 4. Plaintiffs and Their Counsel Adequately Represent the Settlement Class. .............................................................................. 13 24 25 26 B. The Proposed Class Satisfies the Requirements of Rule 23(b)(3)................... 15 1. Common Questions of Law and Fact Predominate. .............................. 15 27 Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - ii T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 3 of 35 2. A Class Action is the Superior Method of Resolving the Controversy. ..................................................................................... 17 1 2 II. 3 The Proposed Settlement Merits Preliminary Approval. ........................................... 18 A. The Proposed Settlement is the Product of Serious, Informed, Non-Collusive Negotiations. ............................................................................... 19 B. A Churchill Analysis Supports Preliminary Approval. ................................... 20 4 5 6 1. The Strength of Plaintiffs Cases, Risk of Further Litigation, and Risk of Maintaining Class Action Status. ....................................... 20 7 8 2. The Amount Offered in Settlement........................................................ 22 9 3. Extent of Discovery Completed and the Stage of the Proceeding. ........ 24 10 4. The Experience and Views of Counsel. ................................................. 25 11 III. 12 CONCLUSION ........................................................................................................................... 27 The Court Should Approve the Proposed Notice Plan. ............................................... 25 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - iii T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 4 of 35 1 2 3 4 5 6 7 8 9 10 TABLE OF AUTHORITIES United States Supreme Court Cases: Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997) .................................................................................................... 10, 11 Erica P. John Fund, Inc. v. Halliburton Co., 563 U.S. 804 (2014) .......................................................................................................... 15 Gen. Tel. Co. of the SW v. Falcon, 457 U.S. 147 (1982) ......................................................................................................... 13 Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016) ................................................................................................ 15, 16 11 Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) .................................................................................................... 12, 14 12 United States Circuit Court of Appeals Cases: 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Abdullah v. U.S. Sec. Assocs., Inc., 731 F.3d 952 (9th Cir. 2013) ............................................................................................ 12 Bateman v. Am. Multi-Cinema, Inc., 623 F.3d 708 (9th Cir. 2010) ............................................................................................ 10 Briseno v. ConAgra Foods, Inc., 844 F.3d 1121 (9th Cir. 2017) .......................................................................................... 10 Class Plaintiffs v. City of Seattle, 955 F.2d 1268 (9th Cir. 1992) .......................................................................................... 18 Churchill Vill., L.L.C. v. Gen. Elect., 361 F.3d 566 (9th Cir. 2004) .......................................................................... 18, 19, 20, 22 Ellis v. Costco Wholesale Corp., 657 F.3d 970 (9th Cir. 2011) ............................................................................................ 14 Evon v. Law Offices of Sidney Mickell, 688 F.3d 1015 (9th Cir. 2012) .......................................................................................... 12 Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) ........................................................................ 12, 13, 14, 15 27 Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - iv T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 5 of 35 1 2 3 4 5 6 In re Bluetooth Headset Prod. Liab. Litig., 654 F.3d 935 (9th Cir. 2011) ................................................................................ 18, 19, 20 In re Hyundai & Kia Fuel Econ. Litig., 926 F.3d 539 (9th Cir. 2019) ............................................................................................ 11 In re Pac. Enters. Sec. Litig., 47 F.3d 373 (9th Cir. 1995) .............................................................................................. 25 Officers for Justice v. Civil Serv. Comm'n of City & Cty. of San Francisco, 688 F.2d 615 (9th Cir. 1982) ...................................................................................... 22, 23 7 8 9 10 11 12 13 14 15 16 Parra v. Bashas’, Inc., 536 F.3d 975 (9th Cir. 2008) ............................................................................................ 12 Rodriguez v. W. Publ’g Corp., 563 F.3d 948 (9th Cir. 2009) ................................................................................ 19, 21, 25 Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003) ............................................................................................ 18 Torres v. Mercer Canyons Inc., 835 F.3d 1125 (9th Cir. 2016) .......................................................................................... 16 Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002) .......................................................................................... 19 17 Wolin v. Jaguar Land Rover N. Am., LLC, 617 F.3d 1168 (9th Cir. 2010) .................................................................................... 13, 17 18 United States District Court Cases: 19 Ali v. Menzies Aviation, Inc., No. 2:16-cv-00262 RSL, 2016 WL 4611542 (W.D. Wash. Sept. 6, 2016) ................ 11, 13 20 21 22 23 24 25 26 27 Bennett v. SimplexGrinnell LP, No. 11-cv-01854-JST, 2015 WL 1849543 (N.D. Cal. Apr. 22, 2015) ............................. 23 Bess v. Ocwen Loan Servicing LLC, 334 F.R.D. 432 (W.D. Wash. 2020) ................................................................................. 16 Betorina v. Randstad US, L.P., No. 15-cv-03646-EMC, 2017 WL 1278758 (N.D. Cal. Apr. 6, 2017) ............................. 21 Geier v. m-Qube, Inc., No. 13-cv-354, 2016 WL 3458345 (W.D. Wash. June 24, 2016) .................................... 10 Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - v T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 6 of 35 1 2 3 4 5 6 7 8 9 10 Gragg v. Orange CAB Co., Inc., No. 12-cv-0576RSL, 2017 WL 785170 (W.D. Wash. Mar. 1, 2017)............................... 19 Helde v. Knight Transportation, Inc., No. 2:12-cv-00904 RSL (W.D. Wash. May 24, 2017) ..................................................... 19 Ikuseghan v. Multicare Health Sys., No. 3:14-cv-05539 BHS, 2016 WL 3976569 (W.D. Wash. July 25, 2016) ... 21, 22, 24, 25 In re Wells Fargo & Co. S'holder Derivative Litig., No. 16-cv-05541-JST, 2020 WL 1786159 (N.D. Cal. Apr. 7, 2020) ............................... 23 Jama v. GCA Services Group, Inc., et al., No. 16-cv-0331 RSL, 2017 WL 4758722 (W.D. Wash. Oct. 20, 2017) .................... 11, 15 Kelley v. Microsoft Corp., 251 F.R.D. 544 (W.D. Wash. 2008) ................................................................................. 17 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Reichert v. Keefe Commiossary Network, LLC, 331 F.R.D. 541 (W.D. Wash. 2019) ..................................................................... 15, 16, 17 Relente v. Viator, Inc., No. 12-cv-05868-JD, 2015 WL 2089178 (N.D. Cal. May 4, 2015) ................................. 18 Rinky Dink, Inc. v. World Bus. Lenders, LLC, No. 14-cv-0268-JCC, 2016 WL 4052588 (W.D. Wash. Feb. 3, 2016) ................ 18, 19, 22 Salinas v. U.S. Xpress Enterprises, Inc., No. 13-cv-00245, 2018 WL 1477127 (E.D. Tenn. Mar. 8, 2018) .................................... 25 Scott v. United Servs. Auto. Ass'n, No. 11-cv-1422-JCC, 2013 WL 12251170 (W.D. Wash. Jan. 7, 2013) ........................... 20 Shasta Linen Supply, Inc. v. Applied Underwriters, Inc., No. 2:16-cv-1211 WBS AC, 2019 WL 358517 (E.D. Cal. Jan. 29, 2019) ....................... 17 Tavenner v. Talon Grp., No. 09-cv-1370 RSL, 2012 WL 1022814 (W.D. Wash. Mar. 26, 2012).......................... 12 Taylor v. Universal Auto Grp. I, Inc., No. 13-cv-5245 KLS, 2014 WL 6654270 (W.D. Wash. Nov. 24, 2014) ................... 16, 17 Wilson v. Maxim Healthcare Servs., Inc., No. 14-cv-789 RSL, 2017 WL 2988289 (W.D. Wash. June 20, 2017) ............................ 18 27 Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - vi T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 7 of 35 1 2 3 4 5 6 7 8 9 10 Miscellaneous Authority: Cornerstone Research, SECURITIES CLASS ACTION SETTLEMENTS, 2017 REVIEW AND ANALYSIS, (2018)............................................................................................ 23 Cornerstone Research, SECURITIES CLASS ACTION SETTLEMENTS, 2018 REVIEW AND ANALYSIS, (2019)............................................................................................ 23 Fed. R. Civ. P. 23 ................................................................................................................... passim Herbert Newberg & Alba Conte, NEWBERG ON CLASS ACTIONS § 11.25 (4th ed. 2002) ....................................................................................................... 18 Herbert Newberg & Alba Conte, NEWBERG ON CLASS ACTIONS § 11:53 (4th ed. 2002) ....................................................................................................... 27 MANUAL FOR COMPLEX LITIGATION (Fourth) § 21.633 (2004) ................................................................................................................. 10 11 12 13 14 15 16 17 NEWBERG ON CLASS ACTIONS § 4:49 (5th ed.) .................................................................................................................. 15 RCW § 4.24.070 ............................................................................................................................. 2 RCW 9.46.010 .............................................................................................................................. 12 RCW § 9.46.0237 ........................................................................................................................... 5 RCW § 19.86.010 ........................................................................................................................... 2 18 19 20 21 22 23 24 25 26 27 Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - vii T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 8 of 35 1 2 INTRODUCTION This is the first ever settlement in a long-running cluster of litigation alleging that social 3 casino apps are illegal gambling. Since its filing in 2015, the parties have vigorously contested 4 this litigation before this Court, the Ninth Circuit (twice), the Washington State Gambling 5 Commission, and even the Washington Legislature. After weeks of arms-length negotiations 6 mediated by the Honorable Layn R. Phillips (retired, and now of Phillips ADR) and his staff, 7 capped off by a 12-hour-long mediation, Plaintiffs Cheryl Kater, Suzie Kelly, and Manasa 8 Thimmegowda and Defendants Churchill Downs, Big Fish Games, Aristocrat Technologies, and 9 Aristocrat Leisure reached a pioneering settlement that is an excellent result for the class. 10 The proposed Settlement provides a non-reversionary cash recovery of $155 million from 11 which every class member who has ever lost money playing Defendants’ social casino games is 12 entitled to recover a substantial portion of their losses back. Class members with higher levels of 13 losses are entitled to recover increasingly higher percentages of their losses, and the upper 14 echelons of “VIP” players stand to recover more than half of their losses. For many, these cash 15 payments will be life changing: five-and-six figure credit card debts will be wiped out; home 16 equity lines of credit will be paid off; and other debts caused by playing Defendants games will 17 be erased overnight. Importantly, the settlement requires Defendants to implement meaningful 18 prospective relief, including by providing addiction-related resources within their social casino 19 games and by creating and honoring a self-exclusion policy akin to what one might expect to 20 soon see at the Emerald Queen or the Muckleshoot brick-and-mortar casinos. Because this 21 settlement is fair, reasonable, and adequate the Court should not hesitate to approve it. 22 Consequently, Plaintiffs respectfully request that the Court: (i) certify the proposed 23 Settlement Class; (ii) grant preliminary approval of the settlement; (iii) appoint Suzie Kelly, 24 Cheryl Kater, and Manasa Thimmegowda as Class Representatives; (iv) appoint Jay Edelson, 25 Rafey S. Balabanian, Todd Logan, Alexander G. Tievsky, and Brandt Silver-Korn as Class 26 Counsel; (v) approve the proposed notice plan; and (vi) schedule the final approval hearing. 27 Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 1 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 9 of 35 1 BACKGROUND 2 A. Plaintiffs’ Allegations. 3 In April 2015, Cheryl Kater filed a proposed class action lawsuit alleging that Big Fish 4 Casino constitutes unlawful gambling under Washington’s gambling laws. See Dkt. 2.1 She 5 alleged that the “social casino” business model, which drives players to pay real money for 6 virtual casino chips, is illegal under Washington law because all internet gambling is illegal in 7 Washington. More specifically, Kater alleged that Big Fish Casino entices users with an “initial 8 allocation of free chips” to wager on an array of Vegas-style slots, id. ¶¶ 26, 37-38, the outcomes 9 of which are “based entirely on chance.” id. ¶ 32. She alleged that these initial free chips are 10 “quickly los[t]” in the course of gameplay, id. ¶ 27, and that—once exhausted—users purchase 11 more chips with real money (in packages ranging from $1.99 to $249.00 each) if they wish to 12 extend gameplay. Id. ¶¶ 27-28. Because users are otherwise “prevent[ed]” from uninterrupted 13 gameplay, id. ¶ 27, Kater alleged that these virtual chips are “things of value” under 14 Washington’s gambling laws, and that under RCW § 4.24.070 (the “Recover of Money Lost at 15 Gambling Act” or “RMLGA”), users are entitled to recoup their losses. See id. ¶¶ 47-59. Kater 16 further alleged that these actions also constituted violations of RCW § 19.86.010 (the 17 “Washington Consumer Protection Act” or “CPA”) and common law unjust enrichment. See id. 18 ¶¶ 60-79. Later, Plaintiff Manasa Thimmegowda filed a separate action (“Thimmegowda”) 19 against Aristocrat Technologies Inc., Aristocrat Leisure Limited (together “Aristocrat”), 20 Churchill Downs, and Big Fish making substantially identical claims, but on behalf of a 21 temporally different class of players. Plaintiff Suzie Kelly ultimately joined Cheryl Kater as an 22 additional named plaintiff in Kater’s case, see Dkt. 85. Kelly also added a new allegation: she 23 had “lost more than $400,000” playing Defendants’ games. See id. ¶ 47. 24 25 26 1 27 Unless otherwise indicated, all “Dkt.” citations are to Kater et al. v. Churchill Downs et al., No. 15-cv-612 (W.D. Wash., Apr. 17, 2015). Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 2 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 10 of 35 1 B. Relevant Litigation History. 2 Defendant Churchill Downs moved to dismiss, arguing principally that Big Fish Casino 3 is not gambling because virtual chips are not “things of value.” See generally Dkt. 24. The 4 Honorable Marsha J. Pechman, who was then presiding over Kater’s case, agreed with Churchill 5 Downs and dismissed Kater’s case with prejudice. See Dkt. 39. Judge Pechman likewise denied 6 Plaintiff’s motion for reconsideration of the dismissal order. See Dkts. 41, 42. 7 In January 2016, Kater timely appealed. Dkt. 43. Briefing before the Ninth Circuit concluded in 8 September 2016, and oral argument was held in February 2018. In March 2018, the Ninth Circuit 9 reversed. Dkt. 46. at 3 (“We therefore reverse the district court and hold that because Big Fish 10 Casino’s virtual chips are a ‘thing of value,’ Big Fish Casino constitutes illegal gambling under 11 Washington law.”) 12 Upon remand, the action was reassigned to this Court. Dkt. 59. Churchill Downs 13 promptly moved to compel Kater’s case to arbitration, arguing that Kater had previously agreed 14 to Big Fish Games’ Terms of Use (and its mandatory arbitration provision). Dkt. 60. Kater 15 opposed, arguing inter alia that Churchill Downs had waived any right to compel arbitration by 16 seeking a dismissal on the merits in 2015. See generally Dkt. 68. In November 2018 the Court 17 agreed, denying Churchill Downs’ motion because “Churchill Downs waived its right to 18 arbitration when it took its first bite of the apple and chewed thoroughly for over three years.” 19 Dkt. 75 at 11. Churchill Downs then answered Kater’s complaint in November 2018. Dkt. 76. 20 The next year of litigation was consumed with motion practice and discovery disputes. In 21 May 2019, in the Thimmegowda action, Big Fish moved to compel arbitration, see Dkt. 33, and 22 Aristocrat and Churchill Downs moved to dismiss for lack of personal jurisdiction. See Dkt. 35. 23 The very same day, Big Fish and Churchill Downs moved to compel arbitration in the Kater 24 matter. See Dkt. 100. With these motions pending, the Parties engaged in protracted negotiations 25 over the manner and scope of discovery, which ultimately resulted in a sixteen-part discovery 26 and scheduling agreement. See Dkt. 118. On September 12, 2019, Defendants’ arbitration and 27 jurisdiction motions were terminated with leave to refile when the Court stayed both cases Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 3 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 11 of 35 1 pending the Ninth Circuit’s disposition of an interlocutory appeal in a related case, Wilson v. 2 Huuuge, Inc., No. 18-cv-05276 (W.D. Wash.). See Dkt. 121. 3 By the fall, the cases veered into waters uncharted in the class action space. In October 4 2019, Big Fish launched a pop-up in its games that—if clicked—purported to bind its players to 5 the “Dispute Resolution Provision,” requiring them to arbitrate any claims against Defendants 6 and to cut the relevant statutes of limitations. See Declaration of Todd Logan (“Logan Decl.”) ¶ 7 3. In response, Plaintiffs moved for a temporary restraining order to enjoin Big Fish from 8 displaying the pop-up. See Dkt. 122. After briefing and argument, the Court granted Plaintiffs’ 9 motion in part, labeling Big Fish’s pop-up “coercive and misleading.” Dkt. 137 at 7. But in the 10 same stroke, the Court ordered the Parties to propose language regarding any future similar pop- 11 up windows, see id., and after the Parties submitted competing proposals, the Court approved 12 Defendants’ proposal. Dkt. 145. With this Court-approved language in hand, Defendants 13 aggressively presented their players with revised pop-ups in December 2019 (and then again in 14 February 2020 and April 2020)—aimed at preventing putative class members, en masse, from 15 participating in this litigation. See Logan Decl. ¶ 4. 16 Plaintiffs responded to this development in “enterprising” fashion, see Mar. 4, 2020 Hr’g 17 Tr. at 5:9. Specifically, Plaintiffs’ counsel established a website to help putative class members 18 opt-out of Big Fish’s Dispute Resolution Provision by sending Big Fish’s legal department a 19 postcard with the click of a button. See Logan Decl. ¶ 5; Dkt. 159. Within days of the website’s 20 launch, scores of putative class members had opted-out of Big Fish’s Dispute Resolution 21 Provision. See Logan Decl. ¶ 6.2 Defendants moved the Court for a Rule 23(d) protective order 22 to immediately shut down the website, see Dkt. 164, but that motion was denied. See Dkt. 185. 23 Both parties appealed to the Ninth Circuit and both appeals were dismissed for lack of appellate 24 jurisdiction. See Dkts. 188, 189. 25 26 2 27 To date, thousands of putative class members have used Plaintiffs’ website to opt-out of Big Fish’s Dispute Resolution Provision. See Logan Decl. ¶ 7. Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 4 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 12 of 35 1 In the midst of this dispute, Plaintiffs moved to certify a class under Fed. R. Civ. P. 2 23(b)(2) and to preliminarily enjoin the sale of virtual chips in Big Fish’s games. See Dkt. 176. 3 On March 4, 2020, prior to Defendants’ response date, the Court denied Plaintiffs’ motion 4 without prejudice, spelling out a clear roadmap for the next steps in the litigation: Defendants’ 5 renewed arbitration and jurisdiction motions would come first, and in the meantime, the Parties 6 would cooperate on a stipulated briefing schedule, ESI Protocol, Protective Order, and limited 7 discovery. See Dkt. 185. 8 9 The Parties fought tooth and nail on each point. They could not reach agreement on a briefing schedule and proposed competing schedules to the Court. See Dkt. 186; Dkt. 187. They 10 could not reach agreement on an ESI Protocol and Protective Order, so Plaintiffs moved for entry 11 of the District’s model orders. See Dkt. 192. And they also could not agree on the scope of 12 discovery ahead of the renewed motions, so Plaintiffs moved to compel outstanding 13 jurisdictional discovery requests. See Dkt. 191. Ultimately, the Court entered Defendants’ 14 briefing schedule and granted both of Plaintiffs’ contested motions, ordering Defendants to 15 produce a bevy of internal documents and communications. See Dkt. 191; Dkt. 213. On April 10, 16 2020, Defendants filed their renewed arbitration and jurisdiction motions, which the Parties fully 17 briefed. See Dkt. 205. It was at this point that the Parties agreed to attempt to resolve these cases 18 through mediation. 19 C. Defendants’ Efforts to Change Washington Gambling Law. 20 While considerable litigation occurred before the Court, Defendants also sought to defeat 21 this litigation on both the administrative and legislative fronts. Just two weeks after the Ninth 22 Circuit’s mandate issued in Kater, Big Fish hired new counsel and sent them to the Washington 23 State Gambling Commission’s (“WSGC”) session in Tacoma to argue a “Petition for a 24 Declaratory Order” asking the Commission to declare that Big Fish’s games “do not constitute 25 gambling within the meaning of the Washington Gambling Act, RCW § 9.46.0237.” Dkt. 79-5 at 26 1. Those particular proceedings before the commission ran until October 2018, when—after 27 three public hearings in July 2018 (in Tacoma), August 2018 (in Pasco), and October 2018 (in Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 5 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 13 of 35 1 Olympia), all in which Plaintiffs’ counsel appeared in person to offer testimony and comment— 2 the WSGC declined to enter a Declaratory Order. See Dkt. 74-1. Plaintiffs’ counsel continues to 3 represent the interests of the class in sporadic flare-ups before the WSGC, including advocacy 4 efforts advanced by Double Down Interactive (a defendant in a related case) and other gambling 5 companies (e.g., The Stars Group). Logan Decl. ¶ 8. 6 Defendants also attempted to change the law in the Washington Legislature. Along with 7 other social casino companies and under the banner of the International Social Gaming 8 Association (“ISGA”), Defendants hired several well-connected lobbyists to try to change 9 Washington gambling law. Logan Decl. ¶ 9. The ISGA even retained WSGC Commissioner 10 Chris Stearns—the only dissenting vote in the WSGC’s denial of Big Fish’s declaratory order 11 petition—and had him advocate at a legislative committee hearing on its behalf.3 Starting in 12 early 2019, ISGA lobbyists began providing legislators draft legislation that would amend 13 Washington’s gambling laws with the effect (and specific intent) of gutting these lawsuits. See 14 Logan Decl. ¶ 10. Over time, these efforts gained steam, with Senators Mark Mullet and John 15 Braun, as well as Representatives Zack Hudgins, Brandon Vick, Bill Jenkin and Brian Blake, 16 collectively sponsoring four (4) bills threatening to kill these cases by “clarifying” that players 17 who lose money playing social casinos cannot recover under the RMLGA. H.B. 2720, 66th Leg., 18 Reg. Sess. (Wash. 2020); S.B. 6568, 66th Leg., Reg. Sess. (Wash. 2020); H.B. 2041, 66th Leg., 19 Reg Sess. (Wash. 2019); S.B. 5886, 66th Leg., Reg. Sess. (Wash. 2019). Local and national 20 media covered these efforts and left no doubt as to what the ISGA hoped to accomplish. See, 21 e.g., Phillip Conneller, Washington State Social Gaming Legislation Could Rescue Big Fish 22 Casino From Legal Trouble, CASINO.ORG (Jan. 29, 2020), https://bit.ly/39dKtWM; Erik Gibbs, 23 Washington State’s Big Fish could be off the hook with new gambling bills, CALVINAYRE.COM 24 (Jan. 30, 2020), https://bit.ly/2OBSIlV. 25 26 27 3 Hearing on H.B. 2720 before the H. Civil Rights & Judiciary Committee, 66th Leg., Reg. Sess. (Wash. 2020) (statement of Chris Stearns), https://www.tvw.org/watch/?clientID=9375922947&eventID=2020011330& startStreamAt=4464. About the ISGA, https://cite.law/QDU6-TDLJ. Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 6 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 14 of 35 1 In response, Plaintiffs’ counsel met with lawmakers at the State Capitol, offered written 2 and in-person testimony before the House Civil Rights & Judiciary Committee, corresponded 3 with Senator Mullet, spoke with local press about the ISGA’s efforts (see, e.g., Melissa Santos, 4 ‘Free’ casino apps prey on addiction, users say, and WA lawmakers are considering a 5 crackdown, CROSSCUT (Feb. 7, 2020), https://bit.ly/3hfFxDl), and coordinated the submission of 6 more than 100 letters to Washington State Representatives from Big Fish Casino players across 7 the country. See Logan Decl. ¶ 11. These efforts ultimately held the line. Each bill introduced 8 over the past two years has stalled, and the ISGA is now resigned to taking its next stab at 9 rewriting Washington’s gambling laws during the 2021 legislative session. 10 D. 11 Settlement talks began in earnest in April 2020. The Parties agreed to schedule a 12 mediation session on May 22, 2020 with Judge Phillips (ret.). See Logan Decl. ¶ 12. From that 13 point forward, over the next several weeks, the Parties were in near-daily communication with 14 the Phillips ADR team and each other, as the Parties sought to crystallize the disputed issues, 15 produce focal information and data, and narrow down potential frameworks for resolution. 16 Logan Decl. ¶ 13. During this period, Defendants provided Plaintiffs with several sets of detailed 17 transactional data, the Parties exchanged more than fifty (50) pages of briefing on the core facts, 18 legal issues, litigation risks, and potential settlement structures, and the Parties supplemented that 19 briefing with extensive written and telephonic correspondence, mediated by the Phillips ADR 20 team, clarifying each other’s positions in advance of the mediation. See id. 21 The Parties Mediate and Reach a Settlement. On May 22, 2020, the Parties participated in a full-day (indeed, more than twelve-hour- 22 long) video-mediation. See Logan Decl. ¶ 14. Following several rounds of arms-length 23 negotiations facilitated by Judge Phillips, the Parties agreed to a settlement in principle, which 24 was memorialized in the form of a binding term sheet. See id.; Dkt. 214. But the negotiations 25 didn’t end there: over the next two months, the parties worked out the details of a fulsome final 26 settlement agreement, exchanged several rounds of a working settlement document and 27 supporting exhibits, met and conferred telephonically to flesh out the remaining disputed Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 7 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 15 of 35 1 provisions, and together met and conferred with Apple Inc., Google LLC, and Facebook, Inc. 2 (the “Platform Providers”) to help design a robust notice plan. See Logan Decl. ¶ 15. On July 23, 3 2020, the Parties executed the Settlement Agreement before the Court. See Logan Decl. ¶ 29, 4 Exhibit 1. 5 THE TERMS OF THE SETTLEMENT AGREEMENT 6 7 For the Court’s convenience, the key terms of the Agreement are briefly summarized as follows: 8 9 10 A. Settlement Class Definition: The Settlement Class is defined as follows: “all persons in the United States who played Big Fish Casino, Jackpot Magic Slots, or Epic Diamond Slots on or before Preliminary Approval of the Settlement.”4 See Agreement § 1.33. 11 B. Monetary Benefits: Defendants have agreed to establish a $155,000,000.00 12 Settlement Fund from which Settlement Class Members who file a valid claim will be entitled to 13 recover a cash payment, after deducting administrative expenses, any fee award to Class 14 Counsel, and any incentive payments to the Class Representatives. See id. § 1.32. No portion of 15 the Settlement Fund will revert to Defendants. Id. § 2.1(j). Any Settlement Class Member checks 16 not cashed within 90 days of issuance will be either be placed in a second distribution fund or 17 donated to a Court-approved cy pres recipient. Id. § 2.1(i). As described in detail in the Plan of 18 Allocation, the amount of each Settlement Class Member’s payment will vary based on the 19 Settlement Class Member’s total losses (those with higher loss amounts are eligible to recover a 20 greater percentage of their losses), whether the Settlement Class Member is potentially subject to 21 Big Fish’s dispute resolution provision, and overall Settlement Class Member participation 22 levels. See id. §§ 1.36, 2.1(c); Exhibit E. Based on its experience, Angeion Group (the 23 “Settlement Administrator”) anticipates that participating Settlement Class Members in the 24 25 26 27 4 Excluded from the Settlement Class are (1) any Judge or Magistrate presiding over this action and members of their families, (2) the Defendants, Defendants’ subsidiaries, parent companies, successors, predecessors, and any entity in which the Defendants or their parents have a controlling interest and their current or former officers, directors, and employees, (3) persons who properly execute and file a timely request for exclusion from the class, and (4) the legal representatives, successors or assigns of any such excluded persons. See Agreement § 1.28. Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 8 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 16 of 35 1 highest category of Lifetime Spending Amounts will recover the majority of their losses, and that 2 participating class members in the smallest category of Lifetime Spending Amounts will recover 3 more than 10% of their losses. See Declaration of Steven Weisbrot (“Weisbrot Decl.”) ¶ 53. 4 Settlement Class Members will be able to quickly and easily estimate the amount of their 5 potential payment on the Settlement Website. See Agreement § 4.2(c). 6 C. Prospective Relief: Defendants have agreed to establish a voluntary self- 7 exclusion policy that will allow players to exclude themselves from further gameplay. See 8 Agreement §§ 2.2, 2.3. Defendants must also make a link to that policy prominently available 9 within the games, and their customer service representatives will provide the link to players who 10 contact them and reference or exhibit video game behavior disorders. See id. Defendants have 11 also agreed to other prospective relief measures, including changes to game mechanics such that 12 when players run out of virtual chips, they won’t need to purchase additional chips or wait to 13 receive free additional chips to keep playing Defendants’ games. See id. 14 D. Release: In exchange for the monetary relief described above, Defendants and 15 other entities, including the Platform Providers Facebook, Apple, Google, and Amazon will be 16 released from all claims raised in these cases relating to the operation of their casino style games 17 and the sale of virtual chips in those games, including claims that the games were illegal 18 gambling or the chips were “things of value.” The full release is contained at id. § 1.27. 19 E. Class Notice: The Settlement Fund will be used to pay the costs of sending the 20 notice set forth in the Agreement and any other notice as required by the Court, as well as all 21 costs of administration of the Settlement. Id. § 1.35. Angeion Group, as the Settlement 22 Administrator, will send class notices via email and/or U.S. Mail based on records produced by 23 Defendants and obtained from third parties. Id. §§ 4.1, 4.2. Angeion will also establish a 24 settlement website and implement a digital publication notice campaign targeting class members. 25 Id. In line with Rule 23, the notice will include the nature of the action, a summary of the 26 settlement terms, and instructions on how to object or opt out of the settlement, including 27 relevant deadlines. Id. § 4.3. Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 9 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 17 of 35 1 F. Incentive Award Requests: With no consideration having been given or 2 received, Cheryl Kater will seek no more than $10,000 as an incentive award; Manasa 3 Thimmegowda will seek no more than $10,000 as an incentive award; and Suzie Kelly will seek 4 no more than $100,000 as an incentive award. See id. § 8.3. Defendants explicitly reserve their 5 right to challenge any incentive award petition. See id. § 8.3. 6 G. Attorneys’ Fees and Expenses Requests: The Parties have agreed that proposed 7 Class Counsel is entitled to an award of reasonable attorneys’ fees and expenses in an amount to 8 be determined by the Court and to be paid from the settlement fund. See id. § 8.1. Without the 9 Parties having discussed the issue of attorneys’ fees at any point in their negotiations, and with 10 no consideration given or received, proposed Class Counsel have unilaterally agreed to limit any 11 petition for attorneys’ fees to no more than 30 percent (30%) of the Settlement Fund, plus 12 reimbursement of expenses. Id. Any fee award requested by proposed Class Counsel will of 13 course be subject to the Court’s approval. Id. 14 15 ARGUMENT I. 16 The Proposed Class Should Be Certified. Before granting preliminary approval, the Court must first determine that the proposed 17 class is appropriate for certification. To do so, the proposed class must meet the requirements of 18 Rule 23(a) and at least one subsection of Rule 23(b). See Amchem Products, Inc. v. Windsor, 521 19 U.S. 591, 614, 621 (1997); Bateman v. Am. Multi-Cinema, Inc., 623 F.3d 708, 712 (9th Cir. 20 2010); MANUAL FOR COMPLEX LITIGATION (Fourth) § 21.633 (2004).5 21 Rule 23(a) requires that a plaintiff demonstrates that (1) the proposed class is so 22 23 24 25 26 27 5 Courts sometimes also inquire into whether the proposed class is “ascertainable,” that is, “whether the Court can reasonably identify which individuals are class members and which are not.” Geier v. m-Qube, Inc., No. 13-cv-354, 2016 WL 3458345, at *2 (W.D. Wash. June 24, 2016). But Ninth Circuit precedent makes clear there is no separate “administrative feasibility” or “ascertainability” requirement implicit in Rule 23. Briseno v. ConAgra Foods, Inc., 844 F.3d 1121, 1123 (9th Cir. 2017) (“[S]eparate administrative feasibility prerequisite to class certification is not compatible with the language of Rule 23.”). Nevertheless, membership in the proposed class here is based on objective, ascertainable criteria: whether a person has previously played an at-issue Application. And the identity of the class members is also readily determinable though records of the Defendants’ and the Platform Providers. Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 10 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 18 of 35 1 numerous that joinder of all individual class members is impracticable (numerosity), (2) there are 2 questions of law or fact common to the proposed class (commonality), (3) the claims of the 3 plaintiff are typical of those of the class (typicality), and (4) the plaintiff will adequately protect 4 the interests of the class (adequacy). Fed. R. Civ. P. 23(a)(1)–(4). In addition, where, as here, 5 Plaintiffs seek certification under Rule 23(b)(3), they must also demonstrate that common 6 questions predominate over any questions affecting only individual members (predominance), 7 and that a class action is superior to other available methods for fairly and efficiently 8 adjudicating the controversy (superiority). See id. at (b)(3). Because the proposed class is being 9 certified for settlement purposes, the Court “need not inquire whether the case, if tried, would 10 present intractable management problems.” In re Hyundai & Kia Fuel Econ. Litig., 926 F.3d 11 539, 557 (9th Cir. 2019) (quoting Amchem, 521 U.S. at 620). 12 13 A. The Proposed Class Meets the Requirements of Rule 23. 1. The Proposed Settlement Class is Sufficiently Numerous. 14 The first prerequisite to class certification under Rule 23(a)—numerosity—requires that 15 the “class is so numerous that joinder of all members is impracticable.” Fed. R. Civ. P. 23(a)(1). 16 There is no specific minimum number of proposed class members required to satisfy the 17 numerosity requirement, but generally a class of forty or more members is considered sufficient. 18 Ali v. Menzies Aviation, Inc., No. 2:16-cv-00262 RSL, 2016 WL 4611542, at *1 (W.D. Wash. 19 Sept. 6, 2016); see Jama v. GCA Services Group, Inc., et al., No. 16-cv-0331 RSL, 2017 WL 20 4758722, at *3 (W.D. Wash. Oct. 20, 2017) (numerosity satisfied by class of 93 class members). 21 Here, there are millions of members of the settlement class. See Logan Decl. ¶ 17. 22 Consequently, the proposed class is so numerous that joinder of their claims is impracticable, and 23 the numerosity requirement is satisfied. 24 25 2. Settlement Class Members Share Common Questions of Law and Fact. The second requirement of Rule 23(a)—commonality—is satisfied where “there are 26 questions of law or fact common to the class.” Fed. R. Civ. P. 23(a)(2). Commonality is 27 construed permissively, and is demonstrated when the claims of all class members “depend upon Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 11 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 19 of 35 1 a common contention,” with “even a single common question” sufficing. Wal-Mart Stores, Inc. 2 v. Dukes, 564 U.S. 338, 350, 359 (2011) (citation omitted); see also Hanlon v. Chrysler Corp., 3 150 F.3d 1011, 1019 (9th Cir. 1998) (“The existence of shared legal issues with divergent factual 4 predicates is sufficient, as is a common core of salient facts coupled with disparate legal 5 remedies within the class.”). The common contention must be of such a nature that it is capable 6 of class-wide resolution, and that the “determination of its truth or falsity will resolve an issue 7 that is central to the validity of each one of the claims in one stroke.” Dukes, 564 U.S. at 350. 8 Moreover, the permissive standard of commonality provides that “[where] the circumstances of 9 each particular class member vary but retain a common core of factual legal issues with the rest 10 of the class, commonality exists,” Parra v. Bashas’, Inc., 536 F.3d 975, 978–79 (9th Cir. 2008), 11 and “[i]t is not necessary that members of the proposed class share every fact in common,” Evon, 12 688 F.3d at 1030 (internal quotations omitted). Indeed, “the theoretical possibility of individual 13 issues is not enough to outweigh the benefits of common resolution of classwide issues.” 14 Tavenner v. Talon Grp., No. 09-cv-1370 RSL, 2012 WL 1022814, at *4 (W.D. Wash. Mar. 26, 15 2012). 16 These cases present common questions in spades. For example: are the virtual chips in 17 Defendants’ Applications “things of value”? If so, are the Applications “gambling games” under 18 Washington law? If so, are class members entitled to recover their losses under the RMLGA? 19 Does the legislative declaration of purpose in RCW 9.46.010 render Defendants’ alleged 20 violations of gambling laws also unfair practices under the Washington CPA? If so, are proposed 21 class members entitled to pursue an injunction? How about treble damages? 22 These common questions—whose answers depend solely on Defendants’ common course 23 of conduct—establish commonality. Abdullah v. U.S. Sec. Assocs., Inc., 731 F.3d 952, 957 (9th 24 Cir. 2013) (noting key inquiry is “whether class treatment will generate common answers apt to 25 drive the resolution of the litigation”) (internal quotations omitted). At the heart of this case is 26 Plaintiffs’ allegations that the Applications are illegal gambling. This litigation, if tried to a 27 verdict, would resolve all claims stemming from that allegation in a single stroke. Rule 23(a)’s Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 12 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 20 of 35 1 2 3 commonality requirement is therefore satisfied. 3. Plaintiffs’ Claims are Typical of Settlement Class Members’ Claims. Rule 23(a)’s next requirement—typicality—requires that the class representatives’ claims 4 be typical of those of the putative class they seek to represent. Fed. R. Civ. P. 23(a)(3). The 5 purpose of this requirement is “to assure that the interest of the named representative aligns with 6 the interests of the class.” Wolin v. Jaguar Land Rover N. Am., LLC, 617 F.3d 1168, 1175 (9th 7 Cir. 2010) (citation omitted). The test of typicality is “whether other members have the same or 8 similar injury, whether the action is based on conduct which is not unique to the named 9 plaintiff[], and whether other class members have been injured by the same course of conduct.” 10 Id.; see, also Ali, 2016 WL 4611542, at *2 (W.D. Wash. Sept. 6, 2016). This is a “permissive” 11 standard and it is met where the representative claims “are reasonably co-extensive with those of 12 absent class members.” Hanlon, 150 F.3d at 1020. At bottom, “a class representative must be 13 part of the class and possess the same interest and suffer the same injury as the class members.” 14 Ali, 2016 WL 4611542, at *2 (quoting Gen. Tel. Co. of the SW v. Falcon, 457 U.S. 147, 156 15 (1982) (internal quotations omitted). 16 Typicality is met here. While Kater, Kelly, and Thimmegowda each have different total 17 loss amounts, each possesses legal claims identical to those possessed by all members of the 18 proposed class: that the Applications are illegal gambling games, and consequently that their in- 19 game losses must be returned to them. In other words, each suffered the same injury as every 20 other class member harmed by their use of the allegedly illegal Applications. Accordingly, each 21 has the same interest as every other class member in obtaining all available relief for these 22 alleged violations. The typicality requirement is satisfied. 23 4. Plaintiffs and Their Counsel Adequately Represent the Settlement Class. 24 Rule 23(a)’s final requirement—adequacy—requires that the proposed class 25 representatives have and will continue to “fairly and adequately protect the interests of the 26 class.” Fed. R. Civ. P. 23(a)(4). To determine if representation is in fact adequate, the Court must 27 ask “(1) do the named plaintiffs and their counsel have any conflicts of interest with other class Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 13 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 21 of 35 1 members and (2) will the named plaintiffs and their counsel prosecute the action vigorously on 2 behalf of the class.” Hanlon, 150 F.3d at 1020. Further, where a plaintiff’s claims are found to be 3 typical of those of the class, appointing that plaintiff as the class representative will also ensure 4 that interest of the class remain adequately protected. See Dukes, 564 U.S. at 349 n.5 (discussing 5 how the fulfillment of the typicality requirement usually also supports a finding of adequacy 6 because an adequate representative will have claims that are typical of those of the class). 7 Here, Plaintiffs clearly meet the requirements to be named class representatives. First, as 8 discussed above, they share the same interest in securing relief for the claims at issue as every 9 other member of the proposed Settlement Class, and there is no evidence of any conflict of 10 interest. Next, Plaintiffs have long demonstrated their willingness to vigorously prosecute this 11 case, including by providing their counsel with relevant documents and testimony, by submitting 12 comments to the WSGC and Washington Legislature, and more broadly raising public awareness 13 about these cases. See Logan Decl. ¶ 18. Plaintiffs will fairly and adequately protect the 14 Settlement Class’s interest. 15 Similarly, appropriateness of appointing Plaintiffs’ counsel from Edelson PC as Class 16 Counsel is readily apparent. The Court must only ask whether proposed Class Counsel are 17 unencumbered by conflicts of interest and will vigorously prosecute the action. Ellis v. Costco 18 Wholesale Corp., 657 F.3d 970, 985 (9th Cir. 2011). The answer to both questions is clearly yes. 19 First, the record discloses no conflicts of interest and counsel are aware of none. See 20 Logan Decl. ¶ 19. Proposed Class Counsel have no financial stake in any of the Defendants, nor 21 do they have any connections to class members that might cause them to privilege certain class 22 members over others. See id. Second, proposed Class Counsel’s commitment to vigorously 23 prosecuting these cases and protecting the interests of the proposed class cannot credibly be 24 challenged. The underlying legal theory in these cases was developed by Edelson PC and first 25 raised in these cases more than five years ago—again, by Edelson PC. See Logan Decl. ¶ 20. No 26 other law firm in the country has ever pursued similar claims. See id. Over the years, Edelson PC 27 has represented the interests of the proposed class not just in the specific bounds of these case Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 14 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 22 of 35 1 dockets, but also in proceedings before the WSGC and before the Washington Legislature. See 2 Logan Decl. ¶ 21. More broadly, proposed Class Counsel are well-qualified and experienced 3 members of the plaintiffs’ bar who have extensive experience in class actions of similar size, 4 scope, and complexity to this case. See Logan Decl. ¶¶ 22, 30; Exhibit 2 (Edelson PC Firm 5 Resume). Proposed Class Counsel have frequently been appointed lead class counsel by courts 6 throughout the country and have the resources necessary to conduct litigation of this nature. See 7 id. In other words, Plaintiffs’ counsel’s adequacy is beyond cavil. 8 Consequently, Rule 23(a)’s adequacy requirement is met. See Jama, 2017 WL 4758722, 9 at *6 (finding adequacy requirement met when “both the named plaintiffs and plaintiffs’ counsel 10 have demonstrated a commitment to vigorously prosecuting [the] action on behalf of the class”). 11 B. 12 In addition to meeting all four of Rule 23(a)’s prerequisites for certification, a proposed 13 class must also satisfy Rule 23(b)(3)’s additional requirements—predominance and superiority. 14 See Fed. R. Civ. P. 23(b)(3). Certification is encouraged where, as here, “the actual interests of 15 the parties can be served best by settling their differences in a single action.” Hanlon, 150 F.3d at 16 1022. As detailed below, both the predominance and superiority requirements of Rule 23(b)(3) 17 are satisfied. 18 The Proposed Class Satisfies the Requirements of Rule 23(b)(3). 1. Common Questions of Law and Fact Predominate. 19 Common questions predominate here. The Supreme Court has made clear that 20 predominance is a qualitative inquiry: “The predominance inquiry ‘asks whether the common, 21 aggregation-enabling, issues in the case are more prevalent or important than the non-common, 22 aggregation-defeating, individual issues.’” Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 23 1045 (2016) (quoting 2 NEWBERG ON CLASS ACTIONS § 4:49 (5th ed.)). When considering 24 whether common issues predominate, the court should begin with “the elements of the 25 underlying cause of action.” Reichert v. Keefe Commiossary Network, LLC, 331 F.R.D. 541, 553 26 (W.D. Wash. 2019) (quoting Erica P. John Fund, Inc. v. Halliburton Co., 563 U.S. 804, 809 27 (2014)). “More important questions apt to drive the resolution of the litigation are given more Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 15 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 23 of 35 1 weight in the predominance analysis over individualized questions which are of considerably less 2 significance to the claims of the class.” Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1134 (9th 3 Cir. 2016). As these cases, and the text of the rule make clear, individual questions need not be 4 absent, but merely must occupy less importance to the litigation than common questions. 5 This inquiry is especially straightforward in these cases. The showings needed for 6 Plaintiffs to prevail on the elements of their claims under the RMLGA and the CPA depend on 7 evidence or legal argument that is common to the class—principally the operation of 8 Defendants’ Applications. A factfinder’s resolution of questions related to the operation of the 9 Applications—for example, whether the chips sold in the games are “things of value”—will 10 resolve questions central to the claims of every class member in one fell swoop, driving the 11 litigation forward. See Reichert, 331 F.R.D. at 554-55 (finding predominance satisfied when all 12 or nearly all elements of the class’s prima facie case presented common questions); Taylor v. 13 Universal Auto Grp. I, Inc., No. 13-cv-5245 KLS, 2014 WL 6654270, at *16 (W.D. Wash. Nov. 14 24, 2014) (predominance satisfied where “predominant” issue contested by the parties was 15 common to the class). An assessment of each class member’s Lifetime Spending Amount will be 16 accomplished by a common and straightforward method: summing their spending—evidenced 17 by the data—to be provided to the court-appointed Settlement Administrator by Defendants and 18 the Platform Providers. Cf. Bess v. Ocwen Loan Servicing LLC, 334 F.R.D. 432, 436 (W.D. 19 Wash. 2020) (quotation omitted) (“[T]he need for individualized findings as to the amount of 20 damages does not defeat class certification.”). These common questions overwhelm any 21 individualized questions affecting particular class members, either as it relates to the Class’s 22 ability to make a prima facie showing of Defendants’ liability, or with respect to potential 23 affirmative defenses. And, in any event, the Supreme Court has made clear that the existence of 24 “affirmative defenses peculiar to some individual class members” does not defeat predominance, 25 even if those defenses must be tried separately. Tyson Foods, 136 S. Ct. at 1045. Predominance 26 is therefore satisfied. 27 Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 16 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 24 of 35 1 2. A Class Action is the Superior Method of Resolving the Controversy. 2 The superiority criterion encompasses at least four considerations: “(A) the class 3 members’ interests in individually controlling the prosecution or defense of separate actions; (B) 4 the extent and nature of any litigation concerning the controversy already begun by or against 5 class members; (C) the desirability or undesirability of concentrating the litigation of the claims 6 in the particular forum; and (D) the likely difficulties in managing a class action.” Fed. R. Civ. P. 7 23(b)(3). The first and second factors plainly point in favor of certification. “There is no 8 indication that any [class members] have an interest in pursuing their own claims—in fact, it 9 would likely be uneconomical for them to do so. There is also no evidence that certain [class 10 members] have already initiated their own individual actions.” Reichert, 331 F.R.D. at 556. 11 While some class members have lost substantial sums of money, it is difficult to imagine that a 12 rational contingency-fee lawyer would take on any individual claim given the time, effort, and 13 resources that Defendants have committed to defending claims against their Applications. See 14 Wolin, 617 F.3d at 1175 (“Where recovery on an individual basis would be dwarfed by the cost 15 of litigating on an individual basis, this factor weighs in favor of class certification.”). Moreover, 16 the huge number of individuals in the class would overwhelm the judicial system if class 17 members were forced to litigate individually. See Taylor, 2014 WL 6654270, at *19 (“Generally, 18 when a large number of plaintiffs are seeking a small amount of damages, class certification is 19 appropriate.”). 20 Next, this forum is the clear choice in which to concentrate the litigation. The claims 21 arise under a Washington law given that Big Fish Games’ headquarters is in Seattle. See Shasta 22 Linen Supply, Inc. v. Applied Underwriters, Inc., No. 2:16-cv-1211 WBS AC, 2019 WL 358517, 23 at *6 (E.D. Cal. Jan. 29, 2019) (“The fact that all remaining claims are brought under California 24 law weighs in favor of a California federal court adjudicating the dispute.”). Moreover, the Court 25 is intimately familiar with the facts and law underlying this action. It would make little sense to 26 force the parties to start over elsewhere. See Kelley v. Microsoft Corp., 251 F.R.D. 544, 560 27 Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 17 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 25 of 35 1 (W.D. Wash. 2008) (finding the forum superior because “the Court is already familiar with 2 [p]laintiffs’ claims”). 3 Accordingly, a class action is the superior method for adjudicating the controversy 4 between the parties, and as all requirements of class certification under Rule 23 are met, the 5 proposed Settlement Class should be certified. 6 II. 7 The Proposed Settlement Merits Preliminary Approval. After determining that the proposed class should be certified, the Court must determine 8 whether the settlement warrants approval. Fed. R. Civ. P. 23(e). This is a two-step process: “(1) 9 preliminary approval of the settlement; and (2) following a notice period to the class, 10 final approval of the settlement at a fairness hearing.” Relente v. Viator, Inc., No. 12-cv-05868 11 JD, 2015 WL 2089178, at *2 (N.D. Cal. May 4, 2015). 12 At the preliminary approval stage, the court determines merely whether the “proposed 13 settlement [is] within the range of final approval” such that notice should be disseminated to the 14 class. Rinky Dink, Inc. v. World Bus. Lenders, LLC, No. 14-cv-0268-JCC, 2016 WL 4052588, at 15 *4 (W.D. Wash. Feb. 3, 2016); see also Herbert Newberg & Alba Conte, NEWBERG ON CLASS 16 ACTIONS § 11.25 at 3839 (4th ed. 2002). While the Ninth Circuit has a “strong judicial policy” 17 favoring settlement of class actions, Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th 18 Cir. 1992), before the Court preliminarily approves a class action settlement, it “has a 19 responsibility to review a proposed class action settlement to determine whether the settlement is 20 ‘fundamentally fair, adequate, and reasonable,’” Wilson v. Maxim Healthcare Servs., Inc., No. 21 14-cv-789 RSL, 2017 WL 2988289, at *1 (W.D. Wash. June 20, 2017) (quoting Staton v. Boeing 22 Co., 327 F.3d 938, 959 (9th Cir. 2003)); Fed. R. Civ. P. 23(e). 23 Where, as here, a settlement agreement is negotiated prior to adversarial class 24 certification, courts generally look to two guideposts in deciding whether to preliminarily 25 approve the settlement: (1) whether there are any signs of collusion between class counsel and 26 the defendant, and (2) whether the so-called Churchill factors suggest the settlement is fair. In re 27 Bluetooth Headset Prod. Liab. Litig., 654 F.3d 935, 946–47 (9th Cir. 2011) (quoting Churchill Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 18 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 26 of 35 1 Vill., L.L.C. v. Gen. Elect., 361 F.3d 566, 575 (9th Cir. 2004)). At the preliminary approval stage, 2 this Court can conduct a “less searching” inquiry than at final approval, and “seek[] merely to 3 identify any ‘glaring deficiencies’ prior to sending notice to class members.” Rinky Dink, 2016 4 WL 4052588, at *4. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 A. The Proposed Settlement is the Product of Serious, Informed, Non-Collusive Negotiations. Here’s an understatement: this is not a collusive settlement. It is instead the product of extraordinarily adversarial litigation and, ultimately, informed and arm’s-length negotiations facilitated by a nationally-renowned mediator. See Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 965 (9th Cir. 2009) (“We put a good deal of stock in the product of an arms-length, noncollusive, negotiated resolution.”); Helde v. Knight Transportation, Inc., No. 2:12-cv-00904 RSL, Dkt. 191 at 2 (W.D. Wash. May 24, 2017) (granting preliminary approval where “Settlement Agreement resulted from extensive arm’s-length negotiations, with participation of an experienced mediator”); Gragg v. Orange CAB Co., Inc., No. 12-cv-0576 RSL, 2017 WL 785170, at *1 (W.D. Wash. Mar. 1, 2017) (same). Furthermore, this settlement presents none of the red flags the Ninth Circuit has flagged as indicative of potential collusion—(1) “when counsel receive a disproportionate distribution of the settlement, or when the class receives no monetary distribution but class counsel are amply rewarded,” (2) “when the parties negotiate a ‘clear sailing’ arrangement,” and (3) “when the parties arrange for fees not awarded to revert to defendants rather than be added to the class fund.” In re Bluetooth 654 F.3d at 947 (quotations omitted). First, proposed Class Counsel is not receiving a disproportionate distribution of the settlement fund or being amply rewarded while the class receives no monetary distribution. To the contrary, proposed Class Counsel have unilaterally limited themselves to a fee petition within the “usual range” for fees in this Circuit—30% of the settlement fund. See Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002). And far from receiving coupons or meaningless cy 27 Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 19 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 27 of 35 1 pres only relief, class members will receive substantial individual cash recoveries.6 Second, there 2 is no “clear sailing” provision in the settlement. See In re Bluetooth, 654 F.3d at 947 (defining 3 clear sailing provisions). Defendants are free to object to proposed Class Counsel’s fee request 4 should Defendants determine the request is unreasonable. See Agreement § 8.1. Third, there is no 5 possibility that any funds revert back to Defendants. See Agreement § 1.35. 6 Ultimately, there are no signs of collusion here because there was no collusion here. This 7 settlement is instead the product of serious, informed, non-collusive negotiations—and that fact 8 militates in favor of preliminary approval. 9 B. 10 11 A Churchill Analysis Supports Preliminarily Approval. In addition to looking for possible signs of collusion, courts assessing a proposed class action settlement weigh the Churchill factors. Those are: 12 (1) the strength of the plaintiff’s case; (2) the risk, expense, complexity, and likely duration of further litigation; (3) the risk of maintaining class action status throughout the trial; (4) the amount offered in settlement; (5) the extent of discovery completed and the stage of the proceedings; (6) the experience and views of counsel; (7) the presence of a governmental participant; and (8) the reaction of the class members of the proposed settlement. 13 14 15 16 In re Bluetooth, 654 F.3d at 946 (quoting Churchill, 361 F.3d at 575). Here, there is no 17 governmental participant and the reaction of class members cannot be known until after the class 18 has been notified of the settlement, so the last two factors are not applicable. The other six 19 Churchill factors weigh in favor of preliminary approval. 20 1. 21 22 The Strength of Plaintiffs Cases, Risk of Further Litigation, and Risk of Maintaining Class Action Status. The first three Churchill factors—the strength of Plaintiffs’ cases, the risk of further 23 24 25 26 27 6 Aside from the Class Representatives’ right to petition the Court for reasonable incentive awards, no class member will be given preferential treatment at the expense of another. See Scott v. United Servs. Auto. Ass'n, No. 11-cv-1422-JCC, 2013 WL 12251170, at *1 (W.D. Wash. Jan. 7, 2013) (noting preliminary approval generally granted absent “obvious deficiencies, such as unduly preferential treatment of class representatives or of segments of the class”) (citations omitted). And while Suzie Kelly may petition the Court for a large incentive award, her endorsement of the Settlement is not conditioned on the allowance of (or, indeed, right to petition for) any incentive award. Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 20 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 28 of 35 1 litigation, and the risk of maintaining class action status—are all tied together, and the relevant 2 analysis supports preliminary approval. See Betorina v. Randstad US, L.P., No. 15-cv-03646- 3 EMC, 2017 WL 1278758, at *5 (N.D. Cal. Apr. 6, 2017) (analyzing the first three Churchill 4 factors together). The key point here is that while Plaintiffs are confident in the strength of their 5 claims and believe they would prevail at class certification and trial, litigating these cases to 6 verdict would thrust upon class members substantial risks that are simply unacceptable in light of 7 the immediate and certain cash recovery this settlement makes available. 8 The most significant of these risks, in Plaintiffs’ counsel’s professional judgment, is that 9 Defendants’ significant investments in Olympia just might pay off in a retroactive change in the 10 law. See Logan Decl. ¶ 23. Plaintiffs’ counsel have thus far fended off the ISGA’s phalanx of 11 well-heeled lobbyists, but Defendants and their ISGA comrades—multi-billion dollar gambling 12 outfits with the support of the Chamber of Commerce and other similar business interests—are 13 formidable opponents. If these cases do not settle now, each legislative cycle the class will be at 14 risk of having their claims eviscerated in the name of “remov[ing] . . . economic uncertainty” by 15 “clarifying” that proposed class members cannot recover under the RMLGA. H.B. 2720, 66th 16 Leg., Reg. Sess. (Wash. 2020). And in addition to lobbying-related risks, it is also of course 17 possible—as with any litigation—that Defendants could prevail on any number of future 18 motions, including motions related to class certification, arbitration, and summary judgment. 19 Even assuming Plaintiffs’ counsel fends off the ISGA and Defendants’ motions long 20 enough for Plaintiffs to try their cases to verdicts, Defendants’ inevitable appeals would take 21 years, further delaying the relief to the class. See Logan Decl. ¶ 24; Rodriguez, 563 F.3d at 966 22 (“Inevitable appeals would likely prolong the litigation, and any recovery by class members, for 23 years. This factor, too, favors the settlement.”); Ikuseghan v. Multicare Health Sys., No. 3:14-cv- 24 05539 BHS, 2016 WL 3976569, at *4 (W.D. Wash. July 25, 2016) (“[T]he outcome of trial and 25 any appeals are inherently uncertain and involve significant delay. The Settlement avoids these 26 challenges.”). The substantial expense and burden associated with litigating these cases not only 27 through trials but also through inevitable appeals further militate in favor of granting preliminary Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 21 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 29 of 35 1 approval now. See Logan Decl. ¶ 24; Rinky Dink, 2016 WL 4052588, at *5 (finding preliminary 2 approval appropriate when considering the expense of the “additional depositions, expert work, 3 and motion work [that] would have to be completed before trial”). 4 In sum, the strength of Plaintiffs cases balanced against the risks and expenses of 5 continued litigation weighs strongly in favor preliminary approval. Id. (finding first three 6 Churchill factors supported preliminary approval when plaintiffs were confident in their case but 7 continuing to litigate risked losing class certification and was “inherently expensive”); 8 Ikuseghan, 2016 WL 3976569, at *4 (“Absent the proposed [s]ettlement, [c]lass [m]embers 9 would likely not obtain relief, if any, for a period of years.”). 10 2. The Amount Offered in Settlement. 11 The next Churchill factor, the relief offered in settlement, also clearly favors approval. 12 One hundred and fifty-five million dollars ($155,000,000) is, no matter how sliced or diced, a 13 massive recovery for the class. It is a significant enough sum that class members with the largest 14 Lifetime Spending Amounts stand to recover more than 50% of their losses, and that no 15 participating class member is likely to recover less than 10% of their losses. See Weisbrot Decl. ¶ 16 53; cf. Officers for Justice v. Civil Serv. Comm’n of City & Cty. of San Francisco, 688 F.2d 615, 17 628 (9th Cir. 1982) (“It is well-settled law that a cash settlement amounting to only a fraction of 18 the potential recovery will not per se render the settlement inadequate or unfair.”). 19 Some specific examples of what Plaintiffs stand to recover, as compared to what they 20 could reasonably have been awarded at trial, help drive home the strength of this monetary 21 recovery. See Churchill 361 F.3d at 577. Plaintiffs Thimmegowda, Kater, and Kelly contend that 22 they have spent approximately $4,000, $40,000, and $400,000 (respectively) in Lifetime 23 Spending Amounts, and those figures represent the most likely upper bound of what Plaintiffs 24 could have expected to win at trial. With those figures in mind, here is the Settlement 25 Administrator’s estimates of Plaintiffs’ likely Gross Payment Amounts under the settlement: 26 $500-$1000 (Thimmegowda—i.e., 12.5%-25%); $10,000-$18,000 (Kater—i.e., 25% to 45%); 27 and $200,000-$300,000 (Kelly—i.e., 50%-75%). Weisbrot Decl. ¶ 52. In the closest comparable Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 22 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 30 of 35 1 cases of this magnitude, these are “excellent” results. See In re Wells Fargo & Co. S'holder 2 Derivative Litig., No. 16-cv-05541-JST, 2020 WL 1786159, at *8 (N.D. Cal. Apr. 7, 2020). The 3 average settlement in securities class actions alleging nine figure damages, for example, recovers 4 somewhere between 2% and 3% of the alleged damages. See id.; Cornerstone Research, 5 SECURITIES CLASS ACTION SETTLEMENTS, 2017 REVIEW AND ANALYSIS, at 8 (2018); see also 6 Cornerstone Research, SECURITIES CLASS ACTION SETTLEMENTS, 2018 REVIEW AND ANALYSIS, 7 at 6 (2019) (noting average 2 percent recovery for 2018). 8 Driving this point home, many class members stand to receive five-and-six figure 9 recoveries. See Logan Decl. ¶ 25. Credit card debts will be wiped out; home equity lines of credit 10 will be paid off; and in the midst of an economic crisis, scores of class members with debts 11 accumulated from playing Defendants’ games will be erased overnight. See id. In other words, 12 the financial terms of this settlement are a triumph for the class. 13 The prospective relief offered by the settlement buttresses the fairness of the settlement. 14 See Bennett v. SimplexGrinnell LP, No. 11-cv-01854-JST, 2015 WL 1849543, at *7 (N.D. Cal. 15 Apr. 22, 2015) (noting “the significant value of the prospective relief also obtained in the 16 settlement agreement” warranted preliminary approval). The settlement requires Defendants to 17 establish and make publicly available a voluntary self-exclusion policy that will allow players to 18 exclude themselves from further gameplay, to link to that policy prominently within the games, 19 and to have their customer service representatives provide that link to players who contact them 20 and reference or exhibit video game behavior disorders. See Agreement §§ 2.2, 2.3. These 21 changes, intended to generally mirror the sorts of voluntary self-exclusion programs that states 22 often require casinos to implement, reflect a pioneering—and, in Plaintiffs’ counsel’s view, long- 23 overdue—advancement in social casino self-regulation. And as relevant here, these changes to 24 Defendants’ conduct—in conjunction with the $155 million cash fund—militate in favor of 25 approval. See Officers for Justice, 688 F.2d at 628 (“It is the complete package taken as a whole, 26 rather than the individual component parts, that must be examined for overall fairness.”) 27 For these reasons, the relief secured by this settlement warrants its approval. Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 23 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 31 of 35 1 2 3. Extent of Discovery Completed and the Stage of the Proceedings. Next, the extent of discovery completed and the stage of the proceedings demonstrate that 3 the Parties “had enough information to make an informed decision about the strength of their 4 cases and the wisdom of settlement.” Rinky Dink, 2016 WL 4052588, at *5. The Parties only 5 agreed to mediate after more than five years of contentious of litigation, and consequently 6 mediated with a crystal-clear understanding of the strengths and weaknesses of the Parties’ 7 claims and defenses. See Logan Decl. ¶ 26. And while the Parties did not conduct a substantial 8 volume of formal discovery prior to mediation, proposed Class Counsel independently undertook 9 massive informal discovery efforts throughout these cases. See id. Those efforts involved 10 frequent communications with members of the proposed class, the collection of large numbers of 11 documents possessed by proposed class members (e.g., email, text message, and in-game chat 12 exchanges with Defendants’ “VIP Hosts”), informal communications and/or attempts with 13 Defendants’ former employees, and more. See id. 14 Moreover, in the weeks before the mediation, Defendants provided Plaintiffs with several 15 sets of detailed transactional data for virtual chip purchases; the parties exchanged reams of 16 briefing on the core facts, legal issues, litigation risks, and potential settlement structures; and the 17 Parties supplemented that briefing with extensive written and telephonic correspondence, 18 mediated and shuttled by the Phillips ADR team, clarifying each other’s positions in advance of 19 the mediation. See Logan Decl. ¶ 13. The May 22, 2020 mediation session lasted more than 20 twelve hours. See Logan Decl. ¶ 14. It was only at the end of that long day, and with the skilled 21 assistance of Judge Phillips and his Phillips ADR team, that the parties were able to hash out a 22 settlement. See id. By then, the parties were fully informed on all pertinent issues and capable of 23 assessing the benefits of the settlement now before the Court. See Logan Decl. ¶ 15; Ikuseghan, 24 2016 WL 3976569, at *3 (approving settlement reached “between experienced attorneys who are 25 familiar . . . with the legal and factual issues of this case in particular”). This factor, too, thus 26 supports preliminary approval. 27 Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 24 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 32 of 35 1 4. The Experience and Views of Counsel. 2 The final Churchill factor that can be considered here—the views and experience of 3 counsel—likewise demonstrates the proposed settlement warrants preliminary approval. As 4 discussed in Section I(A)(4), supra, proposed Class Counsel has extensive experience litigating 5 complex class actions and negotiated this settlement with the best interests of the class in mind. 6 After years of adversarial litigation, substantial pre-mediation efforts, and a full-day of arm’s- 7 length negotiations with the assistance of Judge Phillips, proposed Class Counsel is confident 8 that the proposed settlement is fair, reasonable, and adequate, and in the best interests of the 9 class. See Logan Decl. ¶ 27; Rodriguez, 563 F.3d at 967 (“[P]arties represented by competent 10 counsel are better positioned than courts to produce a settlement that fairly reflects each party's 11 expected outcome in litigation.”) (citing In re Pac. Enters. Sec. Litig., 47 F.3d 373, 378 (9th Cir. 12 1995)); Ikuseghan, 2016 WL 3976569, at *4 (considering that class counsel, “who are 13 experienced and skilled in class action litigation, support the [s]ettlement as fair, reasonable, and 14 adequate, and in the best interests of the [c]lass as a whole,” and approving settlement). 15 III. 16 The Court Should Approve the Proposed Notice Plan. Upon certification, Due Process and Rule 23 require the Court “direct to class members 17 the best notice that is practicable under the circumstances, including individual notice to all 18 members who can be identified through reasonable effort.” Fed. R. Civ. P. 23(c)(2)(B). 19 Here, the parties have agreed upon a multi-part notice plan to be carried out by Angeion 20 Group, a well-respected class action settlement administrator. See, e.g., Salinas v. U.S. Xpress 21 Enterprises, Inc., No. 13-cv-00245, 2018 WL 1477127, at *10 (E.D. Tenn. Mar. 8, 2018) 22 (“Angeion Group has significant expertise in administering class and collective settlements and 23 is fully qualified to administer this settlement.”). 24 Under the Settlement, Defendants have agreed to provide proposed Class Counsel and the 25 Settlement Administrator all Settlement Class Member contact information reasonably available 26 to Defendants, including names, phone numbers, email addresses, and mailing addresses. See 27 Agreement § 4.1(a). For each Friend Code with a Lifetime Spending Amount greater than zero, Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 25 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 33 of 35 1 Defendants must also provide the Friend Code’s Lifetime Spending Amount and information 2 sufficient to determine whether the Friend Code clicked to accept the Big Fish Terms of Use in 3 or after December 2019 but before the date of the execution of this Settlement Agreement. Id. 4 Defendants and proposed Class Counsel must also provide the Settlement Administrator the 5 information reflected in any Dispute Resolution Provision opt-out letters received by Defendants 6 before the date of the execution of this Settlement Agreement. Id. § 4.1(b). Proposed Class 7 Counsel and Defendants’ Counsel have agreed to cooperate, and are in the process of 8 cooperating, to work with the Platform Providers to obtain and furnish to the Settlement 9 Administrator the Lifetime Spending Amounts of, and all contact information in the Platform 10 Providers’ possession—including names, platform-generated usernames, platform-generated 11 PlayerIds, phone numbers, email addresses, and mailing addresses—for all persons in the 12 Settlement Class with a Lifetime Spending Amount greater than zero. Id. ¶ 4.1(c)-(d). 13 All of this information will be used by the Settlement Administrator to create the Class 14 List. Id. § 4.1(f). Within 35 days of the entry of preliminary approval, the Settlement 15 Administrator will use the Class List to send notice via email substantially in the form attached 16 to the Settlement Agreement as Exhibit B, along with an electronic link to the Claim Form, to all 17 Settlement Class Members for whom a valid email address is available in the Class List. See 18 Agreement § 4.2(a). In the event transmission of the email notice results in any “bounce-backs,” 19 the Settlement Administrator will where reasonable correct any issues that may have caused the 20 “bounce-back” to occur and make a second attempt to re-send the email notice, and will, where 21 possible, send Notice substantially in the form attached as Exhibit C via First Class U.S. Mail. 22 See id. The Settlement Administrator will also where possible send notice substantially in the 23 form attached as Exhibit C via First Class U.S. Mail to all Settlement Class Members with a 24 Lifetime Spending Amount greater than $100.00. See id. In total, Class Counsel anticipates that 25 more than 2,800,000 Friend Codes associated with class members will receive direct notice. 26 Logan Dec. ¶ 28. 27 Within seven days of the entry of preliminary approval, the Settlement Administrator will Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 26 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 34 of 35 1 also establish a Settlement Website at www.bigfishgamessettlement.com, which will include the 2 ability to file Claim Forms online. See Agreement § 4.2(c). The Notice provided on the 3 Settlement Website will be substantially in the form of Exhibit D to the Agreement, and the 4 website will advise the Settlement Class of the total value of the Settlement Fund and provide 5 Settlement Class Members the ability to approximate their Settlement Payment. Id. 6 Finally, the Settlement Administrator will supplement the direct notice program with a 7 digital publication notice program that is estimated to deliver more than two hundred million 8 (200,000,000) impressions, reaching more than 80% of likely Settlement Class Members, and 9 serving members of the target audience with more than four different digital impressions each. 10 Id. § 4.2(d). Weisbrot Decl. ¶¶ 36, 40, 56. The digital publication notice campaign will run for at 11 least one month and will contain active hyperlinks to the Settlement Website. Id. § 4.2(d). 12 In addition to reaching the Settlement Class, notice is adequate when it provides the 13 information necessary to make a decision in language that can be readily understood by the 14 average class member. Herbert Newberg & Alba Conte, NEWBERG ON CLASS ACTIONS § 11:53 15 (4th ed. 2002). That is the case here, where the format and language of each form of notice have 16 been carefully drafted in straightforward, easy-to-read language, and all information required 17 under Rule 23 is present. (See Exhibits B–D to the Agreement.) 18 19 Because the proposed methods for providing notice to the Class comports with both Rule 23 and Due Process, the notice plan should be approved by the Court. 20 21 CONCLUSION For the foregoing reasons, Plaintiffs respectfully requests that the Court (1) certify the 22 proposed class for settlement purposes, (2) appoint Cheryl Kater, Suzie Kelly, and Manasa 23 Thimmegowda as Class Representatives, (3) appoint Jay Edelson, Rafey S. Balabanian, Todd 24 Logan, Alexander G. Tievsky, and Brandt Silver-Korn of Edelson PC as Class Counsel, (4) grant 25 preliminary approval of the proposed settlement, (5) approve the proposed notice plan, and (6) 26 schedule a final approval hearing. 27 Pls’ Mot. For Preliminary Approval Case Nos. 15-CV-612, 19-CV-199 - 27 T OUSLEY B RAIN S TEPHENS PLLC 1700 Seventh Avenue, Suite 2200 Seattle, Washington 98101-4416 Tel: 206.682.5600 • Fax: 206.682.2992 Case 2:19-cv-00199-RBL Document 171 Filed 07/24/20 Page 35 of 35