Notices

IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS

COUNTY DEPARTMENT, CHANCERY DIVISION

PENELOPE BAIM BLOCK; VANDANA MAKKER; BALA M. KRISHNA; TY C. GEARHARDT; BRIJ M. SHARMA; CHARANJIT SINGH; LISA M. BERTINI; JEFFREY I. ZIMMERMAN, MUKESH MITTAL; SANJAY AGARWAL; and SAVITA REDDY, Plaintiffs,

v.  Judge Richard Siebel

MCDONALD’S CORPORATION, Defendant.

PLAINTIFFS’ MEMORANDUM

IN SUPPORT OF FINAL APPROVAL OF CLASS

ACTION SETTLEMENT AGREEMENT AND PETITION FOR FEES

This matter comes before the Court for final approval of the Settlement Agreement ("the Agreement") attached as Joint Appendix, Tab A. Notice was published in USA Today, Vegetarian Times, Vegetarian Voice, India Abroad (U.S. distribution only), India Tribune, India West, and The Forward. Notice was also posted on the law firm web sites of various plaintiffs’ counsel. This method of notice was reasonably calculated to reach the largest number of class members.

The parties received approximately 2000 opt-outs and 420 objections to the proposed settlement signed by 597 persons. The objections will be discussed in greater detail below.

Plaintiffs’ counsel also petition this Court to award attorneys’ fees and costs.I. INTRODUCTION

In their consolidated complaint, plaintiffs allege deceptive practices in the sale of french fries and hash browns by defendant McDonald’s Corporation ("McDonald’s"). Between July 1990 and approximately May 24, 2001, McDonald’s and its agents represented in widespread advertising campaigns, press releases, on McDonald’s Internet web site and in McDonald’s restaurants that its french fries and hash browns are cooked only in vegetable oil. In fact, McDonald’s continued to use beef tallow or beef extract in preparing their french fries and hash browns. McDonald’s did not disclose to consumers that its french fries and hash browns contain beef tallow or beef extract, a fact highly material to persons such as the plaintiffs who have ethical, religious and/or moral objections to the consumption of animal-flesh or beef products.

In addition to this action, similar actions were filed in Washington, California, Texas, and New Jersey seeking redress for McDonald’s practice of failing to disclose material ingredients in its french fries and hash browns.

McDonald’s has denied liability and raised numerous defenses to Plaintiffs’ claims. These defenses, which plaintiffs submit are arguable but not likely to prevail, are set forth in McDonald’s Memorandum in Support of Final Approval.

The parties have aggressively litigated these matters and have conducted an extensive investigation into the law and facts relating to the allegations.

In reaching this settlement, counsel for plaintiffs and McDonald’s participated in mediation sessions conducted by Judge Lynch, retired California state court and United States District Judge for the Northern District of California. Additionally, several individual plaintiffs, including Cherie Travis, submitted written or videographic statements to be presented at the mediation. Recognizing that absent a voluntary settlement, protracted and expensive litigation would continue, the outcome of which could not be predicted, the parties chose to settle their claims and entered into the Agreement. As a result, the complaint in this present action was amended to include the names of plaintiffs participating in the Agreement who represented putative classes in state court class actions in Washington, California, and New Jersey. In addition, three plaintiffs from Texas were added as parties. The parties now seek final approval of the Agreement.II. KEY TERMS OF THE SETTLEMENT AGREEMENT

A. Class Definition

On May 1, 2002, this Court provisionally certified a class defined as: all persons resident in the United States (including the District of Columbia and territories and possessions), including but, not limited to, vegetarians and Hindus, who (i) have consumed french fries and hash browns from or at McDonald’s Restaurants since July 23, 1990 and (ii) have concerns, objections, or dietary restrictions, whether ethical, moral, religious, philosophical, or health-related, with respect to the consumption of beef or meat.

B. Relief to the Class.1. Cy Pres Award: McDonald’s will pay $10 million, which will be distributed as follows: 60% to vegetarian organizations; 20% to Hindu and/or Sikh organizations; 10% to children’s nutrition and/or hunger relief organizations; and 10% to organizations promoting the understanding of Jewish law, standards and practices with respect to Kosher foods and dietary practices, and the observance of such standards.

Where (as here) a class action involves a large number of class members but only a small individual recovery, the cost of separately proving and distributing each class member’s damages may so outweigh the potential recovery that the class action becomes unfeasible. Fluid recovery distribution avoids these difficulties by permitting aggregate calculation of damages and distribution of funds to indirectly benefit the entire class. Courts have frequently approved this remedy in the settlement of class actions where the proof of individual claims would be burdensome or distribution of damages costly. See, e.g.,   Six Mexican Workers v. Arizona Citrus Growers, 904 F.2d 1301, 1305 (9th Cir. 1990) (fruit growers’ failure to pay wages to migrant workers); In re "Agent Orange" Product Liability Litigation, 818 F.2d 179, 184-84 (2nd Cir. 1987) (products liability class action; court approved use of portion of settlement fund to fund assistance programs for the class as a whole where distribution to individuals was not feasible). See generally,   2 Herbert B. Newberg & Alba Conte, newberg on class actions § 11.20 (3rd ed. 1992); Shepherd, Damage Distributions in Class Actions: The Cy Pres Remedy,   39 U. Chi. L. Rev.448 (1972). Courts have recognized that Cy Pres   or fluid recovery procedures ensure that wrongdoers do not "retain ill gotten gains" simply because of the administrative difficulties traditionally associated with small per individual damages. State of California v. Levi Strauss & Co., 41 Cal. 3d 460, 224 Cal. Rptr. 605, 715 P.2d 564, 571 (1986) (class action alleging that clothing manufacturer fixed price of blue jeans).

One form of the fluid recovery remedy is referred to as the "consumer trust fund," which is used to further the purposes of the substantive law and provide indirect compensation class members. To avoid administrative expense associated with creating a new organization to distribute such funds, in order to effectuate class action settlements numerous courts have allocated the funds directly to responsible private organizations. See, e.g.,   In re Folding Carton Antitrust Litigation, 557 F. Supp. 1091, 1109 n.10 (N.D. Ill. 1983) (identifying recipients of Cy Pres   fund), aff’d in part and rev’d in part on other grounds,   744 F.2d 1252 (7th Cir. 1984); Levi Strauss, 715 P.2d at 573 (discussing "consumer trust fund" device).

A recent commentary explains the situations when this type of   remedy is appropriate:

In situations involving numerous consumer purchases of relatively inexpensive goods, courts often apply Cy Pres principles to distribute the entire corpus of the [class action] settlement. Distributions of this sort do not go directly to the injured citizens . . ., but to a public purpose designed to benefit those consumers indirectly. This equitable distribution method is both practical and reasonable in situations involving vast numbers of consumers who have bought relatively inexpensive items. The difficulty, if not sheer impossibility of notifying all purchasers of an item such as [French Fries], for example, are obvious. Moreover, there is a distinct risk of fraudulent claims because few consumers retain receipts for inexpensive items and therefore most claims could not be investigated or verified. Finally, direct claims distribution is not without significant costs, including the costs of distributing or publishing notices, reviewing claims, and writing checks. The cost of directly reimbursing consumers for their . . . damages could well exceed the refund. . . .

Susan Beth Farmer, More Lessons From the Laboratories: Cy Pres Distributions in Parens Patriae Antitrust Actions Brought by State Attorneys General, 68 Fordham L. Rev. 361, 399-400 (1999) (footnote omitted).

For example, in State of New York v. Keds Corp., 1994 WL 97201, 1994-1 Trade Cas. (CCH) ¶ 70,549 (S.D.N.Y. Mar. 21, 1994), the 50 states alleged price-fixing on casual footwear. The parties entered into settlement agreements requiring defendant, among other things, to pay $5.7 million to be distributed to charities in lieu of distribution to consumers. The court found that the settlement was "fair, reasonable and adequate," and held that the proposed Cy Pres distribution was "pragmatic and sensible in the circumstances." The court found that the cost of identifying and notifying the purchasers of their opportunity to make a claim would "to the extent successful at all . . . wipe out any economic benefit of the settlements. The game, in short, would not be worth the candle." Id. at *3.

In State of New York v. Reebok Int’l, Ltd.,   903 F. Supp. 532 (S.D.N.Y. 1995), aff’d, 96 F.3d 44 (2nd Cir. 1996), the court approved a $9.5 million settlement in a parens patriae suit filed by 50 states alleging price-fixing on footwear produced by Reebok and Rockport. As in Keds, the agreement provided that the entire fund, after deduction of costs and attorney’s fees, would be dedicated to public purposes instead of providing restitution to affected consumers. 903 F. Supp. at 537. The money was to be distributed to "public and non-profit and/or charitable organizations with express conditions ensuring that the funds will be used for various athletic facilities, equipment, or services." Id.   at 534. In considering the Cy Pres distribution, the court weighed the likely benefit of direct consumer restitution against the substantial costs and found the costs excessive and the benefits slight. Moreover, the court found that the risk of fraudulent claims weighed heavily against individual restitution because few consumers had maintained sufficient receipts to prove their claims. Id.   at 537. The court concluded "the distribution method here serves the general public interest, the interests of the plaintiffs and the consumers, and the public interests of disgorgement and deterrence." Id.   Rejecting objections to the distribution plan that urged the court to require individual refunds, the court found that "any effort at individual refunds – which would not only be impractical but would be consumed in the costs of its own administration" would not be a fair, reasonable, and adequate settlement. Id.   at 538. Affirming both the settlement and the distribution plan on appeal, the Second Circuit found that it would be "impractical" to provide individual restitution "among the multitude of unidentified possible claimants," and that the effort was not required. State of New York v. Reebok Int’l, Ltd., 96 F.3d 44, 49 (2nd Cir. 1996). See also, State of New York v. Dairylea Cooperative, Inc.,   1985 WL 1825, at *2, 1985-2 Trade Cas. (CCH) ¶ 66,675 (S.D.N.Y. June 26, 1985) (determining that an "appropriate and realistic distribution" of settlement sum involving alleged overcharging for milk is the dispersion of funds to schools for nutritional purposes).

The present case, which involves purchasers of McDonald’s french fries and hash browns, has the following important characteristics in common with Keds, Reebok and Dairylea: First, the products involved (whether McDonald’s French Fries or consumer footwear) are all relatively low-cost consumer items, purchased relatively frequently and without warranty, thus preventing consumers from registering and allowing the producer to maintain a master list of purchasers that could be used to verify claims. Second, the number of purchasers of each product was very large, numbering in the millions. Third, the Cy Pres   distribution was narrowly targeted to benefit those persons who were harmed by the alleged wrongdoing: In each case, the funds were directed (or are being directed) to charitable or other organizations with the goal of aiding persons who would likely fit the profile of purchasers of the particular product. Given these circumstances, the creation of the $10 million Cy Pres Fund is an appropriate mechanism to settle this consumer class action.

2. Apology: McDonald’s has issued a public apology. It is posted on McDonald’s Internet web site and accessible through links displayed on the "Press Releases" and "Nutrition Facts" pages of that web site. It has also been published once in the above-referenced specialized publications in which the class notice was published as well as on the various web sites of plaintiffs’ counsel.

3. Corrective Measures: McDonald’s will issue to each manager of a McDonald’s restaurant in the United States instructions as to how restaurant employees should respond to customer inquiries concerning the nutritional/ingredient content of McDonald's menu items, and with direction as to where accurate information can be obtained concerning the content of McDonald’s menu items.

4. Advisory Board: McDonald’s will establish and fund an advisory board which will advise McDonald’s about: the vegetarian, non-beef, and non-meat eating categories of consumers, as well as the dietary restrictions that correspond to each such category; guidelines that companies should follow if they choose to market to these constituencies; providing information about how vegetarians can insure that their diet contains the nutrients they need for good health. The parties have selected the members of the board.

C. Relief to Plaintiffs:

McDonald’s will pay up to $48,000 for incentive awards to the plaintiffs, subject to Court approval. Plaintiffs request $4,000 as an incentive payment to named plaintiffs Penelope Baim-Block, Vandana Makker, Bala M. Krishna, Ty C. Gearhardt, Brij C. Sharma, Charanjit Singh, Lisa M. Bertini, Jeffrey I. Zimmerman, Mukesh Mittal, Sanjay Agarwal, and Savita Reddy, for a total of $44,000. The balance of the $48,000 designated for incentive awards will become part of the Cy Pres Fund.

The Illinois Appellate Court and numerous other courts have approved incentive payments to the class representatives for serving the public interest in bringing the action. See, GMAC Mtge. Corp. v. Stapleton, 236 Ill. App. 3d 486, 603 N.E.2d 767 (1st Dist. 1992); Cook v. Niedert, 142 F.3d 1004, 1016 (7th Cir. 1998) (incentive award of $25,000 for named plaintiff); In re Presidential Life Securities, 857 F. Supp. 331, 333, 337 (S.D.N.Y. 1994) (five plaintiffs shared $10,000 taken out of attorney fees); In re Marine Midland Motor Vehicle Leasing Litigation, 155 F.R.D. 416, 424 (W.D.N.Y. 1994) (seven plaintiffs awarded $500 each); White v. National Football League, 822 F. Supp. 1389, 1406 (D. Minn. 1993), aff'd, 41 F.3d 402 (8th Cir.), cert. denied, 515 U.S. 1137 (1995); In re Dun & Bradstreet Credit Services Customer Litigation, 130 F.R.D. 366 (S.D. Ohio 1990) (various incentive awards to named plaintiffs; highest individual award was $55,000); Bryan v. Pittsburgh Plate Glass Co., 59 F.R.D. 616 (W.D. Pa. 1973), aff'd, 494 F.2d 799 (3d Cir. 1974) ($17,500 award to class representatives); Kazanas v. Millcom, Inc., CCH Fed.Sec.L. Rptr. ¶97,255 (S.D.N.Y. 1992); Luevano v. Campbell, 93 F.R.D. 68, 90 (D.D.C. 1981); In re Jackson Lockdown/MCO Cases, 107 F.R.D. 703, 709-10 (E.D. Mich. 1985); Harris v. Pernsley, 654 F.Supp. 1042, 1053 (E.D. Pa. 1987); Bell v. Automobile Club, 34 FEP Cas. 3, 7 (E.D. Mich. 1980) ("there is something to be said for rewarding those drivers who protest and help to bring rights to a group of employees who have the victims of discrimination"); In re Immunex Sec. Lit., 864 F.Supp. 142 (W.D. Wash. 1994) ($25,000 paid); Spicer v. Chicago Board Options Exchange, 844 F.Supp. 1226, 1266-7 (N.D. Ill. 1993); In re Southern Ohio Correctional Facility, 1997 U.S. Dist. LEXIS 12556 (S.D. Ohio 1997); In re Catfish Antitrust Lit., 939 F.Supp. 493, 503 (N.D. Miss. 1996); Golden v. Schulman, CCH Fed.Sec.L.Rptr. ¶94,060, at p. 90,954 (E.D.N.Y. 1988) ($5,000); In re GNC Shareholder Lit., 668 F.Supp. 450, 451 (W.D.Pa. 1987) ($3,000); Troncelliti v. Minolta Corp., 666 F.Supp. 750, 752 (D. Md. 1987) ($2,000); C. Krislov, Scrutiny of the Bounty: Incentive Awards for Plaintiffs in Class Litigation, 78 Ill.B.J. 286 (June 1990).

D. Attorney’s Fees and Costs

In addition to the $10 million Cy Pres Fund specified above, plaintiffs’ counsel will apply for $2.452 million in fees and expenses to be paid by McDonald’s. McDonald’s has agreed not to oppose an award in that amount. This amount will not be taken from the Cy Pres Fund.

Plaintiffs’ counsel hereby petition the Court for an award of attorney’s fees in the amount of $2,452,000. This is equal to 24.5% of the Cy Pres Fund. Because McDonald’s will pay fees and costs in addition to and not out of the Cy Pres Fund, it amounts to 19.6% of the total monies being paid by defendant to benefit the class.

The Illinois Supreme Court has embraced the percentage method of awarding attorneys’ fees, holding that "the circuit court is vested with the discretionary authority to choose the percentage-of-the-award method or the lodestar method to determine the amount of fees to be granted plaintiffs’ counsel in common fund class action litigation." Brundidge v. Glendale Federal Bank, F.S.B., 168 Ill.2d 235, 243-244, 659 N.E.2d 909 (1995). Courts and commentators have observed that the "recent trend has been toward utilizing the percentage method in common fund cases." Gottlieb v. Barry, 43 F.3d 474, 482 (10th Cir. 1995); see also,   In re Horizon/CMS Healthcare Corp. Securities Litigation, 3 F. Supp. 2d 1208, 1211 (D.N.M. 1998).

An award of attorneys' fees from a common fund generated through the successful prosecution of a class action "‘rests on the perception that persons who obtain the benefit of a lawsuit without contributing to its costs are unjustly enriched at the successful litigant's expense.'" Brown v. Phillips Petroleum Co., 838 F.2d 451, 454 (10th Cir. 1988) (quoting Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980)). Thus, the percentage award results "in a sharing of the fees among those benefitted by the litigation." Brown, 838 F.2d at 454.

As has been discussed, any attorneys’ fees and costs awarded by the Court will not diminish the net benefit to class members because the Agreement creates a separate fund from which such fees and costs will be drawn. Both the public and individual class members have benefitted through the diligent and timely work of plaintiffs’ counsel. Many class members, and certainly the consuming public at large, were unaware of the violations alleged in the several state court lawsuits brought to seek redress from McDonald’s defective disclosures. Additionally, by securing an apology from McDonald’s, plaintiffs’ counsel has secured for the opt outs the benefit of receiving all the benefits of the settlement and retaining the right to sue for damages.

Courts have repeatedly approved percentage fees in the range of 20-30% in class cases, with 25% being the "benchmark." Gottlieb v. Barry, 43 F.3d 474, 487 (10th Cir. 1994) (finding a 22.5% award out of a $44 million class fund reasonable); Camden I Condominium Ass'n v. Dunkle, 946 F.2d 768 (11th Cir. 1991)(vacating district court’s order for fee calculation using lodestar system and ordering district court to calculate fees upon a percentage of common fund in a case where settlement agreement provided that 31% of fund of $3 million would be paid to attorneys); In re Continental Illinois Securities Litigation, 962 F.2d 566, 572 (7th Cir. 1992) (reversing district judge’s decision of reducing by one-half an award of 20% of a $45 million fund); Swedish Hosp. Corp. v. Shalala, 1 F.3d 1261 (D.C. Cir. 1993) (finding that 20% of the $10 million settlement fund produced by the attorneys’ effort for the class to be reasonable); Brown v. Phillips Petroleum Co., 838 F.2d 451, 454 (10th Cir. 1988) (approving fees amounting to 16.5% of a $75 million class fund); Paul, Johnson, Alston & Hunt v. Graulty, 886 F.2d 268, 272 (9th Cir. 1989) (holding that 25% should be the "benchmark" and that 7% of a common fund of $3,315,200 is unreasonably low); Bebchick v. Washington Met. Area Transit Comm'n, 805 F.2d 396, 406-07 (D.C. Cir. 1986); (finding that 25% of $5,827,254 is a "reasonable percentage"); In re Thirteen Appeals Arising Out of San Juan Dupont Plaza Hotel Fire Litigation, 56 F.3d 295, 307 (1st Cir. 1995) (allowing

fees of $68,000,000 from a fund of $220,000,000); 1 Alba Conte, Attorney Fee Awards § 2.02 at 31 (2d. ed. 1993). Fee determinations are subject to reversal only for an abuse of discretion. Aguinaga v. United Food & Commercial Workers Int’l Union, 993 F.2d 1480, 1481 (10th Cir. 1993).

The majority of attorney fee awards fall between 20% and 30% of the fund. See, Camden I, 946 F.2d at 774; Paul, Johnson, supra, 886 F.2d at 272-73 ("ordinarily . . . fee awards range from 20 percent to 30 percent of the fund created"); Bebchick v. Washington Metropolitan Area Transit Comm'n, supra, 805 F.2d at 407 (25% of the recovery "is a reasonable percentage fee for otherwise uncompensated attorneys"); Mashburn v. National Healthcare, Inc., 684 F.Supp. 679, 692 (M.D. Ala. 1988) ("The majority of common fund fee awards fall between 20% and 30% of the fund"); In re Warner Communications Securities Litigation, 618 F.Supp. 735, 749-50 (S.D.N.Y. 1985) ("Traditionally, courts in this Circuit and elsewhere have awarded fees in the 20%-50% range in class actions"); Harman v. Lyphomed, 787 F.Supp. 772 (N.D. Ill. 1992) (flat 20% of the $9.9 million settlement fund awarded on remand); Strang v. JHM Mortgage Securities, Ltd., 890 F.Supp. 499, 503 (E.D. Va. 1995) (awarding 25% of fund plus costs); Torrisi v. Tucson Electric Power Co., 8 F.3d 1370, 1376 (9th Cir. 1993) ("in common fund cases such as this, we have established 25% of the common fund as the 'benchmark' award for attorney fees"), cert. denied sub nom. Reilly v. Tucson Electric Power Co., 129 L. Ed. 2d 834, 114 S. Ct. 2707 (1994).

Prior to the adoption of the percentage method, the courts used the "lodestar and multiplier" method, pursuant to which the attorney’s time and hourly rates were multiplied to produce a "lodestar." Langendorf v. Irving Trust Co., 244 Ill. App. 3d 70, 80, 614 N.E.2d 23, 30 (1st Dist. 1992). The "lodestar" represents the value of the attorney’s services had he been paid on a timely basis by a paying client. The "lodestar" was then multiplied by a "multiplier" to account for the risk presented by the case and the quality of the work done. Langendorf, supra. As Judge Richard Posner stated in Economic Analysis of Law:

It has been argued that contingent fees are often exorbitant; but it is easy to be misled here. A contingent fee must be higher than a fee for the same legal services paid as they are performed. The contingent fee compensates the lawyer not only for the legal services he renders but for the loan of those services. The interest rate on such a loan is high because the risk of default (the loss of the case, which cancels the debt of the client to the lawyer) is so much higher than that of conventional loans. (§21.9, at 534-35 (2d ed. 1984))

Illinois courts have approved of a multiplier of three. Baksinksi v. Northwestern University, 231 Ill. App. 3d 7, 595 N.E.2d 1106 (1st Dist. 1992), leave to appeal denied, 146 Ill.2d 622, 602 N.E.2d 446 (1992); Sampson v. Eastman Kodak Co., 195 Ill. App. 3d 715, 552 N.E.2d 1194 (1st Dist. 1990). Other courts have awarded fees as high as almost 10 times the lodestar. See, Weiss v. Mercedes-Benz of North America, Inc., 899 F. Supp. 1297 (D.N.J. 1995) (9.3 times), aff’d, 66 F.3d 314 (3d Cir. 1995); In re Cenco Inc. Securities Litigation, 519 F. Supp. 322 (N.D. Ill. 1981) (4 times); In re Corrugated Container Antitrust Litigation, 1983-2 Trade Cas. ¶ 65,628, at 69,175, 1983 WL 1872 (S.D. Tex. 1983) (4 times); James v. Meinke, 1984-85 CCH Fed.Sec.L.Rptr. ¶ 91,933 (N.D. Tex. 1984)(3 times); In re Beverly Hills Fire Litigation, 639 F.Supp. 915 (E.D. Ky. 1986) (5 times); Willson v. New York Life Ins. Co., 1995 N.Y. Misc. LEXIS 652 (Sup. Ct. Nov. 8, 1995) (4.6 times), aff’d, 228 A.D.2d 368, 644 N.Y.S.2d 617 (1996).

Plaintiffs’ counsel in this case seek approval of a fee award totaling 19.6% of the common fund. Plaintiffs’ counsel, except for Harish Bharti, also submit their time and expenses, which shows a "lodestar" of $1,065,753.25 and expenses of $135,971.75. The requested fee is, therefore, 2.3 times the "lodestar." Plaintiffs’ Appendix, Exhibits A through D contain declarations from the various plaintiffs’ counsel, except Harish Bharti, in support of time sheets identifying hours worked, the nature of the work, and rates charged for all work performed in this matter. Mr. Bharti may submit a separate declaration.

The requested award is therefore well in line with what has been traditionally considered reasonable on either a percentage or lodestar and multiplier basis. The fees sought are justified and should be awarded.III. STANDARD OF REVIEW FOR FINAL APPROVAL

OF PROPOSED CLASS ACTION SETTLEMENT

In deciding whether to approve a proposed settlement, this Court must determine whether it is fair, reasonable, and in the best interests of the class that will be affected by it. Wilcox v. Equity Funding Life Insurance Co., 61 Ill.2d 303, 317, 335 N.E.2d 448 (1975); Gautreaux v. Pierce, 690 F.2d 616, 631 (7th Cir. 1982); Bennett v. Behring Corp., 737 F.2d 982, 986 (11th Cir. 1984); In re Domestic Air Transportation Antitrust Litigation, 148 F.R.D. 297, 312 (N.D. Ga. 1993).

In implementing this standard, Illinois courts scrutinize the settlement in light of the following criteria:(1) the strength of the case for plaintiffs on the merits, balanced against the extent of the settlement offer, (2) the ability of the defendant to pay, (3) the complexity, length and expense of further litigation, (4) the substance and extent of opposition to the settlement by the class members, (5) the reaction of members of the class to the settlement, (6) the opinion of competent counsel, and (7) the progress of the proceedings. Steinberg v. System Software Associates, Inc., 306 Ill. App. 3d 157, 713 N.E.2d 709 (1st Dist. 1999); City of Chicago v. Korshak, 206 Ill. App. 3d 968, 565 N.E.2d 68 (1st Dist. 1991)(citing Armstrong v. Board of School Directors, 616 F.2d 305, 314 (7th Cir. 1980)). Cf., Bennett, 737 F.2d at 986; In re Domestic Air Transportation Antitrust Litigation, 148 F.R.D. at 312; Gautreaux, 690 F.2d at 631; Armstrong, 616 F.2d at 314.A. The strength of the case for plaintiffs vs. the extent of the settlement

A settlement need not obtain 100% of the requested relief if it represents a knowing and intelligent compromise. Bennett, 737 F.2d at 987 (settlement providing for $675,000 of maximum possible $12 million recovery is adequate). The essence of a settlement is a compromise. Thus, even if "the relief afforded by the proposed settlement is substantially narrower than it would be if the suits were to be successfully litigated," this is no objection to a class settlement, since "the public interest may indeed be served by a voluntary settlement in which each side gives ground in the interest of avoiding litigation." Air Line Stewards & Stewardesses Ass'n v. American Airlines, Inc., 455 F.2d 101, 109 (7th Cir. 1972). "Settlements of class actions are highly favored in the law and will be upheld whenever possible because they are means of amicably resolving doubts and preventing lawsuits." In re Domestic Air Transportation Antitrust Litigation, 148 F.R.D. at 312.

A settlement compromising conflicting positions in class action litigation serves the public interest. Armstrong, 616 F.2d at 313. In evaluating a settlement, the trial court should not decide the merits, or proceed from the assumption that victory is 100% assured and that all claimed damages are properly recoverable. In re Domestic Air Transportation Antitrust Litigation, 148 F.R.D. at 312-13; Armstrong, 616 F.2d at 314-15.

In this case, plaintiffs’ counsel were concerned about the certification of a class under any state’s law because there were no records of purchasers or means of identifying class members. Additionally, plaintiffs’ counsel, although believing they would prevail, had concerns about the viability of McDonald’s defenses.

B. The ability of McDonald’s to pay

Plaintiffs’ counsel have no serious doubt that McDonald’s is in a position to pay any reasonable amount of damages awarded in this case after trial.

C. The complexity, length, and expense of litigation

Litigation of this action would be lengthy and complex. Had this matter not been consolidated with the other pending state court actions, duplicative and costly litigation would have ensued, including the filing of motions for summary judgment for which extensive written and oral discovery would have been taken. Proving actual damages might require individual testimony of each claimant concerning his or her consumption of McDonald’s french fries or has browns and his or her religious, moral, or ethical reasons for not eating meat.

The settlement of this matter presents significant economies. Not only will litigation expenses and the impact on the courts be reduced, but, as discussed below, this particular settlement gains benefits for class members and the consuming public that would not have been available even had the matter been pursued to final judgment through the course of adversarial litigation, including enhanced disclosures, the advisory board, and an apology.D. The substance and extent of opposition to the settlement by class members and the reaction of the class members to the settlement

The response of the class to the Notice strongly favors a finding that the settlement is fair, reasonable, and adequate. Beginning in late May 2002, notice of the pendency of this action and the proposed settlement was published in print and electronic media as described above, as well as independently published by some entities on their organizational web sites. Additionally, once the Notice was issued, news of the proposed settlement was widely publicized in numerous other news publications across the country.

The deadline for filing requests for exclusion and objections was July 8, 2002. As of July 8, 2002, approximately 2000 class members requested exclusion from the Settlement, and 597 class members objected to the Settlement. These numbers represent only a small fraction of the class.1. The Opt Outs

With respect to opt outs, the Agreement represents the rare situation in which opt outs retain all the benefits of being members of the class and should not be considered to be hostile to the settlement. Persons who choose to opt out of a class action settlement must usually forego the benefits of the settlement in order to take the risk of receiving a more valuable reward. In this case, however, opt outs not only receive all the benefits of the settlement, but preserve their right to sue for individual damages. Additionally, opt outs receive the benefit of being put on notice of the pendency of this lawsuit and the nature of the alleged violation. The proposed settlement allows the opt outs to sue for individual damages while still retaining all of the settlement benefits. Thus, the opt outs have not rejected the settlement but have used it to their own additional advantage.2. The Objections

Most of the 597 "objectors" fail to identify themselves as class members and are probably not class members. Vegetarians and others with ethical, moral or religious concerns, objections or dietary restrictions to the consumption of beef or meat are not automatically class members. They must also "have consumed french fries and hash browns from or at McDonald’s Restaurants since July 23, 1990." See, Class Definition, Section II, subsection A, above.

Many vegetarians, Hindus, and others with similar views regarding the consumption of beef would never go to McDonald’s for any reason. It is, in the common parlance, a "hamburger joint". Its main product is hamburgers. It prides itself on being the most prominent fast food chain in the country, having sold billions of hamburgers. As such, McDonald’s represents the epitome of what vegetarians, Hindus, and others adhering to non-beef dietary practices oppose.

571 of the objections received complain about how the Cy Pres grantees are being chosen and that the objectors’ favorite organization may not be selected. These issues are discussed in Section IV, subsections 1 and 2 below.

Through the use of the Internet, these objections were actively solicited or encouraged by several organizations and individuals. Form opt out and objection letters were posted on Internet sites and circulated among the members of certain organizations. The vast majority of the objections were their form objections.

Several "objections" were submitted by organizations. Organizations are not natural persons and, hence, cannot be class members. Objections submitted on behalf of organizations must, therefore, be disregarded.

Only 26 objectors raised other, non-solicited, objections. Most of these objectors identified themselves as class members and complained bitterly about how they had been personally deceived by McDonald’s misrepresentations and omissions. The sense of outrage in these objections indicates that the "political" objectors who did not express similar feelings had not eaten french fries or hash browns at McDonald’s and are not class members. Most of the objectors who raised issues regarding Cy Pres awards cannot be considered class members. What is left is an extremely small number of objections from actual class members. Given the institutional and organized effort to obtain objections, the number of objections actually submitted is very small.

Thus, the 597 objections represent a tiny fraction of the potential class. An overwhelming majority of the class supports this Settlement.

These facts strongly support a finding of adequacy and militate in favor of approval of the Settlement. See, Mangone v. First USA Bank, 206 F.R.D. 222, 227 (S.D. Ill. 2001) ("overwhelming support by class members is strong circumstantial evidence supporting the fairness of the Settlement"); In re Mexico Money Transfer Litigation, 164 F. Supp. 2d 1002, 1020-21 (N.D. Ill. 2000) (acceptance rate of 99.9% of class members who did not object or opt out "is strong circumstantial evidence in favor of settlements"), aff’d, 267 F.3d 743 (7th Cir. 2001); Hispanics United of DuPage County v. Village of Addison, Illinois, 988 F. Supp. 1130, 1169 (N.D. Ill. 1997) (approving the settlement as fair where a small number of class members objected).E. The opinion of experienced counsel

The opinion of plaintiff's counsel with substantial experience in similar litigation as to the desirability of settlement is also an important consideration. Steinberg, 306 Ill. App. 3d at 163; cf., In re Domestic Air Transportation Antitrust Litigation, 148 F.R.D. at 312. Indeed, there is a "strong initial presumption" that an arms-length settlement arrived at by counsel experienced in the type of litigation at issue is fair. Feder v. Harrington, 58 F.R.D. 171 (S.D.N.Y. 1972).

Counsel for plaintiffs have substantial experience in class action litigation, including consumer fraud litigations. Declarations from various members of Hagens Berman, LLP, Caddell & Chapman, Edelman, Combs, Latturner & Goodwin, LLC, and Berger & Montague, PC detailing the extensive class action litigation experience of these firms and individuals are in Plaintiffs’ Appendix, Exhibits A through D .

In counsels' view, there are a number of factors that make the proposed settlement fair, reasonable, and appropriate. These include:

a. Although plaintiffs’ counsel believe that the claims asserted are meritorious, McDonald’s disputes its liability on the merits and whether a class could be certified. A total victory is certainly not 100% assured. Nonetheless, plaintiffs’ counsel notes that McDonald’s apology represents a real triumph to class members. b. The settlement offers the class a substantial portion of the relief it

could obtain at trial, and in this instance, brought some relief to the class and the consuming public that would not have been available at trial. The settlement requires McDonald’s to take a proactive stance in remedying its behavior by creating and funding an advisory board, apologizing to the class and affected members of the consuming public, and contributing funds to organizations whose ideological positions regarding the consumption of meat are diametrically opposed to McDonald’s.

c. The small number of opt-outs and objections as discussed above.F. The progress of the proceedings

Plaintiffs’ counsel have aggressively pursued the interests of plaintiffs and the class, both in the state court actions prior to their consolidation under the above caption, and during the class settlement process in this action. Plaintiffs’ counsel believe that the consolidation and settlement of the state court proceedings brings efficient and beneficial resolution to meritorious claims brought by plaintiffs. Plaintiffs’ counsel further believe that members of the class, opt outs, and the consuming public have gained a significantly greater benefit than would have been available at trial or by summary judgment.IV. RESPONSES TO OBJECTIONS.

The objections being responded to are contained in Joint Appendix, Tab H and are referenced by "Objections [page number]."

The parties have received 420 objections signed by 597 persons. Objections 1 through 420 are classified as follows:

1. Objections claiming discrimination against Muslims462 out of 597 persons objecting to this settlement claimed that the settlement discriminates against Muslims in the distribution of the Cy Pres Fund and the make up of the Advisory Board. Objections pp. 1 through 236. 314 of these objections were obtained and submitted by Gregory Kazarian, attorney for Cherie Travis. Objections pp. 1 through 145. All of the objections submitted by Mr. Kazarian are from various form documents. Most of the other objections in this category are also the same forms.

An Internet retailer called SoundVision published on its web site a flawed synopsis of the case and the rights of Muslim objectors and opt outs. The web site also provided form objection and opt out letters. See, Joint Appendix, Tab F.

In replying in support of its Motion for Preliminary Approval, which this Court granted, plaintiffs noted that SoundVision publishes on its web site recommendations to Muslims who maintain a Halal diet:

Many of us find ourselves standing in line at the nearest fast food joint may wonder whether the food we are about to eat is Halal. With fast food, the answers are not so cut and dried. It is not simply an issue of avoiding pork or meat. For example, there may be bread and vegetable products fried in animal fat. This is why it's a good idea to choose a purely vegetarian or vegan diet if you have to eat at a fast food place.

In and Joint Appendix, Tab F. This lawsuit was brought to remedy exactly the problem addressed by SoundVision in its recommendation. Were it not for McDonald’s failure to disclose the existence of beef fat in its french fries and hash browns, SoundVision’s recommendation to Halal keeping Muslims would have been a good one. Thus, for purposes of this settlement and the objections of those persons who chose to use the SoundVision form objection letter, the interests of Muslims in this matter are perfectly aligned with those of vegetarians. See, Joint Appendix, Tab F.

2. Objections arguing that the parties’ attorneys should have no role in determining Cy Pres recipients

103 persons object to the method of determining the recipients of the Cy Pres Fund, specifically complaining that the parties’ attorneys should have no role in the process. Objections pp. 237 through 349. They request that this Court or someone appointed by this Court make the initial determinations. 84 of these objections were submitted by Harish Bharti, one of Plaintiffs’ counsel, and he served them on proper counsel with his motion. Objections pp. 237 through 326. Almost all of the Bharti objections are submitted on behalf of Hindu organizations seeking a Cy Pres award. Most of the other objections are submitted on behalf of Hindu and other organizations seeking a Cy Pres award. 7 objections were submitted by or on behalf of the Vegetarian Legal Action Network ("VLAN"). Objections pp. 390 through 404.

Many of the Hindu objections are made on behalf of the Science of Identity Foundation ("SIF"), also known as the Chaitanya Mission, which is an organization of persons sharing a belief system similar to Hinduism and Hare Krishna. Some of these objectors claim that the SIF promotes vegetarianism. As such, it is not clear why or how SIF objectors will not benefit by awards to Hindu and vegetarian organizations. The SIF objectors appear to fear that SIF will not receive funds.

To the extent that the VLAN, SIF, and other objections name those organizations as deserving of Cy Pres funds, they must be dismissed as purely motivated by a avaricious fear on the part of those organizations that they will not receive Cy Pres funds.

To the extent that any of the relentless objections to the involvement of counsel in selecting Cy Pres organizations claim that counsel have been biased or prejudiced in their selections, they fail to refer in any way to how these alleged biases or prejudices have improperly influenced counsel’s decision making process. Counsel have proposed organizations that will directly benefit class members according to the criteria established in Section 3.1 of the Agreement.a. VLAN and Related Objections Regarding Determination of Cy Pres Recipients

Certain objectors, including VLAN, claim that it was improper for plaintiffs and defendant McDonald’s to jointly identify, research, consider, agree upon and propose to this Court potential recipients of the $10 million Cy Pres Fund. As set forth herein, the procedure followed by the parties and their counsel is in accordance with the Agreement and applicable legal precedent.

At the end of two days of mediation before Judge Lynch, counsel for plaintiffs and McDonald’s negotiated, discussed, drafted and signed a "deal points" memorandum setting forth the terms and conditions of the settlement. In that "deal points" memorandum all counsel agreed upon the $10 million Cy Pres Fund. During the following three months (January-March 2002), through face-to-face meetings and telephone conferences opposing counsel negotiated a Settlement Agreement that was signed by plaintiffs’ counsel and McDonald’s counsel on March 22, 2002.

Section 3 of that Settlement Agreement provides that the Settlement Amount "shall consist of $10 million, to be placed in a Cy Pres fund for distribution to charitable and/or other tax-exempt organizations to be mutually agreed upon by the Parties on or before the Effective Date." (Emphasis added). Section 3.1 states that the parties agreed that "such funds shall be divided, to the extent practicable," as follows:

• 60% to vegetarian organizations;

• 20% to Hindu and/or Sikh organizations;

• 10% to children’s nutrition and/or children’s hunger relief organizations; and

• 10% to organizations promoting the understanding of Jewish law, standards and practices with respect to Kosher foods and dietary practices, the observance of such standards by persons of the Jewish religion.

Section 3.1 also states that the Parties agreed that the following principles govern the selection of organizations to share in the Cy Pres Fund:

• The organizations’ nonprofit status;

• The organizations’ dedication to the values of Hindu, Sikh and other beef-less dietary rules, vegetarianism, and/or Kosher dietary rules;

• The organizations’ exclusive or majority concentration of services in the U.S.;

• The organizations’ geographical reach within the U.S.; and

• The organizations’ willingness to use the donation for the stated purpose (e.g., children, education, vegetarianism and/or nutrition).

Finally, Section 3.1 states that the organizations chosen to receive an award from the Cy Pres Fund will be mutually agreed upon by the Parties. Consistent with that requirement of the Agreement, the parties have engaged in an extensive vetting process, considering, debating, and discussing the merits of over 100 organizations in correspondence and numerous telephone conference calls.

These procedures were explicated to the Court by counsel for plaintiffs and McDonald’s at the preliminary approval hearings on March 29 and April 19, 2002. Thereafter, acting as a joint committee and in accordance with Section 3.1 of the Agreement, counsel for plaintiffs and McDonald’s have devoted hundreds of hours and numerous telephone conference calls and reams of correspondence to identifying, researching, communicating with, discussing and agreeing upon a group of charitable and/or tax-exempt organizations that meet the criteria set forth above.

It has been asserted that the funds are being allocated to a relatively small number of interest groups by a small number of lawyers with personal preferences or prejudices unrelated to the actual needs and concerns of the class members. The objections do not specify what those personal preferences or prejudices are, and there is no evidence demonstrating that any one of plaintiffs’ counsel or McDonald’s counsel is biased or prejudiced in favor of, or against, any proposed recipient of Cy Pres   funds. Although the objectors assert that plaintiffs’ counsel and McDonald’s counsel are not fully equipped with proper background and information relating to the Hindu, Sikh and Muslim faiths, there is no factual support for this accusation. The objections ignore the careful research and investigation performed by plaintiffs’ and McDonald’s counsel into the background and mission of each organization that was proposed as a recipient of Cy Pres   funds. Although the objectors claim that very deserving and good organizations have been excluded from the list of organizations asked to submit proposals, they do not identify a single organization that has been unfairly treated or discriminated against on the basis of any impermissible criterion.

Certain objectors suggest that any "organization," however unqualified, that applied, should be given Cy Pres   funds, no matter how small the resulting distributions. Judge Marovich rejected similar misguided thinking in applying the Cy Pres doctrine to funds remaining in a class action settlement fund from an antitrust case:

While countless programs could benefit from a contribution from the fund available in this case, the Court has decided to make more substantial grants to a limited number of programs to best utilize the limited funds at its disposal.

In re Scouring Pads Antitrust Litig., 1995 U.S. Dist. LEXIS 6380, at *1-2, 1995-1 Trade Cas. (CCH) ¶ 71,026 (N.D. Ill. May 11, 1995).

Certain objectors ask this Court to tear up the Agreement and appoint a third party to allocate the Cy Pres   Fund. However, these objectors ignore the fact that the proposed allocation of Cy Pres   funds that is agreed upon by plaintiffs’ counsel and McDonald’s counsel is subject to this Court’s approval. Such a procedure is both required by the terms of the Agreement and applicable Illinois law.

To the extent that the objectors only seek that the Cy Pres distribution have court approval, the Agreement and prior orders of this Court already provide for this. To the extent that the objectors seek for this Court to review without any prior vetting, categorizing, or opinions from counsel, the over 100 applications submitted by organizations seeking funds, the objection should be rejected. Plaintiffs’ counsel do not believe that this Court intended that it make the only review of over 100 applications.

VLAN contends that the "designated charitable organizations" that will receive funds must be "closely related" to the "origin" of these consolidated class actions. VLAN Opp. at 10. However, VLAN ignores the correct statement of the applicable rule offered by Judge Will of the Northern District of Illinois:

In recent years, the doctrine appears to have become more flexible. . . . [W]hile use of funds for purposes closely related to their origin is still the best Cy Pres application, the doctrine of Cy Pres and courts’ broad equitable powers now permit use of funds for other public interest purposes by educational, charitable, and other public service organizations, both for current programs or, where appropriate, to constitute an endowment and source of future income for long-range programs to be used in conjunction with other funds raised contemporaneously. Having served on the boards of a number of charitable and educational organizations, the court is cognizant of the advantages of having endowment income as well as current contributions with which to finance operations.

Superior Beverage Co. v. Owens-Illinois, Inc.,   827 F. Supp. 477, 478-80 (N.D. Ill. 1993) (tracing historical development and modern usage of   doctrine). In that case, the court approved grants from unclaimed class action settlement funds in an antitrust case to a legal aid bureau, various law school programs, a museum, a public television station, and other charities. Id.   at 479-89. Accord, Jones v. National Distillers, 56 F. Supp. 2d 355, 359-60 (S.D.N.Y. 1999) (approving distribution of unclaimed funds from securities fraud class action settlement fund to The Legal Aid Society Civil Division).

Pursuant to the Agreement, the parties were responsible for investigating and proposing appropriate recipients of funds. Counsel for plaintiffs (including Mr. Bharti) and counsel for McDonald’s were entitled to (and did) participate to a greater or lesser extent in researching, identifying and selecting potential recipients. The fruits of our efforts have been placed before the Court for its approval, as is the appropriate procedure to be followed in such cases. See, e.g., Reebok,   903 F. Supp. at 534 ("In connection with the approval of the Settlement, each of the [50] States has submitted to the Court a detailed plan for distribution of its share of the Settlement fund."). The federal and state court cases cited and discussed herein all recognize that this is the appropriate procedure to be followed, so long as the trial court retains the discretion to approve or disapprove the parties’ proposed allocations and the court supervises the distribution plan. See, Six Mexican Workers, 904 F.2d at 1308 ("any distribution plan should be supervised by the court"); "Agent Orange," 818 F.2d at 185 ("district court must . . . designate and supervise . . . the specific programs that will consume the settlement proceeds"); In re Motorsports Merchandise Antitrust Litigation, 160 F. Supp. 2d 1392, 1395 (N.D. Ga. 2001) (court "consider[ed] the submissions of the parties and the charitable organizations" before making ultimate determination of recipients of Cy Pres   funds); Superior Beverage., 827 F. Supp. at 479-80 (noting that the court considered and "approve[d] . . . grants" from Cy Pres   funds to charitable and other organizations).

Although VLAN complains that it was excluded from the process of researching, reviewing, negotiating with, and approving potential recipients, see,   VLAN Opp. at 12, it fails to inform this Court that it essentially tried to extort money from the settlement by threatening to "file thousands of objections to the settlement" (and threatening that "no attorneys would see fees in this case") unless it was designated to receive money from the Cy Pres Fund. See, Letter from James Pizzirusso "To Whom it May Concern" (May 22, 2002) and attached document entitled "Vegetarian Organizations Who [sic] Should Benefit From McDonald’s Settlement" at Joint Appendix, Tab C, Attachment D. Having received such threats from Mr. Pizzirusso and VLAN, it was incumbent upon plaintiffs’ counsel and McDonald’s counsel to deal circumspectly with them.

Mr. Pizzirusso misleads this Court about his communications with plaintiffs’ counsel. In his declaration, he states that plaintiffs’ counsel Kevin Roddy of Hagens Berman LLP and Cory Fein of Caddell Chapman "refused to give [Pizzirusso] any details about potential recipients of the Cy Pres   relief contending that ‘hundreds’ of organizations were still under active consideration, including VLAN." Declaration of James Pizzirusso, ¶ 16 (emphasis added). In fact, the May 30, 2002 letter from plaintiffs’ counsel Kevin Roddy to Mr. Pizzirusso accurately states in relevant part:

The list of recipients has not been chosen, and many groups are under consideration even as I write this . . . The procedure for choosing the groups is set forth in the Settlement Agreement, which is accessible through my firm’s website: . . . .

As I am sure you recognize, it would be impractical to carry out the process of selecting the groups in the open. We are exercising our sound business judgment in accordance with the criteria set forth in the Settlement Agreement, and as approved by Judge Siebel. The class representatives are being kept fully informed by their respective counsel. There are numerous groups still under consideration; several of them are the same as those identified as potential candidates in your previous letter   [dated May 22, 2002].

Letter from Kevin Roddy to Mr. Pizzirusso of May 30, 2002, Plaintiffs’ Appendix, Exhibit E. (Emphasis added.)

These statements were accurate given the large number of potential recipients of Cy Pres   funds that plaintiffs’ counsel and McDonald’s counsel were investigating, communicating with, receiving proposals from, and discussing the merits of, it was impractical for us to provide Mr. Pizzirusso, VLAN, or any other potential "objector" with a continuous progress report as to which groups or organizations were still under consideration.

Given the terms of the Agreement preliminarily approved by this Court, the documented efforts devoted by opposing counsel to the selection of potential recipients, and the above-referenced persuasive precedent, this Court should overrule the objections to the selection method.

The remaining VLAN objections are discussed in subsection 6 below.3. Objections that class members do not receive monetary awards

Fourteen persons object because they are not receiving money under the settlement. Objections pp. 350 through 370. Six of these objectors live at the same address and submitted identical letters. Objections pp. 357 through 360 and 363 through 370. Two sought damages of $70,000 each, which includes "the costs of pilgrimages and other atonements that I will have to embark upon...." Objections pp. 350 through 351. Another would have been satisfied with "coupons for vegetarian items on" McDonald’s menu. Objections p. 356. Michael Murray sought $400 for each class member to be used for "Medical product due to the medical-related damages and to include vitamins and other homeopathic remedies...." Objections p. 353.

The objectors seeking individual monetary awards should have opted out. They have received all the benefits of the settlement; the apology, accurate disclosures in the future, the advisory board and distributions that will benefit organizations promoting vegetarianism and religious dietary practices violated by McDonald’s. The settlement allows them to opt out and bring an action for individual monetary damages. Finally the range of damages sought by these objectors and the causes of the damage show the difficulty of deciding individual damages in this class action. These objectors and the persons who did opt out never filed a claim until after notice of the settlement was published. This case and the settlement made these persons aware of their rights and allowed them the opportunity to take action. The settlement has aided, not harmed, these objectors. a. Objection of Christiana Fong

Christiana Fong, Objections pp. 361 through 362, also complains that the $10 million Cy Pres is too low and should have included Buddhist, Seventh Day Adventist and Jain organizations.

The amount of the Cy Pres Fund was heavily disputed and long negotiated. Clearly it was a compromise. Plaintiffs recognize that they did not obtain all they wanted and fought long and hard for. Ultimately the amount of the Cy Pres Fund was resolved during mediation upon the recommendation of the mediator. Plaintiffs presented substantial evidence to the mediator regarding the harm done by McDonald’s deception, including a video tape in which some plaintiffs and other class members expressed directly in their own words and voices the harm done by McDonald’s extremely despicable and repulsive actions.

The recommendation of the mediator, after he had considered plaintiffs’ evidence, was given great weight by the plaintiffs. The issue before the Court is whether the compromise is reasonable. It is a substantial amount. Plaintiffs believe this amount represents a clear victory. Had it been $15 million it would have been a greater victory. Had it been $7 million it still would have been a victory. The settlement is a victory.

4. Objections regarding attorneys’ fees Four persons object to the amount of attorneys’ fees. Objections 371 through 384.

a. One of these objectors also objects that no funds are earmarked for animal rights groups. Objections pp. 371 through 373.

b. Another person also objects that a nationwide class cannot be certified.. Objections pp. 378 through 380.

c. Another also objects to including children’s causes in the settlement, that the apology is worthless and that $10 million is an inadequate amount. Objections pp. 382 through 383.

d. The fourth objector also opposes any Cy Pres distribution. Objections pp. 384.

The reasons why the requested fees are reasonable and should be awarded are set forth above. The remaining objections are addressed below.a. The case was not a "laydown"

Two of these objectors, Ms. Attarzadeh, Objections p. 371, represented by J. Scott Kessinger, and Ms. Livingston, Objections p. 378, represented by John Pentz of the Class Action Fairness Group f/k/a the Objectors Group, claim that the case was so easy that the requested attorneys’ fees are not justified. After the battle is fought and won it is easy for a non-participant to say it was easy.

Five lawsuits were filed against McDonald’s concerning these issues. Neither Ms. Attarzadeh nor Ms. Livingston took the initiative to file their own action.

Plaintiffs’ attorneys were sought out by the plaintiffs because they have national reputations as successful class action attorneys. They were successful here. The success was based on both their skills and reputations. The success achieved here took a lot of hard work. These Monday morning quarterback attorneys are obviously unaware of the extensive work done by class counsel in researching, filing and developing the case, preparation of evidence for the settlement negotiations, conducting the settlement negotiations, achieving a significant victory, negotiating/arguing and then renegotiating/rearguing with McDonald’s over practically every word in the very detailed settlement agreement, the apology and the class notice, answering class members’ telephone calls, and determining their recommendations to the Court for the Cy Pres awards. Mr. Pentz’ unawareness of reality is best reflected in his statement that all class counsel had to do was "file a complaint and wait for McDonald’s to make a settlement offer." Objections p. 380. This is objectively false. In the "negotiations" prior to mediation, the parties were not in the same ball park. It took a massive effort by a skilled mediator to bring the parties together.

b. A class could be certified Mr. Pentz also argues that a class cannot be certified in this case. Objections p. 378. This argument is addressed below. What is significant is that he has made two flatly contradictory arguments. First, Mr. Pentz argues that class counsel has succeeded in a case he would never have brought because it is a difficult case, but class counsel’s fees should be reduced because it is a "laydown" case. Both statements cannot be true at the same time. Such an objection violates Ill. Supreme Court Rule 137.

The assertions regarding class certification also completely negate his argument that if there had been an "auction" at the inception of the actions to determine class counsel some attorneys would have taken the case for less than a 25/20 fee. Mr. Pentz would not have taken the case for less than 25% because he believes the class could not be certified.

Attorneys who specialize in objecting rather than performing could not have achieved these results. This is a classic example of the maxim "Those who can, do; those who can’t, criticize."

This case can be certified as a class action. Livingston, through Mr. Pentz, claims that "[t]he Seventh Circuit has already held that a nationwide class made up of residents of all 50 states, such as the one proposed here, may not be certified," citing In re Bridgestone/ Firestone, Inc., 288 F.3d 1012 (7th Cir. 2002). Livingston, through Mr. Pentz, misstates the holding of Bridgestone, which was an appeal from the Southern District of Indiana. A federal court hearing a state law claim must apply the law of the state in which it sits. The district judge held that under Indiana law, she could apply to the claims of millions of purchasers of Bridgestone/ Firestone tires and Ford Explorers on which they were mounted the law of the states where the auto manufacturer and tire manufacturer were headquartered and devised the defective tire and vehicle designs. The Seventh Circuit, prognosticating how the Indiana Supreme Court would rule on the issue, thought otherwise.

Here, there is no need to prognosticate. Both the Illinois Supreme Court and the First District Appellate Court have held that Illinois courts may apply the Illinois Consumer Fraud Act ("ICFA") to all claims against a business that is located in Illinois and committed unfair or deceptive acts or practices against consumers located both in Illinois and elsewhere. Martin v. Heinold Commodities, 117 Ill.2d 67, 510 N.E.2d 840 (1987), later opinion, 163 Ill.2d 33, 643 N.E.2d 734 (1994); Gordon v. Boden, 224 Ill. App. 3d 195, 586 N.E.2d 461 (1st Dist. 1991).

In Martin, a class action was brought against an Illinois business by an Oklahoma resident, on behalf of a nationwide class alleging breach of fiduciary duty and violation of the ICFA in connection with futures transactions. The court held that Illinois law, both the ICFA and the Illinois law of fiduciary responsibility, would be applied to all members of the class because Illinois had a substantial interest in making companies headquartered in the state comply with the state's laws:

The Supreme Court recently addressed the question of which State's substantive law governs resolution of common factual issues presented in a multistate class-action litigation. The court held that the substantive law of the forum State could be applied, consistent with the requirements of procedural due process, where the forum State has "significant contact or aggregation of contacts to the claims asserted by each member of the plaintiff class, contacts creating state interests . . . ensuring that the choice of its law is not arbitrary or unfair." Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 822 (1985). . .

Martin, 117 Ill.2d at 82.

Applying the Martin standard to the instant case, it is apparent that Illinois substantive law can be applied to resolve the underlying common factual dispute. Here, each member of the class asserts similar claims arising from McDonald’s misrepresentations and omissions. These common allegations implicate the legitimate interests of the State of Illinois in insuring that persons and entities within its jurisdiction, insofar as they undertake to act as agents, do so in accordance with its law. McDonald’s principal place of business is Illinois and that this fact was made manifest to each member of the class. On these facts, there can be no doubt that the claims of each member of the class implicate the legitimate interests of Illinois in applying its law to adjudicate a dispute involving a business principally situated in its jurisdiction and which, by its own efforts, insistently has sought to avail itself of both the courts and the laws of the forum State.

Subsequently, in Gordon v. Boden, 224 Ill. App. 3d 195, 586 N.E.2d 461 (1st Dist. 1991), the First District approved of application of the ICFA to a company that packaged and sold in Illinois and other states what was represented to be pure orange juice. In fact, the company had adulterated its products with waste water and other material, with the result that its products contained very little orange juice and could not properly be described as such.

Gordon is directly on point. McDonald’s stores throughout the United States, both owned and franchised, are required to cook french fries and hash browns using the precise formula sent from McDonald’s Illinois corporate headquarters. Likewise, all representations concerning the products were made from Illinois, and the company’s web site (which contained some of the alleged false representations) is maintained in Illinois. Illinois has a strong interest in preventing itself from becoming a base or sanctuary for fraud, and has the right to apply its law to prevent a local company from engaging in deceptive or fraudulent activity by affording appropriate remedies, regardless of where the victims might be located.

The Illinois Supreme Court has also held that even if it is necessary to apply the consumer fraud laws of all 50 states, there is sufficient similarity between those laws to warrant a national class action. Miner v. Gillette Co., 87 Ill.2d 7, 428 N.E.2d 478 (1982), cert. dismissed, 459 U.S. 86 (1982). It is of note that plaintiffs assert claims pursuant to the Illinois Consumer Fraud Act and the deceptive business practices acts of each of the 50 states. Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997), cited by Livingston, is not to the contrary. Amchem involved an attempt to use the class action mechanism to resolve asbestos litigation, including claims by persons who had been exposed to asbestos through employment or otherwise in the past, but had not yet developed any symptoms or suffered any substantial injury. The court held that the inherent conflicts between the class members, especially between presently injured persons and persons with exposure but no present injury, were such that the proposed class was unworkable, and that if a class did not satisfy the requirements of Fed. R. Civ. Proc. 23(a), it could not be certified on the theory that a settlement and not a trial would result.c. That animal rights groups might not receive funds is not a proper objection to the settlement

Ms. Attarzadeh also argues that Cy Pres funds should have been earmarked for animal rights groups. Objections p. 373. As she acknowledges, animal rights advocates are not specifically mentioned in the class definition but, she claims that if they are vegetarian, they are included under the vegetarian definition. Animal rights advocates advance issues not shared by all vegetarians, such as how domesticated animals raised for consumption are treated prior to being killed and the use of animals to advance medical science. Some groups and persons advocate engaging in criminal acts to advance their views. See, Joint Appendix, Tab E. Animal rights vegetarians benefit under the settlement as vegetarians. The settlement does not encompass animal rights issues.d. The nutritional education of children is a legitimate purpose

Ms. Burman also objects to including children’s causes in the settlement, that the apology is worthless and that $10 million is an inadequate amount for the Cy Pres Fund. Objections pp. 382 through 383.

The education of children regarding nutritional issues is an appropriate purpose because the case is fundamentally about the rights of consumers to receive adequate information with which to make educated decisions. Teaching people to inquire about the content of food products when they are children and most impressionable is an appropriate way to further this basic purpose of the lawsuit.

e. The apology is not worthless Obtaining a formal, widely published apology from a major corporation is an extremely rare event. McDonald’s image has been tarnished. It means that all of McDonald’s promises or representations in the future will be more closely watched by the public. Its future actions must be above suspicion.

Many corporations and persons refuse to apologize for what they have done. Many people believe that an apology is more important than the payment of money. McDonald’s has done both. We believe there would have been more objections if McDonald’s had not apologized. Its action is not "worthless." Quite the contrary, "incidental or nonmonetary benefits conferred by the litigation are a relevant circumstance" to be considered by the court in determining an appropriate attorney’s fee. Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1049 (9th Cir. 2002)(collecting cases).

The adequacy of the Cy Pres Fund is discussed above.f. McDonald’s does not contribute to proposed Cy Pres recipients

Mr. Beck believes that because of McDonald’s long standing charitable contributions the awards provided for in the settlement agreement need not even be mentioned. Objections p. 384. The Cy Pres contributions are designated to groups that McDonald’s does not usually support. The settlement funds will benefit the class of persons that have been wronged. Mr. Beck also objects to including children’s causes in the settlement, that the apology is worthless, and that $10 million is an inadequate amount. These objections are addressed above.

5. The Objection of Mr. Ogunfiditimi Mr. Ogunfiditimi objects because (1)McDonald’s denies the allegations, liability and that the plaintiffs are entitled to relief, (2) African Americans are not properly represented and (3) the incentive awards to the named plaintiffs, the Cy Pres Fund and the attorneys’ fees are all too low. Objections pp. 385 through 387.

a. McDonald’s denial of liability Every settlement involves a defendant’s denial of legal liability. If this objection is upheld it will end settlements of class actions.

b. Mr. Ogunfiditimi’s concern that African American’s are not properly represented Plaintiffs’ counsel are aware of no statistical evidence supporting the proposition that most African Americans are vegetarians. Obviously, if they are, they are represented in the settlement as vegetarians.

c. Mr. Ogunfiditimi’s concern about incentive awards, the Cy Pres Fund, and attorneys’ fees The Cy Pres Fund has been discussed above. While plaintiffs and counsel appreciate Mr. Ogunfiditimi’s opinion that incentive awards and attorneys fees are too low (especially in light of the attacks on attorneys fees above made by other objectors), plaintiffs and counsel are bound by the settlement agreement. 6. VLAN and Pizzirusso objections

Seven members of the VLAN filed identical objections claiming the inadequacy of class counsel, that the attorney fees are too high, that the Cy Pres Fund is inadequate, that the advisory board has no power, that plaintiff Jeffrey Zimmerman is an inadequate class representative, and that the apology is hollow. Objections pp. 388 through 404. Mr. Pizzirusso and the persons submitting the other VLAN objections may represent the entire membership of VLAN.

The experience and adequacy of class counsel, the issue of attorneys’ fees, the value of the awards, and the value of the apology have been discussed above, as well as Mr. Pizzirusso’s extortionate attempts to gain a benefit to VLAN from this settlement. As discussed above, Mr. Pizzirusso demanded that VLAN be given money for allegedly having some role in the genesis of this lawsuit. The truth is that when his demand for money was rejected, he and his VLAN cronies filed baseless objections.

The Pizzirusso and VLAN objections regarding the distribution of Cy Pres funds are baseless because they utterly fail to address the fundamental purpose of the Cy Pres Fund: to benefit class members who were not given sufficient information with which to make relevant dietary choices.

The objections complain that:

(1) VLAN is concerned that it will not receive funds. To the extent that VLAN appears to do little more than spew adversarial bluster, bring lawsuits, and lobby the Food and Drug Administration, its purpose does not coincide with the purpose of the Cy Pres Fund. VLAN did not demonstrate to plaintiffs’ counsel that it was qualified to receive Cy Pres funds under the requirements of Section 3.1 of the Agreement and it is not recommended for this reason.

(2) VLAN is concerned that several farm animal sanctuaries will not receive funds. Rescuing farm animals from farm life is not one of the purposes of this lawsuit. Farm animals are not class members. The purposes of the lawsuit do include giving human beings information they need to make meaningful dietary choices. Meaningful dietary choices for some class members, such as Jews and Muslims, may well include eating farm animals if they are slaughtered according to Kosher or Halal guidelines. Further, meaningful dietary choices for Hindu class members may included eating such farm animals as chickens and lambs.

(3) VLAN is concerned that the Vegetarian Resource Group will not receive funds. This objection is an enigma. During the process of discussing the merits of approximately 100 organizations, plaintiffs’ counsel and McDonald’s agreed that The Vegetarian Resource Group should receive Cy Pres funds. This organization is tentatively on the list of groups to receive an award. Moreover, it is likely it will receive an award greater than any single other organization.

Finally, without citing any facts, VLAN asserts, based upon "information and belief," that the New Jersey plaintiff Jeffrey Zimmerman has a financial relationship with his attorneys, Berger & Montague, PC, that makes him inadequate as a class representative. VLAN is objectively incorrect. There is no financial relationship between Mr. Zimmerman and the Berger firm that does not stem directly from the Berger firm’s representation of Mr. Zimmerman in this lawsuit. Mr. Zimmerman approached the Berger firm about instituting the New Jersey suit because he is a vegetarian, he adheres to a Kosher diet, and he believes that he was misled by McDonald’s regarding the contents of their french fries. His representation of the class is entirely adequate and proper. McDonald’s itself has never challenged his ability to serve in such a capacity.

7. Objection that the settlement discriminates against diabetics Nathaniel Brown claims that the settlement discriminates against diabetics. Objections p. 405. Diabetics are not necessarily vegetarians, however, if they are, they are represented as vegetarians.8. Objection of a non-class member

Sean Henry claims that he is discriminated against because he is "not Jewish, Hindu, or a full vegetarian." Objections p. 406. Mr. Henry may not be a class member. To the extent that he is not a "full vegetarian," if that implies that he is a "partial vegetarian" or has relevant objections to eating beef or meat, he will benefit under this settlement as a vegetarian.

9. Objection that McDonald’s apology does not address Muslims Marian Ismail wants the apology to address Muslims. Objections pp. 407 through 416. It is true that McDonald’s apology does not specifically address Muslims. To the extent that Muslims eat as vegetarians when they are uncertain of whether fast food passes Halal muster, Muslims benefit under the settlement as discussed above. Further, McDonald’s apology is directed to "Hindus, vegetarians and others for failing to provide the kind of information they needed to make informed dietary decisions." The apology is intended to address Muslims and any other persons who did not receive the information they needed to make informed dietary decisions.

10. Objection regarding the advisory board Judith Mason, a McDonald’s stockholder, claims that the $10 million is too low. Objections p. 417. One also objects to the advisory board.

The amount of the Cy Pres Fund has been discussed above. However, plaintiffs appreciate stockholder Judith Mason’s position.

11. Unspecified objections Three persons objected for no discernable reason. Objections pp. 418 through 420.V. CONCLUSION

For the reasons set forth in the responses to the various objections, all aspects of this settlement, including the class benefit, incentive payments to named plaintiffs, and requests for attorneys’ fees and costs should be approved.

Respectfully submitted,

Daniel A. Edelman

Daniel A. Edelman

Cathleen M. Combs

James O. Latturner

Tara L. Goodwin

Jason G. Shanfield

EDELMAN, COMBS, LATTURNER, & GOODWIN, LLC

120 S. LaSalle Street, 18th floor

Chicago, Illinois 60603

(312) 739-4200

(312) 419-0379 (FAX)

Atty. No. 12775

Kevin P. Roddy

HAGENS BERMAN LLP

700 South Flower Street, Suite 2940

Los Angeles, CA 90017-4101

(213) 330-7150

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Steve W. Berman

HAGENS BERMAN LLP

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Seattle, WA 98101

(206) 623-7292

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Michael A. Caddell

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CADDELL & CHAPMAN

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(713) 751-0400

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Michael T. Fantini

BERGER & MONTAGUE, P.C.

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Philadelphia, PA 19103

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(215) 875-4636 (FAX)

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Ricardo G. Cedillo

DAVIS, CEDILLO & MENDOZA, INC.

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Arvind Mahendru

Ashish Mahendru

THE LAW OFFICE OF ARVIND MAHENDRU

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Peter L. Masnik

KALIKMAN & MASNIK

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(856) 428-5222<,/strong>

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BLOCK & BLOCK, P.C.

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