PROPOSED ORDER AND FINAL JUDGMENT
STEPHEN V. WILSON, District Judge.
This matter came before the Court for hearing pursuant to the Court's January 20, 2011 Order on the Parties' application for preliminary approval of the settlement set forth in the Class Action Stipulation And Agreement Of Settlement dated January 7, 2011 (the "Agreement" or "Settlement Agreement"). Due and adequate notice having been given to the Settlement Class
1. The Court has jurisdiction under ERISA over the subject matter of the-Action and over all parties to the Action, including all members of the Class.
2. The Court certifies this action as a Class Action under Fed. R. Crv. P. 23(a) and 23(b)(1). The Class is defined as persons, excluding Individual Defendants, who were participants in or beneficiaries of the PFF 401(k) Plan or the PFF ESOP whose individual Plan accounts were invested in Bancorp Stock at any time during the period from March 1, 2003, through and including September 8, 2010. Plaintiffs Pauline Perez, Bruce Bonanomi, and Tiffany Woodward (the "Plaintiffs" or "Named Plaintiffs") are appointed as Class Representatives, and Barroway Topaz Kessler Meltzer & Check, LLP ("Barroway Firm") and Stember Feinstein Doyle & Payne, LLC ("Stember Firm"), are appointed as Co-Lead Counsel for the Plaintiffs in the Action pursuant to Fed. R. Civ. P. 23(g). Marlin & Saltzman ("Saltzman Firm") is appointed as Liaison Counsel for the Plaintiffs in the Action pursuant to Fed. R. Civ. P. 23(g).
3. The Court finds:
(a) The Class is so numerous that it is impractical to bring all Class Members before the Court individually. Internal Revenue Service/Department of Labor Forms 5500 filed by the Plans indicate that there are approximately one thousands Settlement Class Members, and for the purposes of the Settlement the Defendants do not dispute this estimate.
(b) The Class allegations present common questions of law or fact, including:
(i) Whether the Defendants breached fiduciary obligations to the Plans and their participants by causing the Plans to offer the Bancorp Stock as an investment option in the 401(k) Plan and/or continue to invest in Bancorp Stock in both Plans at a time when the Defendants knew or should have known that the stock was not a prudent investment for the Plans;
(ii) Whether the Defendants breached fiduciary obligations to the Plans and its participants by causing the Plans to make and maintain investments in Bancorp Stock, at a time when it was not prudent to do so;
(iii) Whether the Defendants breached fiduciary obligations to the Plans and their participants by providing incomplete and inaccurate information to participants regarding Bancorp Stock and the risks of further investment in such stock;
(iv) Whether certain Defendants breached fiduciary obligations to the Plans and their participants by failing to prudently monitor the other Defendants, such that the Plans and participants' interests were not adequately protected and served; and
(v) Whether as a result of the alleged fiduciary breaches engaged in by the Defendants, the Plans and their participants and beneficiaries suffered losses.
(c) The typicality requirement of Fed. R. Crv. P. 23(a)(3) is satisfied because the ERISA claims of the Named Plaintiffs arise from the same alleged course of conduct that gives rise to the claims of the Class Members, and theii claims are based on the same legal theories under ERISA's scheme for uniform enforcement. Named Plaintiffs allege that they and the other members of the Class were participants in or beneficiaries of the Plans during the Class Period whose Plan accounts included investments in Bancorp Stock, that the Plans' fiduciaries treated them and all other Plan participants alike, and that Plan-wide relief is necessary and appropriate under ERISA. Under these circumstances, the claims asserted by the Named Plaintiffs are sufficiently typical of the claims asserted by the Class as a whole to satisfy Fed. R. Civ. P. 23(a)(3).
(d) The requirements of Fed. R. Crv. P. 23(a)(4) are also satisfied. Undei ERISA the Named Plaintiffs have no conflicting interests with absent members of the Class. The Court is satisfied that Co-Lead Counsel are qualified, experienced, and prepared to represent the Class to the best of their abilities.
(e) The Class also satisfies the requirements of Fed. R. Crv. P. 23(b)(1). Named Plaintiffs' breach of fiduciary duty claims were brought on behalf of the Plans, creating a risk that failure to certify the Class would leave other Plan participants and beneficiaries without adequate relief. There is also a risk of inconsistent dispositions that might prejudice the Defendants and/or result in contradictory rulings including as to whether various Defendants acted as fiduciaries; whether the Plans' continued investment in Bancorp Stock was prudent, and whether certain Defendants' disclosures to Plan participants were appropriate.
(f) The Court has also considered each of the elements required by Fed. R. Civ. P. 23(g) in order to ensure that Co-Lead Counsel will fairly and adequately represent the interests of the Class. Co-Lead Counsel has done substantial work to identify and investigate potential claims in the Action. Co-Lead Counsel have represented that they have investigated the allegations made in the Amended Complaint by interviewing members of the proposed Settlement Class, reviewing publicly available information, reviewing thousands of pages of documents, making claims in PFF's Chapter 11 proceedings, and taking other actions. Co-Lead Counsel has experience in handling class actions and claims of the type asserted in this Action. Co-Lead Counsel has also demonstrated knowledge of the applicable law. Finally, over the course of more than two years, Co-Lead Counsel has devoted considerable resources to and has aggressively litigated this case. The Court concludes that Co-Lead Counsel has fairly and adequately represented the interests of the Settlement Class.
(g) The Settlement Class has received proper and adequate notice of the certification of this Action as a Class Action, the terms of the Settlement Agreement, the Fairness Hearing, Appointed Counsel's application for attorneys' fees and expenses and for the Named Plaintiffs case contribution awards, and the Plan of Allocation. Such notice included individual notice to all members of the Settlement Class who could be identified through reasonable efforts, as well as national publication and Internet dedicated website notice, and provided valid, due, and sufficient notice of these proceedings and of the matters set forth therein, and included information regarding the procedure for the making of objections. Such notice fully satisfies the requirements of Fed. R. Civ. P. 23 and the requirements of due process.
4. Pursuant to Fed. R. Crv. P. 23(e), the Court hereby approves and confirms the Settlement as a fair, reasonable, and adequate settlement and compromise of the claims asserted in the Action.
5. The Court hereby approves the Settlement Agreement and orders that the Settlement Agreement shall be consummated and implemented in accordance with its terms and conditions.
6. The Court finds that the Settlement embodied in the Settlemenl Agreement is fair, reasonable and adequate, and more particularly finds:
(a) The Settlement was negotiated vigorously and at arms'-length by the Named Plaintiffs and Co-Lead Counsel on behalf of the Settlement Class seeking Plan-wide relief for the Plans;
(b) This Action settled following more than two years of aggressive litigation by both Named Plaintiffs and Defendants. Defendant PFF Bancorp, Inc. is bankrupt and in Chapter 11. Defendant PFF Bank & Trust is in receivership. The insurance available to cover these claims was under a wasting policy. The commencement of the PFF Bancorp, Inc. Chapter 11 cases required participation by Co-Lead Counsel to protect the interests of the Named Plaintiffs and the Class. The Action settled following arms'-length negotiations between counsel who were thoroughly familiar with this litigation with the aid of an experienced mediator. Both Named Plaintiffs and Defendants had sufficient information to evaluate the settlement value of the Action.
(c) If the Settlement had not been achieved, Named Plaintiffs and Defendants faced the expense, risk, and uncertainty of extended litigation. Named Plaintiffs contend that there was a reasonable likelihood of success on the merits at trial and any appeal in light of, inter alia, (i) alleged favorable determinations of legal issues in similar cases, (ii) the expert testimony that Plaintiffs expected to offer at trial, (iii) the structure of the Plans and their administration, and (iv) what Named Plaintiffs characterize as favorable documents and testimony that would be offered at trial. Defendants contend that their chances of success at trial and any appeal were excellent in view of, inter alia, (i) alleged legal presumptions favoring the offering of company stock in ERISA defined contribution plans, (ii) whal Defendants characterize as Plaintiffs' high burden of proof both in pleadings and at trial, (iii) the expert testimony that Defendants expected to offer at trial, (iv) explanations for the Plans' alleged losses unrelated to actions or inactions of the Plans' fiduciaries, and (v) alleged favorable determinations of legal issues in similar cases. The Court takes no position on the merits of the case, but notes these arguments as evidence in support of the reasonableness of the Settlement.
(d) The amount of the Settlement — $3,000,000 plus the proceeds of a $400,000 bankruptcy claim — is fair, reasonable, and adequate. The Settlement amount is within the range of settlement values obtained in similar cases.
(e) At all times, the Named Plaintiffs have acted independently off Defendants and in the interest of the Settlement Class.
(f) The Court recognizes that after dissemination of notice of thej Settlement,
7. The Action is hereby dismissed with prejudice, each party to bear his\ her, or its own costs, except as expressly provided herein.
8. Upon the Effective Date, the following Releases provided in the Settlement Agreement shall become Final by operation of this Order and Final Judgment:
8.1 Upon the Effective Date, Plaintiff-Releasors absolutely and unconditionally release and forever discharge the Releasees from Released Claims asserted in the Action.
87.2 The releases set forth herein are not intended to include the release of any rights or duties arising out of this Settlement Agreement, including! the express warranties and covenants contained herein.
8.7.3 It is understood by the Named Plaintiffs and the Settlement Class that a risk exists that, following the Effective Date of this Settlement, they may incur or suffer losses, damages, or injuries which are related to the Released Claims, but which they do not know about or anticipate on or before the Effective Date. Further, a risk exists that any loss or damage that the Named Plaintiffs and the Settlement Class presently associate with the Released Claims may be or become greater than currently estimated. The Named Plaintiffs and the Settlement Class assume these risks, and agree to be bound by this Settlement, including the release of Claims contemplated by the Settlement, even if such unknown or unanticipated results later become known or anticipated. To this end, Named Plaintiffs, on their own behalf and on behalf of all members of the Settlement Class and the Plans, with respect to all Defendants, hereby expressly waive any and all rights and benefits respectively conferred upon them by the provisions of Section 1542 of the California Civil Code and all similar provisions of the statutory or common laws of any other State, Territory, or other jurisdiction, except as limited in Section 3.2. Section 1542 reads in pertinent part:
Named Plaintiffs, on their own behalf and on behalf of all members of the Settlement Class and the Plans, and Defendants each hereby acknowledge that the foregoing waiver of the provisions of Section 1542 of the California Civil Code and all similar provisions of the statutory or common law of any other State, Territory, or other jurisdiction was bargained for. The release by the Plans provided for by this Section is contingent upon the Settlement's approval by the Independent Fiduciary in accordance with Section 2.6 of the Settlement Agreement and effective only as of the date of such approval by the Independent Fiduciary.
8.8 Nothing in this Order and Final Judgment shall release, bar, waive, or preclude any claim that has been or could be asserted directly or derivatively by any member of the Settlement Class or the Plan under the federal securities laws or the securities laws of any state involving the purchase or sale of any PFF securities, or release, bar, waive, or preclude the Individual Defendants' right with respect to Indemnification Obligations, if any, with respect to such claims. The Debtors reserve their right to object to or to challenge any claim that has been or could be asserted directly or derivatively by any member of the Class or the Plan, or by any Individual Defendants, pursuant to this paragraph on any ground. The releases set forth herein do not include the release of any rights or duties of the Parties arising out of the Settlement Agreement, including the express warranties and covenants contained herein.
10. In the event that the Settlement Agreement is terminated in accordance with its terms, this Judgment shall be rendered null and void and shall be vacated nunc pro tunc, and the Action shall proceed as provided in the Settlement Agreement.
11. This Judgment shall not be construed or used as an admission, concession, or declaration of any fault, wrongdoing, breach or liability by any Party.
12. Any court order regarding the Plan of Allocation, the application for a case contribution award for Named Plaintiffs, or any application for attorneys' fees and expenses shall in no way disturb or affect this Judgment and shall be considered separate from this Judgment.