Appellants challenge the district court's approval of a class action settlement, including the award of attorneys' fees. The class action involved approximately five million merchants and alleged, inter alia, that defendants Visa U.S.A. Inc. and MasterCard International Inc. tied merchant use of defendants' debit products to use of defendants' credit cards, in violation of the Sherman Act. Plaintiffs contended that Visa and MasterCard used their power in the credit card market to force merchants to accept an artificially-inflated transaction fee when accepting payment from consumers using debit cards operated by Visa or MasterCard. Plaintiffs further alleged that defendants employed a scheme of anti-competitive conduct to bar competition in the debit card market. In this bitterly contested lawsuit fought by expert counsel on all sides, the parties agreed to settle just before trial commenced. The resulting settlement was the largest in the history of antitrust law. As part of the settlement, defendants agreed not to tie their debit and credit products together and to pay more than $3 billion to plaintiffs in exchange for the release of any and all claims that were or could have been filed against defendants or their member banks (non-parties in this action) based on the conduct alleged.

On appeal, appellants contest the validity of the settlement's release of non-parties, the adequacy of class representation, the adequacy of notice, the fairness of settlement, and the reasonableness of attorneys' fees. We AFFIRM the district court's order in all respects.

This case involves a clash of commercial titans. Plaintiffs, a class of merchants approximately five million strong led by Wal-Mart, the world's largest retailer, and several other large and sophisticated merchants, including The Limited, Sears, and Safeway, filed suit on October 25, 1996 against Visa U.S.A. Inc. and MasterCard International, Inc. ("Visa" and "MasterCard," respectively),1 seeking damages amounting to tens of billions of dollars for alleged violations of Sections One and Two of the Sherman Act, 15 U.S.C. §§ 1, 2.2 First, plaintiffs claimed that the defendants'"Honor All Cards" policy, which forced merchants who accepted Visa and MasterCard credit cards to accept Visa and MasterCard debit cards, was an illegal "tying arrangement" that violated Section One of the Sherman Act.3 Second, plaintiffs alleged that defendants used their Honor All Cards policy in conjunction with other anti-competitive conduct to monopolize the debit market, in violation of Section Two of the Sherman Act. As a consequence, plaintiffs claimed that they incurred supra-competitive "interchange fees" (described in the next subheading) during every debit and credit transaction made between October 1992 and June 2003.

Essentially, every debit or credit card transaction using a Visa or MasterCard product involves five entities: (1) Visa or MasterCard, (2) a "card-issuing" bank, (3) an "acquiring" bank, (4) a consumer, and (5) a merchant. At the outset, either Visa or MasterCard, each an association, grants a license to a member bank to issue credit and debit cards with its brand name. A "card-issuing" member bank then issues a credit or debit card to a cardholder with either the Visa or MasterCard brand name. An "acquiring" bank, a member of Visa and MasterCard, contracts with a merchant to accept payment through Visa and MasterCard. When a cardholder makes a purchase with either a Visa or MasterCard product, the acquiring institution reimburses the merchant for the cardholder's purchase, less a "discount fee." The discount fee is determined by the acquiring institution. The card-issuing bank charges an "interchange fee" each time it provides funds to the acquiring bank as payment to a merchant for the cardholder's purchase. Visa and MasterCard set the interchange fee that all card-issuing banks charge. Economics demands that the discount fee be greater than the interchange fee the acquiring institution must pay to the card-issuing institution. See Visa Check II, 192 F.R.D. at 72. The following illustrates this network of transactions:

Bank A issues a Visa credit card to Consumer X, who purchases a garment for $100 at Store Y, which was "acquired" for Visa by Bank B. Visa rules mandate that Bank B must pay Bank A an interchange fee of 1.25% of the amount of the transaction, i.e., $1.25. Bank B will charge Store Y a "discount fee" higher than $1.25 in order to recover the mandated interchange fee and other fees that Visa rules mandate Bank B to pay Visa on each and every Visa credit card (and debit card) transaction and to earn a profit for itself. Thus, Bank B may charge a discount fee of 1.60% of the transaction amount (or $1.60) to Store Y. When Store Y presents Consumer X's $100 Visa transaction to Bank B, the bank will credit Store Y's account for $98.40, send the Visa mandated $1.25 interchange fee to Bank A and retain the $.35 balance of the "discount fee."

2d Am. Compl. ¶ 8(o).

Plaintiffs originally filed their complaint on October 26, 1996. The district court certified plaintiffs as a class in February 2000. See Visa Check II, 192 F.R.D. at 71. The class includes "all persons and business entities who have accepted Visa and/or MasterCard credit cards and therefore have been required to accept Visa[ ]Check and/or MasterMoney debit cards under the challenged tying arrangements during the fullest period permitted by the applicable statute of limitations," id. at 90, which is the period from October 25, 1992 through June 21, 2003, Visa Check III, 297 F.Supp.2d at 514 n. 12, 519. Plaintiffs' discovery included "a review of approximately five million pages of documents, almost 400 depositions, discovery from roughly 200 non parties, 54 expert reports, and 21 expert depositions." Id. at 511 n. 8. In June 2002, plaintiffs sent a notice of pendency to all class members. On April 30, 2003, "after complete and exhaustive discovery, summary judgment proceedings, and substantial mediation," id. at 511, Visa and MasterCard each signed a memorandum of understanding setting forth a preliminary settlement agreement with plaintiffs, id. at 508. The final settlement agreements were signed on June 4, 2003 (collectively, the "Settlement").4 Later that month, the district court approved the notice of settlement, which described the terms of settlement and quoted the Settlement's release verbatim. Id. at 509 n. 5, 516; Notice of Settlement ¶¶ 14, 18-19.5 Eighteen merchants, in this class of approximately five million, filed objections to the Settlement and the allocation plan. Id. at 509. In September 2003, the district court held a fairness hearing during which it offered each objector the opportunity to be heard. Id. On December 19, 2003, after considering these objections, the district court issued a Memorandum and Order (a) approving the proposed settlement agreements between plaintiffs and Visa and MasterCard and the plan of allocation to distribute funds to class members, and (b) awarding attorneys' fees. Id. at 507, 526. The court entered final judgments on January 30, 2004. Each appellant filed a timely appeal.

The Settlement is the culmination of approximately seven years of hard-fought litigation and represents "the largest antitrust settlement in history." Id. at 508. The district court described the Settlement as providing for, among other things:

(1) the cessation, as of January 1, 2004, of defendants'"Honor All Cards" rules, by which the defendants' debit card services to merchants were tied to their credit card services;

(2) the creation of a $3.05 billion settlement fund;

(3) the creation of clear, conspicuous and uniform visual identifiers on Visa and MasterCard debit cards by January 1, 2007 (80% by July 1, 2005), so merchants and consumers can distinguish these products from credit cards;

(4) the lowering, by roughly one third, of the interchange rates on debit products for the period from August 1, 2003, through December 31, 2003;6

(5) other injunctive relief, such as the provision of signage from defendants to merchants communicating the merchants' acceptance of defendants' untied debit products; and a prohibition on defendants enacting any rules that prohibit merchants from encouraging or steering customers to use forms of payment other than defendants' debit cards, including by discounting other forms of payment; (6) the Court's continuing jurisdiction to ensure compliance with the Settlement; and

(7) the release of Visa and MasterCard from claims arising out of the conduct at issue in the action prior to January 1, 2004.

Id. (internal citations and footnote omitted). Visa and MasterCard will make cash payments totaling $2,025,000,000 and $1,025,000,000, respectively, in annual installments during the next ten years. Id. The district court concluded that "[t]he discounted present value of the total compensatory relief ... amounts to $3,383,400,000." Id. at 509.

1. Scope of the Release and Adequacy of Representation

At the district court, five of the eighteen objecting merchants challenged the scope of the release provided in the Settlement. All five of these merchants appealed. They are Reyn's Pasta Bella, LLC, Jeffrey Ledon DeWeese, M.D., Barry Leonard d/b/a Critter Fritters, and Hat-In-The-Ring, Inc. d/b/a Eddie Rickenbacker's (collectively, "Pasta Bella"), and NuCity Publications, Inc. The Settlement's release precludes actions for conduct occurring prior to January 1, 2004 that was or could have been alleged in the complaint. If approved by this Court, the release will bar class actions previously filed by Pasta Bella and NuCity.

Pasta Bella, purporting to represent a class, initiated an action against Visa and MasterCard and three member banks (collectively, the "Reyn's defendants") in the United States District Court for the Northern District of California on June 24, 2002. Reyn's Pasta Bella, LLC v. Visa U.S.A., Inc., 259 F. Supp. 2d 992 (N.D.Cal.2003) ("Reyn's").7 Prior to the fairness hearing in this case, the California district court dismissed all but one of the Reyn's claims. Id. at 1004. The surviving claim alleged that the Reyn's defendants fixed credit card interchange fees charged by issuing banks to acquiring banks, which, in turn, set merchant discount fees charged by acquiring banks to merchants. See id. at 998. On March 4, 2004, the District Court for the Northern District of California dismissed Reyn's with prejudice, finding that the Settlement released the Reyn's defendants from further liability.

NuCity initiated a putative class action in the United States District Court for the Southern District of New York on November 13, 2001. In re Visa/MasterCard Membership Rules Antitrust Litigation, No. 01-CV-10027 ("Membership Rules").8 Membership Rules arose out of United States v. Visa U.S.A., Inc., 163 F. Supp. 2d 322 (S.D.N.Y.2001), modified by 183 F. Supp. 2d 613 (S.D.N.Y.2001), aff'd 344 F.3d 229 (2d Cir.2003), cert. denied, 125 S. Ct. 45 (2004) ("Government's Membership Rules"). In Government's Membership Rules, the Government established that Visa and MasterCard's "exclusionary rules" (also known as "membership rules"), which prohibited member banks from issuing competing payment cards, such as American Express or Discover, constituted an illegal boycott and an unreasonable restraint of trade in the credit card market.9 Government's Membership Rules, 344 F.3d at 229. NuCity filed Membership Rules on behalf of merchants injured by the boycott proven in Government's Membership Rules. Pursuant to an order by the district court in that case, Membership Rules remains in limbo pending the outcome of this appeal.

On appeal, Pasta Bella and NuCity argue that the release is overbroad. Alternatively, they argue that the release is not valid with respect to them because their interests were inadequately represented during settlement. Issues involving the release of claims are discussed in Part I of the Discussion section of this opinion.

The Settlement established a notice plan that required mailing the settlement notice to class members and publishing a condensed version of the settlement notice in numerous widely-distributed publications (collectively, the settlement notice and summary notice are referred to as the "Settlement Documents"). As part of the notice plan, plaintiffs' counsel provided direct notice via first class mail to 8,148,276 class members and published notices in publications with a combined circulation of more than 151 million.10 All of this information was printed in English only.

On appeal, Pasta Bella and NuCity argue that they were denied due process because the Settlement Documents did not specifically apprise class members that approval of the Settlement would release the pending claims in Reyn's and Membership Rules.

Armenta's Mexican Food, Inc. and Lupita Llamas Martinez d/b/a Del Yaqui Restaurant (collectively, "Armenta's"), argue that the Settlement Documents and notice plan did not afford them due process or comply with Federal Rule of Civil Procedure 23. Armenta's claims that it learned of the Settlement by observing a summary notice in an English-language magazine.11 Afterward, it retained counsel, filed its objections to the Settlement and also filed a motion to intervene. Counsel for Armenta's appeared and argued at the September 2003 fairness hearing in support of its client's objections to the Settlement. The district court's approval of the Settlement implicitly denied the motion to intervene; Armenta's appealed.

These notice arguments are discussed in Part II of the Discussion section of this opinion.

Pasta Bella, Armenta's, 710 Corp., Inc., and Leonardo's Pizza by the Slice, Inc. challenge the fairness of the Settlement. NuCity seeks limited discovery to determine whether class counsel independently valued the Membership Rules claims, and, if so, the amount of that valuation. Pasta Bella argues that the parties should be judicially estopped from asserting the release against the Reyn's claims because Visa and MasterCard failed to comply with Rule 3-13 of the Local Rules of Practice in Civil Proceedings before the United States District Court for the Northern District of California ("Northern District of California Local Rule 3-13"), which required that they file a notice of pendency in that court concerning the instant action. Part III of the Discussion section of this opinion examines all of these issues.

Class counsel submitted a fee petition to the district court seeking $609,012,000 in fees. The court found this request "excessive," "fundamentally unreasonable, and wholly out of character for a group of counsel whose commitment to the comer store merchants they represent has, until now, been admirable and unflagging." Visa Check III, 297 F.Supp.2d at 522-23. Choosing between awarding fees under the "lodestar" method or the "percentage of the fund" method, id. at 520-21, the court awarded plaintiffs' attorneys 6.5% of the Settlement's compensatory relief under the "percentage of the fund" method, id. at 524. This amounted to a fee award of $220,290,160.44. Id. at 507, 524-26. The court granted counsel an additional $18,716,511.44 in costs and expenses. Id. Objectors 710 Corp., Inc. and Leonardo's Pizza by the Slice, Inc. (collectively, "Leonardo's") appealed the fee award on the ground that it was too high. Class counsel cross-appealed on the ground that the award was too low. Roman Buholzer d/b/a The Continental Garden Restaurant responded in opposition to class counsel's cross-appeal. The district court's fee award is examined in Part IV of the Discussion section of this opinion.

Broad class action settlements are common, since defendants and their cohorts would otherwise face nearly limitless liability from related lawsuits in jurisdictions throughout the country. Practically speaking, "[c]lass action settlements simply will not occur if the parties cannot set definitive limits on defendants' liability." Stephenson v. Dow Chem. Co., 273 F.3d 249, 254 (2d Cir.2001), aff'd in part by an equally divided court and vacated in part, 539 U.S. 111, 123 S. Ct. 2161, 156 L. Ed. 2d 106 (2003).

Plaintiffs in a class action may release claims that were or could have been pled in exchange for settlement relief. Plaintiffs' authority to release claims is limited by the "identical factual predicate" and "adequacy of representation" doctrines. Together, these legal constructs allow plaintiffs to release claims that share the same integral facts as settled claims, provided that the released claims are adequately represented prior to settlement. Adequate representation of a particular claim is established mainly by showing an alignment of interests between class members, not by proving vigorous pursuit of that claim.

The law is well established in this Circuit and others that class action releases may include claims not presented and even those which could not have been presented as long as the released conduct arises out of the "identical factual predicate" as the settled conduct. TBK Partners, Ltd. v. W. Union Corp., 675 F.2d 456, 460 (2d Cir.1982).13

1. Identical Factual Predicate Doctrine Permits Release of Membership Rules Claims

The Settlement precludes lawsuits relating to any conduct that was alleged in the complaint or was, or could have been, asserted in this litigation. NuCity argues that the district court strayed from the identical factual predicate rule by approving release of the Membership Rules claims based simply on the court's recognition of the similarities between the claims in this case and those in Membership Rules.14 We disagree.

The plaintiffs in Membership Rules alleged that Visa and MasterCard's exclusionary rules, which prohibited member banks from issuing or providing services to other credit cards (such as Discover or American Express), inflated the cost of credit card transactions, in violation of Section One of the Sherman Act. Id. at 515. As part of their tying claim, plaintiffs in the case before us claimed that the exclusionary rules solidified Visa and MasterCard's power in the credit card market, enabling Visa and MasterCard to force plaintiffs to accept their debit cards. Id. Thus, the "exclusionary rules have been central to this case from its inception." Id.15 In fact, in January 2000, more than one year before it approved the Settlement, the district court had concluded that this action and Government's Membership Rules — the precursor to Membership Rules — alleged common claims. In re Visa Check/MasterMoney Antitrust Litig., 190 F.R.D. 309, 312, 315 (E.D.N.Y.2000). Finding that Government's Membership Rules involved "essentially the same issues" as the case at bar, Judge Gleeson granted the Government's motion to intervene so that plaintiffs' discovery could be used to assist the Government in its case. Id. at 315; see id. at 315 n. 3 (describing the Government's contention that the exclusionary rules were a common issue between both cases).

NuCity stresses the difference between the elements of an antitrust tying case — this case — and a horizontal boycott case — Membership Rules — to argue that the same factual predicate does not underlie both. Specifically, NuCity argues that

[p]laintiffs' own description of their damage theory indicates that the damages they sought to recover stemmed from the effects of the illegal tying arrangement and [the effects] other associated anticompetitive conduct (which may or may not include the exclusionary rules) had in retarding the development of "regional debit networks" from entering the market — not the exclusion of major competing credit card brands like American Express and Discover.

NuCity Br. at 31 (emphasis added).

NuCity misses the mark. When considering the permissibility of a release, the overlap between elements of claims is not dispositive. Class actions may release claims, even if not pled, when such claims arise out of the same factual predicate as settled class claims. TBK Partners, 675 F.2d at 460; see In re Corrugated Container Antitrust Litig., 643 F.2d 195, 221 (5th Cir. Apr.1981) ("[A] court may release not only those claims alleged in the complaint and before the court, but also claims which `could have been alleged by reason of or in connection with any matter or fact set forth or referred to in' the complaint.") (quoting Patterson v. Stovall, 528 F.2d 108, 110 n. 2 (7th Cir.1976)).16

Based on the foregoing, the district court did not abuse its discretion by concluding that the claims in Membership Rules are based on the identical factual predicate as the claims in this case.

2. Identical Factual Predicate Doctrine Permits Release of Non-Parties

Even though the Reyn's claims may be released with respect to Visa and MasterCard, Pasta Bella objects to the release of the member banks, since they were not parties to this action. However, "class action settlements have in the past released claims against non-parties where, as here, the claims against the non-party being released were based on the same underlying factual predicate as the claims asserted against the parties to the action being settled." In re Lloyd's Am. Trust Fund Litig., 2002 WL 31663577, at *11 (S.D.N.Y. Nov. 26, 2002); see, e.g., In re Holocaust Victim Assets Litig., 105 F. Supp. 2d 139, 143, 160-65 (E.D.N.Y.2000) (approving class settlement with broad releases against non-parties, including insurance carriers, other banks, and Swiss governmental entities); see also 4 ALBA CONTE & HERBERT B. NEWBERG, NEWBERG ON CLASS ACTIONS § 12:16, at 318 (4th ed. 2002) ("NEWBERG") ("A settlement may... seek to discharge parties who have not been served with process and are therefore not before the court."). The district court did not, therefore, err by finding that the non-party banks could be released from liability for conduct premised on the identical factual predicate of claims alleged in this action.

The banks' settlement contributions further support the district court's conclusion. The banks "not only contributed to the Settlement[ ], but virtually all of the relief comes from them." Visa Check III, 297 F.Supp.2d at 514. They agreed to lower temporarily their interchange rates, notify merchants of the cessation of the tying arrangement, and reconfigure their debit cards. Id. Moreover, the banks' membership fees may contribute to the compensatory relief paid by Visa and MasterCard. Id. We cannot find that the district court abused its discretion by releasing nonparties, particularly where, as here, those nonparties are members of the defendants and have contributed to the settlement. Indeed, it is hard to imagine that defendants would have settled without also releasing their member banks from liability; to do so would have invited relitigation of the same factual allegations against the banks.

B. Due Process Requires that Released Claims be Adequately Represented17

A determination that all of the settled claims arose from the same factual predicate does not necessarily end the inquiry. Claims arising from a shared set of facts will not be precluded where class plaintiffs have not adequately represented the interests of class members. On appeal, Pasta Bella interprets the adequacy of representation doctrine to require that "settled claims of absent class members [be] adequately represented as a matter of fact before they can be barred." Pasta Bella Br. at 23. Consequently, Pasta Bella presses that the Settlement inadequately represents the Reyn's claims because it does not require payment from the member banks who were defendants in Reyn's. In the same vein, NuCity argues that Membership Rules seeks damages for billions of dollars stemming from the boycott of credit cards, whereas the Settlement is based merely on damages stemming from alleged tying arrangements in the debit card market and the concomitant effect on interchange rates. Respondents counter that these arguments amount to baseless allegations that the plaintiffs "left significant claims on the table."

We agree. Adequate representation is not solely an assessment of effort. Rather, an examination of the interests of the settling plaintiffs and of the Settlement's effect on those who would be bound by it leads us to the conclusion that lead plaintiffs, who are also members of the classes led by Pasta Bella and NuCity, adequately represented the claims asserted in

and

in this case.

As support for its claim that adequate representation requires vigorous pursuit of class claims, Pasta Bella cites Stephenson. Stephenson involved two Vietnam War veterans who sued several chemical manufacturers for Agent Orange-related injuries. Their injuries manifested after a $180 million class action settlement — involving the same manufacturers and similar allegations — was exhausted. Stephenson, 273 F.3d at 251-52. The settlement purported to resolve all future claims, but only provided for recovery for those individuals whose exposure-related death or disability was discovered prior to 1994. Id. at 260. Since the settlement covered class members who had not yet manifested injury, id. at 252, the defendants argued that the settlement barred the Stephenson plaintiffs from recovery, id. at 256. This Circuit held that the claims of the Stephenson plaintiffs had not been adequately represented in the earlier action because, at the time of the Agent Orange settlement, future claims had not been considered separate from claims involving current injury. Id. at 261 ("[A] class which purports to represent both present and future claimants may encounter internal conflicts."). Thus, the plaintiffs could proceed with their action. Id. at 258.

Stephenson is not directly on point, however, because that case involved future claimants, whereas this case does not. Here, injured parties may obtain remuneration from the settlement fund if they accepted Visa or MasterCard within a finite period — October 25, 1992 through June 21, 2003. Visa Check III, 297 F.Supp.2d at 514 n. 12, 519. Conduct occurring after December 31, 2003 is not precluded from being the subject of a future suit. See supra n. 5 (quoting relevant portion of release). Thus, the essential question in determining whether the Settlement complies with the adequate representation doctrine is whether the interests that were served by the Settlement were compatible with those of Pasta Bella and NuCity when plaintiffs negotiated a release of the Reyn's and Membership Rules claims.

National Super Spuds, Inc. v. New York Mercantile Exchange, 660 F.2d 9 (2d Cir.1981) ("Super Spuds"), guides the first step in our inquiry to determine whether class representatives impermissibly sacrificed the interests of current class claims in exchange for settlement. Super Spuds was a class action seeking damages for the loss in value to potato futures contracts as a result of the defendant's wrongful conduct. Id. at 11. The class was composed of plaintiffs who held liquidated long positions in potato futures. Id. However, a subset of the class also held unliquidated contracts. The subset did not receive additional settlement proceeds in exchange for the release of their unliquidated contracts. Id. at 16. We reversed approval of the settlement, holding that a settlement could not be fair where "a class member holding one liquidated and one unliquidated contract receives no more than another class member holding only one liquidated contract." Id. at 19.

Super Spuds is inapposite to the instant case, however, because Super Spuds hinged on the fact that the class representatives did not possess the unliquidated futures. Id. at 17. On this basis, we held, "The named plaintiffs in a class action `cannot represent a class of whom they are not a part.'" Id. (quoting Bailey v. Patterson, 369 U.S. 31, 32-33, 82 S. Ct. 549, 7 L. Ed. 2d 512 (1962) (per curiam)). Here, every member of the Reyn's class and every member of the Membership Rules class is a member of the instant class. See Visa Check III, 297 F.Supp.2d at 514 n. 12. Thus, the lead plaintiffs are necessarily a part of the Reyn's and Membership Rules classes and their interests are, therefore, aligned with the interests of those classes.

In Joel A. v. Giuliani, 218 F.3d 132 (2d Cir.2000), we considered whether a subset of a class can ever lack adequate representation when the lead plaintiffs of that class possess the claims of that subset. Joel A. arose when objectors to a class action settlement filed a separate class action for redress of the particular harms they claimed to have endured. The class in the first action, Marisol A. ex. rel. Forbes v. Giuliani, 929 F. Supp. 662 (S.D.N.Y.1996) ("Marisol A."), was composed of New York City children at risk of neglect or abuse. Id. at 669-72. The class in Joel A., objectors in Marisol A., was composed of homosexual children contending that the Marisol A. settlement discriminated against them. Joel A., 218 F.3d at 137. In Marisol A., plaintiffs alleged that the City and State of New York deprived them of appropriate child welfare services. After two years of discovery, the Marisol A. class negotiated settlement agreements that provided for a variety of administrative improvements designed to improve care for all class members. Id. at 137, 140-41. The settlement released the City and State of New York from related lawsuits for approximately two years. Id. at 137, 144. Dissatisfied with the general relief provided in the Marisol A. settlement, homosexual members of the Marisol A. class commenced Joel A. seeking redress of their particular grievances. Id. at 137-138. They argued that the Marisol A. settlement could not have adequately represented their interests because they were victims of "bias-related violence, harassment and discrimination at the hands of their heterosexual peers" in the class. Id. at 137-38. They sought "concrete relief for bias-related victimization by their peers[ ] and systemic discrimination based on sexual orientation." Id. (internal quotation marks omitted).

The Joel A. panel found that the Marisol A. class adequately represented the Joel A. class. Id. at 144. While the remedy contemplated in the Marisol A. settlements was broader than the relief sought by the Joel A. sub-class, the remedy provided in the Marisol A. settlement was "likely to deal with these complaints." Id. at 142. We held that "our precedents do not dictate that the settlement be invalidated because [the Joel A. class] claims are subsumed within a more generalized claim." Id. That is precisely the case here.

NuCity hopes that In re Auction Houses Antitrust Litigation, 2001 WL 170792 (S.D.N.Y. Feb. 22, 2001) ("Auction Houses"), aff'd 42 Fed.Appx. 511 (2d Cir.2002), will persuade us that Joel A. does not end our inquiry into the adequacy of representation.19 In Auction Houses, auction patrons filed class actions against auction houses that allegedly conspired to fix auction terms. Id. at *1. Shortly before the parties reached settlement, new class actions arose involving foreign auctions affected by the same alleged conspiracy. Id. at *2. Thereafter, the parties to the initial action reached a settlement that included a release of all claims that could be brought in U.S. courts or foreign courts under U.S. law. Id. at * 2-*3, *11. Realizing that the proposed settlement would preclude U.S.-law claims involving foreign auctions, the district court refused to approve the settlement as long as it required the release of those claims. Id. at *18. The court reasoned that a class could not settle its claims by sacrificing other claims of class members that "were not within the description of claims assertable by the class." Id. at *12 (quotation marks omitted). "[T]he key point is that an expanded release requires the allocation of at least some of the settlement consideration to the holders of the claims prejudiced by the expansion unless the class action judgment would bar the released claims by application of principles of former adjudication." Id. at *13.20

Respondents, however, distinguish Auction Houses, and, for that matter, Super Spuds, by explaining that, in those cases, marginalized groups did not receive any benefit in exchange for the releases contemplated, whereas here, every claimant in Membership Rules benefits from the settlement. Visa Check III, 297 F.Supp.2d at 514. They argue, therefore, that the central issue in determining adequacy of representation is the alignment of class members' interests. Since Wal-Mart, the world's largest retailer, and other large and sophisticated lead plaintiffs, such as The Limited, Sears, and Safeway, stood to gain from damages for the Membership Rules claims, respondents contend there is no basis to conclude that plaintiffs did not seek to obtain the best settlement by obtaining the highest possible amount for the exclusionary rules claims.

A recent Eighth Circuit case, In re Gen. Am. Life Ins. Co. Sales Practices Litig., 357 F.3d 800 (8th Cir.2004) ("General American"), supports respondents' position. In General American, plaintiff brought an action in the state court of New Mexico against General American Life Insurance Company even though she had participated in a class action (the "General American Class Action") against the same defendant in the Eastern District of Missouri that obtained a minimum of $55,000,000 in settlement proceeds. Id. at 802. The General American plaintiff brought her action against the insurer based on alleged omissions and non-disclosures concerning particular aspects of its billing procedures, while the General American Class Action had pursued recovery for more general claims concerning the same conduct. Id.

The Eighth Circuit found that the language used in the class action settlement agreement encompassed the General American plaintiff's state court claims as a subset of the claims released. Id. at 803. Since the notice to the class in General American Class Action was clear and fair — providing class members the opportunity to opt out if they wished — the court found that releasing certain claims was not problematic. Id. Thus, the court affirmed the dismissal of General American plaintiff's claim on the ground that the General American Class Action settlement agreement and the class notice clearly articulated a release of future claims. Id. at 803. In light of the valid and "very broad" settlement release in the class action, which included known and unknown causes of action, the court held that "[w]e have no difficulty in concluding that the [class] judgment bars the New Mexico action." Id. The court articulated the give-and-take nature of the settlement process and the court's role in scrutinizing the efforts of lead plaintiffs:

The release of [a particular] category of claims was one of a series of benefits conferred on the defendant by the class as part of the settlement. On the other side, defendant conferred benefits on the plaintiff class, including a monetary settlement, from which the plaintiff in this [related] case has benefitted, and a ... procedure that could produce additional relief. No part of the consideration on either side is keyed to any specific part of the consideration of the other. Each side gives up a number of things. This is the way settlements usually work. It was the judgment of the class representative that [a particular category of claims], known and unknown, was a proper thing to give up to obtain the benefits offered by [the defendant] .... [W]e have no way to criticize the judgment of the class representative. Accordingly, we hold that the representation afforded was adequate, and that the provisions of Fed.R.Civ.P. 23 were fully met.

Id. at 805.

The Eighth Circuit's analysis of the settlement process is especially compelling here, where class representatives possessed the released claims and did not agree to preclude lawsuits arising out of similar conduct in the future. We agree with respondents that due process does not require that all class claims be pursued. Instead, where different claims within a class involve the identical factual predicate, adequate representation of a particular claim is determined by the alignment of interests of class members, not proof of vigorous pursuit of that claim. Thus, the district court did not err in ruling that plaintiffs' release of the Reyn's and Membership Rules claims did not violate due process, where plaintiffs are members of the Reyn's and Membership Rules classes and the release was part of the consideration necessary to obtain the largest antitrust settlement in history. Visa Check III, 297 F.Supp.2d at 508, 524; see Joel A., 218 F.3d at 142 (release may include "claims [that] are subsumed within a more generalized claim").21

Like the plaintiff in General American, who complained that "the class representative gave away all modal-billing claims (in the release) and received nothing in exchange for them," 357 F.3d at 805, Pasta Bella and NuCity seek greater compensation for the claims asserted in their respective lawsuits. Their contention that they were inadequately represented is more appropriately cast as a challenge to the Settlement's fairness than as a due process claim, since their positions are grounded in the notion that the Settlement resulted in a class recovery that was too low.

The standard for the adequacy of a settlement notice in a class action under either the Due Process Clause or the Federal Rules is measured by reasonableness. See Soberal-Perez v. Heckler, 717 F.2d 36, 43 (2d Cir.1983); Fed.R.Civ.P. 23(e). There are no rigid rules to determine whether a settlement notice to the class satisfies constitutional or Rule 23(e) requirements; the settlement notice must "fairly apprise the prospective members of the class of the terms of the proposed settlement and of the options that are open to them in connection with the proceedings." Weinberger v. Kendrick, 698 F.2d 61, 70 (2d Cir.1982) (internal quotation marks and brackets omitted). Notice is "adequate if it may be understood by the average class member." 4 NEWBERG § 11:53, at 167.

Since the class notice did not name the banks as parties and the settlement notice did not specifically inform class members that the Reyn's claims would be included in the Settlement, Pasta Bella argues that it was denied due process because class members were not given the opportunity to opt out after the settlement notice was issued. Although Pasta Bella forfeited this contention by failing to preserve it at the district court, see Krumme v. WestPoint Stevens Inc., 238 F.3d 133, 142 (2d Cir.2000), we note that even if it had been preserved, the argument cannot prevail. The Ninth Circuit's decision in Class Plaintiffs v. City of Seattle, 955 F.2d 1268 (9th Cir.1992), is directly on point. That case involved class action claims arising from the default of $2.25 billion in bonds issued to finance power plants in the State of Washington. Id. at 1273. Pursuant to a settlement between the parties, the State obtained a release in that action even though it was not a party and was not mentioned in the notice of pendency. Id. at 1288, 1290-91. On appeal, the Ninth Circuit affirmed the district court's approval of settlement by determining that a federal court may release a claim "based on the identical factual predicate as that underlying the claims in the settled class action even though the claim was not presented and might not have been presentable in the class action." Id. at 1287 (quoting TBK, 675 F.2d at 460 (emphasis added in Class Plaintiffs)). Since the parties had been given notice of the action, the opportunity to opt out, notice of the proposed settlement, and the opportunity to object, the court held that it was not required to grant those who objected to the proposed settlement a second opportunity to opt out. Id. at 1289.

Here, although the member banks were not named as defendants, the complaint described "[a]pproximately 4,400 banks that have issued Visa and/or MasterCard credit cards and also issued Visa Check and/or MasterMoney debit cards" as co-conspirators.2d Am. Compl. ¶ 32. The notice of pendency, which incorporated the allegations in the complaint, alleged a conspiracy between Visa, MasterCard, and "their member banks." Notice of Pendency ¶ 3. Attempting to distinguish the Reyn's claims from those in the instant action, Pasta Bella's amended complaint in Reyn's states, "Plaintiffs do not contest in this action, as averred in other litigation, any tying arrangement, of the VISA and MASTERCARD debit charges with other charges." Reyn's 1st Am. Compl. ¶ 11. Yet, Pasta Bella's attempt to distinguish the claims in Reyn's from the claims in the instant action does not alter the fact that the claims in both cases arise out of the identical factual predicate. Indeed, Pasta Bella's artful language belies its recognition of the potential for overlap between the two lawsuits. Thus, Pasta Bella cannot reasonably argue that it was not on notice of the possibility that, pursuant to settlement in this action, the banks would be released from future claims. Pasta Bella was required to opt out at the class notice stage if it did not wish to be bound by the Settlement.

NuCity argues that the settlement notice denied the Membership Rules class due process because it failed to disclose:

1. the judgment against Visa and MasterCard in Government's Membership Rules;

2. the pending claims in Membership Rules;

3. the prospect that the Settlement's contemplated release would extinguish all claims in Membership Rules;

4. the value attributed by plaintiffs' counsel to the Membership Rules claims; and

5. the value received by the class in exchange for release of the Membership Rules claims.

NuCity points to the notice of settlement in Auction Houses and argues that the settlement notice in this case comes up short. In Auction Houses, the notice explicitly informed class members that the settlement would permanently bar them from pursuing claims based on auctions held outside the U.S., and that class members with potential claims arising out of foreign auctions "should consider whether or not to forego the benefits of the proposed settlement." Auction Houses, 2001 WL 170792, at *3. In this case, NuCity asserts that the need to include cautionary language in the settlement notice was especially great, since the notice of pendency also lacked an explanation of the action's impact on Membership Rules. NuCity further asserts that since the Membership Rules class was not yet certified, see supra note 8, claimants could not have been expected to intuit that their Membership Rules claims would be released by the Settlement. Thus, NuCity contends class members did not know they were releasing live claims in an already-filed action seeking billions in damages when they neglected to opt out of the class or object to the Settlement.

Underscoring the need for additional disclosure, NuCity relies on In re Nissan Motor Corp. Antitrust Litigation, 552 F.2d 1088 (5th Cir.1977) ("Nissan Motor"), where the Fifth Circuit found that the class notice serves as the class members'"primary, if not exclusive, source of information for deciding how to exercise their rights under rule 23." Id. at 1104. Nissan Motor required that class members be given "information reasonably necessary to make a decision [whether] to remain a class member and be bound by the final judgment or opt out of the action," though the notice need not include "every material fact" or be "overly detailed." Id. at 1104-05. In light of this standard, the Fifth Circuit held that, where a partial settlement was proposed between plaintiffs and a group of defendants before notice of a class action had been sent to class members, the notice must apprise class members of the proposed partial settlement, because the relief obtained in the proposed settlement would be an "essential factor" in an absent class member's decision whether to opt out of the class. Id. at 1105.

In this case, the settlement notice quoted verbatim the Settlement's release. Respondents argue that (1) the law does not require parties to describe pending actions covered by a release in a proposed settlement notice, and, in any event, (2) quoting a release word for word in the settlement notice is sufficient to inform class members of the scope and effect of the release. In support of its approval of the settlement notice, the district court relied on Weinberger, 698 F.2d at 70, for the proposition that the law merely requires a class notice to describe effectively the scope of a release. Visa Check III, 297 F.Supp.2d at 516. Since the release was quoted in its entirety, the court concluded that "the expansive reach of the release[ ] could not have been clearer. This is all that was required." Id. We agree with the district court and do "not believe that due process requires further explanation of the effects of the release provision in addition to the clear meaning of the words of the release." O'Brien v. Nat'l Prop. Analysts Partners, 739 F. Supp. 896, 902 (S.D.N.Y.1990). Accord Bell Atl. Corp. v. Bolger, 2 F.3d 1304, 1317-18 (3d Cir.1993); Maher v. Zapata Corp., 714 F.2d 436, 452-53 (5th Cir.1983).22

C. Armenta's Lacks Standing to Challenge its Notice

Armenta's appeals the district court's approval of the Settlement on the ground that the English-only Settlement Documents violated due process and Federal Rule of Civil Procedure 23 because an identifiable class — Spanish-speaking class members who could not read and understand the English-only Settlement Documents — was not afforded notice.23

Armenta's does not provide sufficient evidence that it represents an identifiable subclass of claimants who could not comprehend the Settlement Documents. While the representatives of the purported subclass describe a significant preference for Spanish, they do not claim that they cannot read English or that they cannot conduct business in English. See Armenta Aff. ¶¶ 4-5; Martinez Aff. ¶¶ 4-5. Further, the statistics provided by Armenta's to the district court — statistics concerning the number of Spanish-speaking families and businesses in the United States — even if taken as true, do not establish that Spanish-speaking class members could not understand the Settlement Documents. Thus, we do not find error in the district court's conclusion that "a lack of comfort [in the English language] does not mean there was a significant defect in the notice." Visa Check III, 297 F.Supp.2d at 517.

A. The Settlement is Entitled to a Presumption of Fairness

A court may approve a class action settlement if it is "fair, adequate, and reasonable, and not a product of collusion." Joel A., 218 F.3d at 138. A court determines a settlement's fairness by looking at both the settlement's terms and the negotiating process leading to settlement. D'Amato v. Deutsche Bank, 236 F.3d 78, 85 (2d Cir.2001). A "presumption of fairness, adequacy, and reasonableness may attach to a class settlement reached in arm's-length negotiations between experienced, capable counsel after meaningful discovery." Manual for Complex Litigation, Third, § 30.42 (1995). We are mindful of the "strong judicial policy in favor of settlements, particularly in the class action context." In re PaineWebber Ltd. P'ships Litig., 147 F.3d 132, 138 (2d Cir.1998). "The compromise of complex litigation is encouraged by the courts and favored by public policy." 4 NEWBERG § 11:41, at 87.

In the instant case, the district court rightly praised the efforts of plaintiffs' lead counsel. Visa Check III, 297 F.Supp.2d at 524. "Constantine & Partners is a premiere plaintiffs' litigation firm, specializing in antitrust litigation particularly and complex commercial litigation generally." Id. Counsel for the class took and defended approximately 400 depositions, including 21 expert depositions, and reviewed more than 5 million pages of documents during approximately seven years of litigation, id. at 507-08, 511 n. 8. Clearly, counsel conducted meaningful discovery. Of course, "the quality of representation is best measured by results." Goldberger v. Integrated Res., Inc., 209 F.3d 43, 55 (2d Cir.2000). Here, plaintiffs' counsel "produced the largest antitrust settlement ever." Visa Check III, 297 F.Supp.2d at 524. The Settlement includes $3,383,400,000 in compensatory relief, plus additional injunctive relief valued at $25 to $87 billion or more. Id. at 509, 512. According to settlement mediator Eric Green, "the court system and the mediation process worked exactly as they are supposed to work at their best; a consensual resolution was achieved based on full information and honest negotiation between well-represented and evenly balanced parties." Green Decl. ¶ 12. Concluding that "there could not be any better evidence of procedural integrity" than the aggressive litigation spanning nearly a decade and the impassioned settlement negotiations that produced an agreement on the brink of trial, the district court affirmed Green's sentiments by finding that "[c]ollusion or coercion could not conceivably have tainted the process." Visa Check III, 297 F.Supp.2d at 510.

We agree with this assessment and conclude that the district court did not abuse its discretion in determining that a presumption of fairness arose.

When reviewing a district court's approval of a settlement, a "trial judge's views are accorded `great weight ... because he is exposed to the litigants, and their strategies, positions and proofs.... Simply stated, he is on the firing line and can evaluate the action accordingly.'" Joel A., 218 F.3d at 139 (quoting City of Detroit v. Grinnell Corp., 495 F.2d 448, 454 (2d Cir.1974)).

In this Circuit, courts examine the fairness, adequacy, and reasonableness of a class settlement according to the "Grinnell factors." Id. at 138. The factors are:

(1) the complexity, expense and likely duration of the litigation;

(2) the reaction of the class to the settlement;

(3) the stage of the proceedings and the amount of discovery completed;

(4) the risks of establishing liability;

(5) the risks of establishing damages;

(6) the risks of maintaining the class action through the trial;

(7) the ability of the defendants to withstand a greater judgment;

(8) the range of reasonableness of the settlement fund in light of the best possible recovery;

(9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation.

Grinnell, 495 F.2d at 463 (citations omitted).

1. Complexity, Expense and Likely Duration of Litigation

Federal antitrust cases are complicated, lengthy, and bitterly fought. See Weseley v. Spear, Leeds & Kellogg, 711 F. Supp. 713, 719 (E.D.N.Y.1989). "Few areas of federal antitrust law are more confusing than the law that governs tying arrangements." Herbert Hovenkamp, Tying Arrangements and Class Actions, 36 VAND. L. REV. 213, 213 (1983). The district court concluded that this case would have taken three months to try and several years for appellate review. Visa Check III, 297 F.Supp.2d at 510. None of the appellants argue that this case was uncomplicated or would have resulted in a short trial.

On the whole, the class appears to be overwhelmingly in favor of the Settlement. Only eighteen class members out of five million objected to the Settlement. Id. at 511. "If only a small number of objections are received, that fact can be viewed as indicative of the adequacy of the settlement." 4 NEWBERG § 11.41, at 108; see also D'Amato, 236 F.3d 78, 86-87 (holding that the district court properly concluded that 18 objections from a class of 27,883 weighed in favor of settlement). This Court is certainly aware that "[l]ack of objection by the great majority of claimants means little when the point of objection is limited to a few whose interests are being sacrificed for the benefit of the majority." Super Spuds, 660 F.2d at 16. But here, the absence of substantial opposition is indicative of class approval, since every member of the class in Reyn's and Membership Rules is also a member of the instant class.

3. Stage of Proceedings and Amount of Discovery Completed

"If all discovery has been completed and the case is ready to go to trial, the court obviously has sufficient evidence to determine the adequacy of settlement." 4 NEWBERG § 11:45, at 129. Here, plaintiffs entered into settlement only after a thorough understanding of their case. As noted earlier, extensive discovery proceedings spanning over seven years and millions of pages of documents preceded the Settlement. Visa Check III, 297 F.Supp.2d at 511 n. 8. The parties also underwent summary judgment proceedings and mediation before they struck a deal at the courthouse steps. Id. at 508, 511. Certainly, a substantial amount of work had been completed, leaving relatively few unknowns prior to trial.

4. Risks of Class Prevailing (Establishing Liability, Establishing Damages, Maintaining the Class through Trial)

Characterizing the defendants'"Honor All Cards" policy as having at least some pro-competitive features, the district court concluded that establishing liability "was no sure thing" for the plaintiffs. Id. at 511. "Indeed, the history of antitrust litigation is replete with cases in which antitrust plaintiffs succeeded at trial on liability, but recovered no damages, or only negligible damages, at trial, or on appeal." In re NASDAQ Market-Makers Antitrust Litig., 187 F.R.D. 465, 476 (S.D.N.Y.1998); see, e.g., United States Football League v. Nat'l Football League, 644 F. Supp. 1040, 1042 (S.D.N.Y.1986) ("[T]he jury chose to award plaintiffs only nominal damages, concluding that the USFL had suffered only $1.00 in damages as a result of the NFL's unlawful conduct."), aff'd, 842 F.2d 1335, 1377 (2d Cir.1988). That said, we must acknowledge that the Government's successful prosecution of Government's Membership Rules improved plaintiffs' likelihood of success in this case. Yet, on balance, it is certainly fair to conclude that even if the plaintiffs had prevailed in establishing their tying claim, they would have faced significant challenges in proving damages. Visa Check III, 297 F.Supp.2d at 511.24

5. Ability of Defendants to Withstand a Greater Judgment

The compensatory relief provided in the Settlement constitutes "the largest settlement ever approved by a federal court." Id. (quoting plaintiffs' expert Professor John C. Coffee, Jr. of Columbia University Law School). Additionally, the injunctive relief — valued at approximately $25 to $87 billion or more, id. at 511-12 — adds great value to the Settlement. Yet, Pasta Bella insists that a settlement requiring payment from the banks could have been substantially higher. We cannot agree with this argument. It is hardly surprising that the district court did not make explicit findings with respect to the ability of the member banks to withstand a significantly greater damages award, since the banks are not defendants in this case. Even if such a finding were helpful, our concern about financial resources of member banks would be assuaged by the district court's finding that virtually all of the relief in the Settlement already comes from the banks. Id. at 514.

6. Range of Reasonableness of Settlement Fund in Light of Best Possible Recovery and Attendant Risks of Litigation

[T]here is a range of reasonableness with respect to a settlement — a range which recognizes the uncertainties of law and fact in any particular case and the concomitant risks and costs necessarily inherent in taking any litigation to completion — and the judge will not be reversed if the appellate court concludes that the settlement lies within that range.

Newman v. Stein, 464 F.2d 689, 693 (2d Cir.1972). Here, the statistics concerning the Settlement are staggering: the compensatory relief by itself constitutes the largest settlement ever approved by a federal court; the injunctive relief will save the class $25 to $87 billion or more. Since the district court found that experienced and able counsel fought this litigation "aggressively" and "negotiated feverishly," Visa Check III, 297 F.Supp.2d at 510, and that "virtually all of the relief comes from" the banks, id. at 514, there is little reason to believe that additional money would have been put into the settlement pot had the banks been named as parties. The banks' participation in the settlement speaks volumes of their stake in the litigation. Moreover, given that the Reyn's and Membership Rules plaintiffs are substantially similar to the instant plaintiffs, it cannot be said that the settlement fund was unreasonably small or particularly unfair to a subset of plaintiffs.

Indeed, the favorable reaction of the overwhelming majority of class members to the Settlement is perhaps the most significant factor in our Grinnell inquiry. Having considered this factor along with the others, we conclude that the district court did not err in finding the Settlement substantively fair.25

NuCity appeals the district court's denial of its motion for limited discovery to examine whether the Settlement included consideration for claims asserted in Membership Rules, the value attributed to claims foregone, and the justification for such valuation. Generally, such a discovery request depends on "whether or not the District Court had before it sufficient facts intelligently to approve the settlement offer. If it did, then there is no reason to hold an additional hearing on the settlement or to give appellants authority to renew discovery." Grinnell, 495 F.2d at 462-63.

As noted by the Grinnell analysis described above, the district court possessed an abundance of facts to make a fairness determination. Plaintiffs were not required to bargain separately for relief in exchange for the Membership Rules claims. "No part of the consideration on either side is keyed to any specific part of the consideration of the other. Each side gives up a number of things. This is the way settlements usually work." General American, 357 F.3d at 805. Thus, the district court did not abuse its discretion in denying NuCity's discovery motion.

D. The Parties are Not Judicially Estopped from Including the Reyn's Claims in the Settlement

Northern District of California Local Rule 3-13 provides that:

Whenever a party knows or learns that an action filed or removed to this district involves all or a material part of the same subject matter and all or substantially all of the same parties as another action which is pending in any other federal ... court, the party must file with the Court in the action pending before this Court ... a Notice of Pendency of Other Action....

N.D. Cal. Civil L.R. 3-13(a). Instead of filing the required notice in the Northern District of California, Visa and MasterCard settled the instant action and then sought to dismiss Reyn's on the ground that the claims in that case were barred by the Settlement. Pasta Bella argues that Visa and MasterCard knowingly violated Northern District of California Local Rule 3-13 to escape liability for the conduct alleged in Reyn's. According to Pasta Bella, if the actions are related, then compliance with Rule 3-13 would have caused Reyn's to have been transferred to the Eastern District of New York and consolidated with the instant action. See N.D. Cal. Civil L.R. 3-13(b)(3)(B); cf. 28 U.S.C. § 1407 (providing a mechanism for the transfer of "civil actions involving one or more common questions of fact" pending in different districts "for coordinated or consolidated pretrial proceedings"). Pasta Bella contends that if Reyn's had been consolidated with this action, the class recovery would have been higher. Thus, Pasta Bella urges us to estop Visa and MasterCard from benefitting from their failure to comply with the Northern District of California's local rules.

We have previously held that "judicial estoppel applies only when a tribunal in a prior separate proceeding has relied on a party's inconsistent factual representations and rendered a favorable decision." Adler v. Pataki, 185 F.3d 35, 41 n. 3 (2d Cir.1999) (emphasis omitted); see also Rodal v. Anesthesia Group of Onondaga, P.C., 369 F.3d 113, 118 (2d Cir.2004). We need not determine whether defendants' alleged failure to file a notice of pendency constituted "inconsistent factual representations," for there is no evidence that the Northern District of California relied on that failure and "rendered a favorable decision." Estoppel is therefore inappropriate here.

At the district court, lead counsel for the plaintiffs sought a fee of $609,012,000 — approximately 18% of the present value of the Settlement's compensatory relief, 2.14% of the present value of the Settlement (inclusive of injunctive relief), and 9.68 times the lodestar figure of $62,940,045.84.26 Visa Check III, 297 F.Supp.2d at 522. Seventeen merchants objected to counsel's fee petition. Id. at 509 n. 6, 522 n. 27. The court found the fee petition excessive despite the excellence of plaintiffs' representation, id. at 522, 524. Assessing the fee petition with a careful eye for the interests of all class members, the court awarded fees in the amount of $220,290,160.44 plus an additional $18,716,511.44 in costs and expenses. Id. at 507, 524-26. Leonardo's argues that the district court's fee award was too high, while Constantine & Partners ("C&P"), plaintiffs' lead counsel, contends that the fee award was too low.

A. "Percentage of the Fund" is an Appropriate Method

The district court utilized the "percentage of the fund" method to calculate attorneys' fees. Visa Check III, 297 F.Supp.2d at 524. Courts may award attorneys' fees in common fund cases under either the "lodestar" method or the "percentage of the fund" method. See Goldberger, 209 F.3d at 50. The lodestar method multiplies hours reasonably expended against a reasonable hourly rate. Id. at 47. Courts in their discretion may increase the lodestar by applying a multiplier based on factors such as the riskiness of the litigation and the quality of the attorneys. Id. The trend in this Circuit is toward the percentage method, Visa Check III, 297 F.Supp.2d at 520, which "directly aligns the interests of the class and its counsel and provides a powerful incentive for the efficient prosecution and early resolution of litigation," In re Lloyd's Am. Trust Fund Litig., 2002 WL 31663577, at *25. In contrast, the "lodestar create[s] an unanticipated disincentive to early settlements, tempt[s] lawyers to run up their hours, and compel[s] district courts to engage in a gimlet-eyed review of line-item fee audits." Baffa v. Donaldson Lufkin & Jenrette Secs. Corp., 2002 WL 1315603, at *1 (S.D.N.Y. June 17, 2002) (internal quotation marks omitted).

B. The Goldberger Factors Confirm the Reasonableness of the Fee Award

Irrespective of which method is used, the "Goldberger factors" ultimately determine the reasonableness of a common fund fee. They include:

(1) the time and labor expended by counsel;

(2) the magnitude and complexities of the litigation;

(3) the risk of the litigation ...;

(4) the quality of representation;

(5) the requested fee in relation to the settlement; and

(6) public policy considerations.

Goldberger, 209 F.3d at 50 (citation omitted); see, e.g., Baffa, 2002 WL 1315603, at *1 ("district courts should continue to be guided by the [Goldberger factors]"). Recognizing that economies of scale could cause windfalls in common fund cases, courts have traditionally awarded fees for common fund cases in the lower range of what is reasonable. Goldberger, 209 F.3d at 52; see also In re Indep. Energy Holdings PLC, 2003 WL 22244676, at *6 (S.D.N.Y. Sept. 29, 2003) ("[T]he percentage used in calculating any given fee award must follow a sliding-scale and must bear an inverse relationship to the amount of the settlement. Otherwise, those law firms who obtain huge settlements, whether by happenstance or skill, will be over-compensated to the detriment of the class members they represent.").

The district court concluded that the Goldberger factors compel an "extraordinary" fee under these circumstances: lead counsel devoted tremendous time and labor to this case for seven years; antitrust cases, by their nature, are highly complex; this case was especially large and complicated, involving almost every U.S. bank and more than five million U.S. merchants; the risk of the litigation was very high; lead counsel devoted 52% of its legal staff to work on a case that spanned seven years without any guarantee of recovery; plaintiffs' counsel achieved extraordinary results; plaintiffs' counsel did not have the benefit of "piggybacking" off of a previous case — instead, the Government piggybacked off of plaintiffs' counsel's work by using it in Government's Membership Rules; even a very large fee award would be a small percentage of the settlement fund; and the Settlement produced "significant and lasting benefits for America's merchants and consumers." Visa Check III, 297 F.Supp.2d at 523-24. Asserting its jealous regard for absent class members, the court sought to compensate plaintiffs' counsel handsomely and at the same time limit the percentage of the award so that plaintiffs' counsel would not receive a windfall detrimental to the class:

Were the Fund not so large, dwarfing the funds in all of the cases Lead Counsel have cited, a larger percentage might be appropriate. But given the circumstances as they are, my award is appropriate. Only in comparison to the amount sought can it be considered anything but generous.

Id. at 525 (footnote omitted). C&P argues that the district court's fee award was insufficient because (a) the fee award provides a meager percentage of the settlement fund and (b) the fee award reduces the incentive to class lawyers to seek maximum relief.

1. The Fee Award is Based on a Reasonable Percentage of the Fund

C&P cites In re Linerboard Antitrust Litigation, 2004 WL 1221350 (E.D.Pa. June 2, 2004) ("Linerboard"), in support of its argument against a declining percentage approach to large fee awards. In that case, the court found that "the sliding scale approach is economically unsound." Id. at * 17. The Linerboard court explained that it is especially important to provide appropriate incentives to attorneys pursuing antitrust actions because public policy relies on private sector enforcement of the antitrust laws. Id. C&P contends that not only was the court's percentage award low, but also the court did not adequately compensate counsel for the substantial injunctive relief it obtained for the class. Thus, C&P argues that the district court's fee award severely inhibits the strong public policy articulated in Linerboard that favors providing incentives to attorneys to pursue maximum relief for their clients.

We need not dispute whether the sliding scale approach is economically rational in the context of ensuring competent and committed counsel. Public policy concerns oftentimes redefine the focus of the court. In this case, the district court's decision in favor of protecting the instant class from an excessive fee award militates against awarding attorneys' fees based purely on economic incentives. Satisfied that its ruling would not deter plaintiffs' attorneys from pursuing similar claims, the district court remarked, "If [this fee award] amounts to punishment, I am confident there will be many attempts to self-inflict similar punishment in future cases." Visa Check III, 297 F.Supp.2d. at 525. We agree.

While courts in megafund cases often award higher percentages of class funds as fees than the district court awarded in this instance, see id. at 525 n. 33, the sheer size of the instant fund makes a smaller percentage appropriate. As a "cross-check" to a percentage award, courts in this Circuit use the lodestar method. Goldberger, 209 F.3d at 50. Here, the lodestar yields a multiplier of 3.5, which has been deemed reasonable under analogous circumstances.27 See In re Cendant Corp. PRIDES Litig., 243 F.3d 722, 742 (3d Cir.2001) (finding lodestar multiplier of 1.35 to 2.99 common in megafunds over $100 million); NASDAQ Market-Makers, 187 F.R.D. at 489 ("multipliers of between 3 and 4.5 have become common") (internal quotation marks omitted). Thus, the district court did not abuse its discretion in awarding plaintiffs' counsel a generous fee based on a somewhat low percentage of the fund.

2. The District Court Was Not Required to Adhere to the Fee Agreement Between Plaintiffs' Counsel and Lead Plaintiffs

Plaintiffs' counsel argues that the district court was aware that class counsel had negotiated a fee arrangement with five of the nation's largest merchants that exceeded the 18% fee class counsel requested from the court and far exceeded the fee the court awarded.28 Thus, class counsel argues that the district court ignored the Goldberger proviso that "market rates, where available, are the ideal proxy for [class counsel's] compensation." Goldberger, 209 F.3d at 52. As further proof of class satisfaction with counsel's fee request, counsel argues that none of the large and sophisticated merchants in this class action objected to its fee petition. But see Goldberger, 209 F.3d at 53 ("[Class members] have no real incentive to mount a challenge that would result in only a minuscule pro rata gain from a fee reduction.") (internal quotation marks omitted). For the reasons discussed in the prior subsection, we cannot say that the district court abused its discretion merely because it chose not to heed the terms of an agreement purportedly reached between lead plaintiffs and their counsel when settlement payments to approximately five million absent class members are at stake.29

A final word is in order here. Measuring the difficulties of a large antitrust action and the degree of success by counsel in forging a settlement is not an easy task. In our view, the district court carried out its responsibility with admirable care and thoroughness, and with an eye to a just result. There is no doubt this case dominated the lives of all involved for many years. In approving the district court's fee award, we recognize the sacrifice and commitment plaintiffs' counsel made to its clients while preserving as much as possible for those who were harmed.

The settlement release is enforceable against the claims in Reyn's and NuCity because the claims in those cases arose out of the identical factual predicate as the claims in this case and were adequately represented here. The settlement notice was adequate because it fairly apprised members of the terms of settlement, including the scope of the release. Under a Grinnell analysis, the Settlement is fair. As a result, NuCity is not entitled to discovery. Judicial estoppel is not appropriate here, where the defendants did not benefit from any concealment. The district court's fee award is reasonable, as confirmed by the Goldberger factors.

We AFFIRM the district court in all respects.