Motion for Final Approval - In re: Refrigerant Compressors ... · PDF fileFor the reasons set forth in the attached Brief in Support of this Motion, ... Appointment of Class Counsel

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

In re: Refrigerant Compressors Antitrust Litigation This Document Relates to ALL DIRECT PURCHASER ACTIONS

Case No. 2:09-md-02042

Honorable Sean F. Cox United States District Judge

DIRECT PURCHASER CLASS PLAINTIFFS’ MOTION FOR FINAL APPROVAL OF THE CLASS ACTION SETTLEMENTS BETWEEN

DIRECT PURCHASER CLASS PLAINTIFFS, THE TECUMSEH DEFENDANTS, EMBRACO DEFENDANTS, DANFOSS FLENSBURG,

AND PANASONIC DEFENDANTS; APPROVAL OF THE PLAN OF ALLOCATION OF THE NET SETTLEMENT FUNDS; AND INCENTIVE

PAYMENTS TO THE THREE CLASS REPRESENTATIVES

For the reasons set forth in the attached Brief in Support of this Motion, Direct

Purchaser Class Plaintiffs (“DP Plaintiffs”) hereby move the Court, pursuant to

Federal Rule of Civil Procedure 23(e), for an Order:

1 . Granting final approval of the proposed settlement of this litigation

between DP Plaintiffs and: (1) Tecumseh Products Company, Tecumseh

Compressor Company, Tecumseh do Brasil, Ltda and their subsidiaries

and affiliates (“Tecumseh Defendants”); (2) Embraco North America,

Inc., Whirlpool S.A. and their subsidiaries and affiliates (“Embraco

Defendants”); (3) Danfoss Flensburg GmbH, formerly Danfoss

Compressors GmbH (“Danfoss Flensburg”); and, (4) Panasonic

2:09-md-02042-SFC Doc # 488 Filed 05/14/14 Pg 1 of 46 Pg ID 12887

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Corporation, Panasonic Corporation of North America and their

subsidiaries and affiliates (“Panasonic Defendants”), pursuant to the

terms of their respective settlement agreements (“Settlements”). The

aforementioned Defendants are referred to collectively herein and in the

accompanying brief as the “Settling Defendants”;

2 . Approving the proposed Plan of Allocation; and,

3 . Approving incentive payments to the three class representatives in the

amount of $7,500 each.

In support of this motion, DP Plaintiffs rely upon the accompanying Brief and

declaration.

DP Plaintiffs have made multiple attempts to contact a representative of

Appliance Components Companies SpA or ACC USA, LLC to ascertain whether the

companies consent to the relief sought in this Motion. Despite reasonable efforts, DP

Plaintiffs have been unable to conduct a conference with a representative of Appliance

Components Companies SpA or ACC USA, LLC regarding this Motion.

The Settling Defendants concur in the relief requested in this Motion and to

entry of the proposed order submitted herewith.


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Respectfully Submitted,

FINK + ASSOCIATES LAW

Dated: May 13, 2014 By: /s/ David H. Fink David H. Fink (P28235) Darryl Bressack (P67820) 100 West Long Lake Rd.; Suite 100 Bloomfield Hills, Michigan 48304 Tel: 248.971.2500 Fax: 248.972.3600 [email protected] [email protected]

THE MILLER LAW FIRM, P.C. E. Powell Miller (P39487) Casey A. Fry (P72332)

950 W. University Drive, Suite 300 Rochester, MI 48307 (248) 841-2200 www.millerlawpc.com [email protected]

Class Counsel for the Settlement Class



SOUTHERN DIVISION

In re: Refrigerant Compressors Antitrust Litigation This Document Relates to ALL DIRECT PURCHASER ACTIONS

Case No. 2:09-md-02042

Honorable Sean F. Cox United States District Judge

BRIEF IN SUPPORT OF DIRECT PURCHASER CLASS PLAINTIFFS’ MOTION FOR FINAL APPROVAL OF THE CLASS ACTION

SETTLEMENTS BETWEEN DIRECT PURCHASER CLASS PLAINTIFFS, THE TECUMSEH DEFENDANTS, EMBRACO DEFENDANTS, DANFOSS FLENSBURG, AND PANASONIC DEFENDANTS; APPROVAL OF THE PLAN OF ALLOCATION OF THE NET SETTLEMENT FUNDS; AND

INCENTIVE PAYMENTS TO THE THREE CLASS REPRESENTATIVES


TABLE OF CONTENTS

TABLE OF CONTENTS ........................................................................................... i

STATEMENT OF THE ISSUES PRESENTED ..................................................... iii

CONTROLLING OR MOST APPROPRIATE AUTHORITIES ........................... iv

INTRODUCTION ..................................................................................................... 1

STATEMENT OF FACTS ........................................................................................ 2

History of the Investigation ...................................................................... 2 A.

Procedural History .................................................................................... 4 B.

The Settlement Agreements .................................................................... 10 C.

1. Settlement Between Plaintiffs and the Tecumseh Defendants ............... 11

2. Settlement Between Plaintiffs and the Embraco Defendants ................. 13

3. Settlement Between Plaintiffs and the Panasonic Defendants ............... 15

4. Settlement Between Plaintiffs and Danfoss Flensburg .......................... 16

Approval of Settlement Class and Appointment of Class Counsel ........ 17 D.

Dissemination of Notice to Class Members and Exclusions .................. 18 E.

Plan of Allocation ................................................................................... 20 F.

ARGUMENT ........................................................................................................... 20

Standard of Review for Final Approval of Class Action Settlements .... 20 A.

The Settlement Agreements Warrant Final Approval ............................ 23 B.

1. The Settlement Agreements Were Negotiated at Arm’s Length ............ 23

2. The Risks, Expenses and Delay of Continued Litigation Favor Approval of the Settlements ................................................................................... 25

3. Plaintiffs Have Obtained Sufficient Information to Make Informed Settlement Decisions. ............................................................................. 27


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4. The Risks of Continued Litigation Militate in Favor of Settlement ....... 29

5. Experienced Class Counsel Strongly Endorse the Settlements .............. 30

6. The Reaction of Class Members Weighs in Favor of Settlement .......... 31

7. Approval of the Settlements is in the Public Interest ............................. 32

The Plan of Allocation for the Settlement Funds is Fair and Reasonable C.and Should be Approved by the Court ................................................... 32

The Court Should Award Incentive Payments to the Three Named Class D.Representatives ...................................................................................... 33

CONCLUSION ........................................................................................................ 34


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STATEMENT OF THE ISSUES PRESENTED

1. Should the Court grant Direct Purchaser Plaintiffs’ Motion for Final

Approval of the Class Action Settlements with the Tecumseh, Embraco, and

Panasonic Defendants and Danfoss Flensburg?

Direct Purchaser Plaintiffs Answer: Yes.

Settling Defendants Answer: Yes.

2. Should the Court approve Direct Purchaser Plaintiffs’ Plan of Allocation

of the Net Settlement Funds?



3. Should the Court approve incentive payments to the three class

representatives?




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CONTROLLING OR MOST APPROPRIATE AUTHORITIES

Fed. R. Civ. P. 23(e)

ClassicStar Mare Lease Litig., 727 F3d 473 (6th Cir. 2013)

Griffin v. Flagstar Bancorp, Inc., 2013 WL 6511860 (E.D. Mich. Dec. 12, 2013)

Hadix v. Johnson, 322 F.3d 895 (6th Cir. 2003)

In re Auto. Refinishing Paint Antitrust Litig., No. MDL 1426, 2004 WL 1068807 (E.D. Pa. May 11, 2004)

In re Cardizem CD Antitrust Litig., 218 F.R.D. 508 (E.D. Mich. 2003)

In re Packaged Ice Antitrust Litig., No. 08-MD-01952, 2011 WL 717519 (E.D. Mich. Feb. 22, 2011)

In re Packaged Ice Antitrust Litig., 08-MDL-01952, 2011 WL 6209188 (E.D. Mich. Dec. 13, 2011)

In re Packaged Ice Antitrust Litig., No. 08-MD-01952, 2012 WL 5493613 (E.D. Mich. Nov. 13, 2012)

Int'l Union v. Ford Motor Co., 05-74730, 2006 WL 1984363 at *21 (E.D. Mich. July 13, 2006) aff'd sub nom. Int'l Union, United Auto., Aerospace, & Agr. Implement Workers of Am. v. Gen. Motors Corp., 497 F.3d 615 (6th Cir. 2007)

IUE–CWA v. Gen. Motors Corp., 238 F.R.D. 583 (E.D. Mich. 2006)

Poplar Creek Dev. Co. v. Chesapeake Appalachia, LLC, 636 F.3d 235 (6th Cir. 2011) Sheick v. Automotive Component Carrier LLC, No. 09-14429, 2010 WL 4136958 (E.D. Mich. Oct. 18, 2010)

Williams v. Vukovich, 720 F.2d 909 (6th Cir.1983)


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INDEX OF AUTHORITIES

Cases

Axelrod v. Saks & Co., Nos. 76-4011, 1981 WL 2031 (E.D. Pa. Feb. 23, 1981) .... 27

ClassicStar Mare Lease Litig., 727 F3d 473 (6th Cir. 2013) ................................... 28

Date v. Sony Electronics, Inc., 2013 WL 3945981 (E.D. Mich. Jul. 31, 2013) ...... 30

Fischer Bros., Inc. v. Mueller Brass Co., 630 F. Supp. 493 (E.D. Pa. 1985) .......... 26

Fussell v. Wilkinson, 2005 WL 3132321 (S.D. Ohio 2005) .................................... 22

Genord v. Blue Cross & Blue Shield of Michigan, 440 F.3d 802 (6th Cir. 2006) .. 11

Griffin v. Flagstar Bancorp, Inc., 2013 WL 6511860 (E.D. Mich. Dec. 12, 2013) ........................................................................... 23, 27

Hadix v. Johnson, 322 F.3d 895 (6th Cir. 2003) ..................................................... 34

In re Auto. Refinishing Paint Antitrust Litig., No. MDL NO. 1426, 2004 WL 1068807 (E.D. Pa. May 11, 2004) ..................... 26

In re Cardizem CD Antitrust Litig., 218 F.R.D. 508 (E.D. Mich. 2003) .... 22, 25, 33

In re Gen. Tire & Rubber Co. Sec. Litig., 726 F.2d 1075 (6th Cir.1984) ............... 29

In re Global Crossing Sec. & ERISA Litig., 225 F.R.D. 436 (S.D.N.Y.2004) ........ 27

In re HealthSouth Corp. Sec. Litig. 334 Fed. Appx. 248 (11th Cir. 2009) ............. 13

In re Packaged Ice Antitrust Litig., 08-MDL-01952, 2011 WL 6209188 (E.D. Mich. Dec. 13, 2011) ................................ 30, 31, 32, 33

In re Packaged Ice Antitrust Litig., No. 08-MD-01952, 2011 WL 717519 (E.D. Mich. Feb. 22, 2011) .................................. 21, 23, 26, 27

In re Plastic Tableware Antitrust Litig., No. Civ.A. 94-3594, 1995 WL 678663 (E.D. Pa. Nov. 13, 1995) ......................................................... 26

In re Telectronics Pacing Sys., Inc., 137 F. Supp. 2d 985 (S.D. Ohio 2001) .......... 25

Int’l Union v. Gen. Motors Corp., 497 F.3d 615, 631 (6th Cir. 2007) .................... 22


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Int'l Union v. Ford Motor Co., 05-74730, 2006 WL 1984363 (E.D. Mich. July 13, 2006) aff'd sub nom. Int'l Union, United Auto., Aerospace, & Agr. Implement Workers of Am. v. Gen. Motors Corp., 497 F.3d 615 (6th Cir. 2007) ................. 21, 22, 23, 27

IUE–CWA v. Gen. Motors Corp., 238 F.R.D. 583, 593 (E.D. Mich. 2006) ..... 21, 29

Jermano v. Taylor, 11-10739, 2013 WL 1316970 (E.D. Mich. Feb. 28, 2013) report and recommendation adopted, 11-10739, 2013 WL 1316958 (E.D. Mich. Mar. 29, 2013) (Whalen, J.) ............ 32

Poplar Creek Dev. Co. v. Chesapeake Appalachia, LLC, 636 F.3d 235 (6th Cir. 2011) ......................................................................... 22, 29

Sheick v. Automotive Component Carrier LLC, No. 09–14429, 2010 WL 4136958 (E.D. Mich. Oct. 18, 2010)............................................ passim

Williams v. Vukovich, 720 F.2d 909 (6th Cir.1983) ................................................ 30

Rules

Fed. R. Civ. P 23(b)(3) ............................................................................................. 10

Fed. R. Civ. P. 23(a) ................................................................................................. 10

Fed. R. Civ. P. 23(e)(1) ..................................................................................... 19, 32

Treatises

Newberg on Class Actions, § 8.32 (4th Ed. 2010) ........................................... 19, 32


INTRODUCTION

Counsel for Direct Purchaser Class Plaintiffs (“DP Plaintiffs”) seek final

approval of four separate Settlement Agreements (“Settlement Agreements”,

“Settlements” or “Agreements”) that would provide meaningful relief for Class

Members who purchased fractional compressors1 (meaning those less than one

horsepower) (hereinafter, “Compressors”) from Defendants at allegedly

supracompetitive prices between February 25, 2005, and December 31, 2008 (the

“Settlement Period”). Specifically, after five years of contentious litigation,

counsel for DP Plaintiffs reached separate Settlement Agreements with the

Tecumseh Defendants, Danfoss Flensburg, the Embraco Defendants, and the

Panasonic Defendants (collectively, the “Settling Defendants”). The Settlements

reflect the judgments of DP Plaintiffs and the Settling Defendants that it is in their

best interests to compromise regarding DP Plaintiffs’ allegations that the Settling

Defendants are jointly and severally liable for damages based on the sale of

Compressors.

On December 27, 2013, DP Plaintiffs filed a Motion for Preliminary

Approval of the Class Action Settlements between DP Plaintiffs and the Settling

Defendants. (Dkt. No. 456). On January 9, 2014, this Court issued an order

1 A compressor is a device that compresses a refrigerant gas. (Second Amended

Master Amended Complaint ¶ 54).


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granting DP Plaintiffs’ Motion for Preliminary Approval. (Dkt. No. 460). In its

Order Granting Preliminary Approval, the Court found that the proposed

settlements with the Settling Defendants were “sufficiently fair, reasonable, and

adequate to authorize dissemination of notice and a claim form to the Settlement

Class.” (Dkt. No. 460 at ¶ 2). DP Plaintiffs have complied with the notice

requirements in the Order and now seek final approval of these settlements under

Federal Rule of Civil Procedure 23(e) because each settlement is an excellent result

for the Settlement Class in light of the proceedings in this matter. The Settlements

are fair, reasonable, and adequate; well within the range of possible approval; and in

the best interest of class members.

For the reasons set forth below, DP Plaintiffs respectfully request that the

court grant final approval of the Settlement Agreements.

STATEMENT OF FACTS

History of the Investigation A.

In mid-2008, the Tecumseh Defendants disclosed to the United States, Brazilian,

and European authorities information about possible anti-competitive practices in the

market for Compressors. (Declaration of David H. Fink in Support of Direct

Purchaser Plaintiffs’ Motion for Final Approval of the Class Action Settlements with

the Tecumseh, Embraco, Danfoss, and Panasonic Defendants; Approval of the Plan of

Allocation of the Net Settlement Funds; and Incentive Payments to the Three Class


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Representatives (“Fink Decl.”) ¶ 8) (Exhibit 1). The Tecumseh Defendants

subsequently entered into leniency agreements with each of these authorities in

exchange for their continued cooperation. (Id.). The investigation was made public on

February 18, 2009, when news reports revealed that Brazilian antitrust authorities had

raided the offices of certain of the Embraco Defendants in connection with the

investigation. (Id.).

The United States Department of Justice (“DOJ”) subsequently confirmed that

its Antitrust Division was investigating anti-competitive practices in the Compressor

industry, and the Tecumseh Defendants acknowledged entering into leniency

agreements with authorities in the United States, Brazil and the European Union. (Id. ¶

9).

After learning of the conspiracy investigations and leniency agreements, counsel

for Plaintiffs began investigating potential claims against the alleged conspirators, the

largest manufacturers and distributors of Compressors in the United States. Among

other things, attorneys for the plaintiffs and professionals working under their

direction reviewed all publicly available information concerning the investigation and

the nature of the Compressor industry. (Id. ¶ 10). Plaintiffs’ counsel also retained the

services of an economist to review the pricing, input costs, and the structure of the

industry to learn whether those factors were consistent with the allegations of a price-

fixing conspiracy. (Id.). Moreover, counsel learned that a grand jury had been


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empanelled in the Eastern District of Michigan to hear evidence regarding the

Defendants’ anticompetitive conduct. (Id.).

This litigation began in February 2009, when numerous class action complaints

were filed against Compressor manufacturers. (Id. ¶ 11). The complaints alleged that

the Defendants engaged in a conspiracy to restrain the trade of Compressors sold in

the United States. (Id.). Related actions were filed in federal courts in New York, New

Jersey, Pennsylvania, Maryland, Ohio, Michigan and the District of Columbia. (Id. ¶

12).

During this phase of the proceedings, investigators retained by Plaintiffs’

counsel identified numerous former employees of the Defendants and conducted

interviews of at least a dozen of them. (Id. ¶ 13). Some of these witnesses provided

important information about the industry and the alleged conspiracy. (Id.).

Procedural History B.

On June 9, 2009, the Judicial Panel on Multidistrict Litigation consolidated the

related antitrust lawsuits in the United States District Court for the Eastern District of

Michigan before this Court. (Id. ¶ 12). On November 2, 2009, the Court appointed

David H. Fink and The Miller Law Firm as Interim Lead Counsel for DP Plaintiffs in

this action. (Dkt. No. 114).

The parties subsequently reached agreement on many portions of a proposed

case management order (“CMO”), but could not agree on when discovery should


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begin. This disagreement was conveyed to the Court during a Status Conference

hearing on March 8, 2010, and on March 9, 2010, the Court issued a briefing schedule

and ordered the parties to brief the issues. (Dkt. No. 127). Plaintiffs and Defendants

filed opposing briefs on March 19, 2010. (Dkt. Nos. 130, 131). On April 19, 2010, the

Court ruled that discovery would not commence until after the Court ruled on all

motions to dismiss. (Dkt. No. 143).

DP Plaintiffs filed a Master Amended Complaint on June 30, 2010 (Dkt. No.

155) and filed a Motion for Preliminary Approval of a Class Action Settlement with

the Tecumseh Defendants on August 5, 2010 (Dkt. No. 157). In order to prepare the

Master Amended Complaint, Plaintiffs’ Counsel had consulted with their experts and

conducted further investigation, including interviews of persons with knowledge of

the Compressor industry. (Fink Decl. ¶ 24). The Master Amended Complaint alleged

that Defendants engaged in a conspiracy to fix, raise and maintain the price of

Compressors and Compressor Products (i.e. products that incorporated Compressors)

sold in the United States. (Dkt. No. 155). Plaintiffs also alleged that, as a result of the

Defendants’ conspiracy, members of the Class paid higher prices than they would

have paid for Compressors and Compressor Products absent the conspiracy. (Id.).

On August 30, 2010, Defendant Whirlpool Corporation (“Whirlpool”) filed a

Motion to Dismiss on several grounds. (Dkt No. 165). On June 28, 2012, before the

Court ruled on Whirlpool’s Motion to Dismiss, DP Plaintiffs and Whirlpool reached a


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stipulation that allowed for the dismissal of Whirlpool Corp. from the case. (Dkt. No.

310).

On August 30, 2010, the same date Whirlpool filed its Motion to Dismiss, the

other Defendants (except the Tecumseh Defendants) moved to dismiss the case under

Fed. R. Civ. P. 12(b)(1) and 12(b)(6). (Dkts. No. 164, 165). Defendants argued,

among other things, that: 1) Plaintiffs lacked standing to seek damages under the

federal antitrust laws because they did not assert that they were direct purchasers of

Compressors; 2) the Complaint failed to allege that the Complaint only addressed

purchases in the United States; and 3) any claims regarding antitrust violations that

occurred prior to February 25, 2005, should be dismissed because they occurred

outside of the four year statute of limitations.

In their response brief, Plaintiffs argued that they had standing to pursue claims

relating to the purchase of “Compressor Products” where the product incorporating

the Compressor was manufactured by one of the Defendants. (Dkt No. 197). Further,

Plaintiffs argued that they only sought to represent persons who purchased

Compressors and Compressor Products in the United States and therefore, the Foreign

Trade Antitrust Improvements Act (FTAIA) was not applicable. (Id.). Finally,

Plaintiffs argued that the Complaint adequately pled affirmative concealment by

Defendants and due diligence; therefore, the statute of limitations was tolled. The

Court heard oral arguments on the Motions to Dismiss on May 26, 2011.


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On June 13, 2011, the Court determined that the putative DP Plaintiffs did not

have standing to pursue claims relating to Compressor Products as such sales were

indirect. (Dkt. No. 245). In the same Order, the Court also held that DP Plaintiffs had

not pled fraudulent concealment with the requisite particularity and therefore were

barred from recovering damages incurred prior to February 25, 2005. (Id.). Finally,

the Court deferred a decision on the FTAIA argument and ordered Plaintiffs to include

allegations of specific purchases of price-fixed Compressors that occurred within the

United States. (Id.). Also on June 13, 2011, the Court entered an Order denying the

Motion for Preliminary Approval of the settlement with the Tecumseh Defendants,

because the Plaintiffs lacked standing to pursue claims relating to the purchase of

Compressors Products. (Dkt. No. 246).

On June 30, 2011, Plaintiffs sought reconsideration of the Court’s Order. (Dkt

No. 255). Plaintiffs asked the Court to reconsider its holding that the only persons or

entities with standing to assert federal antitrust claims are those persons or entities

who directly purchased Compressors from a Defendant. (Id.). Specifically, DP

Plaintiffs asked the Court to reconsider whether direct purchasers of condensers

(which contain Compressors as a key component) have standing to assert claims in

this action because, among other reasons, all Defendants sell condensers or similar

products, which contain Compressors as their primary component. (Id.). Plaintiffs

argued that the condenser purchases were direct purchases from alleged conspirators


8

and therefore the DP Plaintiffs have standing to pursue claims related to these

products. (Id.). In the same Motion, Plaintiffs also asked the Court to reconsider its

ruling that DP Plaintiffs may not amend their Complaint to re-plead fraudulent

concealment. (Id.). The DP Plaintiffs sought permission to include additional

allegations regarding alleged steps Defendants took to conceal their alleged fraud.

(Id.).

On August 2, 2011, this Court denied the Motion for Reconsideration,

confirming that to have standing as a direct purchaser in this action, a plaintiff must

have purchased a Compressor. (Dkt. No. 261). The Court found that purchasers of

condensers or other products incorporating Compressors were not direct purchasers.

(Id.). Additionally, the Court declined to reconsider its previous ruling that DP

Plaintiffs failed to adequately allege the “due diligence” necessary to assert fraudulent

concealment. (Id.).

On August 23, 2011, Plaintiffs filed their First Amended Master Amended

Complaint. (Dkt No. 267). Plaintiffs amended their allegations to clarify which class

representatives directly purchased Compressors from each Defendant, removed

allegations relating to the purchase of Compressor Products, removed allegations

relating to fraudulent concealment, and modified the class period to begin no earlier

than February 25, 2005. (Id.).


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On September 7, 2011, Plaintiffs sought leave to file a Second Amended Master

Amended Complaint to include three additional categories of allegations not explicitly

authorized by the Court’s June 13, 2011 Order: 1) allegations related to plea

agreements entered by Embraco North America, Inc. and Panasonic Corporation; 2)

allegations previously included in the Master Amended Complaint regarding

fraudulent concealment; and 3) allegations regarding condensing units – a non-

finished product that contains Compressors. (Dkt. No. 271). On September 28, 2011,

Defendants (except the Tecumseh Defendants) filed a brief opposing Plaintiffs’

Motion. (Dkt No. 273).

On June 7, 2012, the Court issued an order granting in part and denying in part

Plaintiffs’ Motion. (Dkt. Nos. 295, 298). The Court granted leave for Plaintiffs to

include allegations of recent guilty pleas entered by two Defendants and to include

factual allegations relating to the alleged conspiracy that were previously contained in

a section of the Complaint entitled “fraudulent concealment.” (Dkt No. 295). The

Court denied the Motion in all other respects. (Id.). The Court did not allow DP

Plaintiffs to pursue claims relating to condensing units or to include additional

allegations of fraudulent concealment.

On June 20, 2012, consistent with this Court’s Orders, Plaintiffs filed their

Second Amended Master Amended Complaint.


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The Settlement Agreements C.

The Settlement Agreements provide for Settlement Funds of more than

$30,000,000.2 Plaintiffs previously submitted these Settlement Agreements to the

Court on December 27, 2013, and the Court granted preliminary approval of all four

Settlement Agreements on January 9, 2014. (Dkt. Nos. 456, 460). The Settlement

Agreements are also available online at www.CompressorsSettlement.com/court.

The Settlement Agreements stipulate that the requirements of FRCP 23(a) and

23(b)(3) are satisfied for settlement purposes and, subject to Court approval, the

following direct purchaser class should be certified for settlement purposes:

All persons or entities (but excluding government entities and Defendants, their officers, directors and employees, as well as Defendants’ parents, predecessors, successors, subsidiaries, or affiliates) who purchased Compressors in the United States, its territories and possessions, directly from any Defendant including Settling Defendants, or from any of their parents, predecessors, successors, subsidiaries, or affiliates, at any time during the period from and including February 25, 2005 up to and including December 31, 2008. Compressors include compressors of less than one horsepower, excluding compressors used in air conditioners.

(Tecumseh Agreement at ¶ 23; Embraco Agreement at ¶ 23; Danfoss Agreement at ¶

22; Panasonic Agreement at ¶ 20). The settlement class definition fully comports with

2 As of the date of this Brief, the total amount allocated to the Settlement Funds

by Settling Defendants is $29,855,156. However, funds allocated by the Embraco Settlement to “notice and administration,” in excess of the amount necessary for notice and administration, revert to the Embraco Settlement Fund. Also, interest earned on escrowed funds will be added to the common fund. For these reasons, the final settlement funds will exceed $30,000,000.


11

this Court’s rulings regarding antitrust standing and regarding the relevant class

period.

In addition, the Settlement Agreements between DP Plaintiffs and the

Tecumseh Defendants, Embraco Defendants and Danfoss Flensburg included

cooperation in any continued litigation in this matter – a concession that DP Plaintiffs

sought in the event litigation continued and in order to create pressure for additional

settlements. (Tecumseh Agreement ¶¶ 45-66; Embraco Agreement ¶¶ 50-54; Danfoss

Agreement ¶¶ 44-57).

1. Settlement Between Plaintiffs and the Tecumseh Defendants

Plaintiffs’ Counsel and counsel for the Tecumseh Defendants first began

discussing settlement in May 2009. (Declaration of David H. Fink (“Fink Decl.”) at ¶

41). Over the next year, the parties participated in in-person meetings in Washington

D.C., Detroit and New York City and held numerous telephone conferences to

discuss and negotiate settlement terms. (Id.). Plaintiffs’ Counsel were informed of

various facts concerning liability and damages and the relative strengths and

weaknesses of each side’s litigation position. (Id. ¶ 42). The parties analyzed and

evaluated many contested legal and factual issues posed by the litigation so that

adequate demands and accurate evaluation of the Tecumseh Defendants’ positions

could be made. (Id.) As noted in the Motion for Preliminary Approval, the financial


12

condition of the Tecumseh Defendants was also a factor in the decision to reach an

early resolution with the Tecumseh Defendants.

Following these vigorous arms’ length negotiations, on June 24, 2010, Plaintiffs

entered into an initial settlement agreement with the Tecumseh Defendants. To

comply with the Court’s rulings regarding integrated products and fraudulent

concealment, the initial agreement was replaced with a new agreement on October 15,

2012 (the “Tecumseh Agreement”).

The Tecumseh Defendants have paid into an escrow account a settlement

amount of $7,000,000 and an additional $150,000 for notice and administration costs

under the terms of the Tecumseh Agreement. (See Tecumseh Agreement ¶¶ 34-35).

The $7,000,000 cash payment, which will not be reduced because of class members

who exclude themselves from the class, represents 2.7% of the Tecumseh Defendants’

sale of Compressors to direct purchasers in the United States during the Settlement

Class Period. Any interest earned on the amounts will become part of the Tecumseh

Settlement Fund. (Id. ¶ 39).

The Tecumseh Defendants, as the first Settling Defendants, provided valuable

cooperation to DP Plaintiffs, including the production of documents previously

produced to a grand jury investigating the Compressor industry. (See Tecumseh

Agreement ¶¶ 45-48; Fink Decl. ¶ 44). Moreover, the Tecumseh Defendants agreed

to use their best or reasonable efforts to make available their present and former


13

employees, officers or directors who have first-hand knowledge of the claimed

conspiracy for interviews by DP Plaintiffs. (Tecumseh Agreement ¶¶ 53-54).

The Tecumseh Agreement also provided that DP Plaintiffs’ Counsel would

supply the Tecumseh Defendants with a written list of all Settlement Class Members

who have timely exercised their rights to be excluded from the Settlement Class (to

“Opt Out”) within ten business days after the deadline established by the Court for

Settlement Class Members to so exclude themselves. (Tecumseh Agreement ¶ 44). In

the event that the Opt Out amount was equal to or greater than the amount set forth in

a separate letter agreement between the parties, then the Tecumseh Defendants had the

right to withdraw from the Tecumseh Agreement.3 (Id. ¶ 44).

This deadline has since passed. The Tecumseh Defendants did not have the

option to withdraw from the settlement because no class members opted out of the

Tecumseh Agreement.

2. Settlement Between Plaintiffs and the Embraco Defendants

Settlement discussions between Plaintiffs’ Counsel and counsel for the

Embraco Defendants commenced in May 2010. (Fink Decl. ¶ 45). Between May

2010 and February 2013, the parties participated in three in-person meetings,

including two meetings in Washington, DC, numerous telephone conferences and an

3 Separate letter agreements are commonly kept confidential and filed under

seal. See, e.g., In re HealthSouth Corp. Sec. Litig. 334 Fed. Appx. 248, 250 n.4 (11th Cir. 2009).


14

all-day facilitation session with retired Judge Richard Kaufman in the Detroit area.

(Id.) These discussions and negotiations were always at arm’s length and non-

collusive. (Id.) Both sides vigorously negotiated their respective positions on all

material terms. (Id.). Counsel negotiated with a full understanding of liability and

damages and the parties’ strengths and weaknesses. (Id. ¶ 46). Counsel also debated

many contested legal and factual issues posed by the litigation so that adequate

demands and an accurate evaluation of the Embraco Defendants’ positions could be

made. (Id.).

Plaintiffs entered into a Settlement Agreement with the Embraco Defendants on

February 12, 2013 (the “Embraco Agreement”). Under the Embraco Agreement, the

Embraco Defendants agreed to pay up to $30,000,000 into the Embraco Settlement

Fund, representing approximately 5.1% of the Embraco Defendants’ sales of

Compressors to direct purchasers in the United States during the Settlement Class

Period. (Embraco Agreement ¶¶ 17, 32-33). Any interest earned on the funds will

become part of the Embraco Settlement Fund. (Embraco Agreement ¶ 38). A

$500,000 notice and administration amount was also paid to a Notice and

Administration Fund (as defined in the Embraco Agreement ¶ 12). Any moneys not

used for notice and administration costs will revert to the Embraco Settlement Fund.

The Embraco Agreement provided that if any class member excluded itself

from the settlement, the settlement amount would be reduced based on ninety (90)


15

percent of the opt-outs’ purchases from Embraco during the Settlement Class Period.

(Embraco Agreement ¶¶ 32, 46-49). Specifically, the parties agreed that the initial

amount of $30 million could be reduced by the proportion of Embraco’s Class Sales

represented by 90% of the Opt Out Sales compared to total class sales. (Id. ¶ 32). To

effect this adjustment, the Embraco Defendants agreed to pay the difference between

(a) the initial amount and (b) 90% of the dollar amount determined by multiplying the

initial amount by the percentage of class purchases opting out of the settlement. (Id. at

¶¶ 17, 32). Three purchasers excluded themselves from the Embraco settlement,

representing 68.7% of Embraco’s United States sales. Therefore, the final settlement

amount was $11,455,156. (Fink Decl. ¶ 48). The purchasers who opted out will not be

eligible to receive any portion of the Embraco Settlement Fund, meaning the

remaining claimants shall receive a net benefit from the opt-outs, including the 10%

still remaining with the Class from the only 90% reduction for the opt-out sales.

3. Settlement Between Plaintiffs and the Panasonic Defendants

Initial settlement discussions between counsel for Plaintiffs and counsel for the

Panasonic Defendants commenced in June 2010. (Fink Decl. ¶49). Over the next two

years, the parties participated in three in-person meetings in New York and numerous

telephone conferences to discuss and negotiate settlement terms. (Id.). As with the

other negotiations, Plaintiffs’ Counsel ensured they were aware of all potential issues

regarding liability and damage and the strength and weaknesses of their arguments.


16

(Id. ¶ 50). Plaintiffs’ Counsel used their knowledge of the facts and legal arguments to

ensure that they made adequate demands and accurately evaluated the settlement

proposals. (Id.).

Following these arms’ length negotiations, Plaintiffs entered into a Settlement

Agreement with the Panasonic Defendants on December 13, 2013 (the “Panasonic

Agreement”). Under the Panasonic Agreement, the Panasonic Defendants agreed to

pay $7,900,000 (“Panasonic Settlement Fund”) into an escrow account. (Panasonic

Agreement ¶ 29). The $7,900,000 represents a percentage of non-opt-out sales

significantly greater than the percentages applicable to other Settling Defendants.

Any interest earned on the escrowed funds will be added to the Panasonic Settlement

Fund. The Panasonic Agreement is not subject to reduction due to opt-outs, and the

Panasonic Defendants did not have the right to withdraw from their Settlement

Agreement due to any opt out amount or percentage.

4. Settlement Between Plaintiffs and Danfoss Flensburg

Initial settlement discussions with counsel for Danfoss Flensburg commenced

in August 2012. (Fink Decl. ¶ 53). Over the next several months, the parties

participated in multiple in-person meetings in Michigan and New York and numerous

telephone conferences to discuss and negotiate settlement terms. (Id.). Once again,

Plaintiffs’ Counsel negotiated with full awareness of liability and damages issues and

the strengths of each side’s legal positions. (Id. ¶ 54).


17

Following these arms’ length negotiations, Plaintiffs entered into a Settlement

Agreement with Danfoss Flensburg on March 5, 2013 (the “Danfoss Agreement”).

Under the Danfoss Agreement, Danfoss Flensburg agreed to – and did pay –

$3,500,000 into the Danfoss Settlement Fund, and an additional $100,000 for notice

and administration costs. (Danfoss Agreement ¶¶ 33-34). Any interest earned on the

settlement fund will become part of the Danfoss Settlement Fund. (Id. ¶ 21).

As with the Tecumseh settlement, Danfoss Flensburg had the right to withdraw

from their Settlement Agreement if the Opt Out amount was equal to or greater than

the amount set forth in a separate letter agreement between the parties. But, the opt-

out amount was minimal—far less than the percentage set forth in the letter

agreement—so Danfoss Flensburg did not have the option to withdraw from their

Settlement Agreement.

Approval of Settlement Class and Appointment of Class Counsel D.

On December 27, 2013, DP Plaintiffs filed an unopposed Motion for

Preliminary Approval of the class action settlements with the Tecumseh Defendants,

the Embraco Defendants, Danfoss Flensburg and the Panasonic Defendants. (Dkt. No.

456).

On January 9, 2014, the Court granted DP Plaintiffs’ Motion. (Dkt. No. 460).

In its Order, the Court stated that the proposed settlements were “sufficiently fair,

reasonable, and adequate to authorize dissemination of notice and a claim form to the


18

Settlement Class….” (Id. ¶ 2). The Order stated that “[f]or purpose of the settlements:

the Settlement Class satisfies the requirements of Rules 23(a) and 23(b)(3) of the

Federal Rules of Civil Procedure with respect to numerosity, common questions,

typicality, adequacy and predominance.” (Id. ¶ 3). The Order provides that “David H.

Fink, Fink + Associates Law and The Miller Law Firm, P.C. are adequate and are

appointed as Class Counsel for the Settlement Class.” (Id. ¶ 6).

Dissemination of Notice to Class Members and Exclusions E.

The January 9, 2014 Order also approved the proposed method of providing

Notice to class members and the procedures for exclusions and objections. (Id. ¶¶ 7-

12). DP Plaintiffs and Settling Defendants fully complied with the Court’s Order

regarding dissemination of Notice.

On February 7, 2014, through the retained administrator, Garden City Group

(“GCG”), Notices and Claim Forms were mailed to all 1,006 Class Members, who had

been identified as Compressors purchasers by the Defendants. (See Declaration of

Jennifer M. Keough [of Garden City Group] Regarding Notice and Claims

Administration (“GCG Decl.”) ¶ 6) (Exhibit 2). From February 1, 2014 through

March 1, 2014, counsel, through GCG caused to be published a Banner Ad on the

website www.ApplianceMagazine.com, which provided a link to the Settlement

Website (www.CompressorsSettlement.com). (Id. ¶ 8). On February 3, 2014, the

Summary Notice, which provided the address of the Settlement Website


19

(www.CompressorsSettlement.com) was published in the magazine Air Conditioning,

Heating and Refrigeration News. (Id. ¶ 9). Finally, on February 12, 2014, the

Summary Notice, which provided the address of the Settlement Website

(www.CompressorsSettlement.com) was published in the national edition of the Wall

Street Journal. (Id. ¶ 10).

The Notice, Claim form, and Summary Notice were provided in substantially

the form of Exhibits 3, 4, and 5 of Plaintiffs’ Motion for Preliminary Approval.

Additionally, Class Counsel published the Notice online at the website

www.CompressorsSettlement.com. The Notice also referenced this web site and

informed the recipients that the Notice and claim form could be viewed and

downloaded there.4

Pursuant to the Preliminary Approval Order, any class member who wished to

be excluded from or opt-out of the settlements was required to mail a letter to GCG,

postmarked by March 24, 2014, requesting to be excluded from a settlement class.

Information regarding how to request to be excluded from the Settlement was

4 The above stated methods directed notice in a “reasonable manner to all class

members who would be bound by the propos[ed judgment]. Fed. R. Civ. P. 23(e)(1). “The contents of a Rule 23(e) notice are sufficient if they inform the class members of the nature of the pending action, the general terms of the settlement, that complete and detailed information is available from the court files, and that any class member may appear and be heard at the hearing.” Newberg on Class Actions, § 8.32 (4th Ed. 2010).


20

included in the Full Notice, Summary Notices, and was listed on the Settlement

Website. (GCG Decl. ¶ 16). As of May 12, 2014, GCG has received four timely

requests for exclusion.5 (Id.).

Plan of Allocation F.

The Court’s January 9, 2014 Order also approved the Plan of Allocation that

was set forth in the Notice mailed to class members. (Dkt. No. 460 ¶ 7). Under the

Plan of Allocation, the Settlement Funds will first be used to pay attorneys’ fees,

incentive payments to the three Class Representatives, and expenses approved by the

Court. (See Notice at p. 4). The remaining amounts in the Settlement Funds will be

distributed to Class Members who submitted valid and timely claims.6 (Id.). The Net

Settlement Funds will be distributed to Settlement Class Members on a pro rata basis

among all Settlement Class Members who submit valid and timely Claim Forms. (Id.).

ARGUMENT

Standard of Review for Final Approval of Class Action Settlements A.

The Sixth Circuit Court of Appeals and courts in the Eastern District of

Michigan have recognized that there is a strong public interest in settling class action

5 One of those requests—from Norcold, Inc.—was based upon an apparent misunderstanding of the purpose of an exclusion. That “request for exclusion” stated that the company did not purchase Compressors from Danfoss and continued as follows: “Therefore, Norcold, Inc. wishes to be excluded from the Danfoss Settlement.”

6 To be considered valid and timely, Claim Forms must have been postmarked

by June 9, 2014.


21

lawsuits. IUE–CWA v. Gen. Motors Corp., 238 F.R.D. 583, 593 (E.D. Mich. 2006)

(noting “the general federal policy favoring the settlement of class actions”); In re

Packaged Ice Antitrust Litig., No. 08-MD-01952, 2011 WL 717519, at *7 (E.D. Mich.

Feb. 22, 2011). “Given that class settlements are favored, the role of the district court

is limited to the extent necessary to reach a reasoned judgment that the agreement is

not the product of fraud or overreaching by, or collusion between, the negotiating

parties, and that the settlement taken as a whole, is fair, reasonable and adequate to all

concerned.” IUE–CWA, 238 F.R.D. at 594 (internal quotation marks and citations

omitted); Sheick v. Automotive Component Carrier LLC, No. 09–14429, 2010 WL

4136958, at *14 (E.D. Mich. Oct. 18, 2010) (“In assessing a proposed settlement, the

district court judge ‘may not substitute his or her judgment for that of the litigants and

their counsel’ and ‘should approve a class settlement if, following a hearing, the court

determines that the settlement ‘is fair, reasonable, and adequate.’”) (quoting IUE–

CWA, 238 F.R.D. at 593). “Settlement embodies a bargained give and take between

the litigants that is presumptively valid about which the Court should not substitute its

judgment for that of the parties.” Int'l Union v. Ford Motor Co., 05-74730, 2006 WL

1984363 at *21 (E.D. Mich. July 13, 2006) aff'd sub nom. Int'l Union, United Auto.,

Aerospace, & Agr. Implement Workers of Am. v. Gen. Motors Corp., 497 F.3d 615

(6th Cir. 2007) (internal quotation marks and citation omitted).


22

Essentially, a court is tasked with analyzing “whether the interests of the class

as a whole are better served if the litigation is resolved by the settlement rather than

pursued.” In re Cardizem CD Antitrust Litig., 218 F.R.D. 508, 522 (E.D. Mich. 2003);

Sheick v. Auto. Component Carrier LLC, 2010 WL 4136958 at *14-15. “To determine

whether a settlement [is fair, reasonable, and adequate, courts in the Sixth] Circuit are

required to consider: ‘(1) the risk of fraud or collusion; (2) the complexity, expense

and likely duration of the litigation; (3) the amount of discovery engaged in by the

parties; (4) the likelihood of success on the merits; (5) the opinions of class counsel

and class representatives; (6) the reaction of absent class members; and (7) the public

interest.’” Poplar Creek Dev. Co. v. Chesapeake Appalachia, LLC, 636 F.3d 235, 244

(6th Cir. 2011) (quoting Int’l Union v. Gen. Motors Corp., 497 F.3d 615, 631 (6th Cir.

2007). “The Court may choose to consider only those factors that are relevant to the

settlement at hand and may weigh particular factors according to the demands of the

case.” Int’l Union v. Ford Motor Co., 2006 WL 1984363 at *22. A detailed analysis

of each of these seven factors follows below.

Finally, this Court has already preliminarily approved the Settlement

Agreements and “preliminary approval [too] gives rise to a presumption that the

settlement is fair, reasonable and adequate,” particularly in the absence of objections

by class members. See Fussell v. Wilkinson, 2005 WL 3132321 at *3 (S.D. Ohio

2005).


23

The Settlement Agreements Warrant Final Approval B.

1. The Settlement Agreements Were Negotiated at Arm’s Length

Settlement negotiations are presumed to have been conducted in good faith and

without collusion, unless there is evidence to the contrary. Griffin v. Flagstar

Bancorp, Inc., 2013 WL 6511860, at *3 (E.D. Mich. Dec. 12, 2013); In re Packaged

Ice, 2011 WL 717519, at *12; Int’l Union v. Ford, 2006 WL 1984363, at *26; Sheick,

2010 WL 4136958 at *19-*20. The four Settlement Agreements reached in this case

were the product of hard-fought and contentious litigation and negotiation by

experienced counsel well versed in class action antitrust cases. Discussions and

negotiations between counsel were always at arm’s length and non-collusive. (Fink

Decl. ¶¶ 41, 45, 49, 53). A strong presumption of fairness attaches to a settlement

agreement when it is the product of such negotiations. See Int'l Union v. Ford Motor

Co., 2006 WL 1984363 at *26.

Moreover, the fact that each of the Settling Defendants reached agreements with

DP Plaintiffs at different times further demonstrates that each of the Settlement

Agreements were the product of independent negotiation, were conducted at arm’s

length, and were non-collusive. For example, DP Plaintiffs began settlement

discussions with the Tecumseh Defendants in May 2009, and entered into an initial


24

settlement agreement with them on June 24, 2010.7 (Fink Decl. at ¶ 41, 43). Counsel

for DP Plaintiffs did not commence initial settlement discussions with counsel for the

Embraco Defendants until May 2010. (Id. ¶ 45). These discussions did not result in a

settlement until February 12, 2013, after counsel for DP Plaintiffs and the Embraco

Defendants participated in three in-person meetings and an all-day mediation session

before an experienced facilitator. (Id. ¶¶ 45, 47). Likewise, counsel for DP Plaintiffs

first began settlement discussions with counsel for the Panasonic Defendants in June

2010. (Id. ¶ 49). After three in-person meetings in New York and multiple telephone

conferences over two years, counsel for DP Plaintiffs and the Panasonic Defendants

reached the Panasonic Agreement on December 13, 2013. (Id. ¶¶ 49, 51). Counsel for

DP Plaintiffs did not begin settlement discussions with counsel for Danfoss Flensburg

until August 2012. (Id. ¶ 53). Following arms’ length negotiations, DP Plaintiffs and

Danfoss Flensburg entered into the Danfoss Agreement on March 5, 2013. (Id. ¶ 55).

For the above reasons, there is no evidence of collusion or fraud.

7 The June 24, 2010 agreement between DP Plaintiffs and the Tecumseh

Defendants was replaced by a new agreement (the “Tecumseh Agreement”) on October 15, 2012. (Fink Decl. ¶ 43). The parties renegotiated the terms of the Tecumseh Agreement after the Court denied preliminary approval of the June 24, 2010 agreement because the original terms included not only Compressors but also Compressor Products. (Id. ¶¶ 57, 58).


25

2. The Risks, Expenses and Delay of Continued Litigation Favor Approval of the Settlements

“Settlements should represent a compromise which has been reached after the

risks, expense, and delay of further litigation have been assessed.” In re Cardizem CD

Antitrust Litig., 218 F.R.D. 508, 523 (E.D. Mich. 2003) (internal quotations and

citations omitted). This is especially true for class actions, since they are “inherently

complex.” In re Telectronics Pacing Sys., Inc., 137 F. Supp. 2d 985, 1013 (S.D. Ohio

2001).“[S]ettlement avoids the costs, delays, and multitude of other problems

associated with them.” Id. Accordingly, the Court must weigh the risks, expenses, and

delay Plaintiffs would face if they continued to prosecute this complex litigation

through trial and appeal and weigh those factors against the amount of recovery

provided to the class in the Settlement Agreements. Id.

Antitrust cases are notoriously protracted – this one has been pending more than

five years – and any adjudicated recovery for the class would almost certainly be

many years away. Should DP Plaintiffs’ claims proceed to a trial, the trial would be

time-consuming and complex, and include testimony from multiple expert witnesses.

Even a favorable trial outcome would likely be vigorously contested on appeal.

Indeed, each subsequent step in the litigation process would require the class to incur

additional expenses without the promise of a favorable outcome.

Settlement also is beneficial for members of the Settlement Class because it

provides certain recovery. Among other things, absent a settlement, Settling


26

Defendants would argue (and offer expert testimony to support their argument) that

their costs increased by significantly more than their prices during the relevant period

and that Compressor purchasers did not suffer any injury from the alleged conspiracy.

Although Plaintiffs dispute this and believe they would prevail if the case proceeded

to trial, the proposed settlement avoids the inherent risk of protracted litigation and

ensures recovery for members of the Settlement Class.

The Settlement Agreements include significant payments by the Settling

Defendants for the benefit of the Settlement Class Members. The payments represent

approximately 2.7% of the volume of sales to class members in the United States

during the class period by the Tecumseh Defendants, more than 5.1% of the volume of

sales by the Embraco Defendants to direct purchasers (who are eligible to file claims)

in the United States during the Settlement Class Period, and a substantially greater

percentage of sales for Danfoss Flensburg and for the Panasonic Defendants. These

percentages are consistent with the percentages approved for settlement in other direct

purchaser antitrust class actions. See, e.g., In re Packaged Ice, 2011 WL 717519 at *9

(2.5 percent); In re Auto. Refinishing Paint Antitrust Litig., No. MDL NO. 1426, 2004

WL 1068807, at *2 (E.D. Pa. May 11, 2004) (4.2 percent); Fischer Bros., Inc. v.

Mueller Brass Co., 630 F. Supp. 493, 499 (E.D. Pa. 1985) (0.2 percent); In re Plastic

Tableware Antitrust Litig., No. Civ.A. 94-3594, 1995 WL 678663, at *1 (E.D. Pa.

Nov. 13, 1995) (3.5 percent); Axelrod v. Saks & Co., Nos. 76-4011, 1981 WL 2031, at


27

*1 (E.D. Pa. Feb. 23, 1981) (3.7 percent). Class Counsel believe the Settlements

represent an excellent result for the class give the risk and uncertainty in proceeding

with the case. See In re Packaged Ice, 2011 WL 717519 at *10 (“As is true in any

case, the proposed Settlement represents a compromise in which the highest hopes for

recovery are yielded in exchange for certainty and resolution.”) (quoting Int’l Union v.

Ford, 2006 WL 1984363 at *23) (internal quotation, marks and citation omitted).

Accordingly, this factor weighs in favor of approval.

3. Plaintiffs Have Obtained Sufficient Information to Make Informed Settlement Decisions.

Approval of a settlement agreement is favored where the parties have developed

a body of documents and information sufficient to permit their informed assessment of

the litigation and settlement. See Sheick, 2010 WL 4136958 at *19. Despite the fact

that merits discovery has not been completed, DP Plaintiffs’ counsel have completed

sufficient investigation and review of documents to make informed and competent

settlement decisions for the class.8 DP Plaintiffs acquired useful information through

other channels. For example, after the DOJ confirmed that its Antitrust Division was

investigating anti-competitive practices in the Compressor industry and other publicly

available news reports came to light in 2009, DP Plaintiffs began investigating

8 There is no specific amount of discovery needed to satisfy this factor.

Packaged Ice, 2010 WL 3070161, at *5-6. The “question is whether the parties had adequate information about their claims.” Griffin, 2013 WL 6511860, at *4 (quoting In re Global Crossing Sec. & ERISA Litig., 225 F.R.D. 436, 458 (S.D.N.Y.2004)).


28

potential claims against the Defendants, who were the largest sellers of Compressors

in the United States. (Fink Decl. ¶¶ 9-10). DP Plaintiffs retained an economist to

review pricing, input costs, and the structure of the industry before concluding that

there was a sufficient basis upon which to assert an antitrust claim. (Id. ¶¶ 10-11).

After numerous class action antitrust lawsuits in multiple states were consolidated into

the instant case, investigators retained by counsel identified numerous former

employees of the Defendants and conducted interviews of at least a dozen of them,

some of whom provided important information concerning the industry and the

alleged conspiracy. (Id. ¶ 13).

In addition to conducting interviews with former employees of the Defendants,

DP Plaintiffs also received valuable information due to cooperation from the

Tecumseh Defendants. Pursuant to an agreement reached on November 5, 2009, the

Tecumseh Defendants were required to, and did, provide valuable cooperation with

Plaintiffs, including a detailed proffer and the production of key documents. (Id. ¶ 44).

By conducting the aforementioned investigations and review of documents

from the Tecumseh Defendants, in conjunction with a review of publicly available

information from press reports and criminal plea agreements, DP Plaintiffs have

acquired sufficient information to make informed judgments about the relative

strengths of its claims against the Settling Defendants. Accordingly, this factor

weighs in favor of approval.


29

4. The Risks of Continued Litigation Militate in Favor of Settlement

“‘The most important of the factors to be considered in reviewing a settlement

is the probability of success on the merits. The likelihood of success, in turn, provides

a gauge from which the benefits of the settlement must be measured.’” Poplar Creek,

636 F.3d at 245 (quoting In re Gen. Tire & Rubber Co. Sec. Litig., 726 F.2d 1075,

1086 (6th Cir.1984) (citations omitted). When considering the reasonableness of a

settlement, a court looks to “a ‘range of reasonableness,’ which ‘recognizes the

uncertainties of law and fact in any particular case and the concomitant risks and costs

inherent in taking any litigation to completion.’” Sheick, 2010 WL 4136958, *15

(quoting IUE-CWA v. General Motors Corp., 238 F.R.D. at 594).

Here, DP Plaintiffs believe that they have a strong case and could prove that

Defendants conspired to fix the prices of Compressors if the case proceeded to trial.

However, Plaintiffs recognize that a successful finding on the merits is by no means

certain. Defendants would challenge class certification; if that failed, they would offer

a number of defenses to the DP Plaintiffs’ claims. Even if DP Plaintiffs successfully

established that the Defendants engaged in a conspiracy to fix prices, Defendants

would offer expert testimony showing that damages were less than sought by

Plaintiffs. Although Plaintiffs dispute these arguments and believe they would prevail

if the case proceeded to trial, the proposed settlement avoids the inherent risk of

protracted litigation and ensures recovery for members of the Settlement Class.


30

Therefore, this factor weighs in favor of approval.

5. Experienced Class Counsel Strongly Endorse the Settlements

“Class Counsel’s judgment that settlement is in the best interests of the class is

entitled to significant weight, and supports the fairness of the class settlement.” In re

Packaged Ice Antitrust Litig., 08-MDL-01952, 2011 WL 6209188 at *12 (E.D. Mich.

Dec. 13, 2011). “In the absence of evidence of collusion (there is none here) this Court

‘should defer to the judgment of experienced counsel who has competently evaluated

the strength of his proofs.’” Date v. Sony Electronics, Inc., 2013 WL 3945981, at *9

(E.D. Mich. Jul. 31, 2013) (quoting Williams v. Vukovich, 720 F.2d 909, 922–23 (6th

Cir.1983)).

As described above, counsel for DP Plaintiffs, who have significant expertise in

prosecuting civil class action cases, spent considerable time reviewing media reports,

public court records, DOJ press releases, and economist’s reports, before settling with

the Tecumseh Defendants. Additionally, Class Counsel reviewed documents provided

to the DOJ and other investigative bodies, and transactional data provided by the

Tecumseh Defendants pursuant to the Tecumseh Agreement. (See Tecumseh

Agreement ¶¶ 45-66).

Class Counsel’s opinion that the Settlement Agreements should be approved is

further supported by the fact that the Agreements were the product of many months of

arm’s length negotiations with the Settling Defendants, including countless telephonic


31

conferences and multiple in-person meetings in New York, Washington, D.C. and

Detroit, before arriving at the Settlement Agreements. This factor too supports

approval of the Settlement Agreements. See In Re Packaged Ice Antitrust Litig., 2011

WL 6209188 at *12 (finding this factor satisfied where class counsel represented to

the Court that they negotiated the settlement agreement at arm’s length over many

months, that they have met with top executives to discuss the financial health of the

settling corporate defendant’s entities and that the settling corporate defendant

rejected many offers before agreeing to the terms of the settlement agreement).

6. The Reaction of Class Members Weighs in Favor of Settlement

The deadline for Plaintiff Class Members to exclude themselves from the

proposed Settlement Agreements passed on March 24, 2014. Only three plaintiffs,

elected to exclude themselves from the Embraco Agreement prior to the March 24,

2014 exclusion deadline. (Fink Decl. ¶ 50). Two of those opt-outs were the largest

purchasers of Compressors in the United States, with both the resources and the

motivation to litigate or settle their claims independently. Only one of the hundreds of

other class members elected to opt out of any of these settlements.

The deadline to object to the Proposed Settlement Agreement, the Plan of

Allocation of Net Settlement Proceeds, or the Request for Attorneys’ Fees and Other

Expenses is May 23, 2014. If there are objections, counsel for DP Plaintiffs will

respond to them in a reply brief.


32

7. Approval of the Settlements is in the Public Interest

The settlement of complex class actions such as this one is in the public interest

because of the difficulty of such litigation and because settlement conserves judicial

resources. See In Re Packaged Ice Antitrust Litig., 2011 WL 6209188 at *15 (“[T]here

is a strong public interest in encouraging settlement of complex litigation and class

action suits because they are ‘notoriously difficult and unpredictable’ and settlement

conserves judicial resources.”) (citation and quotation omitted). Further, here, no one

has come forward to suggest to any countervailing public interests. Id.

The Plan of Allocation for the Settlement Funds is Fair and Reasonable C.and Should be Approved by the Court

On January 9, 2010, this Court approved the Plan of Allocation as stated in the

Notice provided to class members. (Dkt. No. 460 ¶ 7). The Plan of Allocation was set

forth in the Notice mailed to the Class Members.9 DP Plaintiffs now seek approval of

the Plan of Allocation.

9 Due process requires that class members be given notice of, and an

opportunity to be heard regarding, a settlement. The methods of Notice, previously approved by the court—and followed by counsel—were appropriate because they directed notice in a “reasonable manner to all class members who would be bound by the propos[ed judgment].” Fed. R. Civ. P. 23(e)(1). “The contents of a Rule 23(e) notice are sufficient if they inform the class members of the nature of the pending action, the general terms of the settlement, that complete and detailed information is available from the court files, and that any class member may appear and be heard at the hearing.” Newberg on Class Actions, § 8.32 (4th Ed. 2010); see also .


33

Under Rule 23, plans of allocation are governed by the same standards of

review applicable to class action settlements as a whole — the plan must be fair,

reasonable and adequate. In Re Packaged Ice Antitrust Litig., 2011 WL 6209188 at

*15. The purpose of developing a plan of allocation is to create a method that permits

the equitable distribution of limited settlement process to all eligible members of the

Class. As explained in the Notices, the Plan of Allocation specifies the following

priority of payments: (1) payment of attorneys’ fees; (2) payment of litigation

expenses; (3) incentive awards to the three Class Representatives; (4) distribution of

the remaining proceeds in the Settlement Funds on a pro rata basis to Class Members

who submitted valid Claim Forms postmarked by June 9, 2014. (Id.). Courts in this

district have previously held that using a pro rata formula for calculating each class

member’s share of a settlement fund is fair and reasonable. See In Re Packaged Ice

Antitrust Litig., 2011 WL 6209188 at *15; see also In re Cardizem, 218 F.R.D. at 531.

Therefore, the Court should approve the Plan of Allocation in the instant case

because it is fair, reasonable and adequate to the class.

The Court Should Award Incentive Payments to the Three Named D.Class Representatives

In In re Cardizem, 218 F.R.D. at 535, and In Re Packaged Ice Antitrust Litig.,

2012 WL 5493613 at *9, the courts awarded incentive payments to class

representatives, because the class representatives devoted time and effort in assisting

with the case to the general benefit of the class. In both cases, the courts found that the


34

total of the incentive awards amounted to a small fraction of the total settlement fund,

less than .2%. Id.

Here, DP Plaintiffs are requesting $7,500 for each of the three class

representatives – Appliance Parts Distributors, Incorporation, B & B Appliance Parts

of Mobile, Inc., and Sanden Vendo America, Inc. Compared with approximately

$30,000,000 in net settlement funds, the total amount of proposed incentive awards—

$22,500—is less than 0.1% of the net funds and is reasonable. Like the counsel for

plaintiffs in Packaged Ice, Class Counsel notified Class Members that they intended

to make this request in the Notice sent to all class members. See Notice at p. 6.

Further, the Sixth Circuit has stated that incentive awards can be appropriate in

common fund cases. See Hadix v. Johnson, 322 F.3d 895, 898 (6th Cir. 2003).

Accordingly, DP Plaintiffs respectfully request that the Court approve $7,500 as an

incentive award to each of the three class representatives in this action.

CONCLUSION

For the foregoing reasons, Plaintiffs respectfully request that the Court: 1) Grant

final approval of the proposed settlements between DP Plaintiffs and the Settling

Defendants; 2) Approve the Plan of Allocation for the Net Settlement Proceeds; and,

3) Award Incentive Payments of $7,500 to each of the three class representatives.


35

Dated: May 13, 2014 By: /s/ David H. Fink FINK + ASSOCIATES LAW David H. Fink (P28235) Darryl Bressack (P67820) 100 West Long Lake Rd.; Suite 100 Bloomfield Hills, Michigan 48304 Tel: 248.971.2500 Fax: 248.972.3600 [email protected] [email protected]

THE MILLER LAW FIRM, P.C. E. Powell Miller (P39487) Casey A. Fry (P72332)

950 W. University Drive, Suite 300 Rochester, MI 48307 (248) 841-2200 www.millerlawpc.com [email protected]

Class Counsel for the Settlement Class


CERTIFICATE OF SERVICE

I hereby certify that on May 13, 2014, I electronically filed the foregoing paper

with the Clerk of the court using the ECF system which will send notification of such

filing to all counsel of record registered for electronic filing.

FINK + ASSOCIATES LAW

By: /s/David H. Fink David H. Fink (P28235) Darryl Bressack (P67820) 100 West Long Lake Road, Suite111 Bloomfield Hills, MI 48304 (248) 971-2500 [email protected]



SOUTHERN DIVISION

INDEX OF EXHIBITS

Exhibit 1 Declaration of David H. Fink in Support of Direct Purchaser

Plaintiffs’ Motion for Final Approval of the Class Action Settlements with the Tecumseh, Embraco, Danfoss, and Panasonic Defendants; Approval of the Plan of Allocation of the Net Settlement Funds; and Incentive Payments to the Three Class Representatives

Exhibit 2 Declaration of Jennifer M. Keough Regarding Notice and Claims

Administration Exhibit 3 Unpublished Opinions

2:09-md-02042-SFC Doc # 488-1 Filed 05/14/14 Pg 1 of 1 Pg ID 12933






































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DECLARATION OF JENNIFER M. KEOUGH REGARDING NOTICE AND CLAIMS ADMINISTRATION

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HONORABLE SEAN F. COX


SOUTHERN DIVISION

IN RE: REFRIGERANT COMPRESSORS ANTITRUST LITIGATION This Document Relates to ALL DIRECT PURCHASER ACTIONS _______________________________

) ) ) ) ) ) ) ) )

MDL No. 2:09-md-02042 DECLARATION OF JENNIFER M. KEOUGH REGARDING NOTICE AND CLAIMS ADMINISTRATION Final Approval Hearing: June 12, 2014 at 2:00 p.m.

I, JENNIFER M. KEOUGH, declare as follows:

1. I am the Chief Operating Officer of The Garden City Group, Inc. (“GCG”). The

following statements are based on my personal knowledge and information provided by other GCG

employees working under my supervision and, if called on to do so, I could and would testify

competently thereto. GCG has been providing comprehensive legal administration services for

over 25 years.

2. GCG has a considerable amount of experience in class action administration and the

development of notice programs. In its over 25 years, our team has served as administrator for


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over 2,500 cases. In connection with serving as administrator in those cases, we have disseminated

over 700 million emails, handled over 28 million phone calls, processed over 50 million claims,

and distributed over $33 billion in benefits. GCG’s legal notices have appeared in more than 40

languages in approximately 170 countries.

3. GCG is serving as the Claims Administrator in the above-captioned litigation (the

“Action”) for the purpose of providing notice and claims administration. In this capacity, GCG is

charged with, among other duties: (a) creating and formatting a Claim Form; (b) creating and

formatting the Full Notice, Summary Notice for publication in the Wall Street Journal, the

Summary Notice for publication for Air Conditioning Heating & Refrigeration News magazine,

and the Banner Ad for the website www.ApplianceMagazine.com; (c) establishing and maintaining

a toll-free telephone number (1-800-961-8035) dedicated to this Settlement; (d) establishing and

maintaining a website (www.CompressorsSettlement.com) dedicated to this Settlement;

(e) creating the capability to download a Claim Form from the website; (f) processing Claim

Forms; (g) providing weekly reports to Counsel; and (h) providing a declaration attesting to the

completion of the notice process and the ongoing claims administration process to Counsel for

filing with the Court.

RECEIPT AND HANDLING OF DATA

4. Pursuant to the Order Granting Preliminary Approval of Proposed Class Action

Settlement Between Direct Purchaser Class Plaintiffs and the Tecumseh, Embraco, Danfoss and

Panasonic Defendants, Authorizing the Dissemination of Notice and Claim Form and Scheduling

Final Approval Hearing (“Preliminary Approval Order”), Paragraph 11, the Defendants were

required to provide data regarding the names and addresses of Defendants’ customers who directly

purchased Compressors from the Defendants during the Settlement Class Period by January 20,

2014. GCG received the following data:

• On October 31, 2013, GCG received a data file with 302 ct. Embraco customers;

• On October 31, 2013, GCG received a data file with 247 ct. Danfoss customers;

• On November 6, 2013, GCG received a data file with 18 ct. Panasonic customers; and

• On January 21, 2014, GCG received a data file with 452 ct. Tecumseh customers.


http://www.appliancemagazine.com/

http://www.canamoresettlement.com/

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GCG downloaded and analyzed the electronic data files that contained a total of 1,019 records.

Then, GCG established a dedicated database for the records (“Settlement Database”). The records

contained the names and addresses of the putative Class Members for all four (4) Defendants.

Pursuant to the Preliminary Approval Order, Paragraph 4, the Settlement Class is defined as

follows:

All persons or entities (but excluding government entities and Defendants, their officers, directors and employees, as well as Defendants’ parents, predecessors, successors, subsidiaries, or affiliates) who purchased Compressors in the United States, its territories and possessions, directly from any Defendant including Settling Defendants, or from any of their parents, predecessors, successors, subsidiaries, or affiliates, at any time during the period from and including February 25, 2005 up to and including December 31, 2008. Compressors include compressors of less than one horsepower, excluding compressors used in air conditioners.

Each record in the Settlement Database is identified with a code to designate which Defendant

provided the data.

5. GCG then processed all addresses through the National Change of Address

(“NCOA”) database.1 GCG analyzed the data and removed duplicative records. There were a total

of 1,006 unique records in the Settlement Database.

NOTICE TO THE SETTLEMENT CLASS

Direct Mail Notice

6. Pursuant to the Preliminary Approval Order, Paragraph 9, entered on January 9,

2014 (Dkt. No. 460), GCG formatted the Notice and Claim Form (“Notice Packet”) and caused

them to be printed. On February 7, 2014, (the “Notice Date”), Notice Packets were mailed, via

first-class U.S. Mail, to a total of 1,006 Class Members. A true and correct copy of the Notice

Packet is attached hereto as Exhibit A. GCG also promptly mailed a copy of the Notice Packet to

any potential Class Member who requested one. 1 The NCOA database is the official United States Postal Service technology product, which makes change of address information available to mailers to help reduce undeliverable mailpieces before mail enters the mailstream. This product is an effective tool to update address changes when a person has completed a change of address form with the Post Office. The address information is maintained on the database for 48 months.


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Notice by Publication

7. The Preliminary Approval Order, Paragraph 10, required a Summary Notice to be

published, on or before February 17, 2014, on one occasion in the national edition of the Wall

Street Journal, on one occasion in the magazine Air Conditioning, Heating and Refrigeration

News, and on the website www.ApplianceMagazine.com.

8. From February 1, 2014 through March 1, 2014, GCG caused to be published a

Banner Ad on the website www.ApllianceMagazine.com which provided a link to the Settlement

Website (www.CompressorsSettlement.com). A true and correct copy of the Banner Ad that ran

on the ApplianceMagazine.com website is attached hereto as Exhibit B.

9. On February 3, 2014, the Summary Notice, which provided the address of the

Settlement Website (www.CompressorsSettlement.com) was published in the magazine Air

Conditioning, Heating and Refrigeration News. A true and correct copy of the Summary Notice

published in the magazine Air Conditioning, Heating and Refrigeration News is attached hereto as

Exhibit C.

10. On February 12, 2014, the Summary Notice, which provided the address of the

Settlement Website (www.CompressorsSettlement.com) was published in the national edition of

the Wall Street Journal. A true and correct copy of the Summary Notice published in the Wall

Street Journal is attached hereto as Exhibit D.

TOLL-FREE NUMBER

11. Beginning on February 1, 2014, GCG set up and continues to maintain an

automated toll-free telephone number (1-800-961-8035), which Class Members can call and obtain

information about the Settlement. The interactive voice response system dedicated to this

settlement is accessible 24 hours a day, 7 days a week. GCG has responded to each message

promptly, and will continue to accommodate Class Member inquiries. As of May 11, 2014, GCG

had received 102 incoming calls to the Call Center.


http://www.appliancemagazine.com/

http://www.aplliancemagazine.com/

http://www.compressorssettlement.com/



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WEBSITE

12. Beginning on February 1, 2014, GCG set up an official website,

www.CompressorsSettlement.com (the “Settlement Website”). The Settlement Website has been

continuously available to the present, and is accessible 24 hours a day, seven days a week. It lists

important dates associated with final approval of the Settlements, lists Class Members’ Options,

and provides contact information for GCG as the Claims Administrator. There is a tab that posts

the Full Notice, another tab where Class Members can download a Claim Form, and the website

also posts various court documents, including the Preliminary Approval Order, the Tecumseh

Settlement Agreement, the Embraco Settlement Agreement, the Danfoss Settlement Agreement,

and the Panasonic Settlement Agreement. Finally, there is a tab that contains Frequently Asked

Questions and answers thereto. As of May 11, 2014, GCG had received 634 visits and 1,672 page

views of the Settlement Website.

CLAIMS

13. Pursuant to the Preliminary Approval Order, Paragraph 16, Class Members who

wish to participate in one or more of the Settlement must file a claim postmarked on or before June

9, 2014.

14. GCG has been providing weekly reports to counsel concerning the number of Claim

Forms received, the number of visits to the website, the number of telephone calls received, the

number of requests for exclusion received, the number of objections received, and the number of

pieces of Administrative Mail received.

OBJECTIONS

15. Pursuant to the Preliminary Approval Order, Paragraph 15, any Settlement Class

Member who wished to object to the Settlement was required to inform the Court and the Parties of

their intent on or before May 23, 2014. Information regarding how to object to the Settlement was

included in the Full Notice, the Summary Notices, and was listed on the Settlement Website. As of

May 11, 2014, GCG had not received and is not aware of any objections to the Settlement, timely

or otherwise.



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EXCLUSION REQUESTS

16. Pursuant to the Preliminary Approval Order, Paragraph 12, any Settlement Class

Member who wished to be excluded from or opt-out of the Settlement was required to mail a letter

to GCG requesting to be excluded from the Settlement Class, postmarked by March 24, 2014.

Information regarding how to request to be excluded from the Settlement was included in the Full

Notice, Summary Notices, and was listed on the Settlement Website. As of May 11, 2014, GCG

has received four (4) timely requests for exclusion.2 A true and correct list of the Class Members

that requested to be excluded from the Settlement is attached hereto as Exhibit E.

I declare under penalty of perjury that the foregoing is true and correct.

Executed this 13th day of May, at Seattle, Washington.

_________________________

Jennifer M. Keough

2 One of those requests—from Norcold, Inc.—was based upon an apparent misunderstanding of the purpose of an exclusion. That “request for exclusion” stated that the company did not purchase Compressors from Danfoss and continued as follows: “Therefore, Norcold, Inc. wishes to be excluded from the Danfoss Settlement.”
























Jermano v. Taylor, Not Reported in F.Supp.2d (2013)

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 1

2013 WL 1316970Only the Westlaw citation is currently available.

United States District Court,E.D. Michigan,

Southern Division.

M. Amelia (Neal) JERMANO, Plaintiff,v.

Troy TAYLOR, et al., Defendants.

No. 11–10739. | Feb. 28, 2013.

Attorneys and Law Firms

M. Amelia (Neal) Jermano, Birmingham, MI, pro se.

John J. Gillooly, Garan Lucow, Detroit, MI, Thomas L. Auth,Jr., Sullivan, Ward, Southfield, MI, Melvin R. Schwartz,Schwartz, Jalkanen, Southfield, MI, for Defendants.

Opinion

REPORT AND RECOMMENDATION

R. STEVEN WHALEN, District Judge.

*1 Before the Court is Defendants YWCA of MetropolitanDetroit, Pamela McCormick, Sandra Jones–Karim and CurtisFrance's Motion for Judgment on the Pleadings [Dock. # 96],which has been referred for a Report and Recommendationpursuant to 28 U.S.C. § 636(b)(1)(B). For the reasons setforth below, I recommend that the motion be GRANTED,dismissing these Defendants WITH PREJUDICE.

I. BACKGROUND

Plaintiff M. Amelia (Neal) Jermano (“Plaintiff”) filed apro se civil complaint on February 23, 2011, naming 48Defendants in 25 counts, including members of the OakPark and Troy, Michigan police departments and presentDefendants, YWCA of Metropolitan Detroit (“YWCA”),Pamela McCormick (“McCormick”) Sandra Jones–Karim(“JonesKarim”), and Curtis France (“France”). Plaintiff'ssecond amended complaint, filed April 29, 2011, pertains tothe alleged actions of various police officers and agencies,and a state criminal action against her for violating aPPO and aggravated stalking. She alleges violations of herconstitutional rights pursuant to 42 U.S.C. §§ 1983, 1985 and

1986, violations of various federal criminal statutes and anumber of state law claims. Docket # 11.

On January 21, 2009, Defendant Anna Magner, Plaintiff'sformer psychological counselor, petitioned for and wasgranted a PPO on the basis that Plaintiff had been callingher 15 times a day at work, and 50 to 60 times on her cellphone, threatening bodily harm and destruction of her career.Docket # 11–2, pg. 15–16. According to the petition, betweenApril, 2008 and January, 2009, Defendant Magner contactedthe Oak Park, Michigan Police Department 13 times as aresult of Plaintiff's harassment. Docket # 11–1, pg. 37 of50. Plaintiff alleges that on February 20, 2009 while drivingthrough Troy, Michigan, she was arrested following a trafficstop, based on an outstanding warrant for violating the PPO.Second Amended Complaint at ¶ 105. Following the February20, 2009 arrest, Plaintiff was detained at the Oakland CountyJail for 228 days before the aggravated stalking charges weredismissed. Id. at ¶ 177(p).

Plaintiff's claims against present Defendants are set forth inparagraphs 165–168 of the Second Amended Complaint:

¶ 165. Defendants France, Karim, McCormick and Magnerand YWCA jointly aided and abetted in the obstruction ofjustice when they condoned the creation and assertion of[ ] falsified inter-office memos that reported false claimsof [Plaintiff] making harassing phone calls to DefendantMagner at her place of work-YWCA Interim House, thatthey knew to be false at the time.

¶ 166. Defendants McCormick and Magner and YWCAInterim House of Metro Detroit, jointly aided and abettedin the obstruction of justice when they condoned thecreation and assertion of [ ] falsified inter-office memosthat reported false claims of [Plaintiff] making harassingphone calls to Defendant Magner at her place of work-YWCA Interim House that they knew to be false at thetime.

*2 ¶ 167. France, Karim, McCormick and YWCA InterimHouse of Metro Detroit, jointly conspired to falsely accuseanother of a crime (the Plaintiff [ ] ) contrary to M.C.L.750.157 by creating false inter-office memos for use in themalicious prosecution of [Plaintiff] that they knew to befalse at the time.

¶ 168. Defendants McCormick and Magner and YWCAInterim House of Metro Detroit, jointly breached theconfidentiality of [Plaintiff] in violation of the Michigan


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Consumer Protection Act 133 of 1976–445.903(bb),(cc) and (jj) which prohibits unfair, unconscionable ordeceptive methods, acts or practices in conduct of trade orcommerce.

II. STANDARD OF REVIEW

A motion for judgment on the pleadings pursuant toFed.R.Civ.P. 12(c) of the Federal Rules of Civil Procedureis subject to the same standards of review as a Rule 12(b)(6)motion to dismiss for failure to state a claim upon which reliefcan be granted. Grindstaff v. Green, 133 F.3d 416, 421 (6thCir.1998).

Fed.R.Civ.P. 12(b)(6) provides for dismissal of a complaint“for failure of the pleading to state a claim upon whichrelief can be granted.” Rule 12(b) also provides that if,on consideration of a motion under paragraph (6), “mattersoutside the pleadings are presented to and not excluded bythe court, the motion shall be treated as one for summaryjudgment and disposed of as provided in Rule 56 (summaryjudgment).” In assessing a Rule 12(b)(6) motion, the courtaccepts the plaintiff's factual allegations as true, and askswhether, as a matter of law, the plaintiff is entitled to legalrelief. Rippy v. Hattaway, 270 F.3d 416, 419 (6th Cir.2001).

In assessing the complaint's sufficiency, the court must firstdetermine whether a complaint contains factual allegations,as opposed to legal conclusions. Ashcroft v. Iqbal, 556 U.S.662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). “Threadbarerecitals of the elements of a cause of action, supported bymere conclusory statements, do not suffice.” Id., 556 U.S. at676 (citing Bell Atlantic Corp. v. Twombley, 550 U.S. 544,555, 127 S.Ct. 1955, 1964–1965, 167 L.Ed.2d 929 (2007)).Second, the facts that are pled must show a “plausible” claimfor relief, which the Court described as follows:

“Determining whether a complaintstates a plausible claim for relief will,as the Court of Appeals observed, be acontext-specific task that requires thereviewing court to draw on its judicialexperience and common sense. Butwhere the well-pleaded facts do notpermit the court to infer more thanthe mere possibility of misconduct, thecomplaint has alleged-but it has not

shown-that the pleader is entitled torelief.”

556 U.S. at 679 (internal citations omitted).

III. ANALYSIS

To begin with, the claim that present Defendants createdfalse “inter-office memos” does not state a claim uponwhich relief can be granted. See Iqbal, 556 U.S.at 679.However, the Second Amended Complaint, cobbled togetherwith Plaintiff's response to the present motion and herprevious pleadings, appears to allege that these Defendants,along with other counseling agency personnel, See Docket# 64, reported Plaintiff's alleged threats against Magner toauthorities, resulting in Plaintiff's incarceration for violatinga PPO.

*3 Given a liberal construction, claims against theseDefendants are nonetheless subject to dismissal.

A. 42 U.S.C. § 1983Counts I through V, VII, and XII of the Second AmendedComplaint allege constitutional violations pursuant to § 1983.Present Defendants state that the § 1983 claims should bedismissed because at no time during the events in questionwere any of them acting under “color of law.” Defendants'Brief at 4. Because Plaintiff has failed to make a plausibleclaim that present Defendants were acting under color of lawduring the course of the alleged events, the constitutionalclaims must be dismissed.

Under § 1983, an alleged deprivation of right guaranteedby the Constitution or laws of the United States must bedone under color of State law or regulation. 42 U.S.C. §1983. A “state action requires both an alleged constitutionaldeprivation ‘caused by the exercise of some right or privilegecreated by the State or by a rule of conduct imposed bythe State or by a person for whom the State is responsible,’and that ‘the party charged with the deprivation must be aperson who may fairly be said to be a state actor.’ “ AmericanMfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 49, 119 S.Ct.977, 143 L.Ed.2d 130 (1999) (emphasis in original) (quotingLugar v. Edmondson Oil Co., 457 U.S. 922, 937, 102 S.Ct.2744, 73 L.Ed.2d 482 (1982)). “The Sixth Circuit has threetests for state action: (1) the public function test; (2) thestate compulsion test; and (3) the symbiotic relationship ornexus test.” Bormuth v. Dahlem Conservancy, 837 F.Supp.2d


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667, 671 (E.D.Mich.2011) (Steeh, J.) (citing Lansing v. Cityof Memphis, 202 F.3d 821, 828 (6th Cir.2000); Ellison v.Garbarino, 48 F.3d 192, 195 (6th Cir.1995); Wolotsky v.Huhn, 960 F.2d 1331 (6th Cir.1992)).

Plaintiff does not allege that Defendant YWCA, a non-profit organization, and its Defendant employees are liableunder either the public function or state compulsion test.Her response to the present motion seems to allege thatpresent Defendants violated her rights by communicating heralleged threats against Magner to a law enforcement agency.Plaintiff's Response at 11–20, Docket # 102. Defendantsappear to concede that they passed along Plaintiff's threatsagainst Magner to the authorities, but note they made thereports as required by M.C.L. § 330.1946. Reply, at 3,Docket # 103. However, reporting Plaintiff's threats doesnot sufficiently allege a symbiotic relationship betweenDefendants and state actors. “Providing information to thepolice, responding to questions about a crime, and offeringwitness testimony at a criminal trial does not expose aprivate individual to liability for actions taken under colorof law.” Moldowan v. City of Warren, 578 F.3d 351, 399(6th Cir.2009) (internal punctuation omitted). Defendants arecorrect that because they were not acting under color of law,the Eighth Amendment allegations, brought pursuant to §1983 should be dismissed.

B. Conspiracy Claims*4 Plaintiff's claim that present Defendants “aided and

abetted in the obstruction of justice” is construed as aconspiracy claim pursuant to 42 U.S.C. § 1985(c). In contrastto § 1983 claims, private individuals engaged in a conspiracyfor the deprivation of constitutional rights with state actorsare deemed acting “under color of law” for purposes of §1983 actions. Macko v. Bryon, 641 F.2d 447, 449–50 (6thCir.1981). Plaintiff seems to allege that Defendants madefalse reports about her as part of a conspiracy motivatedby antihomosexual prejudice in violation of 42 U.S.C. §1985(3) which “prohibits a conspiracy ‘for the purpose ofdepriving either directly or indirectly, any person or classof persons of the equal protection of the laws or of equalprivileges and immunities under the laws.’ “ Radvansky v.City of Olmsted Falls, 395 F.3d 291, 314 (6th Cir.2005);42 U.S.C. § 1985. To maintain a cause of action under a §1985 claim, “one must prove (1) a conspiracy; (2) for thepurpose of depriving, either directly or indirectly, any personor class of persons of the equal protection of the laws, orof equal privileges or immunities of the laws; (3) an act infurtherance of the conspiracy; (4) whereby a person is either

injured in his person or property or deprived of any rightor privilege of a citizen of the United States.” Radvansky,395 F.3d at 314 (6th Cir.2005) (internal citations omitted).In addition, the claimant must demonstrate “ ‘some racialor perhaps otherwise class-based, invidiously discriminatoryanimus behind the conspirators' actions.’ “ Id. (citing Griffinv. Breckenridge, 403 U.S. 88, 102, 91 S.Ct. 1790, 29 L.Ed.2d338 (1971)).

Plaintiff's allegations that the present Defendants actedwith discriminatory animus based on her sexual orientationdoes not state a § 1985(3) claim. “[H]omosexuals are nota protected class for purposes of 42 U.S.C. § 1985(3).”Preston v. Hughes, 178 F.3d 1295, 1999 WL 107970, at *1(6th Cir.1999) (unpublished); Vega v. Artus, 610 F.Supp.2d185, 204–205 (N.D.N.Y.2009) (same). Even assuming thatPlaintiff had sufficiently alleged membership in a protectedclass, the allegation that Defendants reported Plaintiff'salleged threats to the intended victim and law enforcementagencies does not show that they engaged in a conspiracy.To the contrary, in reporting Plaintiff's alleged threatsagainst Magner to the applicable authorities, Defendantswere discharging their “duty to warn” under M.C.L. §330.1946, which provides (1) “If a patient communicates toa mental health professional who is treating the patient athreat of physical violence against a reasonably identifiablethird person and the recipient has the apparent intent andability to carry out that threat in the foreseeable future, themental health professional has a duty” to timely (2)(a) initiatecommitment proceedings [or] (b) make “a reasonable attemptto communicate the threat to the third person” and report thethreat to the appropriate authorities.

*5 Even setting aside Defendants' duty to warn, the fact thatone or more of Defendants reported Plaintiff's threats to theintended victim or provided police with a report does not statea plausible claim under § 1983 or state law that they conspiredto deprive her of her constitutional or statutory rights. “Inthis circuit, ‘[i]t is well-settled that conspiracy claims mustbe pled with some degree of specificity and that vague andconclusory allegations unsupported by material facts will notbe sufficient to state such a claim under § 1983.’ “ Moldowan,supra, 578 F.3d at 395 (citing Gutierrez v. Lynch, 826 F.2d1534, 1538 (6th Cir.1987)).

The conspiracy claim would require the Court to believethat Magner terminated Plaintiff as a client in May, 2008,then falsely reported to the Oak Park Police that Plaintiffwas harassing her. Docket # 11–1, pg. 37 of 50. One would




















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also be required to believe that Magner cajoled presentDefendants into creating false reports against Plaintiff andthen submitting them to law enforcement. While Plaintiffalleges trivial inconsistencies in Magner's numerous policecomplaints, evidence shows that Magner reported incidentsof harassment independent of present Defendants' report ofthreats against her. Docket # 11–2, pg.12 of 25. For example,Plaintiff does not deny that she banged on Magner's door,trespassed in Magner's backyard, or other committed actswhich would have constituted independent grounds for astalking charge. Id. at pg. 16. Plaintiff's failure to allege aviolation of § 1985 also moots the 42 U.S.C. § 1986 claim thatDefendants failed to prevent the commission of a conspiracy.

C. Fifth Amendment ClaimsThe Fifth Amendment protection against self-incriminationdoes not apply to noncustodial statements made voluntarilyto private citizens. See Talley v. Feldman, 941 F.Supp. 501,512 (E.D.Pa.1996) (“It is well settled that the First and FifthAmendment of the Constitution ‘apply to and restrict onlythe Federal Government and not private persons' ”) (quotingPublic Utils. Comm'n of D.C. v. Pollak, 343 U.S. 451, 461–62, 72 S.Ct. 813, 96 L.Ed. 1068 (1952); Smith v. Goord, 412F.Supp.2d 248, 252 (W.D.N.Y.2006) (“The purely privateacts of private citizens do not implicate the Fourth, Fifthand Sixth Amendments, all of which were meant to regulategovernment activity”); United States v. Romero, 897 F.2d 48,

52 (2d Cir.1990) (“Miranda 1 does not apply to incriminatingstatements made to private persons.”).

D. Claims Brought under Title 18 of the United StatesCode and the State Penal CodePlaintiff's claims of criminal misfeasance against Defendantsmust also be dismissed. None of the statutes cited byDefendants (18 U.S.C. §§ 4, 241, 242, 1512(d)(2), 242, 1513,1001, 1505, 1506, 249(a)(2)) contains a private cause ofaction. Morganroth & Morganroth v. DeLorean, 123 F.3d374, 386 (6th Cir.1997). Moreover, as a private citizen,Plaintiff “has no authority to initiate a federal criminalprosecution of the defendants for their alleged unlawful acts.”Kafele v. Frank & Wooldridge Co., 108 Fed.Appx. 307, 308–309, 2004 WL 1859348, *2 (6th Cir.2004) (citing Diamondv. Charles, 476 U.S. 54, 64–65, 106 S.Ct. 1697, 90 L.Ed.2d48 (1986)). As such, all claims brought under Title 18 of theUnited States Code should be dismissed. Likewise, Plaintiff'sclaims under Michigan's penal code, M.C.L. § § 750.411h,750.411i, 750.81, 750.81d do not provide a private causeof action and are also subject to dismissal. “[G]enerally,

where a statute contains criminal penalties for violationsof its provisions ... no private cause of action based onalleged violations of the statute will lie.” Patton v. Village ofCassopolis, 2012 WL 205832, *5 (January 24, 2012) (citingLane v. KinderCare Learning Ctrs. Inc., 231 Mich.App. 689,699, 588 N.W.2d 715 (1998)); Lowell R. Fisher v. WA FooteMemorial Hosp., 261 Mich.App. 727, 730, 683 N.W.2d 248(2005).

E. Other State Claims*6 Although Plaintiff's allegations are often difficult to

fathom, her response to the present motion states that the statelaw claims against present Defendants also include maliciousabuse of process and intentional infliction of emotionaldistress. Docket # 102, at 36.

To recover under a theory of abuse of process, a plaintiffmust plead and prove (1) an ulterior purpose, and (2) anact in the use of process that is improper in the regularprosecution of the proceeding.” Bonner v. Chicago Title Ins.Co., 194 Mich.App. 462, 472–473, 487 N.W.2d 807, 812–813 (1992). Consistent with the above discussion, Plaintiffhas not made a plausible claim that these Defendants had anulterior purpose in reporting her threats, but to the contrary,were discharging their duty to warn under M.C.L. § 330.1946.For overlapping reasons, the claims of intentional infliction ofemotional distress (“IIED”) must be dismissed. To establisha claim of IIED a plaintiff must show “(1) extreme andoutrageous conduct, (2) intent or recklessness, (3) causation,and (4) severe emotional distress.” Graham v. Ford, 237Mich.App. 670, 674, 604 N.W.2d 713 (1999). Plaintiff cannotshow that the alleged actions were unreasonable, much lessoutrageous. This claim is also defeated by her failure to makea plausible claim that Defendants made a report to authoritieswith the intention of causing her emotional distress.

While Plaintiff also includes a claim against these Defendantsunder the Michigan Consumer Protection Act (“MCPA”) forreleasing the confidential information, Defendants' actionsas either counselors or psychologists is authorized by astate regulatory board. Thus, they are exempt from therequirements of the MCPA. See M.C.L. § 445.904(1).

IV. CONCLUSION










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For these reasons, I recommend that the Motion for Judgmenton the Pleadings [Docket # 96] be GRANTED, dismissingthese Defendants WITH PREJUDICE.

Any objections to this Report and Recommendation must befiled within 14 days of service of a copy hereof as providedfor in 28 U.S .C. § 636(b)(1) and E.D. Mich. LR 72.1(d)(2).Failure to file specific objections constitutes a waiver of anyfurther right of appeal. Thomas v. Arn, 474 U.S. 140, 106S.Ct. 466, 88 L.Ed.2d 435 (1985); Howard v. Secretary ofHHS, 932 F.2d 505 (6th Cir.1991); United States v. Walters,638 F.2d 947 (6th Cir.1981). Filing of objections which raisesome issues but fail to raise others with specificity will notpreserve all the objections a party might have to this Report

and Recommendation. Willis v. Secretary of HHS, 931 F.2d390, 401 (6th Cir.1991); Smith v. Detroit Fed'n of TeachersLocal 231, 829 F.2d 1370, 1373 (6th Cir.1987). Pursuant toE.D. Mich. LR 72.1(d)(2), a copy of any objections is to beserved upon this Magistrate Judge.

Within 14 days of service of any objecting party's timelyfiled objections, the opposing party may file a response. Theresponse shall be not more than 20 pages in length unless bymotion and order such page limit is extended by the court.The response shall address specifically, and in the same orderraised, each issue contained within the objections.

Footnotes

1 Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966).

End of Document © 2014 Thomson Reuters. No claim to original U.S. Government Works.


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International Union v. Ford Motor Co., Not Reported in F.Supp.2d (2006)

39 Employee Benefits Cas. 1896


2006 WL 1984363United States District Court,

E.D. Michigan, Southern Division.

INTERNATIONAL UNION, United Automobile,Aerospace, and Agricultural Implement

Workers of America, and Bobby Hardwick,Carl Maltifano, Walter Berry, Raymond

J. Mitchel, Fay Barkley, Arlen Banks, andYvonne Hicks, on behalf of themselves and

all other persons similarly situated, Plaintiffs,v.

FORD MOTOR COMPANY, Defendant.

Nos. 05-74730, 06-10331. | July 13, 2006.

Opinion

FINDINGS OF FACT AND CONCLUSIONSOF LAW APPROVING THE CLASS ACTION

SETTLEMENT, FINDING THAT THE SETTLEMENTIS IS FAIR, REASONABLE, AND ADEQUATE

PURSUANT TO FED. R. CIV. P. 23(e)(1)(C)

BORMAN, J.

*1 Now before the Court is a health care benefits classaction lawsuit. The contesting parties have presented thisCourt with a proposed settlement agreement. The Courtheld a Federal Rule of Civil Procedure 23(e)(1)(C) FairnessHearing regarding the proposed settlement agreement on May31, 2006. At the hearing, the Court heard arguments fromcounsel for the parties (Case No. 05-74730), from counselfor objectors Bronson, et al. (Case No. 06-10331), and fromcounsel for objector Lapso, and the Court heard the specificobjections of twenty-five (25) individual objectors who hadexpressed a desire to be heard.

At the conclusion of the Fairness Hearing, the Court requestedthat the parties submit joint proposed findings of fact andconclusions of law, and the parties did so on June 14,2006. Objectors' counsel were then given an opportunity torespond to the joint proposed findings of fact and submitalternative proposed findings of fact and conclusions of law.The Bronson objectors filed a Response on June 23, 2006.

The Court has examined the proposed findings andconclusions, the objectors' responses to the proposed findings

and conclusions, as well as the additional material (i.e.,documentary evidence, affidavits, etc.) supplied by theparties during the pendency of this litigation. The Courthas also taken into consideration the positions stated bythose individual objectors who presented views to the Courtin writing or presented oral comments to the Court at the

Fairness Hearing. 1

The Court now makes the following findings of fact andconclusions of law that govern and conclude this litigation.

I. FINDINGS OF FACT

A. Background

1. Defendant Ford Motor Company (“Ford”) and PlaintiffUAW are parties to a series of collective bargainingagreements (“CBAs”), under which Ford provideshealth care benefits to active hourly workers and toeligible hourly retirees and their spouses, survivingspouses, and dependents. (Am.Compl.¶ 13) PlaintiffsBobby Hardwick, Carl Malfitano, Walter Berry,Raymond J. Mitchell, Fay Barkley, and Arlen Banksare former UAW hourly employees of Ford who haveretired. (Id. ¶¶ 6-11) Plaintiff Yvonne Hicks is thesurviving spouse of a deceased UAW hourly employee.(Id. ¶ 12)

2. In 2005, Ford announced its decision to unilaterallymodify the health benefits of retired hourlyemployees. (Id. ¶ 26) On December 13, 2005,named plaintiffs Hardwick, Malfitano, and Berry,on behalf of a class of retired Ford hourlyemployees and their spouses, surviving spouses anddependents (hereafter referred to collectively as“retirees” unless otherwise indicated) joined withthe UAW to commence this declaratory judgmentaction against Ford. On December 27, plaintiffsfiled an Amended Complaint adding Mitchell,Barkley, Banks, and Hicks (referred to collectivelywith Plaintiffs Hardwick, Malfitano and Berry as“class representatives”) as named Plaintiffs.

3. As set forth in the Amended Complaint, other thanPlaintiff Hicks, all of the individual Plaintiffs areFord retirees. (Am.Compl.¶¶ 6-11) Mrs. Hicks isthe surviving spouse of a Ford retiree. (Id.. ¶ 12)The six retiree plaintiffs had, in the past, been


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elected by fellow retirees to serve on various retiredworker councils and chapters. (Id. ¶¶ 6-11)

*2 4. More particularly, Plaintiff Hardwick wasemployed by Ford in Lorain, Ohio, and was amember of the bargaining unit represented by theUAW until his retirement in 1997. In March 2004,Mr. Hardwick was elected chairperson of the UAWEastern Kentucky Retired Workers Council, whichis part of the UAW Region 3 Area Retired WorkersCouncil. (Docket No. 878, Ex. 7, Hardwick Decl.)

5. Plaintiff Malfitano was employed by Ford inSterling Heights, Michigan, and was a member ofthe bargaining unit represented by the UAW untilhis retirement in 1992. After his retirement fromFord, Mr. Malfitano was appointed Chairpersonof the UAW Region 1 Retired Workers Council,which covers several counties in Michigan.(Docket No. 878, Ex. 8, Malfitano Decl.)

6. Plaintiff Berry was employed by Ford inIndianapolis, Indiana, and was a member of thebargaining unit represented by the UAW untilhis retirement in 1987. Mr. Berry serves as thechairperson of the Local 1111 Retired WorkersChapter. (Docket No. 878, Ex. 9, Berry Decl.)

7. Plaintiff Mitchell was employed by Ford in Wayne,Michigan and Allen Park, Michigan, and was amember of the bargaining unit represented by theUAW until his retirement in 1998. In 1999, hewas elected chairperson of the UAW Local 931Retired Workers Chapter. (Docket No. 878, Ex. 10,Mitchell Decl.)

8. Plaintiff Barkley was employed by Ford in SterlingHeights, Michigan, and was a member of thebargaining unit represented by the UAW untilher retirement in 1988. In 1994, Mrs. Barkleywas elected chairperson of the UAW Local 2280Retired Workers Chapter. (Docket No. 878, Ex. 11,Barkley Decl.)

9. Plaintiff Banks was employed by Ford in LongBeach, California, and Pico Rivera, California untilhis retirement in 1980. In approximately 1995, hewas elected chairperson of the UAW Region 5 AreaRetired Workers Council, which covers SouthernCalifornia. (Docket No. 878, Ex. 12, Banks Decl.)

10. Plaintiff Hicks's late husband Samuel Hicksworked for Ford at its Sharonville, Ohio, facility.He retired in 1980 and passed away in 2005.(Docket No. 878, Ex. 13, Hicks Decl.)

11. On January 24, 2006, Objector Lawrence Bronsonand two other Ford/UAW retirees filed a complainttitled Bronson, et al. v. Ford Motor Co., Civ.A. No. 06-10331 (E.D.Mich.), asserting the sameclaims and seeking the same relief as the classin this action. (See Bronson Compl., Civ. A. No.06-10331, Docket No. 1, at 1-2) The Bronsoncomplaint also sought, pursuant to Federal Rule ofCivil Procedure 23(b)(2) and 23(b)(3), to certifya class defined substantially identical to the classoriginally alleged by the Hardwick plaintiffs andto have Mr. Bronson's counsel, Mark Baumkel,Steven Schwartz and Daniel Scott, named as ClassCounsel. (See id. at 3-4, 11) On January 25, 2006,Bronson also moved to intervene in this action. (SeeDocket No. 6, Mot. to Intervene)

12. On February 6, 2006, class representativesfiled a motion seeking certification of a classof Ford retirees, spouses, surviving spouses,and dependents; class representatives also soughtappointment of Class Counsel. (Docket No. 16,Mot. for Class Certification)

*3 13. On February 13, 2006, after Class Counselhad completed their investigation and giventheir recommendation to class representatives,the parties entered into a Settlement Agreement.(See Docket No. 24, Ex. 1, Proposed SettlementAgreement Preamble; see also Docket No. 878,Exs. 7-13 (class representatives' declarations))Over the preceding weeks, the parties negotiatedthe terms of the Agreement. Class Counsel fullyparticipated in these negotiations. During thenegotiations, as an example, Ford demanded thatit be able to re-coup monthly premium paymentsfrom retirees and surviving spouses who mightbe improperly placed in the protected group (i.e.,those participants who are not subject to monthlypremium payments, co-pays, and deductibles). (Id.¶ 23) The UAW and Class Counsel resistedthis demand, and the Settlement Agreement doesnot permit Ford to retroactively charge suchindividuals. On the same date, the parties submitted








their proposed Settlement Agreement to the Courtand asked the Court to preliminarily approve theproposed Settlement and order that notice of thesettlement be sent to class members. (Docket No.24, Jt. Mot. for Prelim. Approval)

14. The instant case was initially assigned to UnitedStates District Judge Arthur Tarnow. On February24, 2006, Judge Tarnow provisionally certifieda class, and approved the named plaintiffs asrepresentatives of the class and their counsel ascounsel to the class. (Docket No. 36, Order) JudgeTarnow defined the class as:

All persons who, as of December 22, 2005, were(a) Ford/UAW hourly employees who had retiredfrom Ford with eligibility to participate in retirementin the Ford Hospital-Surgical-Medical-Drug-Dental-Vision Program (“Plan”), or (b) the spouses,surviving spouses and dependents of Ford/UAWhourly employees, who, as of December 22, 2005,were eligible for post-retirement or surviving spousehealth care coverage under the Plan as a consequenceof a Ford/UAW hourly employee's retirement fromFord or death prior to retirement.

(Docket No. 36, Order ¶ 8).

15. Judge Tarnow ruled that all of the requirementsof Rule 23(a) were satisfied and that the class wasproperly certified under Rule 23(b)(2).

16. The Court certified the following class:

All persons who, as of December 22, 2005, were(a) Ford/UAW hourly employees who had retiredfrom Ford with eligibility to participate in retirementin the Ford Hospital-Surgical-Medical-Drug-Dental-Vision Program (“Plan”), or (b) the spouses,surviving spouses and dependents of Ford/UAWhourly employees, who, as of December 22, 2005,were eligible for post-retirement or surviving spousehealth care coverage under the Plan as a consequenceof a Ford/UAW hourly employee's retirement fromFord or death prior to retirement. (Id.)

17. Also in this Order, the Court appointed attorneysWilliam T. Payne, John Stember, and Edward J.Feinstein as Class Counsel, finding that:

*4 [T]hese attorneys will fairly and adequatelyrepresent the interests of the class, in considerationof the work counsel has done in identifying orinvestigating potential claims in this action, counsel'sexperience in handling class actions, other complexlitigation, and claims of the type asserted in thisaction, counsel's knowledge of the applicable law, andthe resources counsel will commit to representing theclass. (Id.)

18. The Court also preliminarily approved theSettlement Agreement by Order dated February 24,2006. (Docket No. 35) The Court concluded:

The Settlement Agreement (at exhibit 1 to theparties' Joint Motion for Preliminary Approval) ispreliminarily approved. The Court finds that theproposed settlement falls within the range of possibleapproval, does not disclose grounds to doubt itsfairness, and includes no obvious deficiencies.

19. The Court also directed Ford to use its bestefforts to send notice to individual class membersby March 10, 2006. The form of Notice sentto class members is attached to the PassarellaDeclaration. (Docket No. 882, Ex. F, PassarellaDecl.) Along with the Notice, class members werealso sent the actual Settlement Agreement. TheNotice includes a brief summary of the Agreement,advising that much “technical detail” was omittedfrom the Notice, urging class members to readthe Agreement carefully, and explaining that ifthere were any inconsistencies between the Noticeand the Agreement, the Agreement would govern.(Docket No. 882, Ex. F, Passarella Decl. Ex.1,Class Notice at 5, 19) The Court-approved Noticealso explained precisely how objections were tobe submitted and that any objecting class membercould tell the Court in person why he or shebelieved the settlement should not be approved.(Id. at 17) The Notice was sent to class membersalong with a cover letter from Class Counsel and theUAW that provided additional information aboutthe settlement. (See id.) Notice was also publishedin USA Today, the Detroit News and the DetroitFree Press. (Docket No. 882, Ex. G, Kuzma Decl.¶¶ 3-5)

20. Also on February 24, 2006, after preliminarilyapproving the proposed Settlement, certifying the







Hardwick class, and appointing Messrs. Payne,Stember, and Feinstein as Class Counsel, the Courtdenied Bronson's motion for intervention. (DocketNo. 37, Order Denying Mot. to Intervene WithoutPrejudice) Thereafter, on February 28, 2006, theCourt issued an order consolidating the Bronson

action with this action. 2 (Bronson v. Ford, Civ. A.No. 06-10331, Docket No. 11, Order ConsolidatingCases)

21. On March 23, 2006, Class Counsel filed a motion forattorneys' fees and expenses. (Docket No. 131) On July12, 2006, this Court entered an Order granting ClassCounsel's Motion for Attorney Fees.

B. Plaintiffs' Claims And Ford's Defenses

22. In their Amended Complaint, plaintiffs alleged thatunder the CBAs, plaintiffs' health benefits are vested,and that Ford “may not unilaterally terminate or modifythose benefits.” (Am.Compl.¶¶ 23, 25) According toplaintiffs, Ford's decision to modify benefits is an“anticipatory repudiation” of its “contractual obligation”under the CBAs and “its obligations as plan sponsor andadministrator” of an employee welfare plan. (Id. ¶¶ 29,32)

*5 23. In Count I, brought under Section 301of the Labor Management Relations Act, 29U.S.C. § 185, plaintiffs seek an injunction and adeclaration that retiree health care benefits cannotbe unilaterally terminated or modified by Ford. (Id.¶¶ 3, 28-30) The plaintiffs also seek the same reliefin Count II, under Section 502(a)(1)(B), (a)(3) ofthe Employee Retirement Income Security Act of1974 (“ERISA”), 29 U.S.C. § 1132(a)(1)(B), (a)(3).(Id. ¶¶ 4, 31-33)

24. Ford filed its Answer and Affirmative Defenses onJanuary 17, 2006. Ford denies that the retiree healthcare benefits it provides are vested benefits thatcannot be unilaterally modified or terminated byFord. (Docket No. 4, ¶ 26) Ford asserts affirmativedefenses, including that plaintiffs' claims arebarred by the terms of the CBAs, as well as byacquiescence, waiver, ratification and/or estoppel.(Id. Affirm Def. ¶¶ 1-9)

C. Ford's Financial Crisis

25. In recent years, Ford has faced increasingly difficultfinancial problems, stemming largely from its corebusiness, North American auto manufacturing. In 2005,Ford's global automotive operations lost $1.0 billion,and virtually all of the loss was experienced in NorthAmerica. (See Docket No. 882, Ex. C, Gouin Decl. ¶3) First quarter results for 2006 show a loss of $0.5billion-$1.1 billion less than first quarter 2005. (Id.)Even though Ford's worldwide automotive operationslost $1.0 billion, the company had a $2.0 billion profitlast year due to the performance of the financing side ofFord's business. (Id. ¶ 2)

26. Ford's automotive operating cash flow-the cashflow generated by Ford's automotive business-has also substantially declined. In 2005, Fordexperienced negative automotive cash flow of$1.3 billion (excluding the $0.4 billion cost ofemployee separation programs). (See id. ¶ 4). In thefirst quarter of 2006, cash flow has continued todeteriorate, with Ford already experiencing $0 .7billion negative cash flow (excluding $0.5 billioncost of separation programs). (See id.)

27. Ford's market share position in the U.S.automotive market has declined significantly,dropping to 17% in 2005 from 25% only ten yearsago. (Id. ¶ 5) Among the reasons for Ford's declinein market share is that many of the brands withwhich Ford is now competing-including Infinity,Lexus, Acura, and Scion-do not have the legacyexpenses of long-standing U.S. automakers likeFord, and therefore enjoy a substantial pricing andcompetitive advantage. (Id.)

28. Ford's financial and competitive problems havealso affected the value of its business. In 2001,Ford's market capitalization-a measure of valuedetermined by the market price of its outstandingshares of stock-stood at $54 billion. (Id. ¶ 6) By2005, it had dropped almost 75%, to only about $14billion. (Id.) To put that present market value inrelevant context, Ford's total market capitalizationis now only 40% of the present value of its futurepost-retirement non-pension benefits. (Docket No.882, Ex. A, Benson Decl. ¶ 9) The present value ofFord's future retirement benefits, typically referredto as either accumulated post-retirement benefitsobligation (“APBO”) or other post-employment


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benefits obligation (“OPEB”), was $37 billion in2005, and virtually all of that, $35 billion, isattributable to retiree health care costs. (Id. ¶7) Over the same period, Ford's stock price hasdropped from $30 per share in March 2001 to $6.80per share as of July 11, 2006. (Docket No. 882, Ex.C, Gouin Decl. ¶ 6)

*6 29. Market capitalization, APBO and loss ofmarket share also influence how credit analystsview the company. As recently as 2000, Ford'scredit rating was “A+,” but by May 2005 the ratinghad been downgraded to non-investment or “junk”levels by both Standard & Poor's and Moody's,the two leading debt rating agencies. (Id. ¶ 7)As one of the reasons for the downgrade, creditrating agencies cited Ford's massive retiree healthcare expense, reflecting their uncertainty that Fordcan meet its financial obligations under certainconditions. (Id. ¶ 8; see also Docket No. 24, Jt. Mot.For Prelim. Approval, Ex. 2) Just recently, FitchRating downgraded Ford's rating from BB to B+.J. McCracken, Ford's Debt Rating Is DowngradedTwo Notches, Wall Street Journal, Jun. 9, 2006 atA3.

30. Ford's deteriorating credit rating has severaladverse effects on Ford's financial position. It limitsthe Company's access to capital and substantiallyincreases the cost of borrowing, making it moredifficult for Ford to generate revenue and investin new products and other business development.(Id. ¶ 9) It worsens Ford's competitive position,because most of Ford's competitors do not facethe same constraints. (Id. ¶ 10) And importantly,it also reduces the positive net income generatedby Ford's finance and lending arm, Ford Credit.(Id.) In recent years, Ford Credit has provided theprimary positive contribution to Ford's financialperformance, accounting for all of the company'scumulative consolidated profits since 2001. (Id.)Because of the downgrades, Ford Credit's overallcost of borrowing has significantly increased, andit has been forced to shift from unsecured fundingto asset-backed borrowing. (Id.) Ford Credit'sbusiness is largely dependent on financing Ford'sautomotive sales, which are declining in marketshare. (Id.) And Ford's financial position will alsobe affected by the recent sale of Hertz car rental toraise needed cash. (Id. ¶ 12)

D. Impact Of Health Care Expense On Ford's FinancialPerformance

31. Ford provides health care benefits to approximately590,000 employees, retirees, and their dependents in theUnited States. (Docket No. 882, Ex. A. Benson Decl. ¶ 4)In 2005, the company spent $3.5 billion on health care,of which over two-thirds, or $2.4 billion, was spent onhealth care for Ford retirees. (Id.) Health care expenseis rapidly escalating. Ford's total health care expensehas increased 67% since 2000, and retiree health careaccounted for some 80% of that increase. (Id. ¶ 5)

32. Looking at health care costs from anotherperspective, Ford spent some $1,100 per vehicleon health care in 2005-more than the per-vehiclecost of steel. (Id. ¶ 6) Over two-thirds of thisper-vehicle cost was attributable to retiree healthcare. (Id .) This huge cost represents a significantcompetitive disadvantage, because many of Ford'sforeign competitors do not bear the substantiallegacy costs of retiree health care. For example,Japanese automakers that manufacture and selltheir products in the United States bear a per-vehicle cost of only $450 to provide health care forboth active and retired personnel-less than half thelevel Ford pays. (Id.)

*7 33. Ford's $37 billion APBO is one of thelargest among U.S. companies, according toinformation obtained from available Securities andExchange Commission 10-K filings for publiclyheld companies. (Id. ¶ 9) Across Fortune 50companies, APBO liability is on average less than10% of either revenues or market capitalization.(Id.) In contrast, as of December 31, 2005, Ford'sAPBO was nearly 300% of the value of thecompany itself as measured by the market value ofits outstanding shares of stock, and was equal toalmost 40% of its annual sales. (Id.)

E. The UAW's History Of Fighting For Retirees

34. The UAW has a long and storied history of defendingthe interests of retirees-including particularly, retireehealth care and other retiree benefits-both at thebargaining table and in the courtroom. For example,during the 1960s the UAW negotiated improvementsin health care for already retired employees, with theresult that a retiree who left Ford in 1958 under a





collective bargaining agreement providing for no Fordcontribution to retiree health became entitled by 1967 toFord's payment of 100% of the premiums for himself andeligible dependents. (Docket No. 896, Bantom Decl. ¶ 6)

35. In addition, the UAW has litigated or funded thelitigation of numerous cases on behalf of UAWretirees to preserve retiree benefits. (Id. ¶ 7 & Ex.C) The UAW has litigated these cases in trial andappellate courts, with active workers footing thelegal bills through their union dues.

36. UAW active members have historically proventheir willingness to devote their bargainingleverage, their dues, and now their scheduled wageincreases, to the cause of retiree health benefitsfor two reasons: because active workers-about one-quarter of whom are facing imminent retirementthemselves-recognize that they will benefit fromthe UAW's advocacy when it comes time for theirown retirement, and because they believe it issimply the right thing to do. (Id. ¶ 8)

F. The UAW And Class Counsel's Independent AnalysisOf Ford's Finances

37. Before Plaintiff UAW agreed to negotiate withDefendant Ford on retiree health care benefits,it insisted that Ford provide full access toFord's books, including highly confidential financial,manufacturing, purchasing, marketing, personnel, andproduct information, as well as access to top executives,from which and whom UAW could make an independentanalysis of Ford's finances. The UAW retained theinvestment banking firm of Lazard Frères & Co. LLC(“Lazard”) to perform a financial analysis. Lazard'smandate included:

(i) evaluating Ford's financial position and prospects,(ii) analyzing Ford's ability to meet its prospectiveretiree healthcare obligations and (iii) consideringthe need for and potential impact of healthcarerelief on Ford's financial condition and prospects.

(Docket No. 890, Yearley Decl. ¶ 9)

38. Ford accepted the UAW's conditions and providedthe UAW and Lazard with unprecedented accessto sensitive confidential information about theCompany's financial condition generally and health

care expenditures in particular. (See Docket No. 24,Ex. 1, Proposed Settlement Agreement ¶ 3)

*8 39. Lazard's analysis fully confirmed Ford'sconsiderable financial challenges and that Fordwas at serious risk of further decline. (See DocketNo. 879, Bantom Decl. ¶¶ 17-19; Docket No.879, Yearley Decl. ¶¶ 19-22) On the basis ofthis independent confirmation of Ford's condition,the UAW agreed to consider entering into anagreement with Ford concerning retiree health carebenefits similar to an agreement it had entered

into with General Motors (“GM”). 3 The UAWconcluded:

Furthermore, UAW was aware the Ford retiree medicalbenefits are not funded by sufficient assets held in trustfor that purpose, and Ford retirees are directly dependenton the corporation's survival for their continued benefit.If the company's financial situation continued to worsen,even to the point of insolvency, retiree medical benefitscould be eliminated altogether. UAW was convincedthat if Ford was at significant risk of continuing in adownward financial spiral, it was vastly preferable toaccept modified benefits than nothing at all.

(Docket No. 896, Bantom Decl. ¶ 12). The UAW'sframework was not automatically binding on theretirees, but was contingent on court approval.

40. Class Counsel also conducted a substantial factualinvestigation and legal inquiry. Class Counsel wasafforded access to all of the information that wasprovided to the UAW, as well as to the analyses andopinions of the UAW's experts who reviewed thisinformation. (Docket No. 878, Ex. 1; Payne Decl.¶ 25) Class Counsel also retained their own expertsto assist in reviewing the documents provided tothem by Ford, UAW and UAW's financial advisorsin order to analyze Ford's financial condition. (Id.¶ 11) Class Counsel's independent investigationand analysis included, inter alia, review ofFord's financial information and projected financialcondition, review and analysis of relevant healthcare and plan documents and CBAs, and reviewof material on Ford's health care costs. (Id. ¶¶26-27; see also Docket No. 24, Ex. 1, ProposedSettlement Agreement ¶ 3) Like counsel for theUAW, Class Counsel also thoroughly reviewed therelevant collective bargaining agreements by which





retiree health benefits were created and investigatedthe law applicable to Ford's unilateral decision tomodify retiree health benefits. (Docket No. 878, Ex.1, Payne Decl. ¶¶ 25, 29; Docket No. 24, Ex. 1,Proposed Settlement Agreement § 3)

41. Based on their investigation, Class Counselconcluded that Ford is facing very serious financialdifficulties and that continuation of a quality retireemedical program depends on Ford remaining aviable company. (Docket No. 878, Ex. 1, PayneDecl. ¶ 28; Docket No. 24, Ex. 1, ProposedSettlement Agreement § 4) Class Counsel furtherconcluded that absent substantial cost-reductionmeasures, Ford may not survive in a form thatallows it to continue to provide comprehensive andhigh quality retiree medical benefits over the longterm. (Id.)

G. UAW/Ford Negotiations

*9 42. In December 2005, UAW presented Ford with apackage of modest cuts to retiree health benefits. Underthis proposal, the most financially vulnerable retireeswere protected and Ford was required to mitigate thecosts to retirees of these cuts through contributions toa defined contribution Voluntary Employee BenefitsAssociation (“DC-VEBA”) trust. (Docket No. 896,Bantom Decl. ¶ 21) Specifically, the proposal protectedretirees whose pensions fell below $8,000 per year(and a benefit multiplier of $33.33 per month peryear of service) from the requirement of any monthlycontributions, co-pays, or deductibles. (Id. ¶ 21) Forretirees with higher pension benefits, the plan calledfor relatively low drug co-payments, deductibles, andmonthly contributions, which were subject to out-of-pocket maximums and a three percent cap on theamounts that these payments could increase annually.(Id. ¶ 21) The proposal also included a “case-law standstill” whereby, if Ford later terminated theSettlement Agreement and attempted to unilaterallydecrease retiree health benefits, the ensuing litigationwould be controlled by the case law as it existed atthe time of the agreement's final approval (precedentthat UAW deemed favorable to retirees). (Id. ¶ 21)Finally, the proposal was also conditioned on UAWactive workers voting to agree to contribute their ownfuture contractual wage and cost of living increases,amounting to just under $1.00 per hour initially, andincreasing cumulatively over time with an additional 2

cents per quarter of COLA contributions, to the DC-VEBA to mitigate costs to the retirees. (Id. ¶ 21)

43. Ford initially requested a 25% reduction in itsOPEB liability. (Id. ¶ 22) UAW determined thata 25% reduction in Ford's OPEB liability wouldrequire that the defined benefit portion of theretirees' health care plan be reduced more than thelevel the UAW had proposed. (Id. ¶ 22) UAWinformed Ford that it would not agree to suchreductions. Ford eventually agreed to the definedbenefit levels proposed by the UAW. (Id. ¶ 22)According to Ford's actuaries, this resulted inroughly a 15% reduction in Ford's OPEB liability.(Id. ¶ 22)

44. Furthermore, Ford and UAW negotiated overseveral other aspects of the proposed Settlement.One was the size of Ford's contribution to theDC-VEBA, which Ford attempted to limit to $35million. (Id. ¶ 23) Eventually, Ford agreed tocontribute $108 million in cash to the DC-VEBAand to make additional contributions if Ford's stockappreciated or Ford issued special dividends. (Id.¶ 23) Ford also unsuccessfully requested that thecase-law standstill be softened or eliminated, andthat it be allowed to charge higher prescriptiondrug co-pays for mail order drugs than the co-paysset forth in the UAW proposal. (Id. ¶ 23) UAWinsisted on the lower drug co-pays it had proposed,and Ford ultimately agreed. (Id. ¶ 23) Based onthe actuarial calculations of its benefits consultants,the UAW determined that at the funding andinitial mitigation levels secured by the Settlement,the DC-VEBA is projected to last well beyondtwenty years. (Id. ¶ 23) Accordingly, UAW agreedto forgo its demand profit-sharing contributionsand the contingent possibility of regular dividendcontributions (in the event that Ford increased itsregular dividends) to the DC-VEBA. (Id. ¶ 23)

*10 45. The parties' negotiations resulted in aMemorandum of Understanding on December 14,2005, that was ratified in a vote by Ford's activehourly UAW workforce on December 22, 2005,and ultimately culminated in a detailed SettlementAgreement on February 13, 2006, contingent oncourt approval pursuant to Federal Rule of CivilProcedure 23. (Id. ¶ 24). Class Counsel participatedin negotiation of the Settlement Agreement.







H. Memorandum Of Understanding (“MOU”)

46. The MOU (Docket No. 879, Ex. 1), which laid out thebasic framework for settlement, was ratified, albeit by aslim margin, in a vote of active Ford UAW employeeson December 22, 2005. (Docket No. 24, Ex.1, ProposedSettlement Agreement ¶ 5)

47. Under the terms of the MOU, active Ford hourlyemployees will defer wages and cost-of-livingallowance adjustments in order to partially fundretiree health care benefits, if the parties' settlementis approved. (Docket No. 879, Ex. 1, MOU at 6;see also Docket No. 24, Ex. 1, Proposed SettlementAgreement § 13.B)

48. The MOU provides that “Future Retirees,” definedas hourly Ford employees retiring after December22, 2005, will receive retiree health care benefitspursuant to the terms of the Settlement Agreementon the same basis as class members, althoughFuture Retirees are not class members. (Docket No.879, Ex. 1, MOU at 4, 7)

I. The Proposed Settlement

49. The parties' Settlement provides for the establishmentof a new health care plan, called the “Modified Plan,”and the establishment of the DC-VEBA.

50. Ford/UAW retirees currently pay no monthlypremiums or co-insurance and are not subjectto any annual deductibles. For the mostfinancially vulnerable retiree households, thisremains unchanged. These “Protected Retirees”will continue to pay no monthly premiumsor yearly deductibles. This protected categoryincludes approximately 32,000 class members, oralmost 20% of the class (Docket No. 24, Jt.Mot. For Prelim. Approval at 9), and consistsof class members who (a) are entitled to anannual Ford pension benefit income of $8,000or less; and (b) receive a pension based ona monthly rate of $33.33 or less per year ofcredited service. (Docket No. 24, Ex. 1, ProposedSettlement Agreement ¶ 7) Protected Retirees willsee only minor administrative modifications to theirbenefits. (See id. at 13-14) Only two of the sevenclass representatives are “Protected Retirees.” (See

Class Representatives' Declarations, Docket Nos.906, 908-12, 915).

51. Under the terms of the Settlement, remainingclass members who participate in the regularFord program, termed “General Retirees,” will paymodest new charges as part of the Modified Plan. Inthe initial plan year, taking into account mitigationprovided by the DC-VEBA which is describedinfra, the impact on General Retirees will be asfollows:

• Monthly premiums will be $10 for individualparticipants and $21 for family participant

*11 • Deductibles will be $150 per individualparticipant, subject to an aggregate limit of $300per family; and

• “Co-insurance” will be instituted, meaning thatGeneral Retirees will be responsible for 10% ofmost medical charges. The effect of this new co-insurance will be minimal because a new “out-of-pocket” maximum will cap the annual total ofdeductibles and co-insurance at $250 per singleperson and $500 per family for in-network services.

(Docket No. 24, Ex. 1, Proposed Settlement Agreement§ 14.A) At most, these new charges can cost a singleretiree $370 per year ($120 in premiums, $150 ina deductible, and another $100 in co-insurance toreach the out-of-pocket maximum), and can cost afamily $752 per year ($252 in premiums, $300 ina deductible, and another $200 in co-insurance toreach the out-of-pocket maximum) for in-networkservices. (Docket No. 878, Ex. 1, Payne Dec. ¶ 33)Based on their pensions, five of the seven classrepresentatives would be “General Retirees.” (See

Class Representatives' Declarations, Docket Nos.906, 908-12, 915)

52. Under the Modified Plan, General Retireeswill have prescription drug coverage under whichthey will be responsible for modest co-payments.For drugs purchased at retail, the co-payment is$5 for generic drugs and $12 for brand-namedrugs. (Docket No. 24, Ex. 1, Proposed SettlementAgreement § 5.A.2(f))

53. General retirees will also be subject to a co-payment rate of $50 per emergency room visit





unless the patient is admitted, in which case theco-payment is waived. (Docket No. 24, Ex. 1,Proposed Settlement Agreement § 5.A.2(e))

54. All of these dollar denominated amounts aresubject to annual increases of no more than three(3) percent. (Id. § 5.B)

55. Even with these increases, and assuming nomitigation, the Modified Plan provides a rangeof benefits for retirees that substantially exceedsthe benefits generally available to most otherretirees under health care plans offered by largeU.S. employers, and at a cost to retirees that issubstantially less than most other retirees pay.(Docket No. 882, Ex. E, Borzi Decl. ¶¶ 20-21)The Modified Plan is more generous as comparedto other large employer-sponsored retiree healthcare plans with respect to monthly premiums,annual deductibles, out-of-pocket maximums, andprescription drug benefits. (Id.) Additionally, Fordhas submitted an expert evaluation indicating thateven as modified, its retiree health benefits remainamong the most generous in the nation. (See DocketNo. 882, Ex. E, Borzi Decl. ¶ 21)

56. Under the terms of the Settlement Agreement,Ford remains responsible for providing retireehealth care coverage. Funds in the DC-VEBA willbe used to mitigate the monthly contributions,deductibles, out-of-pocket maximums, and/or co-insurance amounts payable by retirees; dentalbenefits also will be paid out of the DC-VEBA.(Docket No. 24, Ex. 1, Proposed SettlementAgreement § 14.A)

*12 57. Under the Settlement Agreement, retireeswho do not enroll in the Modified Plan will beenrolled in the Catastrophic Plan. The CatastrophicPlan does not require any monthly premiums, butit has, inter alia, higher deductibles and higherco-payments for emergency room visits and forprescription drugs, and no dental coverage. (Id. § 6& Ex. 2)

58. Under the Settlement Agreement, the parties willestablish the DC-VEBA, which will be governedby a board of trustees entirely independent of Ford.The DC-VEBA is designed to reduce costs forhealth care benefits, that, under the SettlementAgreement, will not be paid by Ford. (See id. § 14)

This trust will be funded from several sources. Fordwill contribute $108 million to the DC-VEBA inthe form of contributions of $30 million in 2006,$35 million in 2009, and $43 million in 2011. (Id.§ 13.A) The 2009 and 2011 contributions will bemade earlier if the balance of funds in the trustfalls below a level sufficient to provide the costmitigation described above. (Id.)

59. Active UAW-represented employees willcontribute to the DC-VEBA through the deferralof an average of 99 cents per hour of future wageincreases, consisting of (i) a total of $0.17 perhour of cost of living adjustments at a maximumrate of $0.06 per quarter, and (ii) the scheduledSeptember 2006, 3% wage increase. In addition,active hourly employees will defer $0.02 per hourof cost of living increases cumulatively in eachsubsequent quarter. (Id. § 13.B) All told, eachactive UAW-represented employee initially willgive up approximately $2,000 per year in order tofund the DC-VEBA for the benefit of retirees, andthis amount will increase each year. (Docket No.896, Bantom Decl. ¶¶ 36-37)

60. The DC-VEBA will also hold stock appreciationrights on 8,750,000 shares of Ford stock. Ford willbe required to make additional deposits to the DC-VEBA based on future increases in Ford's stockprice. (Id. § 13.C) The DC-VEBA will also receivean additional payment in the event Ford issues anyspecial dividends between December 14, 2005 andthe third anniversary of the Effective Date of theSettlement Agreement. (Id. § 13.D)

61. The Settlement Agreement will continue in effectuntil at least September 14, 2011. (Id. § 18)Thereafter, the Settlement Agreement will continuein effect indefinitely, unless either Ford or theUAW elects to terminate it. (Id.)

62. In the event that Ford or the UAW elects toterminate the Settlement Agreement, it providesthat all parties will remain protected by the “NoAdmissions; No Prejudice” provisions set forth inSection 19 of the Agreement. (Id.) In the eventof such termination, the class will be free to suenot only to reinstate the benefits of the ModifiedPlan, but also to prospectively reinstate the currentplan, i.e., a comprehensive plan without monthly





contributions and deductibles. (See id.) Also in theevent of such termination and ensuing litigation,the applicable body of decisional law will be caselaw as of the date the Settlement goes into effect.E.g., UAW v. Yard-Man, Inc., 716 F.2d 1476

(6 th Cir.1983). (Docket No. 24, Ex. 1,ProposedSettlement Agreement § 19)

*13 63. The Settlement Agreement provides thatthe Court's final judgment will expressly reciteand confirm the provisions of Section 19, the “NoPrejudice” provision. (Id. § 19) Those provisionsare as follows:

No Admissions; No Prejudice

A. Notwithstanding anything to the contrary, whetherset forth in this Settlement Agreement, the MOU, theJudgment, the Notice Order, any documents filed withthe Court in the Hardwick Case, any documents whetherprovided in the course of or in any manner whatsoeverrelating to the 2005 and 2006 discussions between Fordand UAW and Class Counsel with respect to health carebenefits or relating to this Settlement Agreement or theMOU, whether distributed, otherwise made available to orobtained by any person or organization, including withoutlimit, Active Employees, Class Members, or the spouses,surviving spouses or dependants of any of the foregoing, orto the UAW or Ford in the course of the negotiations thatled to entry into this Settlement Agreement, or otherwise:

(a) Ford denies and continues to deny any wrongdoingor legal liability arising out of any of the allegations,claims and contentions made against Ford in theHardwick Case and in the course of the negotiationof the MOU or this Settlement Agreement. Noneof the MOU, any disputes or discussions betweenFord and the UAW with respect to health carebenefits or regarding entry into this SettlementAgreement occurring on or after January 1, 2005,this Settlement Agreement nor any document referredto or contemplated herein nor any action taken tocarry out this Settlement Agreement nor any retireehealth care benefits provided hereunder or any actionrelated in any way to the ongoing administrationof such retiree health care benefits (collectively, the“Settlement Actions” ) is, may be construed as, or maybe viewed or used as, an Admission by or against Fordof any fault, wrongdoing or liability whatsoever, or asan Admission by Ford of the validity of any claim or

argument made by or on behalf of the UAW, ActiveEmployees, the Class or Future Retirees, that retireehealth benefits are vested. Without limiting in anymanner whatsoever the generality of the foregoing,the performance of any Settlement Actions by Fordmay not be construed, viewed or used as an Admissionby or against Ford that, in the event of the terminationof this Settlement Agreement pursuant to Section 18,it does not have the unilateral right to modify orterminate retiree health care benefits.

(b) Each of the UAW, the Class Representatives andthe Class Members claim and continue to claim thatthe allegations, claims and contentions made againstFord in the Hardwick Case have merit. Neither thisSettlement Agreement nor any document referred toor contemplated herein nor any Settlement Actionsmay be construed as, or may be viewed or used as,an Admission by or against any of the UAW, theClass Representatives or the Class Members of anyfault, wrongdoing or liability whatsoever or as anAdmission by the UAW, the Class Representativesor the Class Members of the validity of any claim orargument made by or on behalf of Ford that Ford hasa unilateral right to modify or terminate retiree healthcare benefits or that retiree health care benefits are notvested. Without limiting in any manner whatsoeverthe generality of the foregoing, the performance ofany Settlement Actions by any of the UAW, the ClassRepresentatives or the Class Members, includingwithout limitation, the acceptance of any retiree healthcare benefits under any of the Ford health care plansset forth in this Settlement Agreement, may not beconstrued, viewed or used as an Admission by oragainst any of the UAW, the Class Representatives orthe Class Members that, in the event of the terminationof this Settlement Agreement pursuant to Section 18,Ford has the unilateral right to modify or terminateretiree health care benefits.

*14 (c) There has been no determination by anycourt as to the factual allegations made against Fordin the Hardwick Case. Entering into this SettlementAgreement and performance of any of the SettlementActions shall not be construed as, or deemed to beevidence of, an Admission by any of the partieshereto, and shall not be offered or received inevidence in any action or proceeding against anyparty hereto in any court, administrative agency orother tribunal or forum for any purpose whatsoever






other than to enforce the provisions of this SettlementAgreement or to obtain or seek approval of thisSettlement Agreement in accordance with Rule 23 ofthe Federal Rules of Civil Procedure and the ClassAction Fairness Act of 2005.

For the purposes of Section 19 of this SettlementAgreement, Ford and the UAW refer to Ford MotorCompany and the Union, respectively, as organizations,as well as any and all of their respective directors,officers, and agents.

B. (a) This Settlement Agreement and anythingoccurring in connection with reaching this SettlementAgreement are without prejudice to Ford, the UAWand the Class Members. The parties may usethis Settlement Agreement to assist in securingthe Judgment approving the settlement and toimplement the Administrative Changes, ModifiedPlan, Catastrophic Plan, and DC VEBA in accordancewith the Exhibits to this Settlement Agreement.It is intended that neither Ford nor the UAW,Future Retirees or the Class Members may usethis Settlement Agreement, or anything occurring inconnection with reaching this Agreement, as evidenceagainst Ford, the UAW or the Class Members in anycircumstance except where the parties are operatingunder or enforcing this Settlement Agreement or theJudgment approving this Settlement Agreement.

(b) Ford, the UAW, and the Class Members expresslyagree and acknowledge that each party is enteringinto this Settlement Agreement and compromisingmaterial claims in light of the Case Law as itexists as of the Effective Date. For purposes ofthis Settlement Agreement, “Case Law” shall mean,judicial decisional law, whether existing in the federalsystem (including, but not limited to, decisions of theUnited States Supreme Court or any United StatesCircuit Court of Appeals) or in any state or locality;but does not include statutes, regulations, codes, rulesor subsequent legislative, regulatory or administrativedevelopments.

Each of the parties hereto further expressly agree andacknowledge that in the event that Ford terminatesthis Settlement Agreement following the Effective Datein accordance with Section 18 hereof, and there islitigation between Ford, the UAW and/or, the ClassMembers over the right of Ford to unilaterally modify

and/or terminate retiree health benefits or whether suchbenefits are vested, the Case Law as of the EffectiveDate shall be treated as the applicable body of judicialdecisional law for such litigation, subject to any andall changes in the applicable law from legislative,regulatory, or administrative developments after theEffective Date and provided that neither the ClassMembers nor the UAW would retain the right to seek,damages, reimbursement, recovery or equitable relief inconnection with the health care changes incorporated inthis Settlement Agreement and the applicable plans forthe Effective Period. Moreover, (i) Ford, the UAW, andthe Class Members may make any and all arguments inany such litigation as are available to them regardingsuch Case Law as of the Effective Date and (ii) forpurposes of any applicable statute of limitations in suchlitigation, any changes in retiree health care benefitsprovided for in this Settlement Agreement shall bedeemed to have occurred on the date this SettlementAgreement terminates.

*15 For the avoidance of doubt, it is the expressintention and agreement of Ford, the UAW and ClassMembers to apply the Case Law as it exists as ofthe Effective Date to any litigation between Ford, theUAW, and/or Class Members over the right of Fordto unilaterally modify and/or terminate retiree healthbenefits or whether such benefits are vested should thisSettlement Agreement be terminated by Ford followingthe Effective Date in accordance with Section 18, subjectto any and all changes in the applicable law fromsubsequent legislative, regulatory, or administrativedevelopments and the right of Ford, the UAW and theClass Members to make any and all arguments in anysuch litigation as are available to it regarding such CaseLaw as of the Effective Date. No judicial decisionsissued after the Effective Date shall be relevant to orhave any bearing on consideration or resolution by anycourt, administrative agency or other tribunal or forumof the issue of Ford's right to unilaterally modify and/or terminate retiree health care benefits or whether suchbenefits are vested in any litigation between Ford, theUAW, and/or Class Members should this SettlementAgreement be terminated by Ford in accordance withSection 18, except insofar as such judicial decisionsinterpret, apply, or reflect changes in applicable lawresulting from legislative, regulatory or administrativedevelopments after the Effective Date. Ford, the UAWand/or Class Members shall not be precluded fromraising any legal theory or argument which such parties







could have made under the Case Law as of the EffectiveDate merely because it is reflected in a judicial decisionafter the Effective Date.

This provision is a material part of this SettlementAgreement. The Judgment shall expressly recite andconfirm the provisions of this Section 19. In the eventthis Settlement Agreement is terminated, nothing inSection 19 shall prevent Ford, the UAW, and the ClassMembers from using, relying or referring, in support oftheir respective positions, to any documentary evidencewhich was in existence on January 1, 2005, and whichsuch parties, on the Effective Date, could have used,relied upon or referred to in support of their respectivepositions, except that plan documents and similarmaterial prepared and distributed up to the RatificationDate without regard to the discussions leading up to thenegotiation of the MOU and this Settlement Agreementmay be so relied upon and referred to by Ford, theUAW or Class Members, to the extent such documentsand similar materials are consistent with the previousversions that were in effect on January 1, 2005.

Ford further agrees, in its capacity as settlor, sole sponsorand administrator of Ford's H-S-M-D-D-V Program, thatsuch Program shall, to the extent permitted by ERISA,be bound by Section 19 to the same extent as Ford andis subject to the same conditions and limitations as Fordunder this Section.

64. With regard to counsel fees and expenses, theSettlement Agreement provides that Ford will supportapplication by the UAW and Class Counsel forreimbursement by Ford of reasonable attorney andprofessional fees and expenses for hours workedin an amount to be determined in accordance withcurrent market rates (not to include arrangementssuch as any contingency fees, success fee, completionbonus, or rate premiums) incurred in connectionwith the court proceedings to obtain the judgmentapproving the Settlement Agreement. (Docket No. 24,Ex. 1, Proposed Settlement Agreement § 20 .B) TheSettlement Agreement provides that approval of thesefee requests will be included in the Court's judgment.(Id.)

J. The Parties' Conclusions Regarding Settlement

*16 65. Based on their investigation, Class Counseldetermined, on behalf of the class, that it is in the bestinterest of the class that this case be settled as set forth

in the Settlement Agreement, and that the terms of thisSettlement are fair and reasonable. (Docket No. 24, Ex.1, Proposed Settlement Agreement § 4)

66. The UAW has also concluded that the Settlementis fair, reasonable, and in the best interests of theclass. (Id.).

67. Ford has concluded that it is desirable, beneficial,and in the company's best interests that the claimsof class members are settled as set forth in theSettlement Agreement and that the terms of theSettlement are fair and reasonable. (Id.)

68. The class, the UAW, and Ford have all concludedthat approval of the Settlement will confer asignificant public benefit. (Id.)

K. Objections

69. Out of the approximately 170,000 class members whowere sent notice, there were a total of 794 objections,not counting (i) duplicate objections filed on behalf ofthe same individual, and (ii) objections that disclose ontheir face that the objector is not a member of the class.(See Doc. 882, Ex. L, Young Decl. ¶ 3) The objectorscomprise only one half of one percent of the class of170,000. Using this ratio, if the class had consisted of5000 members, only 23 would have objected.

70. Of the objections filed, most (508) contained nostatement of the reasons for the objection. (Id. ¶ 5)

71. Objectors who did give reasons raised severaltopics. In terms of objections relating directly toclass claims and the substance of the SettlementAgreement, objectors have asserted that theirbenefits were promised and/or provided for inwritten documents and were vested or for lifeand could not be altered (see, e.g., Doc. 70, 71),that Ford is not facing financial distress (see, e.g.,Doc. 166), that the changes to health care benefitsapplicable under the proposed settlement to retireesshould also apply to active employees, or that thechanges should apply only to active employees(see, e.g., Doc. 97), that it was unfair that objectorscould not vote to approve or disapprove of theSettlement (see, e.g., Doc 49), that objectorswere not properly represented by the UAW (see,e.g., Doc. 55), that under the proposed changes,objectors would have difficulty affording their





medical benefits (see, e.g., Doc. 66), that classmembers age 65 and older should be exempt fromthe Settlement because Medicare picks up manyof the costs for such members (see, e.g., Doc.166), that benefits should not be altered becauseretirees already paid into and/or worked to earntheir benefits (see, e.g., Doc. 55), that the DC-VEBA will go broke (see, e.g., Doc. 141), andthat the Class Notice was vague and/or difficult tounderstand. (See, e.g., Doc. 88)

72. In terms of more general grievances, objectorshave asserted that Ford's financial difficulties arethe fault of Ford management, and that it ismanagement, not retirees, or together with retirees,who should now make sacrifices (see, e.g., Doc.142), that they went on strike and/or made othersacrifices to obtain their benefits (see, e.g., Doc.86), that working at Ford caused their current healthconditions (see, e.g., Doc. 145), that they should beallowed to return to their former jobs at Ford (see,e.g., Doc. 75), and that Ford misused their benefitmoney. (See, e.g., Doc. 102, 113)

*17 73. Objectors also argue that various changesshould be made to the proposed settlement. Forexample, a few objectors argue that the group ofprotected retirees should be expanded, either byincreasing the $8,000 ceiling (see, e.g., Doc. 145)or by including disabled retirees. (See, e.g., Doc,362, 392) On the other hand, at least one objectorcomplains that the protected class of retirees shouldnot exist at all because they will not share inthe additional costs of benefits. (See, e.g., Doc.584) Another objector has argued that the coststo retirees should be graduated based on theirpension amounts. (See, e.g., Doc. 396) At leastone objector contends that the monthly premiumshould be eliminated and retirees should only payper usage. (See, e.g., Doc. 97) At least one objectorargues that special costs should be set for retireeswho worked at Ford for less than 30 years. (See,e.g., Doc. 469) And at least one objector arguesthat costs should only apply to those retirees whoreceive pension bonuses. (See, e.g., Doc. 458)

74. One objector, Dennis Lapso, who is representedby counsel other than objectors counsel, askedthe Court to defer ruling on the fairness of the

Settlement until his internal appeal within the UAWwas decided. (Doc. 390)

75. The “Bronson Group of Objectors,” referredto herein as “Bronson,” make several objections.First, Bronson asserts that the class did not receiveadequate representation. (Doc. 739, Objection at12-27) Specifically, Bronson contends that theUAW had a conflict of interest; that Class Counselare inadequate because they did not negotiate amore favorable settlement and allegedly failedto conduct an independent investigation into thefairness of the settlement; and that the classrepresentatives are inadequate. Bronson also arguesthat class treatment is “problematic” under the DueProcess Clause and the Seventh Amendment. (Id.at 27-29)

76. Bronson also makes several arguments in anattempt to establish that the Settlement is not fair,reasonable, and adequate. (Id. at 29-38) Bronsoncontends that the Settlement allegedly was notthe product of arm's length negotiations. He alsoasserts that the Settlement places an unfair burdenon retirees relative to current Ford employees. Inaddition, he maintains that what he believes is thestrong likelihood of plaintiffs' success on the merits“weighs against” approval of the settlement.

77. Finally, Bronson asserts that the notice sentto class members was inadequate and that thesettlement violates the Age Discrimination inEmployment Act. (Id. at 38-41)

L. General Findings

78. The Court finds that there is no evidence supporting aconclusion or an inference that there was any impropercollusion among or between any of the parties tothis litigation. To the contrary, the above cited recordevidence, and in particular the evidence surroundingthe negotiation of the Settlement Agreement, establishesthat the parties' conduct in connection with this litigationwas at all times above-board and non-collusive.

*18 79. The above-cited record evidence establishesthat Class Counsel diligently investigated theproposed Settlement, acted solely in the interest ofthe class, and concluded, based upon the expertopinions and their considerable experience in like





cases, that the Settlement is fair, reasonable, andadequate.

80. The Court finds that there is no evidencesupporting a conclusion or an inference that theUAW was improperly motivated to preserve activeemployees' interests at the expense of retireemedical benefits. To the contrary, the evidenceamply supports a finding that the UAW negotiatedthe Settlement in good faith and for the purposeof furthering the strong mutual interest of activeand retired employees in keeping Ford in business,enabling the company to continue to employ activeemployees and to continue to provide qualitybenefits to retirees.

81. The record evidence establishes that this casedoes not involve a limited fund, an artificiallycreated limited fund, or an externally limited poolof assets for satisfaction of competing claims. Nordoes this case involve anything analogous to alimited fund in any form. To the contrary, theevidence establishes that a key objective of theSettlement is to address Ford's financial struggleand maintain the company's viability, allowingthe continued generation of income from whichboth active employees and retired employees willbenefit for the foreseeable future.

82. The Court finds that the cost increases entailed bythe Settlement are modest, and the most financiallyvulnerable retirees will be protected from eventhose modest costs. The potential loss of allbenefits, due to either Ford's financial difficultiesor Ford's prevailing on the merits, would be farworse for all class members than the relativelymodest charges they will be required to pay underthe Settlement Agreement.

II. CONCLUSIONS OF LAW

A. Jurisdiction

1. This Court has jurisdiction under Section 301 of theLMRA, 29 U.S.C. § 185, and Section 502(e)(1) and (f)of ERISA, 298 U.S.C. § 1132(e)(1) and (f).

B. Class Certification

2. In order to be certified, the proposed class must meetthe requirements of Rule 23(a), and one of the three

subsections of Rule 23(b). Sprague v. General MotorsCorp., 133 F.3d 388, 397 (6th Cir.1998) (en banc).When, as here, the case is settled before the class iscertified, the requirements of Rule 23 that are designedto protect absent class members “demand undiluted,even heightened, attention.” Amchem Prods. v. Windsor,521 U.S. 591, 620, 117 S.Ct. 2231, 138 L.Ed.2d 689(1997).

3. Following a meeting with the parties and counselfor Bronson objectors on February 24, 2006,the Court, per Judge Tarnow, concluded that therequirements of Rule 23(a) and Rule 23(b)(2) hadbeen met, and certified the class. Based on therecord as a whole, including evidence and writtensubmissions received at and after the fairnesshearing, the Court now confirms that the class isproperly certified.

*19 i. Numerosity. There are more than 170,000class members, which satisfies the requirementthat the class is “so numerous that joinder of allmembers is impracticable.” FED. R. CIV. P. 23(a)(1). See, e.g., Bittinger v. Tecumseh Prods. Co., 123F.3d 877, 884 n. 1 (6th Cir.1997) (objection basedon numerosity requirement was frivolous whereclass consisted of 1,000 members).

ii. Commonality. The requirement of commonalityrequires only a common question of law or fact.Bittinger, 123 F.3d at 884; see also Sprague, 133F.3d at 397 (noting that one common questionof law or fact is sufficient). Here, the questionwhether Ford has the right to unilaterally modifyor terminate retiree health benefits is a questioncommon to all class members. Bittinger, 123 F.3dat 879, 884 (commonality requirement met whereretirees sought lifetime benefits, even though aseries of different CBAs governed the benefits);Fuller v. Fruehauf Trailer Corp., 168 F.R.D. 588,596 (E.D.Mich.1996) (determination of effect ofdefendant's reservation of rights provides commonquestion under Rule 23(a)(2)).

iii. Typicality. “A plaintiff's claim is typical [underRule 23(a)(3) ] if it arises from the same event orpractice or course of conduct that gives rise to theclaims of other class members, and if his or herclaims are based on the same legal theory.” In reAm. Med. Sys., 75 F.3d 1069, 1082 (6th Cir.1996)
































(quotation and citation omitted). The requirementis not onerous. If there is a strong similarity oflegal theories, the requirement is met, even if thereare factual distinctions among named and absentclass members. See Bittinger, 123 F.3d at 884-85;Forbush v. J.C. Penny Co., 994 F.2d 1101, 1106(5th Cir.1993).

4. The plaintiffs claim that Ford's decision tounilaterally modify or terminate their retiree healthbenefits violates Ford's obligations under ERISAand under the CBAs between Ford and UAW.Each plaintiff asserts an identical obligation byFord and satisfies the typicality requirement,notwithstanding any purported factual differenceswith respect to individual class members. Bittinger,123 F.3d at 884 (typicality satisfied where plaintiffsclaimed that defendant had promised to providelifetime, fully-funded benefits to retirees).

5. Adequacy of Class Representatives. To satisfyRule 23(a)(4), class representatives “must possessthe same interest and suffer the same injury.”Amchem, 521 U.S. at 625-26. The two criteriafor determining whether class representatives areadequate are “(1) the representatives must havecommon interests with unnamed members of theclass, and (2) it must appear that the representativeswill vigorously prosecute the interests of theclass through qualified counsel.” Senter v. GeneralMotors Corp., 532 F.2d 511, 525 (6th Cir.1976).Here, the class representatives share the sameinterest in protecting retiree health benefits, therecord reflects that they have vigorously pursuedthat interest to date, and there is nothing to suggestthat they would not vigorously protect the interestsof the class.

*20 6. Nor are there any intra-class conflicts thatwould defeat the adequacy requirement or classcertification. “[O]nly a conflict that goes to the verysubject matter of the [claims] will defeat a party'sclaim to representative status. CHARLES ALANWRIGHT, ET AL ., FEDERAL PRACTICE ANDPROCEDURE § 1768 (West 2005). “Differencesbetween named plaintiffs and class members renderthe named plaintiffs inadequate representativesonly if those differences create conflicts betweenthe named plaintiffs' interests and the classmembers' interests.” Mullen v. Treasure Chest

Casino, LLC, 186 F.3d 620, 625-26 (5th Cir.1999).See also Steiner v. Equimark Corp., 96 F.R.D.603, 610 (W.D.Pa.1983) (“key question” is whethernamed representatives' interests are antagonistic tointerests of class members).

7. The named representatives' interests are not inconflict with or antagonistic to the interests ofclass members simply because the Settlement mayimpact individuals differently based on preexistingcircumstances. See Kamen v. Kemper Fin. Servs.,Inc., 908 F.2d 1338, 1350 (7th Cir.1990)(differences among class members should bedistinguished from a “concrete conflict of interestbetween ‘representative’ and other members ofthe class”), rev'd on other grounds, 500 U.S. 90,111 S.Ct. 1711, 114 L.Ed.2d 152 (1991); Halfordv. Goodyear Tire & Rubber Co., 161 F.R.D. 13,20 (W.D.N.Y.1995) (no antagonism among classmembers where claims sought injunction seekingreinstatement of retiree benefits). “If subclassingis required for each material legal or economicdifference that distinguishes class members, theBalkanization of the class action is threatened.”In re Cendant Corp. Sec. Litig., 404 F.3d 173,202 (3d Cir.2005) (noting that a “fragmentedclass might be unmanageable, would reduce theeconomic incentives [of class litigation] and couldbe extremely difficult to settle.”).

8. Adequacy of Class Counsel. To evaluate theadequacy of Class Counsel, Rule 23(g)(1)(i)requires the Court to consider (a) the work counselhas done in identifying or investigating potentialclaims in the action, (b) counsel's experience inhandling class actions, other complex litigation,and claims of the type asserted in the action, (c)counsel's knowledge of the applicable law, and (d)the resources counsel will commit to representingthe class.

9. Class Counsel in this case is adequate and hasthe resources to commit to representing the class.The evidence established that Class Counsel iswell-qualified, has extensive knowledge of thelaw relating to retiree benefits litigation, and hassubstantial experience litigating actions of thiskind.































10. The Court also concludes that the class may becertified under Rule 23(b)(2). A class is properlycertified under Rule 23(b)(2) if “the party opposingthe class has acted or refused to act on groundsgenerally applicable to the class, thereby makingappropriate final injunctive relief or correspondingdeclaratory relief with respect to the class as awhole.” FED. R. CIV. P. 23(b)(2). Certificationunder Rule 23(b)(2) is appropriate when “thecommon claim is susceptible to a single proof andsubject to a single injunctive remedy.” Senter, 532F.2d at 525. That is the case here, where plaintiffschallenge Ford's decision to modify retiree healthbenefits. See, e.g, id.; Forbush, 994 F.2d at 1106.

*21 Accordingly, the Court GRANTS final certification ofthe Class defined above in the Findings of Fact.

C. Final Approval of the Class Action Settlement

11. To ensure that the interests of class members areprotected, Rule 23(e)(1)(C) requires the Court to hold ahearing to determine whether the settlement is a “fair,reasonable, and adequate” resolution of class members'claims. That Fairness Hearing was held on May 31,2006.

12. The law favors the voluntary settlement of classaction litigation. Steiner v. Fruehauf Corp., 121F.R.D. 304, 305 (E.D.Mich.1988), aff'd sub nom.Priddy v. Edelman, 883 F.2d 438 (6th Cir.1989).

13. Given this policy, in reviewing a class actionsettlement, the role of the district court is “limitedto a determination of whether the terms proposedare fair and reasonable to those affected .”Steiner, 121 F.R.D. at 305. Settlement embodies“a bargained give and take between the litigantsthat is presumptively valid,” Berry, 184 F.R.D. at97, about which “the Court should not substituteits judgment for that of the parties.” Steiner, 121F.R.D. at 306. Further, the Court should not decidethe merits of the dispute. See Clark Equip. Co., 803F.2d at 880. Nor should the Court engage in the“detailed and thorough investigation that it wouldundertake if it were actually trying the case,” Berry,184 F.R.D. at 98 (quoting Armstrong v. Bd. OfSch. Directors, 616 F.2d 305, 315 (7th Cir.1980)),because the “whole purpose behind a compromise

is to avoid a trial.” Charles A. Wright et al ., FedPrac. & Proc. § 1797.5.

14. “In assessing the settlement, the Court mustdetermine ‘whether it falls within the rangeof reasonableness, not whether it is the mostfavorable possible result in the litigation.” ’ Inre Domestic Air Transp. Antitrust Litig., 148F.R.D. 297, 319 (N.D.Ga.1993) (quoting FisherBros. v. Cambridge-Lee Indus., 630 F.Supp. 482,489 (E.D.Pa.1985)). An appropriate range ofreasonableness “recognizes the uncertainties of lawand fact in any particular case and the concomitantrisks and costs necessarily inherent in taking anylitigation to completion.” Frank v. Eastman KodakCo., 228 F.R.D. 174, 186 (W.D.N.Y.2005) (quotingNewman v. Stein, 464 F.2d 689, 693 (2d Cir.1972)).Under this standard, “[a] just result is often no morethan an arbitrary point between competing notionsof reasonableness.” In re Corrugated ContainerAntitrust Litig. (II), 659 F.2d 1322, 1325 (5thCir.1981).

15. Approval of a class action settlement is committedto the discretion of the district court. Clark Equip.Co., 803 F.2d at 880; Detroit Police Officers Ass'nv. Young, 920 F.Supp. 755, 761 (E.D.Mich.1995).In exercising that discretion, the Court “may limitthe fairness hearing ‘to whatever is necessary toaid it in reaching an informed, just and reasoneddecision.” ’ Tenn. Ass'n of Health Maint. Orgs.,Inc. v. Grier, 262 F.3d 559, 567 (6th Cir.2001)(quoting United States v. Oregon, 913 F.2d 576,582 (9th Cir.1990)). The Court may consider briefs,declarations, and the arguments of counsel, andneed not conduct an evidentiary hearing. E.g.,Tenn. Ass'n of Health Maint. Orgs., Inc., 262F.3d at 567 (rejecting the suggestion that “thefairness hearing must entail the entire panoplyof protections afforded by a full-blown trial onthe merits”); Depoister v. Mary M. HollowayFound., 36 F.3d 582, 586 (7th Cir.1994) (“thereis no requirement that an evidentiary hearingbe conducted as a precondition to approving asettlement in a class action suit”). “Even when theCourt becomes aware of one or more objectingparties, the Court ... may limit its proceeding towhatever is necessary to aid it in reaching aninformed, just and reasoned decision.” ' Ass'n forDisabled Americans, Inc. v. Amoco Oil Co., 211



















































F.R.D. 457, 467 (S.D.Fla.2002) (quoting Cotton v.Hinton, 559 F.2d 1326, 1331 (5th Cir.1977)). Inother words, “the settlement or fairness hearing isnot to be turned into a trial or rehearsal for trialon the merits.” Officers for Justice v. Civil Serv.Comm'n, 688 F.2d 615, 625 (9th Cir.1982). Seealso In re Inter-Op Hip Prosthesis Liab. Litig., 204F.R.D. 330, 350 (N.D.Ohio 2001) (same).

*22 16. Factors relevant to the Court's evaluation ofthe fairness of the Settlement are:

(a) “the likelihood of success on the merits weighedagainst the amount and form of the relief offered inthe settlement;

(b) the risks, expense, and delay of further litigation;

(c) the judgment of experienced counsel who havecompetently evaluated the strength of their proofs;

(d) the amount of discovery completed and thecharacter of the evidence uncovered;

(e) whether the settlement is fair to the unnamed classmembers;

(f) objections raised by class members;

(g) whether the settlement is the product ofarm's length negotiations as opposed to collusivebargaining; and

(h) whether the settlement is consistent with the publicinterest.”

In re Cardizem Antitrust Litig., 218 F.R.D. 508, 522(E.D.Mich.2003)

17. The Court may choose to consider only thosefactors that are relevant to the settlement at handand may weigh particular factors according to thedemands of the case. Granada Invest. Inc., 962 F.2dat 1205-06.

i. The likelihood of success on the merits weighedagainst the amount and form of the relief offered in thesettlement

18. The legal issue presented in this case is whetherplaintiffs' retiree health benefits are vested. The partiesvigorously dispute this issue, with class representativesand UAW on one side and Ford on the other side,

asserting that governing Sixth Circuit law supports theirrespective positions. See, e.g., Yolton v. El Paso Tenn.Pipeline Co., 435 F.3d 571, 572 (6th Cir.2006).

19. The parties make various legal and factualarguments in support of their positions,demonstrating the strongly contested nature of theirdispute. The Court need not, and should not, resolvethat dispute. Clark Equip. Co., 803 F.2d at 880.The relevant question is whether the parties havebeen able to assess their respective positions andmake an informed and appropriate determinationabout the relative merits and risks of settlement.The parties' briefs and argument make clear thatthey have analyzed the relevant plan documents,understand the governing law, and have thoroughlyevaluated the respective arguments on the merits.

20. Of equal importance, the parties recognizethat, whatever the strengths of their positions,continued litigation involves substantial risks toeach side. The parties acknowledge the inherentrisks of litigation and the potentially catastrophicconsequences for the retirees should the Courthold that their benefits are not vested. In thatcase, Ford would be able to institute changes inretiree health benefits significantly more costlyto retirees or terminate the benefits altogether.Class representatives and the UAW reasonablyconcluded that even if their risk of losing was small,the consequence of a loss would be potentiallycalamitous for the UAW and the class. For the class,even a slight risk of substantially higher costs iswell averted. UAW v. GM, 2006 WL 891151 at *16(E.D.Mich. Mar.31, 2006). Thus, “[t]he fact that theplaintiff might have received more if the case hadbeen fully litigated is no reason not to approve thesettlement.” Priddy, 883 F.2d at 447.

*23 21. It was reasonable for the plaintiffsto conclude that, considering Ford's financialcondition, the interests of the class lay not inachieving a possibly hollow victory in court but incontinuing to receive their health benefits, and thatthe best means to do that lay in making modestconcessions in settlement now in order to increasethe likelihood that Ford will continue to be ableto provide retiree health benefits into the future.In re Milken and Assoc. Sec. Litig., 150 F.R.D.




















46, 55-56 (S.D.N.Y.1993) (noting that continuedlitigation could impair defendant's ability to pay).

22. Therefore, the Court concludes that the partiesadequately assessed their respective positions onthe merits. This is particularly so consideringthe realities of Ford's financial position and thepotential for catastrophic consequences to the classof a loss, no matter how small the risk.

23. Courts recognize that settlements are not craftedto secure the full value of the loss claimed byplaintiffs. “There is no reason, at least in theory,why a satisfactory settlement could not amount toa hundredth or even a thousandth part of a singlepercent of the potential recovery.” Grinnell Corp.,495 F.2d at 455 n. 2.

24. Here, the Settlement Agreement providesconsiderable benefits to the class. (See Docket No.896, Taranto Decl. ¶ 8) (Modified Plan equals87% of the value of current health benefits) Fordmaintains responsibility for most of the cost of theModified Plan. It realizes significant cost savings,without which Ford's continued ability to providebenefits would be threatened, while maintaining acomprehensive level of coverage for class memberswith only a slight increase in cost. In fact, benefitswill be maintained without a cost increase for themost financially vulnerable members of the class.(See Docket No. 24, Ex. 1, Proposed SettlementAgreement § 7) For other class members, withthe partial mitigation funding provided by the DC-VEBA, a single participant's monthly premiumcontribution initially will be $10, with a 10%copay (after an annual deductible of $150) up to amaximum out-of-pocket contribution of $250. (Id.§ 14.A) For a single retiree, these new charges caninitially cost no more than $370 per year-or justover one dollar per day. The co-payment for genericprescription drugs purchased at retail remains thesame as the current plan ($5.00) and for genericmail order prescriptions, the co-pay increases byonly $5.00 for a 90-day supply-or an additional$1.67/month. (Id. § 5.A.2(f)) All of these costincreases are moderate, particularly compared tothe costs faced by many employees and retirees intoday's economy. (Docket No. 882, Borzi Decl. ¶21 .)

25. “As is true in any case, the proposed Settlement‘represents a compromise in which the highesthopes for recovery are yielded in exchange forcertainty and resolution.” ’ In re Rent-Way,305 F.Supp.2d at 509 (citation omitted). Hence,whether the plaintiffs conceivably “might havereceived more if the case had been fully litigated” isnot the issue. Priddy, 883 F.2d at 447. “It is neitherrequired, nor is it possible for a court to determinethat the settlement is the fairest possible resolutionof the claims of every individual class member;rather, the settlement, taken as a whole, must befair, adequate and reasonable.” Shy v. Navistar Int'lCorp., 1993 WL 1318607, at *2 (S.D.Ohio May 27,1993) (unpublished) (citing Clark Equip. Co., 803F.2d 878) (emphasis in original).

*24 26. The Court concludes that the benefitsprovided to the class under the Settlement are fair,reasonable, and adequate when weighed against theuncertainties of litigation and the risks posed byfurther erosion of Ford's financial condition.

ii. The risks, expense and delay of further litigation

27. In addition to the risk of losing, the litigation itself mayimpair the plaintiffs' prospects for obtaining the benefitsthey seek to protect. The parties agree that without asignificant reduction in the costs of retiree health care,Ford's financial condition will continue to deteriorate.

28. Given the financial crisis facing Ford, the severefinancial drag of its existing benefits liability,and the grave significance of these matters forclass members, a prompt settlement is superior tocontinued litigation. See Christine Tierney & BrettClanton, Outlook! GM Rises, Ford Falls, DET.NEWS, May 26, 2006, at A1, A9; see, e.g., Inre Milken, 150 F.R.D. at 55-56 (S.D.N.Y.1993)(noting danger that prolonged litigation couldimpair defendant's ability to pay). The costs oflitigation and the delay in effecting necessary cost-saving measures could lead to further deteriorationof Ford's financial condition, which counsels infavor of settlement. See, e.g., Godshall v. FranklinMint Co., 2004 WL 2745890, at 5 (E.D.Pa. Dec.1,2004). Even if plaintiffs ultimately prevailed, acourt order confirming the vested nature of theretiree health benefits would be of little value if thatorder were directed to a corporation that could not

















survive in a form that would allow it to continue toprovide such retiree health benefits over the longterm.

29. The risk of huge expense and long delay issignificant here. Litigation over retiree benefitsis frequently costly and time-consuming, asdemonstrated by other retiree health cases in thiscircuit. In Sprague, for example, GM salariedworkers and retirees sued in 1989 challengingGM's modification of their health care benefits.Ultimately GM won, but only after nine years oflitigation, including a trial in the district court andhearing (and rehearing) in the Sixth Circuit. SeeSprague v. General Motors Corp., 133 F.3d 388(6th Cir.1998) (en banc). Likewise, the litigationin Bittinger v. Tecumseh Products consumed eightyears before it was finally resolved in favor ofthe employer on its second appeal to the SixthCircuit. See 201 F.3d 440 (6th Cir.1999) (percuriam), aff'g 83 F.Supp.2d 851 (E.D.Mich.1999).The costs and uncertainty of lengthy and complexlitigation weigh in favor of settlement. See In reCincinnati Policing, 209 F.R.D. at 400 (“the Courthas no doubt that the trial of this class actionwould be a long, arduous process requiring greatexpenditures of time and money on behalf of boththe parties and the court [which] clearly counsels infavor of settlement.”) (internal quotation marks andcitations omitted).

30. At the Fairness Hearing, the Bronson objectorsargued that retiree medical cases “go throughquickly.” (Docket No. 905, Tr. at 72-73) Mr.Baumkel argued that Yolton v. El Paso TN. Pipeline

Co. ., 435 F.3d 571 (6 th Cir.2006), was decided“summarily” in favor of retirees after only twoyears of litigation. (Id. at 71-72) The Court ofAppeals opinion in Yolton, however, reveals thatthe 2006 decision was merely the affirmance ofa preliminary injunction based on a finding of“likely” success, not a final ruling, 435 F.3dat 578, and that litigation continues. The sameis true of Cole v. ArvinMeritor, Inc., 2005 WL3502182 (E.D.Mich.2005) (granting preliminaryinjunction).

*25 31. In short, success at litigation (for eitherside) may prove illusory-a prospect that makessettlement an even more reasonable course. See,

e.g., In re Milken, 150 F.R.D. at 66 (noting dangerthat prolonged litigation could impair defendant'sability to pay);

iii. The judgment of experienced counsel who havecompetently evaluated the strength of their proofs

32. “It is well recognized that the [C]ourt should deferto the judgment of experienced counsel who hascompetently evaluated the strength of the proofs.” Mich.Hosp. Ass'n v. Babcock, 1991 U.S. Dist. LEXIS 2058, at*6 (W.D.Mich. Feb. 11, 1991) (unpublished).

33. Here, counsel for all parties are reputablepractitioners and trial counsel experienced incomplex class action litigation. Under the law, theircollective judgment in favor of the Settlement isentitled to considerable weight. Ass'n for DisabledAmericans, Inc., 211 F.R.D. at 467 (“the Court mustrely upon the judgment of experienced counsel and,absent fraud, should be hesitant to substitute itsown judgment for that of counsel.”) (citation andquotation omitted).

iv. The amount of discovery completed and thecharacter of the evidence uncovered

34. In evaluating a proposed settlement, the Court need notpossess sufficient “evidence to decide the merits of theissue, because the compromise is proposed in order toavoid further litigation.” 4 Newberg on Class Actions§ 11:45 (4th ed.2002). Instead, the district judge needonly have “sufficient facts before him to intelligentlyapprove or disapprove the settlement.” Epstein v. Wittig,2005 WL 3276390, at *7 (D.Kan. December 02, 2005)(unpublished).

35. In this regard, the absence of formal discoveryis not an obstacle, so long as the parties andthe Court have adequate information in order toevaluate the relative positions of the parties. SeeNewby v. Enron Corp., 394 F.3d 296, 306 (5thCir.2004) (“[F]ormal discovery [is not] a necessaryticket to the bargaining table.”); Cotton, 559 F.2dat 1332 (upholding settlement despite fact that littleformal discovery had been conducted; “[B]eing anextra judicial process, informality in the discoveryof information is desired.”); Robinson v. FordMotor Comp., 2005 U.S. Dist. LEXIS 11673, at*14-15 (S.D. Ohio June 15, 2005) (unpublished)(approving settlement without formal discovery).




























36. Here, Ford provided full disclosure to the classand the UAW of Ford's business and financialcondition, including its health care liability, andthe relevant CBAs and health care plan documents.This is confirmed by both the UAW and theclass, who selected experts and undertook theirown independent analyses of Ford's condition.The Court concludes that there was significantinformation available to the parties to negotiatetheir compromise, and there is more than anadequate basis and record on which the Court canassess the parties' agreement. It also is noteworthythat all of the Ford financial information as wellas the CBA's and plan documents-all of theinformation provided by Ford to UAW and ClassCounsel-was also produced to counsel for ObjectorBronson.

v. Whether The Settlement Is The Product Of Arms-Length Negotiations As Opposed To CollusiveBargaining

*26 37. Courts presume the absence of fraud or collusionunless there is evidence to the contrary. In re RioHair Naturalizer, 1996 WL 780521, at *14 (“Courtsrespect the integrity of and presume good faith in theabsence of fraud or collusion in settlement negotiations,unless someone offers evidence to the contrary.”). Thispresumption is conclusive here as no one has presentedany evidence of collusion.

38. Here, there is a decidedly adversarial relationshipbetween the class/UAW and Ford on the questionof Ford's right to unilaterally change, modify, orterminate health care benefits. Indeed, the partiesare in fundamental disagreement on this issue. TheSettlement was the result of protracted negotiationsover several months, the exchange and evaluationof information, and the independent review andacceptance of the compromise by all parties.(Docket No. 24, Jt. Mot. For Prelim. Approval at5-6) The settlement process was conducted whollyat arm's length.

39. Many courts have held that if the settlementagreement itself is fair, reasonable and adequate,the Court may assume that the negotiations wereproper and free of collusion. E.g., Bowling v.Pfizer, Inc., 143 F.R.D. 141, 152 (S.D.Ohio 1992)(“In essence, under this test, if the terms of the

proposed settlement are fair, then the court mayassume the negotiations were proper.”), citing Inre Corrugated Container Antitrust Litig., 643 F.2d195, 212 (5th Cir.1981) (“It is, ultimately, inthe settlement terms that the class representatives'judgment and the adequacy of their representationis either vindicated or found wanting.”).

40. In considering this factor, courts have also lookedto whether (1) the named plaintiffs' claims aretreated more favorably than other plaintiffs' claims,and (2) the fee agreement suggests collusion.See Heit v. Van Ochten, 126 F.Supp.2d 487,490-91 (W.D.Mich.2001). Neither considerationraises concerns here. The class representativesobtain no different or more favorable treatmentunder the Settlement Agreement than any otherclass member. And Class Counsel's fee petition,which is subject to court approval, makes clear thatthey seek fees from Ford based solely on hoursworked at a reasonable rate, not a premium orcontingency fee arrangement.

vi. Whether the settlement is fair to the unnamed classmembers

41. The class is cohesive and the Settlement Agreementaffects similarly situated class members the same. Nopreference is granted to the class representatives andbecause all class members have a unitary interest inseeking the best possible benefits for retirees, there is norisk of an undue burden on absent class members. See,e.g., Heit, 126 F.Supp.2d at 490-491.

vii. Whether the settlement is consistent with the publicinterest

42. There is no question that Ford's continued viabilityhas a significant effect on the economy of Michigan,and indeed, the nation as a whole. The evidenceestablished that approximately 131,000 Americans earntheir livelihood building and selling Ford vehicles, andanother 170,000 retired employees depend on Ford fortheir pensions. In 2005, Ford paid its 131,000 U.S.-based employees $10.7 billion in wages and issuedpension payments of $2.9 billion to its more than170,000 U.S. retirees. In Michigan alone, Ford is oneof the largest employers, with over 62,000 residentson its payroll. Ford also purchases billions of dollarsof automobile parts from manufacturers with a majorpresence in Michigan. In the past five years alone,















Ford has purchased $38 billion in parts and suppliesin the United States. This substantial economic activitydepends on Ford's continued viability, which depends onmanaging the company's huge health care costs.

*27 43. The delay and risks of litigation thus impactnot only Ford, the UAW, and the class, but also thefamilies, businesses, and communities that dependon Ford's continued competitiveness and viability.Those interests are advanced by the Settlement.The Settlement also serves the public interest byconserving the resources of the parties and theCourt and promoting the “strong public interest inencouraging settlement of complex litigation andclass action suits.” In re Cardizem, 218 F.R.D. at530.

D. Objections to the Settlement

44. “A court should not withhold approval of a settlementmerely because some class members object.” Mich.Hosp. Ass'n, 1991 U.S. Dist. LEXIS 2058, at *10. On theother hand, although the Court must evaluate objections,it has an obligation to protect the interests of the “silentclass majority,” even over “vociferous opposition by avocal minority to the settlement.” Mich. Hosp. Ass'n,1991 U.S. Dist. LEXIS 2058, at *10.

45. In this case, the minority was very small. Less than800 out of more than 170,000 class members-lessthan one half of one percent-submitted an objectionto the Settlement Agreement. This very small levelof opposition is another reason to conclude thatthe Settlement is fair, reasonable, and adequate.Robinson, 2005 U.S. Dist. LEXIS 11673, at *17(“a relatively small number of class members whoobject is an indication of a settlement's fairness”)(citing Newberg on Class Actions § 11.48).

46. Of the small number of class members whoobjected, over half provided no basis for theobjection. (See Docket No. 882, Ex. L ¶ 5.) Generalobjections that provide no reason for the objection“carry little weight.” In re Rio Hair Naturalizer,1996 WL 780512, at *14;.

47. Of the objections that contain a statementconcerning the basis for the objection, mostobjectors stated that they objected because theybelieve the Settlement is a breach of contract orpromise, they had no vote on the Settlement, or they

believe their benefits were vested. None of theseobjections provide a basis for withholding approvalof the Settlement.

48. With respect to the objection that modification ofretiree benefits is a breach of contract or that thebenefits are vested, these objections amount to adisagreement over the merits of the parties' disputeand are not a basis for disapproving the Settlement.Laskey v. Int'l Union, UAW, 638 F.2d 954, 957(6th Cir.1981) (“the objections made indicatedthese employees did not want to compromise at allbut wanted full benefits, rather than making anycomplaint directed to the adequacy of their legalrepresentation”).

49. Some objected that retirees were not allowedto “vote” on the Settlement. However, theseobjections are not addressed to the terms ofthe Settlement and misapprehend Rule 23. Rule23 ensures fairness by the requirements forcertification and by requiring the Court to makean independent determination that the Settlement isfair, reasonable, and adequate, not by taking a voteof class members.

*28 50. A number of objectors noted that they willexperience hardship if the Settlement is approved.However, much of the structure of the Settlementis aimed at mitigating the impact of premiums,deductibles, and the like on retirees and theirfamilies. The Settlement also protects the mostvulnerable class members by continuing theircomprehensive health benefits without imposingco-payments, co-insurance, or annual deductibles.Moreover, the Court cannot ignore that anunfavorable litigation outcome might result in evengreater hardship to the risk of the class.

51. Other retirees objected because they felt thatactive employees and Ford's management wereunfairly asking retirees to accept cutbacks withoutshouldering their own fair share of the burden. (See,e.g., Docket No. 463) The evidence established,however, that the parties developed the Settlementin light of the relative burdens assumed by Ford,active workers and retiree class members. First,active Ford workers are giving up one-third oftheir scheduled wage increase (which will becompounded by future cost-of-living increases that




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will also be diverted into the DC-VEBA), which, ata total of approximately $2,000 per active workerin the first year, represents a significant sacrifice. Inaddition, active workers will be subject to the samereduced health care benefits upon their retirement.(See Docket No. 896, Bantom Decl. ¶¶ 34-36)Second, Ford is taking other cost-saving measuresincluding reducing its active hourly and salariedworkforce and managerial staff. (See Docket No.882, Ford Motor Corporation's Brief in Support ofFinal Approval, at 8) Finally, before agreeing tothe settlement, the UAW, based on advice fromits financial advisor, concluded that because thereare so many fewer active workers than retirees,spouses, surviving spouses, and retiree dependents(Docket No. 896, Bantom Decl. ¶ 26), activeworker participation in the modified health planwould be less beneficial to retirees than the activeworkers' contributions to the DC-VEBA. For thesereasons, the Court concludes that this objectiondoes not warrant disapproval.

i. Objections Submitted by Lawrence Bronson

52. Objector Lawrence Bronson submitted a lengthy briefin support of his objections and a brief in response tothe Settlement parties' motions for final approval, andhis counsel provided argument at the Fairness Hearing.Among other things, Bronson objects to the adequacy ofClass Counsel and the class representatives, and assertsthat there is a conflict between UAW's interests inrepresenting active workers and the interests of retireeclass members. Second, Bronson objects because heclaims that a mandatory Rule 23(b)(2) class violatesthe Due Process Clause and the Seventh Amendment.Third, he objects to specific terms of the Settlement andasserts that the Settlement is not fair, reasonable andadequate. And fourth, he objects that the class noticewas insufficient. The Court has carefully consideredBronson's objections, and determined that they do notmerit disapproval of the Settlement.

a. Objection Concerning The Adequacy Of Class CounselAnd The Class Representatives

(a). Objection concerning the role Of UAW in negotiatingthe settlement

*29 53. Bronson argues that the Settlement must betainted because the UAW has a “conflict of interest”between retirees and the active workers it represents.

He relies on Allied Chemical Workers v. PittsburghPlate Glass Co., 404 U.S. 157, 174, 92 S.Ct. 383, 30L.Ed.2d 341 (1971), but that decision does not establishan inherent conflict of interest. In Pittsburgh Plate Glassthe Supreme Court held only that retirees were not“employees” within the meaning of the National LaborRelations Act, and that an employer therefore had nolegal duty to bargain with the union over the benefits ofworkers who were already retired.

54. As for collective bargaining, the Supreme Courtemphasized that a union could bargain on behalfof its retirees if the employer agreed. Id. at 181n. 20. In fact, as Judge Cleland found in the GMcase, “[t]he Sixth Circuit and other courts havesince [Pittsburgh Plate Glass ] held that a unionmay negotiate for, and assert rights on behalf of,retirees.” UAW v. GM, 2006 WL 891151, at *24(citing UAW v. Yard-Man, Inc., 716 F.2d at 1476(6th Cir.1983).

55. Bronson also relies on Cleveland ElectricIlluminating Co. v. Utility Workers, 440 F.3d809 (6th Cir.2006), for the proposition that aunion lacks authority to negotiate on behalf ofretirees. Cleveland Electric, contrary to Bronson'scontention, explicitly holds that, under PittsburghPlate Glass, “a union and company may agreeto bargain for retirees' benefits,” and that “theunion has standing to represent the retirees in anydispute concerning those benefits.” Id. at 815. TheSixth Circuit added only that the union must obtainthe retirees' consent in order to represent themin arbitrating a grievance over such benefits, id.at 817-18-a holding that has no application here,where the retiree class is separately represented andthe UAW does not purport to represent it in anyjudicial or extra-judicial proceeding.

56. As noted in the Findings of Fact, UAW has a longhistory of bargaining with Ford over retiree issues,including notably improvements in retiree health-care benefits, and of using its members' dues todefend retirees' benefits in court where necessary.In this case, UAW entered into negotiations withFord with the aim of reaching a settlement thatwould, in a way that was fair to retirees, provideFord with a level of cost savings that would increasethe likelihood that it would survive and continueto pay promised benefits in the future; indeed, the


















settlement framework UAW negotiated was moreadvantageous to the retirees than any agreementnegotiated solely on their behalf without UAW'sinvolvement could have been.

57. Bronson contends that “UAW negotiated adeal that is far more beneficial to current Fordemployees than to retirees.” (Docket No. 739,Objection at 14) Bronson emphasizes, in particular,that most of the changes in retiree health-carebenefits introduced under the Settlement are notapplied to the health-care benefits of activeemployees. (See id. at 14) But his conclusion thatthe Settlement is therefore skewed in favor of activeemployees overlooks two important points.

*30 58. First, if the Settlement is approved, thechanges in retiree health benefits will apply to allcurrently active employees upon retirement, just asthey will to currently retired employees. (DocketNo. 24, Ex. 1, Proposed Settlement Agreement §2.) The active employees, in other words, haveaccepted the same changes in their retiree healthcare. This is particularly significant in view of thefact that one quarter of Ford's UAW-representedworkforce is eligible for retirement. (See DocketNo. 896, Bantom Decl. at 18)

59. Second, while most changes in retiree health-care are not applicable to the benefits of activeemployees, these employees are contributing to theSettlement in another way that is much more costlyfor them and much more beneficial to the retirees-by giving up an average of $2,000 per year inwages initially to help fund the DC-VEBA that willmitigate health care costs for retirees. (See DocketNo. 24, Ex. 1, Proposed Settlement Agreement §13.B) Thus, as Judge Cleland noted with respectto the GM settlement, “active employees will‘participate’ in the give-back twice.” UAW v. GM,2006 WL 891151, at *7. Bronson's assertion thatthe settlement framework UAW negotiated was“far more beneficial to current Ford employees thanto retirees,” (Docket No. 739, Objection at 14), isunfounded.

60. These reductions in active workers' compensationpackages could not have been negotiated withoutthe UAW's participation on behalf of the retirees.The UAW is the sole bargaining representative

for its members, and therefore the only bodyauthorized to agree to divert active employees'scheduled wage increases to the DC-VEBA.

61. In a related argument, counsel for Bronson arguedat the Fairness Hearing that, under the CBA, activeemployees who were hired after 1996 are notentitled to health care upon retirement, and thatthey therefore have no stake in the modificationof retiree health benefits. This argument is basedon an erroneous reading of the eligibility provisionof the CBA, which provides that employees hiredafter September 30, 1996 who have less than tenyears of service will not be eligible for health carebenefits in retirement. (See Docket No. 884, Ex.J, Moog Decl. Ex. 2, H-S-M-D-D-V § 4(d)(3))There is no evidence to support an inference thatthe active employees who ratified the MOU willbe unaffected at retirement because they will havean insufficient period of service to be eligible forretiree health benefits.

62. Bronson also argues that, on the alleged adviceof its financial experts, UAW decided to negotiateconcessions on retiree health care during 2005 forthe purpose of improving its negotiating positionon behalf of active employees when its collectivebargaining agreement expires in 2007. (Id. at14) The evidence does not support this assertion.UAW asked Lazard to analyze Ford's financialcondition and, if concessions appeared necessary,to “evaluate the extent to which relief from Ford'sretiree health obligations would improve Ford'sprospects.” (Docket No. 896, Bantom Decl. ¶16) “Lazard was never instructed to devise oranalyze healthcare relief proposals with a goalto benefit active employees at the expense ofretirees....” (Docket No. 890, Yearley Decl. ¶ 9)UAW agreed to negotiate with Ford in late 2005because UAW concluded, based on advice receivedfrom its financial consultants, that this was the besttime to secure the best deal for retirees. (See DocketNo. 896, Bantom Decl. ¶¶ 18-20) There is nothingin any of the Lazard reports that suggests otherwise,nor is there anything in the record that supportsBronson's assertion.

*31 63. Last, the fact remains that, regardlessof UAW's wishes, there could and would havebeen no settlement of this litigation without the







independent decision of Class Counsel to enter intothe Settlement. And, as the Court has previouslyobserved, Class Counsel are highly qualified torepresent the class in this litigation, regardlessof whether it was litigated or settled. (See Order(Docket No. 36) (Feb 24, 2006) (appointing ClassCounsel))

(b). Objection Relating To The Adequacy Of The ClassRepresentatives And Class Counsel

64. Bronson also complains that the Settlement is unfairbecause it was not the product of “arm's lengthnegotiations involving Class Counsel.” (Docket No.739, Objection at 30) This argument is founded onthe claim addressed above, that in undertaking itsnegotiations with Ford prior to the initiation of thelawsuit, UAW favored its active employees over theretirees, and that the class representatives and ClassCounsel merely and uncritically supported the pre-suitnegotiation position of the UAW. Bronson has offeredno evidence to support his contention.

65. The evidence established that the classrepresentatives and Class Counsel have anundivided loyalty to the class. The fact thatthe UAW is also participating as a plaintiff(represented by separate counsel) does not disturbthe cohesiveness of the class or the loyalty ofClass Counsel and the class representatives. Thisseparate representation of the class provides the“structural protection” that Rule 23 requires. Ortizv. Fibreboard Corp., 527 U.S. 815, 855, 119 S.Ct.2295, 144 L.Ed.2d 715 (1999).

66. Although the framework of the Agreement wasdeveloped by UAW in negotiations with Ford,Class Counsel and the class representatives couldhave rejected the settlement at any time, based ontheir own independent evaluation. Class Counselrepresent a cohesive class, they are expert in retireebenefits litigation, and they are entirely capableof determining whether the final Agreement theyparticipated in negotiating-and that they couldhave rejected at any point-sufficiently protectedthe interests of the class. See In re Diet DrugsProds. Liab. Litig., 2000 U.S. Dist. LEXIS 12275,at *135-36 (E.D.Pa. Aug. 28, 2000) (unpublished)(counsel was “qualified to make assessments of theextent to which he or she needed to be involved

in the negotiations”). Nothing in Rule 23 or thecases cited by the Bronson Objectors “requiresthat ... counsel fight among one another or attendevery negotiation session.” Id. at *159. See alsoUAW v. GM, 2006 WL 891151, at *26 (“In short,regardless of UAW's wishes, there could and wouldhave been no settlement of this litigation withoutthe independent decision of counsel appointed bythis Court to represent the class to enter into thesettlement.”).

67. At bottom, Bronson's complaint is that he orhis counsel would have negotiated a differentagreement or no agreement at all. But even iftrue, that is not a sound basis for an objection.The fact that some class members would preferto litigate claims rather than compromise them,or would “press for more drastic relief,” raisesno issue of inadequate representation. UnitedStates v. City of New York, 198 F.3d 360, 367(2d Cir.1999) (“Representation is not inadequatesimply because ‘the applicant would insist on moreelaborate ... pre-settlement procedures or press formore drastic relief’ or has ‘different views onthe facts, the applicable law, or the likelihoodof success of a particular litigation strategy” ’);In re NASDAQ Market-Makers Antitrust Litig.,187 F.R.D. 465, 491 (S.D.N.Y.1998) (where anallegation of inadequate representation rests on factthat class counsel negotiated a settlement of whichhe did not approve, this issue can be addressedthrough the court's consideration of objections).Nor is class representation inadequate merelybecause the objectors disagree with particularterms of the settlement. See, e.g., DeBoer v.Mellon Mortg. Co., 64 F.3d 1171, 1175, 1177(8th Cir.1995) (disagreement with settlement termsdoes not demonstrate that class representationwas inadequate); Bradley v. Milliken, 828 F.2d1186, 1192 (6th Cir.1987) (“A mere disagreementover litigation strategy or individual aspects ofa remediation plan does not, in and of itself,establish inadequacy of representation.”). To holdthat an objector's disagreement with the settlementterms made class representation inadequate “wouldrequire decertification any time an objection israised to a class, certainly not the standardenvisioned by Rule 23.” DeBoer, 64 F.3d at 1175.























b. Bronson's objection concerning due process and theSeventh Amendment

*32 68. Bronson contends that certification of a Rule23(b)(2) class violates due process and the SeventhAmendment because “this [S]ettlement takes awaymoney to which Ford retirees otherwise would have aclaim.” (Docket No. 739, Objection at 28-29) Bronsonargues that the class certification should include opt-outrights because “if Ford reduced health benefit paymentsto individual retirees, the affected retirees would havea money claim to recover those benefits amounts backfrom Ford.” Id. at 27.

69. First, Bronson contends that class treatment is“problematic” in this case, citing references inOrtiz v. Fibreboard, 527 U.S. 815, 119 S.Ct.2295, 144 L.Ed.2d 715 (1990) to the SeventhAmendment right to a jury trial and due process.Bronson then goes on to argue that, for thisreason, mandatory Rule 23(b)(2) certification isinappropriate. Fibreboard, however, applies onlyto limited fund class actions brought under FED.R. CIV. P. 23(b)(1)(B), not to cases primarilyfor injunctive relief, like the case here, broughtpursuant to Rule 23(b)(2).

70. Fibreboard involved complicated individualdamage claims for asbestos exposure, as well asSeventh Amendment jury trial rights of absentclass members-both of which are reasons forallowing opt-out under Rule 23(b)(3). That case,which involved a proposed global settlement offuture claims against a manufacturer of asbestos-containing products, concerned “the difficultiesfacing limited fund treatment of huge numbers ofactions for unliquidated damages arising from masstorts, the first such hurdle being a computation ofthe total claims.” Id. at 850. However, Fibreboardis not implicated absent a fund that is limitedindependently of agreement by the parties.

71. By contrast, this case is an “action for adeclaratory judgment” seeking declaratory andinjunctive relief under ERISA Section 502(a)(1)(B), (a)(3) and Section 301 of the LaborManagement Relations Act (“LMRA”). (Am. Compl. ¶¶ 2-4, 34 (“seek[ing] a declaration thatrights to retiree health care benefits cannot beunilaterally terminated or modified by Ford, and a

permanent injunction prohibiting such terminationor modification”)) This action was filed beforeFord made any modifications to retiree healthbenefits, and consequently does not raise any issuesthat could result in money damages, much less alimited fund. See, e.g., Berger v. Xerox Corp. Ret.Income Guar. Plan, 338 F.3d 755, 763-64 (7thCir.2003) (affirming Rule 23(b)(2) certificationof declaratory judgment claim by pension planparticipants “to recover benefits” under ERISA §502(a)(1)(B)).

72. Instead, the class has a common claim (that theirbenefits are vested) that “is susceptible to a singleproof and subject to a single injunctive remedy,”and no possible claim for money damages. Senterv. General Motors Corp., 532 F.2d 511, 525 (6thCir.1976).

73. Similarly, because the plaintiffs in this case wereseeking purely prospective, equitable relief, theywould not be entitled to a jury trial. See Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S.204, 221, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002)(ERISA “ § 502(a)(3), by its terms, only allows forequitable relief”).

*33 74. Because the claims implicated in theSettlement Agreement seek only injunctive anddeclaratory relief, they are indisputably appropriatefor mandatory class treatment pursuant to Rule23(b)(2). See FED. R. CIV. P. 23(b)(2) AdvisoryCommittee's Note; Amchem Products Inc. v.Windsor, 521 U.S. 591, 614, 117 S.Ct. 2231, 138L.Ed.2d 689 (1997).

75. Although Bronson alleges in his complaint that theclaims are “properly maintained as a class actionunder” Rule 23(b)(2), (see Bronson v. Ford, Civ.No. 06-10331, E.D. Mich., Docket No. 1, ¶ 14),he nonetheless argues that class members shouldbe allowed to opt-out. But in each of the casesrelied upon by Bronson, the class sought bothinjunctive relief and monetary damages or involvedindividually varying claims where “individual classmembers may be able to make even stronger claimsbased on their own individual circumstances.”Fuller v. Fruehauf Trailer Corp., 168 F.R.D. 588,593, 603 n. 26, 605 (E.D.Mich.1996) (alleging, in







































addition to an ERISA claim, a RICO claim formoney damages).

76. Allowing class members to opt out from a unifiedclass would necessarily mean that different retireescould have different rights under the same Fordhealth care plan, which would make effectivedeclaratory or injunctive relief impossible, andwould make the administration of benefits underthe Settlement unworkable. See Day v. NLO, 851F.Supp. 869, 885 (S.D.Ohio 1994) (“Opting outis generally not reasonable because plaintiff-by-plaintiff injunctive relief is not practical.”). Itwould also “defeat the fundamental objective of(b)(2), to bind the members of the class withone conclusive adjudication.” Kyriazi v. W. Elec.Co., 647 F.2d 388, 393 (3d Cir.1981) (citationomitted); Ass'n for Disabled Ams., Inc. v. AmocoOil Co., 211 F.R.D. at 473 (same); Stewart v. Rubin,948 F.Supp. 1077, 1090 (D.D.C.1996) (Rule 23(b)(2) is “designed specifically to avoid the risks ofinconsistency, prejudice, or inequity that wouldresult to persons similarly situated in the absence ofa unitary adjudication of their common claims.”);Heit v. Van Ochten, 126 F.Supp.2d at 493. Seealso UAW v. GM, 2006 WL 891151, at *31-*32(confirming certification of Rule 23(b)(2) classwithout opt-out right). Furthermore, contrary toBronson's suggestion, in an equitable class actionsuch as this one, neither minimum contacts norconsent to the forum's jurisdiction is necessary tosatisfy due process. E.g., In re Joint E. & S. Dist.Asbestos Litig., 78 F.3d 764, 777-78 (2d Cir.1996);Avagliano v. Sumitomo Shoji Am., Inc., 107 F.R.D.748, 749-50 (S.D.N.Y.1985).

c. Bronson's Objections To Particular Settlement Terms

77. The Hold Harmless Provision. Bronson objects tothe modification of the health plan's hold harmlessprovision under the Settlement Agreement. Under thecurrent program, if a retiree receives services from aprovider participating in one of the available healthplans, that provider is obligated by agreement withthe plan's administrator to charge only the rate agreedwith the relevant Plan and cannot bill the retiree forany unpaid balance. If a retiree elects to obtain carefrom a non-participating provider, one who has notagreed to abstain from “balance billing” the retiree, thePlan reimburses the provider up to the “reasonable and

customary” amount charged by participating physicians.(Docket No. 884, Ex. K, Mezza Decl. ¶ 7 & Ex. 2)The administrator will then defend that amount againsta non-participating provider's claims for additionalpayment from a retiree (unless the retiree has entered anagreement with the provider regarding the charges). (Id.)

*34 78. Under the Settlement Agreement, the holdharmless provision is modified by removing theadministrator's obligation to defend the “reasonableand customary” charges in the event a non-participating provider balance bills a retiree andthen pursues him or her for payment. (See id. ¶ 10& Ex. 1; Docket No. 24, Ex. 1, Proposed SettlementAgreement, Ex. 1, at 4-5) Thus, if a retiree obtainsservices from a participating provider, the changehas no effect on payment to that provider. Ifa retiree elects to obtain medical services froma non-participating physician, he or she will beresponsible for any charges beyond the “reasonableand customary” amount that participant physicianshad agreed to accept for those services. (Docket No.24, Ex. 1, Proposed Settlement Agreement, Ex. 1,at 4-5; Docket No. 884, Ex. K, Mezza Decl. ¶ 10)

79. Under the Settlement Agreement, the effectof the modification is relatively minor. First, itapplies only when the retiree elects to obtainservice from a non-participating provider. Underthe Agreement, the retiree will not be responsiblefor any additional charges if he “d[id] not havethe ability or control to select a [participating]provider to perform the service.” (Docket No. 24,Ex. 1, Proposed Settlement Agreement, Ex. 1,at 5; see also Docket No. 884, Ex. K, MezzaDecl. ¶ 12) For example, if the retiree undergoessurgery at a participant hospital with a participantphysician, but a member of the surgical team, suchas the anesthesiologist, is a non-participant, theretiree would not be responsible for any additionalcharges by that non-participating member of theteam. (Docket No. 884, Ex. K, Mezza Decl. ¶12.) Retirees may also avoid extra charges foran out-of-network provider by first obtaining areferral. (Id.) Also, retirees without appropriategeographic access to an in-network primary careprovider, obstetrician/gynecologist, or pediatricianmay, without additional out-of-pocket expense,receive care from an out-of-network provider byobtaining an out-of-area waiver. (Id. ¶ 13)






















80. The Katz Declaration on which Bronsonrelies ignores these safeguards-Katz claims, forexample, that “patients may have less access toa highly experienced orthopedic surgeon becausethe anesthesia group the surgeon works with isnot in the plan network”-and rests on speculation.(Docket No. 739, Katz Decl. ¶ 6.) Dr. Katzdid not base his opinions on the relevant factsof this case, such as the coverage terms of theFord health plan, the size, breadth, and depthof the provider networks (including participatingspecialists and their reasonable and customaryrates), which number over 650,000, and the Fordretiree population. Thus, there is no support for hissupposition concerning the “potential” effect of theSettlement on the plaintiffs if certain speculativeconditions occur. Consequently, his opinion isunreliable and unhelpful to the Court's analysis.See, e.g., Brainard v. Am. Skandia Life Assur.Corp., 432 F.3d 655, 664 (6th Cir.2005) (withincourt's discretion to discard affidavit in the absenceof meaningful analysis because “an expert opinionmust ‘set forth facts' and, in doing so, outline a lineof reasoning arising from a logical foundation”)(citation omitted).

*35 81. As modified by the Settlement Agreement,the hold harmless provision is intended to conformFord's plan to the common practice of healthplans, and to reasonably control costs by providingan incentive for retirees to select from a widenetwork of participating providers for their healthcare services. Considering the common use of thisfeature in health plans and the protections builtinto the Settlement, the modification of the holdharmless provision does not provide a basis fordisapproving the Settlement. See UAW v. GM, 2006WL 891151, at *29-*31 (rejecting precisely thesame argument);

82. DC-VEBA Funding. Bronson questions thesufficiency of the funding for the DC-VEBA, andposits that Ford's share of the funding is necessarilysuspect because, scaled by the number of retirees,GM provided a proportionately larger contributionto fund a DC-VEBA under its similar settlementagreement. (See, e.g., Docket No.. 739, Objectionat 22)

83. The DC-VEBA is to be funded in large partby wage and cost-of-living deferrals by activeemployees averaging $2,000 in the first year andincreasing in subsequent years, as well as by $108million in cash contributions by Ford. (Docket No.896, Bantom Decl. at ¶ 34 & Ex. A at 4; see DocketNo. 24, Ex. 1, Proposed Settlement Agreement§ 13) Based on these sources, UAW's actuarialconsultants have determined that “the DC VEBAis projected to have sufficient assets over a twentyyear period to provide for the level of mitigationpayments anticipated in the current SettlementAgreement [.]” (Docket No. 896, Taranto Decl.,Ex. A at 3) In fact, even without any additionalcontributions arising from special dividends orproceeds from stock appreciation rights, Millimanestimates that the DC-VEBA will carry a $2 billionsurplus at the end of twenty years. Even if theDC-VEBA's investment return should average only3% over the 20 year period-which even Bronson'sexpert seems to suggest is a low estimate (DocketNo. 739, Ex. 5, Wobbeking Decl. ¶ 18)-the DC-VEBA would be left with a balance of $1.4 billionafter 20 years. (Docket No. 896, Taranto Decl., Ex.A at 3) In addition, proceeds for stock dividendsor stock appreciation rights may provide additionalfunding to the DC-VEBA for mitigation purposes.But the forecast that the DC-VEBA will be viablefor the 20-year period is in no way dependent onsuch additional contributions.

84. Bronson's comparison of the ratio of class size toDC-VEBA contribution misunderstands the factorsthat effect Ford's contribution as compared to GM's.The evidence established that because Ford hasslightly more than two retirees for each activeworker, compared to GM's five retirees for eachactive worker, the contributions by Ford activeworkers to the DC-VEBA more than compensatefor the lower contribution by Ford. (Docket No.896, Taranto Decl. at ¶ 19)

85. Bronson also complains that Ford does not providea “guaranty” of the adequacy of the DC-VEBA,citing Settlement Agreement ¶ 14.A (Docket No.739, Objection at 36), but that provision primarilyreflects the fact that under the Agreement, Fordwill have no role in the operation of the mitigationplan or the maintenance and administration of the









DC-VEBA, which will be entirely independentand separate from the company. To the extentthat the DC-VEBA funding and return on DC-VEBA investment exceeds expectations, retirees'benefits will be further enhanced beyond theexpected mitigation amounts, and such mitigationdecisions will be made by the committee thatoperates the DC-VEBA, a committee that isentirely independent of Ford. (See Docket No. 24,Ex. 1, Proposed Settlement Agreement § 14.B)More fundamentally, retiree health care benefitsunder the current agreements are not guaranteedin the sense of being fully funded, any more thanthey are by virtually any other employer. One ofthe primary reasons for the Settlement is to helpplace Ford on a financial footing that will providegreater assurance that it will be able to providebenefits into future years, and as plaintiffs' experthas concluded, if the Settlement is approved, themitigation amounts will be “guaranteed,” in thesense of being adequately funded, by the assets ofthe DC-VEBA.

*36 86. Settlement Termination. Bronson alsoobjects that Ford or UAW may terminate theSettlement Agreement in 2011, but that classmembers may not. While Ford or the UAW canterminate the Settlement beginning in September2011, the effect of any such termination byFord would be to return the retirees to theirpre-Settlement position. If Ford terminates theagreement and were again to assert its presentposition that it is entitled unilaterally to modifyor terminate the retiree's benefits, the SettlementAgreement provides that the dispute over that issuewould be decided on the basis of the case law as itexists on the date the Settlement is approved. (Id.

at § 19(B)(b)) After 2011, therefore, class membersmay continue with the modified health benefitsprovided under the Settlement Agreement, or, ifFord terminates the agreement, they will return tothe position they were in before the Settlement.

87. Medicare Coordination And The ADEA. Bronsontakes issue with the Medicare coordinationprovision of the Settlement, claiming it is unfairto class members over age 65, and that itviolates the Age Discrimination in EmploymentAct (“ADEA”). (Docket No. 739, Objection at26, 32-34) This argument is founded on a

misapprehension about the current Ford healthplan. Medicare coordination is already in placeunder the current program for retirees who areenrolled in Medicare (see Moog Decl. Ex. 2, H-S-M-D-D-V Prog. § 11), and in fact five of the classrepresentatives are currently enrolled in Medicare.(See Supplemental Declaration of Dennis DePaulis¶ 5, attached hereto as Exhibit 1) For Medicare-enrolled retirees, Medicare is the primary payer andthe Ford health plan is the secondary payer, with theeffect that the Medicare-enrolled retiree ultimatelyreceives the same total benefit, notwithstandingthat some portion of the cost is paid by Medicare.(See Docket No. 884, Ex. K, Mezza Decl. ¶ 14) TheSettlement Agreement does not change the existingpolicy, so the fact that the Modified Plan continuesto require Medicare coordination provides no basisfor disapproval of the Settlement.

88. Bronson argues that Medicare coordination is“illegal” under the ADEA because a plan maynot “reduce health benefits for retirees age 65or older by coordinating with Medicare, unlessthe plan specifically includes a corresponding costreduction for younger plan participants or someother corresponding increase in benefits to thoseover 65,” citing Erie County Retirees Ass'n v.County of Erie, Pa., 220 F.3d 193 (3d Cir.2000).(Docket No. 739, Objection at 32) Erie Countyinvolved a group of retirees aged 65 and older (i.e.,Medicare-eligible) who sued their former employerbecause they were provided a health care plan thatwas different and inferior to the plan available toretirees who had not reached the age of Medicareeligibility. 220 F.3d at 196. Younger retirees wereprovided a traditional indemnity plan, while those65 or older were only provided with an HMO.Id. at 197. The retirees appealed from a summaryjudgment ruling that “the ADEA clearly was notintended to apply to retirees, like the Plaintiffshere, who premise their complaint on allegeddisparities in their retirement health benefits basedon Medicare-eligibility.” 220 F.3d at 200. TheThird Circuit reversed and held that, to comply withthe ADEA, the County's retiree health plans mustprovide either “equal benefit[s]” to all retirees orincur “equal cost” for benefits for all retirees. Id. at216.












*37 89. In contrast to Erie County, Ford retireesunder 65, and retirees 65 and over, participatein the same plan and receive the same benefits,currently and under the Settlement. In addition,Ford provides retired hourly employees enrolled inMedicare with a Medicare supplement of the costof the premium paid by Medicare enrollees. (Supp.DePaulis Decl. ¶ 6) Very few employers provide acomparable payment.

90. Moreover, although Bronson suggests thatcoordination with Medicare is illegal under ErieCounty, the Third Circuit only remanded thecase, instructing that, in applying the “equalbenefit” prong of the analysis, Medicare benefits“should” be taken into account along with theemployer-provided benefits. 220 F.3d at 216(emphasis added). On remand, the district courtconsidered whether the employer-provided benefitsand the Medicare-provided benefits together metthe “equal benefits” requirement. Erie CountyRetirees Ass'n v. County of Erie, 140 F.Supp.2d466, 470 (W.D.Pa.2001). In doing so, the districtcourt relied upon the governing EEOC regulation,which provided that, “it is not necessary foran employer to provide health benefits whichare otherwise provided to certain employeesby Medicare.” Id. at 470 (citing 29 C.F.R. §1625.10(e)). Under the regulation, coordinationwith Medicare is impermissible only if, “takingthe employer-provided and Government-providedbenefits together, an older employee is entitled toa lesser benefit of any type ... than a similarlysituated younger employee [.]” Id. While thecourt found for plaintiffs, because the HMOprovided for the Medicare-eligible plaintiffs wasinferior to the indemnity plan available to youngerretirees, nothing in Erie County prohibits Medicarecoordination where, as here, benefits available toolder retirees are not inferior to those available tothose under 65.

91. Ford's coordination of benefits with Medicare iscompliant with EEOC regulations. The relevantlaw is clear that coordinating benefits withMedicare, as done under the existing program andas would be continued under the Settlement, ispermissible. It is also a commonplace feature ofemployer-provided health plans. (See Docket No.

884, Ex. K, Mezza Decl. ¶ 14; Ex. E, Borzi Decl. ¶14) In any event, the objection has no merit becausethe Settlement does not alter existing policy underthe current plan.

92. Necessity of Subclasses. Bronson also arguesthat the class should have been broken intosubclasses so that class members with pensions of$8,000 per year or less, who retain their existinghealth coverage, and class members over age65, who receive part of their benefits throughMedicare, have their own counsel. (Docket No.739, Objection at 25-27) But “ ‘there is no rule thatsettlements benefit all class members equally, ... aslong as the settlement terms are ‘rationally based onlegitimate considerations.” ’ UAW v. GM, 2006 WL891151, at *28 (citing cases); see also id. at *11 (to“require the class to be fragmented based on minuteindividual differences divorced from any notionof antagonism ... would endanger the class actiondevice and discourage settlements.”). Since allclass members have the same fundamental interestin maintaining health care, it is no impediment toclass treatment that the Settlement provides extraprotection for the most vulnerable class members.Id. Nor are subclasses required to separate retireesunder age 65 and age 65 and older. Retirees overage 65 receive the same benefits as retirees underage 65, except that older retirees receive part oftheir health insurance from the federal governmentinstead of from Ford. For that reason, their interestsare not materially different from or antagonistic tothose of class members under age 65. In any event,the class representatives include both ProtectedRetirees and General Retirees as well as fiveretirees who are over age 65 and enrolled inMedicare. (See Ex. 1, Supp. DePaulis Decl. ¶¶ 4-5)The participation of class representatives with thesevarious characteristics supports the conclusion thatsubclasses are not warranted.

d. Bronson's objection concerning the applicability of theFederal Rules of Evidence

*38 93. Bronson argues in a lengthy footnote that theLazard and Milliman reports submitted by the UAW-and expert reports submitted by the other parties-areinadmissible because they do not comply with therequirements of Federal Rule of Evidence 702.







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94. Many appellate courts have implicitly approvedthe use of affidavits or declarations in evaluatingthe fairness of class action settlements. E.g.,Newby v. Enron Corp., 394 F.3d 296, 307 (5thCir.2004); In re Rite Aid Corp. Sec. Litig., 396F.3d 294, 298 (3d Cir.2005) (expert declarationsubmitted in connection with fee request); Petrovicv. Amoco Oil Co., 200 F.3d 1140, 1149 (8thCir.1999). The Court is aware of only a single,unreported case in which a district court in sucha proceeding has declined to consider affidavits(which ultimately proved cumulative) on hearsaygrounds. Dumont v. Charles Schwab & Co., Inc.,No. CIV.A 99-2840, 2000 WL 1023231 (E.D.La.July 21, 2000) (nonetheless approving settlement).

95. While the Court need not reach this issue,because it is entitled to consider anything itdeems helpful in evaluating the Settlement, it isclear that the expert opinions presented by Lazardand Milliman would be admissible because theyare relevant and reliable, and they easily meetthe requirements set forth by Federal Rule ofEvidence 702 and the Supreme Court's decisionin Daubert v. Merrell Dow Pharmaceuticals, Inc.,509 U.S. 579, 597, 113 S.Ct. 2786, 125 L.Ed.2d469 (1993). Lazard and Milliman are leadinginvestment banking and health care actuarial firms,respectively, in the nation. The qualifications andexperience of Andrew Yearley, Suzanne Taranto,and Drew Davidoff, explained in the declarationsaccompanying their reports, attest to their abilityto conduct financial and actuarial analysis. See,e.g., United States v. Majors, 196 F.3d 1206,1215 (11th Cir.1999) (proper for district court toadmit opinion rendered by accountant because theexpert had eight and one-half years' experience as afinancial analyst). The Lazard and Milliman reportsthemselves carefully explain the tasks performed,steps taken, and assumptions used, so that theCourt can properly assign weight to the opinionsexpressed. The reports are not required to re-createfor the Court each calculation performed over thecourse of these experts' extensive involvement withFord; that would defeat the purpose of an expertreport, which is to distill the expert's conclusionsin a manner understandable and helpful to theCourt. For these reasons, the Court concludesthat it is appropriate to consider the expert

reports and declarations submitted by the parties.The Court also notes that Bronson could haveprovided detailed expert analyses of the data on thesame subject matter, as the underlying data wereavailable to him, but he chose not to do so.

e. Bronson's objections relating to class notice

96. Notice of a class settlement need only “fairly apprisethe prospective members of the class of the terms of theproposed settlement and of the options that are open tothem in connection with [the] proceedings.” Weinbergerv. Kendrick, 698 F.2d 61, 70 (2d Cir.1982) (quotationand citation omitted). Class Notice “can practicablycontain only a limited amount of information,” and,therefore, may properly be limited to “very generaldescriptions of the proposed settlement.” Id. (See alsoDocket No. 739, Objection at 38) The Class Notice thatthe Court approved satisfies Rule 23(e). It explainedthe background of the litigation, summarized the termsof the Settlement, and advised class members of theirright to object. It also included a complete copy of theSettlement Agreement and an explanatory letter writtenby Class Counsel and the UAW.

*39 97. Bronson objects to the Class Noticeprimarily on the ground that it does not includehis views on the wisdom of the Settlement orthe circumstances that led to it, and that it doesnot highlight terms that Bronson deems to beimportant. But a summary necessarily does notinclude every term. “The mere fact that the noticesdo not fully explore [certain issues] is immaterial.Class members are not expected to rely uponthe notices as a complete source of settlementinformation.... Any ambiguities regarding thesubstantive aspects of the settlement could becleared up by obtaining a copy of the agreement.”Grunin v. Int'l House of Pancakes, 513 F.2d 114,122 (8th Cir.1975). In this case, a copy of theSettlement Agreement was mailed to each classmember along with the notice and for that reasonBronson's objection on this point is not wellfounded.

98. Other objections raised by Bronson concerningthe Class Notice are wrong as a factual matter.For example, Bronson complains that the Notice“failed to mention anywhere ... the elimination of‘hold harmless protection” ’ relating fees above the



























reasonable and customary charge for health careservices provided by a non-participating physician.But the Notice expressly states that “AdministrativeChanges” under the Settlement include “limitationson Ford's responsibility for all fees chargedabove those reasonable and customary,” and that“[m]ore information concerning AdministrativeChanges is set forth in Exhibit 1 to the SettlementAgreement.” (Docket No. 883, Passarella Decl. Ex.1, Class Notice at 3)

99. Last, Bronson accuses Ford and UAW of tryingto “confuse and intimidate retirees” from objectingby mailing the retirees a postcard encouragingthem to authorize pension deductions to pay formonthly premiums under the Modified Plan inthe event that the Settlement is approved. Theevidence does not support Bronson's view. In mid-April, Ford and UAW mailed to class members aform authorizing monthly deductions from pensionbenefits of the health-care premiums that will berequired if the Settlement Agreement is approvedby the Court. The form informed recipients that“[t]he Court has not yet approved the healthcare Settlement Agreement[,]” (Docket No. 739,Bronson Objection, Ex. 17), and clearly stated,at two different points, that “[i]f the Court doesnot approve the health care Settlement Agreement,the authorization will not be used to make anydeductions.” (Id.) The form also explained thatit was mailed to class members before the Courtruled on settlement approval because, in the eventthe Settlement was approved, class members whohad not authorized pension deductions would beenrolled in the “catastrophic plan,” which coversonly major health care expenses. The deductionform was mailed to class members prior to approvalof the Settlement to minimize the danger thatretirees might be placed in the catastrophic plansimply because of a failure to complete thenecessary paperwork in a timely fashion. TheCourt concludes that the mailing does not warrantdisapproval of the Settlement.

ii. Objections raised by Dennis Lapso.

*40 100. Objector Dennis Lapso has asked the Court to“defer ruling on the fairness of the proposed [S]ettlementuntil completion of appeals he has filed to the UAW'sConvention Appeals Committee” (“CAC”) and further

asked the Court to issue an order requiring the CACto hear his appeal at the UAW annual conventionand to issue a ruling expeditiously. (Docket No. 898,Memorandum of Dennis Lapso Objecting to ProposedSettlement at 19)

101. There is no basis for the Court to delayits decision with respect to settlement approvalpending Lapso's internal union appeal. Based onthe decision of the CAC denying a similar internalappeal relating to the GM settlement, ObjectorLapso withdrew his arguments relating to his claimthat retirees should have had the right to voteon the settlement and his claim based on factsalleged in one unsigned affidavit. (Docket No. 905,Tr. at 51-52) His appeal is therefore now basedonly on the timing of the ratification vote in onelocal union, Local 1250. However, the provisionof the UAW Constitution cited by Objector Lapsorequires only that ratification votes take place“at a meeting ... or through such procedure ...to encourage greater participation of members invoting.” UAW Article 19 § 3 (emphasis added).Lapso does not allege that the vote did not takeplace at a meeting, but only that he would havepreferred the meeting to take place on a differentdate. (Docket No. 898, Lapso Objection at 10-11)His assertion that the ratification procedure violatedthe UAW Constitution thus does not appear tohave merit and does not provide a reason forthe Court to defer its ruling on the fairness ofthe Settlement. That is especially so in viewof the importance to Ford of implementation ofthe Settlement as soon as possible. Indeed, theimportance of the implementation of this settlementas soon as possible is important to the class aswell, insofar as it provides significant benefitsto the viability of Ford, the provider of theirmedical benefits, and also benefits the class bythe monetary contributions of active Ford UAWmember employees.

E. Motion For Fees And Expenses.

101. On March 23, 2006, Class Counsel submitted amotion for fees and expenses (Docket No. 131) TheCourt rules that Class Counsel's requested hourly ratesare reasonable and appropriate pursuant to SettlementAgreement Section 20.B and given the size of thesettlement and the extensive legal work performed.





The Court approves a request for reasonable fees andexpenses by Class Counsel, and will determine the exactamount of such fees and expenses after a motion madewithin 14 days pursuant to Rule 54(d)(2). Similarly, theUAW is to file its motion for reasonable attorney andprofessional fees, also pursuant to Section 20.B of theSettlement Agreement, within 14 days after judgmentpursuant to Rule 54(d)(2), and the Court will rule onUAW's fee motion at that time. The amounts of fees andexpenses awarded to both Class Counsel and to UAWwill be set forth in a supplemental order that will beincorporated into the Court's judgment.

F. Settlement Is Without Prejudice

*41 102. The parties have agreed that in the eventthe Settlement Agreement is terminated pursuant to itsSections 17 or 18, all parties will remain protected bythe “No Admissions; No Prejudice” provisions set forthin Section 19 of the Agreement. The Court expresslyconfirms the provisions of Section 19 of the SettlementAgreement, and incorporates them herein as if fully setforth.

G. Indemnification

103. In the Settlement Agreement, the parties haveagreed that Ford will indemnify UAW, and its officers,directors, and employees, and reimburse their reasonableattorneys' fees and expenses on the basis set forth inSection 20.A of the Settlement Agreement. (Docket No.# 24, Ex. 1, Settlement Agreement § 20.A) The Courtfinds such a provision is reasonable.

H. Releases

104. In consideration of Ford's entry into the SettlementAgreement and the other obligations of Ford containedtherein, the class representatives, the Class Counsel, andthe UAW consent to the entry of this Judgment, whichwill be binding upon all class members pursuant to Rule23(b) of the Federal Rules of Civil Procedure. All of the

release provisions set forth in the Settlement Agreementshall be binding upon the parties and class members asset forth in that Agreement.

I. Retention of Jurisdiction

105. Pursuant to Section 22.B of the SettlementAgreement, the Court retains exclusive jurisdictionto resolve any disputes relating to or arising out ofor in connection with the enforcement, interpretationor implementation of the Settlement Agreement. SeeKokkonen v. Guardian Life Ins. Co. of Am., 511U.S. 375, 382, 114 S.Ct. 1673, 128 L.Ed.2d 391(1994) (a district court retains jurisdiction to enforce asettlement agreement if it either (1)has language in thedismissal order indicating its retention of jurisdiction,or (2)incorporates the terms of the settlement agreementinto the dismissal order); RE/MAX Int'l, Inc. v. RealtyOne, Inc., 271 F.3d 633, 645(6th Cir.2001) (same).

III. CONCLUSION

106. For the foregoing reasons, the Court concludes thatthe Settlement is fair, reasonable adn adequate, and¿PPROVESthe parties' Settlement Agreement in allrespects and as to all parties, including Ford, UAW,class representatives, and class members. The plaintiffs'claims, including the claims of the class, are herebyDISMISSED with prejudice pursuant to Federal Rulesof Civil Procedure 41(a)(2) and 23(e)(1)(A) and (C),subject to the Court's retention of jurisdiction as statedabove.PH0H#SO ORDERED.CC#CERTIFICATE OFSERVICE

GOODINE, J.

Copies of this Order were served on the attorneys of recordby electronic means or U.S. Mail on July 13, 2006.

Parallel Citations


Footnotes

1 This Court notes that a significant portion of the parties' jointly-proposed findings of fact are not contradicted. The Bronson Objectors,

though, have stated objections to a number of the proposed findings of facts and conclusions of law.

The Court rejects the Objector's contentions and, in large part, adopts the parties' “Joint Proposed Findings of Fact and Conclusions

of Law.” Some portions of the joint proposed findings and conclusions are not included in this order because the Court believes

that those points are covered elsewhere in the order, not because the Court disagrees with those unadopted propositions. The Court















finds that all important jointly proposed findings are supported by record evidence, and those proposed findings which are not

included in this Order have been omitted for conciseness.

2 Judge Tarnow subsequently recused himself from the case. Judge Anna Diggs Taylor was reassigned to the case, and thereafter

recused herself. The case was then reassigned to the undersigned.

3 On March 31, 2006, U.S. District Judge Robert Cleland entered an order approving a class action settlement in UAW et. al v. General

Motors, Case No. 05-CV-73991-DT, 2006 WL 891151 (E.D.Mich. March 31, 2006) (unpublished), a case similar to the instant case.





In re Plastic Tableware Antitrust Litigation, Not Reported in F.Supp. (1995)

1995-2 Trade Cases P 71,184


1995 WL 678663United States District Court, E.D. Pennsylvania.

In re ANTITRUST LITIGATION

No. CIV.A.94–3564. | Nov. 13, 1995.

Opinion

MEMORANDUM & ORDER

HUYETT, J.

*1 Plaintiffs have moved for Final Approval of the ClassAction Settlements against Defendants Plastics Inc., CometProducts, Inc., and Polar Plastics Manufacturing, Ltd.

Federal Rule of Civil Procedure 23(e) provides that anysettlement of a class action must be approved by the court.Settlement is favored by the Third Circuit, as a methodwhich may result in substantial cost savings for the class. SeeGeneral Motors Corp. Pick–Up Truck Fuel Tank ProductsLiability Litigation, 55 F.3d 768, 784 (3d. Cir.1995). Inreviewing the proposed settlement, the Court must determine“whether the settlement is fair, adequate and reasonable.” SeeStoetzner v. United States Steel Corp., 897 F.2d 115, 118 (3d.Cir.1990). The standards for approval of settlement were setforth in Girsh v. Jepson, 521 F.2d 153, 157 (3d. Cir.1975) andcited with approval in Stoetzner, 897 F.2d at 118. The factorsto be considered are

1) the complexity, expense and likelyduration of the litigation; 2) thereaction of the class to the settlement;3) the stage of the proceedings andthe amount of discovery completed;4) the risks of establishing liability;5) the risks of establishing damages;6) the risks of maintaining the classaction through the trial; 7) the abilityof the defendants to withstand agreater judgment; 8) the range ofreasonableness of the settlement fundin light of the best possible recovery;[and] 9) the range of reasonablenessof the settlement fund to a possiblerecovery in light of all the attendantrisks of litigation.

Girsh, 521 F.2d at 157.

This case involves complex issues would have resultedin lengthy and expensive litigation if not settled. Anappeal could have postponed any potential recovery forseveral years. Plaintiffs completed substantial discovery;they reviewed the criminal case and tens of thousands ofdiscovery documents. Although guilty pleas in the criminalaction may have increased the likelihood of establishingsome liability, the criminal charges covered a conspiracyof only one year, while the civil action covers a periodof four and one-half years. Plaintiffs would have beenrequired to establish liability for the entire period at trial.Plaintiffs would also have been required to prove damagesbefore a jury, through the presentation of complex economicevidence. The proposed settlement is well within the range ofreasonableness as compared with the best possible recoveryin this case; it represents three and one-half percent oftotal sales of Defendants over the period at issue. Othercourts have approved similar or smaller percentages ofrecovery in antitrust litigation. See Fisher Bros. v. PhelpsDodge Industries, Inc., 604 F.Supp. 446, 451 (E.D.Pa.1985)(2.4% recovery); Fisher Bros. Inc. v. Mueller Brass Co.,630 F.Supp. 493, 499 (E.D.Pa.1985) (.2% recovery); In reArmored Car Antitrust Litigation, 472 F.Supp. 1357, 1368(N.D.Ga.1979) (3.88% recovery); In re Anthracite CoalAntitrust Litigation, 79 F.R.D. 707, 711 (M.D.Pa.1978).Finally, in the case of Polar, any larger settlement would havebeen impracticable in light of its financial situation.

*2 Based on the foregoing, the Court finds the ProposedSettlement with Plastics, Comet and Polar is fair, reasonableand adequate. An appropriate order follows.

ORDER AND FINAL JUDGMENT

AND NOW, this 25th day of October, 1995, uponconsideration of the Plaintiffs' Motion for Final Approvalof Class Action Settlements with defendants, Plastics Inc.(“Plastics”), Comet Products, Inc. (“Comet”) and PolarPlastics Manufacturing, Ltd. (“Polar”), a duly-noticed finalapproval hearing held October 25, 1995, and the Courtexpressly finding, pursuant to Rule 54(b) of the Federal Rulesof Civil Procedure, that there is no just reason for delay,the Court expressly directs the entry of the following finaljudgment as to defendants Plastics, Comet and Polar:


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IT IS HEREBY ORDERED, ADJUDGED AND DECREEDas follows:

i. The Court finds that due and adequate notice was providedpursuant to Rule 23 of the Federal Rules of Civil Procedureto all members of the Class, as hereinafter defined, notifyingthe Class, inter alia, of the pendency of this action and theproposed settlements with defendants Plastics, Comet andPolar. The notice provided was the best notice practicableunder the circumstances and included individual notice byfirst class mail to all members of the Class who could beidentified through reasonable effort and notice published inthe national edition of The Wall Street Journal. The noticeprovided fully complied in all respects with the requirementsof Rule 23 of the Federal Rules of Civil Procedure and theterms of the Settlement Agreements with defendants Plastics,Comet and Polar.

ii. Pursuant to Rule 23, the Court certified the following classfor purposes of settlement only, by Order dated August 24,1995:

All persons, firms, corporations,partnerships, groups or other entitiesin the United States and its territories(excluding (a) federal, state, andlocal governmental entities, and(b) defendants, their alleged co-conspirators, and other manufacturersof plastic tableware products andtheir parent companies, subsidiaries,and affiliates) that purchasedplastic tableware products from anydefendant, or any parent, subsidiary, oraffiliate, at any time during the periodfrom June 1, 1990 to December 31,1994. (the “Class”).

iii. The Court finds that all such entities who have not dulyrequested to be excluded from the Class are members of theClass.

iv. The Court finds that the entities identified on Schedule“A” annexed hereto, and no others, have duly requested to beexcluded from the Class and accordingly are not included inor bound by this final judgment.

v. The Court finds that the Agreements of Settlement betweenplaintiffs and the Class and defendants Plastics, Comet and

Polar, are fair, reasonable and adequate and meet all therequirements of Rule 23 of the Federal Rules of CivilProcedure.

vi. The Agreements of Settlement between plaintiffs and theClass, and defendants Plastics, Comet and Polar, are herebyapproved pursuant to Rule 23 of the Federal Rules of CivilProcedure.

*3 vii. All claims of plaintiffs and the Class which wereasserted against defendants Plastics, Comet and Polar in theFirst Consolidated Complaint are dismissed with prejudice,with each party to bear its own costs (except as provided forin the Agreements of Settlement).

viii. Plaintiffs and each member of the Class (other than thoseentities identified on Schedule “A”) are permanently barredand enjoined from prosecuting against any of the defendantsand each defendant's past or present officers, directors,agents, employees, affiliates, predecessors, shareholders,parents, subsidiaries, divisions, successors, assigns and legalrepresentatives (the “Released Parties”), any claim, demand,action, cause of action or liability of any nature, whetherknown or unknown, any Class Member which has nottimely excluded itself from the Class ever had against anyof the Released Parties, at any time prior to the dates ofthe Agreements of Settlement, with respect to any and allpurchases and sales of plastic tableware products in theUnited States prior to December 31, 1994, which were orcould have been asserted, successfully or unsuccessfully, inplaintiffs' complaints in this litigation.

ix. Defendants Plastics, Comet and Polar, shall have noobligation for attorneys' fees, taxable costs or other fees orcosts of any kind whatsoever, including without limitation,administration of the settlement.

x. Without affecting the finality of this judgment in anyway, this Court hereby retains continuing jurisdiction forthe purpose of directing the disposition of the settlements inaccordance with the terms of the Agreements of Settlementwith defendants Plastics, Comet and Polar, including, but notlimited to, distributing the settlement funds among variousmembers of the Class.

IT IS SO ORDERED.












Parallel Citations




In re Packaged Ice Antitrust Litigation, Not Reported in F.Supp.2d (2011)





Southern Division.

In re PACKAGED ICE ANTITRUST LITIGATION.Direct Purchasers Action.

No. 08–MD–01952. | Feb. 22, 2011.

Opinion

AMENDED 1 OPINION AND ORDER

(1) GRANTING DIRECT PURCHASER PLAINTIFFS'MOTION FOR FINAL APPROVAL OF PROPOSEDSETTLEMENT WITH DEFENDANT THE HOME

CITY ICE COMPANY (DKT. NO. 309); (2) GRANTINGTHE DIRECT PURCHASER PLAINTIFFS' MOTION

FOR AUTHORIZATION TO USE A PORTIONOF THE HOME CITY SETTLEMENT FUNDS

FOR LITIGATION EXPENSES (DKT. NO. 310);(3) GRANTING FINAL APPROVAL OF THESETTLEMENT CLASS; AND (4) GRANTINGFINAL APPROVAL OF THE SETTLEMENT

AGREEMENT WITH DEFENDANT HOME CITY

PAUL D. BORMAN, District Judge.

*1 This matter is before the Court on the DirectPurchaser Plaintiffs' (“Plaintiffs”) Motion for Final Approvalof Proposed Settlement with Defendant the Home CityIce Company (Dkt. No. 309) and Plaintiffs' Motion forAuthorization to Use a Portion of the Home City Ice CompanySettlement Funds for Litigation Expenses (Dkt. No. 310).

The Court held a final fairness hearing on February 10, 2011(“the Fairness Hearing”). After careful consideration of thePlaintiffs' motions and briefs, as well as the comments ofcounsel for Plaintiffs and Defendant Home City Ice Company(“Home City”) at the Fairness Hearing, and noting theabsence of any objections to the proposed settlement withHome City, the Court GRANTS Plaintiffs' motion for finalapproval of the settlement with Home City and GRANTSPlaintiffs' motion to use a portion of the settlement funds forlitigation expenses.

I. BACKGROUNDThe background of this multidistrict antitrust litigation is setforth in great detail in this Court's July 1, 2010 Opinion andOrder denying the Reddy Ice and Arctic Glacier Defendants'motions to dismiss (Dkt. No. 260) and in this Court'sAugust 2, 2010 Opinion and Order denying the Reddy Iceand Arctic Glacier Defendants' motion to stay preliminaryapproval of the Home City Settlement (Dkt. No. 274).In summary, in 2008 the Department of Justice (“DOJ”)criminal investigation into the packaged ice industry in theUnited States surfaced in the media. Thereafter, multiplecivil antitrust actions were filed against the Reddy IceDefendants, the Arctic Glacier Defendants and DefendantHome City. In June, 2008, the civil cases were transferredto this Court pursuant to the committee on multi-districtlitigation, and consolidated for all pretrial proceedings. TheDOJ investigation resulted in guilty pleas by Arctic GlacierInternational, Inc., Home City Ice and three Arctic Glacierexecutives to conspiring to allocate territories in SoutheasternMichigan. The DOJ has recently concluded its criminalinvestigation into the packaged ice industry without issuingfurther criminal indictments.

On June 1, 2009, this Court appointed Kohn, Swift &Graft, P.C. as interim lead counsel and Gurewitz & Raben,PLLC as liaison counsel for the proposed class of antitrustclaims filed by Direct Purchasers (primarily gas stations andretail stores). (Dkt. No. 175.) On September 15, 2009, thePlaintiffs filed their Consolidated Amended Class ActionComplaint (“CAC”). (Dkt. No. 198 .) On October 30, 2009,the Reddy Ice Defendants and the Arctic Glacier Defendantsfiled motions to dismiss the CAC. (Dkt.Nos.202, 203.)On July 1, 2010, this Court issued an Opinion and OrderDenying Defendants Reddy Ice and Arctic Glacier's Motionsto Dismiss, finding that the CAC stated a plausible claim forrelief as to both Reddy Ice and Arctic Glacier under section 1of the Sherman Antitrust Act. (Dkt. No. 260).

On November 13, 2009, Plaintiffs filed a motion forpreliminary approval of a settlement agreement dated October30, 2009 between Plaintiffs and Defendant Home City (“theSettlement Agreement”). The motion sought preliminaryapproval of the Settlement Agreement and approval todisseminate notice to the proposed Settlement Class. (Dkt.No. 206.) On November 30, 2009, the Reddy Ice and ArcticGlacier Defendants (the “non-settling Defendants”) filed amotion to stay preliminary approval of the proposed HomeCity Settlement Agreement. (Dkt. No. 211.) The Court deniedthe motion to stay on August 2, 2010. (Dkt. No. 274.)


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*2 On August 26, 2010, the Court held a preliminaryfairness hearing on the proposed Home City SettlementAgreement. In an Opinion and Order dated September2, 2010, the Court preliminarily approved the proposedSettlement Agreement, authorized Plaintiffs to disseminatenotice, and set February 10, 2011 as the date for the FinalFairness Hearing on the proposed Settlement Agreement.(Dkt. No. 285.) The Court's September 2, 2010 Order alsoappointed Kohn, Swift & Graf, P .C. and Gurewitz & Raben,PLLC (“Class Counsel”) as Class Counsel for the SettlementClass.

On February 10, 2011, the Court held the final fairnesshearing (“the Fairness Hearing”) as scheduled and heardargument from Class Counsel and counsel for Home City.Counsel for the Reddy Ice Defendants, Mr. James Nelson,and counsel for the Arctic Glacier Defendants, Mr. HowardIwrey, were present at the hearing; neither addressed theCourt. No objections were filed to the proposed SettlementAgreement and no objectors appeared at the Fairness Hearing.Class Counsel informed the Court at the Fairness Hearing thatPlaintiffs had received 19 requests by potential class membersto opt-out. Class Counsel provided the Court at the FairnessHearing with a list of the opt-out entities. That list is attachedto this Order as Exhibit A.

For the reasons that follow, the Court now provides finalcertification of the Settlement Class that it preliminarilyapproved in its September 2, 2010 Order (“the SettlementClass”) and provides final approval of the SettlementAgreement, which the Court concludes is fair, reasonable andadequate. Further, the Court approves the request of ClassCounsel for authorization to use a portion of the SettlementFunds for ongoing litigation expenses.

II. ANALYSIS

A. The Terms of the Settlement AgreementThe principal terms of the Settlement Agreement are asfollows:

(1) The Settlement Amount. The Settlement Agreementprovides that Home City will pay $13.5 million in settlement(“the Settlement Amount”). The Settlement Amount has beenwired into the Settlement Fund which has been establishedas an escrow account pursuant to the terms of the SettlementAgreement. (Settlement Agreement ¶ 19.) Plaintiffs are not atthis stage proposing a plan of allocation and distribution of the

Settlement Amount if the settlement is approved. (Pls.' Mot.for Final Approval, 5.) Plaintiffs plan to propose an allocationplan at a future date, which will include the dissemination ofadditional notice and proof of claim forms to the SettlementClass Members and will require further Court approval.(Id.) Although the Notice sent to putative Settlement ClassMembers did not specify a plan for distribution, the Noticedoes indicate that Class Members who do not seek to beexcluded will receive a second notice setting forth a proposeddistribution plan and a claim form.

Class Counsel explained at the Fairness Hearing that the finalplan of allocation was not included in the original Noticein part because of the potential for additional settlementswith other Defendants which may affect the final planof allocation. (Transcript of February 10, 2011 FairnessHearing, Dkt. No. 322, 13 .) Class Counsel also explained tothe Court at the Fairness Hearing that, although the specificsof a final plan of allocation would be the subject of aformal motion at some future date, the broad outlines of theallocation are “no mystery.” The allocation would likely bebased, as in many antitrust cases, on the respective volumeof a class member's purchases compared to the total numberof claims submitted. (Fairness Hr'g Tr. 15.) Class Counselalso confirmed that the final plan of allocation, as well asany request for incentive awards for the named Plaintiffs, orfor legal fees and expenses for Class Counsel, will be thesubject of additional notice to Class Members and additionalopportunities for Class Members to object and be heard andfurther Court approval. (Fairness Hr'g Tr. 15–16.)

*3 (2) Right to Reduce the Settlement Amount. Paragraph20 of the Settlement Agreement provides that Home City hasthe right to reduce the Settlement Amount, or to withdrawfrom the settlement altogether, if certain opt-out thresholds,calculated based upon the total dollar amount of sales ofPackaged Ice made by Home City during the class periodrepresented by class members who have timely exercisedtheir right to be excluded from the Settlement Class, havebeen met. At the time Plaintiffs filed their Motion for FinalApproval on January 11, 2011, only 12 (twelve) ClassMembers had requested exclusion, none had objected andnone of the contingencies provided for in Paragraph 20had occurred. Requests for exclusion were required to besubmitted to Class Counsel on or before January 21, 2011.Objections were required to be filed with the Court byJanuary 21, 2011 and none has been filed to date. Plaintiffswere required to provide Home City, by January 26, 2011,a written list of all potential Settlement Class members





who have timely exercised their right to be excluded fromthe Settlement Class so that the opt-out amounts could becalculated. (Settlement Agreement ¶ 20.)

At the Fairness Hearing, Class Counsel informed the Courtthat there have been no objections to the SettlementAgreement and the Plaintiffs have received19 (nineteen)requests for exclusion from the Settlement Class. ClassCounsel has provided the Court and Home City with a listof those 19 potential Class Members who have requestedexclusion and represented to the Court that none wassignificant enough, nor were they collectively sufficient, totrigger any of the reduction provisions of paragraph 20 of theSettlement Agreement. (Fairness Hr'g Tr. 6–7, 15.) The list ofthose entities that exercised their right to opt-out is attachedas Exhibit A to the Court's Final Order and Judgment.

Class Counsel informed the Court at the Fairness Hearingthat Plaintiffs received inquiries regarding opt-outs andobjections, including inquiries from a professional law firmknown for representing major companies as opt-outs andobjectors in antitrust cases, but that all those who inquiredchose to remain in the class and none objected to theSettlement Agreement. (Fairness Hr'g Tr. 11–12.)

(3) The Settlement Fund. The Fund, into which the SettlementAmount has been paid (except for $225,000 depositedinto a federally insured bank to cover expenses associatedwith providing notice to the proposed Settlement Class,administering the settlement, or related to taxation matters)has been invested in United States Government Treasuryobligations and all interest earned on the Settlement Fund willbecome and remain a part of the Settlement Fund. (SettlementAgreement ¶¶ 21–22.)

(4) Cooperation. In addition to paying the $13.5 millioninto escrow, Home City is obligated under the terms ofthe Settlement Agreement to cooperate with Plaintiffs andClass Counsel in their continued prosecution of Plaintiffs'claims against the non-settling Defendants. Following theCourt's September 2, 2010 Order preliminarily approvingthe Home City Settlement Agreement, Home City, perthe Settlement Agreement, produced certain documentsrelating to the allegations of the Complaint and arrangeda meeting between outside counsel for Home City andClass Counsel. (Settlement Agreement ¶¶ 28, 29.) Upon theCourt's final approval of the Settlement Agreement, HomeCity has agreed to use its best and good faith efforts makepresent and former officers with knowledge of the alleged

anticompetitive conduct available for interviews, depositionsor trial testimony. (Settlement Agreement ¶ 30.)

*4 At the Fairness Hearing, Class Counsel informedthe Court that Home City's cooperation to date has beenbeneficial and is moving the case forward. (Fairness Hr'gTr. 9.) Class Counsel informed the Court that, amongother things, Plaintiffs have issued a subpoena to thegovernment with respect to certain specific conversations thatPlaintiffs believe were recorded by the government based oninformation obtained from Home City. (Id.)

(5) Releases. Upon the occurrence of the Effective Dateof the Settlement Agreement, as defined in paragraph 17of the Settlement Agreement, the named Plaintiffs and theSettlement Class members (as defined in paragraph 7 ofthe Settlement Agreement) release all claims (as defined inparagraph 18 of the Settlement Agreement) against HomeCity (and additional “releasees” as defined in paragraph 6of the Settlement Agreement). Specifically excluded fromthe category of “releasees” are the non-settling Defendants,Reddy Ice Holdings, Inc., Arctic Glacier Income Fund,Arctic Glacier, Inc. and Arctic Glacier International, Inc.(Settlement Agreement ¶ 6.) Specifically excluded from theclaims released are any claims made by indirect purchasersof packaged ice as to their indirect purchases, or anyproduct defect or similar claim between the parties relating topackagedice. (Settlement Agreement ¶ 18.)

(6) Sales by Home City Remain in the Case Against the Non–Settling Defendants. Home City sales amounts will remainin the case as a basis for damage claims and the non-settlingDefendants remain jointly and severally liable for damageson those sales. (Settlement Agreement ¶ 32.)

(7) Most Favored Nation Status Granted to Home City. IfPlaintiffs enter into any Qualifying Settlement, as defined inparagraph 34(a) of the Settlement Agreement, which is finallyapproved by the Court, and if the Settlement Ratio, as definedin paragraph 34(b) of the Settlement Agreement, for suchsettling Defendants is less than the Settlement Ratio paid byHome City under the Settlement Agreement, then Home Cityshall be entitled to a refund (“the MFN Refund”) sufficientto bring the Home City Settlement Ratio down to an amountequal to the Settlement Ratio for the Qualifying Settlement.(Settlement Agreement ¶ 34(b) and (c).) Any MFN Refundshall be paid solely from the funds recovered in the QualifyingSettlement, not from the amount paid under the Home CitySettlement Agreement.





(8) Stipulation to Class Certification. The parties to theSettlement Agreement have stipulated that the requirementsof Fed.R.Civ.P. 23(a) and 23(b)(3) have been satisfied andhave stipulated to certification of the following SettlementClass, for purposes of settlement with Home City only:

All purchasers of Packaged Icewho purchased Packaged Ice inthe United States directly fromany of the Defendants or theirsubsidiaries or affiliates (includingall predecessors thereof) at any timeduring the period from January 1,2001 to March 6, 2008. Excludedfrom the Settlement class aregovernmental entities and Defendants,including their parents, subsidiaries,predecessors or successors, andDefendants' co-conspirators.

B. Notice to the Settlement Class Was The Best andMost Practicable Notice Under the Circumstances*5 As required by the Court's preliminary order of approval,

the Defendants provided to Plaintiffs in electronic formattheir complete list of customers to whom they had soldpackaged ice during the proposed class period and this listwas utilized by the mailing house that issued the Class Notice.(Fairness Hr'g Tr. 5.) Plaintiffs, in compliance with the Noticeprovisions of this Court's September 2, 2010 PreliminaryApproval Order, mailed 264,762 notices to these potentialClass Members and also published a Summary Notice in theNational Edition of the Wall Street Journal (“Notice”). TheNotice, Settlement Agreement and a copy of the CAC werealso made available at www.kohnswift.com. (Dkt. No. 316,Notice of Filing Mailing and Published Notice Affidavits inConnection with the Proposed Settlement with the Home CityIce Company.)

The Court finds that the method, form and content of theNotice by mail and publication approved by the Court onSeptember 2, 2010 (Dkt. No. 285, Preliminary ApprovalOrder), mailed to the Class Members by Smith Edwards–Dunlap Printing Company first class U.S. Mail on November2, 2010 and published in the Wall Street Journal on November12, 2010, satisfied Rule 23(e)(1) notice requirements. “Thecontents of a Rule 23(e) notice are sufficient if they informthe class members of the nature of the pending action,the general terms of the settlement, that complete and

detailed information is available from the court files, andthat any class member may appear and be heard at thehearing.” 3 Newberg on Class Actions, § 8.32 (4th ed.2010).Plaintiffs obtained the names and addresses of potential ClassMembers from customer lists provided by the Defendants,and the Notice explained the litigation and the terms of theSettlement Agreement in detail and also provided the ClassMembers access to the relevant documents, i.e. the SettlementAgreement and the CAC, via the Kohn Swift website. TheNotice explained in detail, and highlighted in bold print, theprocess for requesting exclusion and for filing objections withthe Court and also informed Class Members of their right toattend the hearing upon proper notice to the Court. The Courtconcludes that the Notice was the best notice practicableunder the circumstances and was “reasonably calculated,under all the circumstances, to apprise [the Class Members]of the pendency of the action and afford them an opportunityto present their objections.” UAW v. General Motors Corp.,497 F.3d 615, 629 (6th Cir.2007) (citations omitted).

C. Certification of the Settlement Class Solely forPurposes of the Home City Settlement is AppropriateCertification of a class must satisfy the requirements ofFederal Rule of Civil Procedure 23(a) and one of thesubsections of Federal Rule of Civil Procedure 23(b). Int'lUnion v. Ford Motor Co., No. 06–10331, 2006 WL 1984363,at * 18 (E.D.Mich. July 13, 2006) (citing Sprague v. GeneralMotors Corp., 133 F.3d 388, 397 (6th Cir.1998)). Forthe reasons that follow, the Court approves the followingSettlement Class (“the Settlement Class”):

*6 All purchasers of PackagedIce who purchased Packaged Icein the United States directly fromany of the Defendants or theirsubsidiaries or affiliates (includingall predecessors thereof) at any timeduring the period from January 1,2001 to March 6, 2008. Excludedfrom the Settlement Class aregovernmental entities and Defendants,including their parents, subsidiaries,predecessors or successors, andDefendants' co-conspirators.

The Court concludes that the requirements of Fed.R.Civ.P.23(a) with respect to the Settlement Class have been met:


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(1) The numerosity requirement of Rule 23(a)(1) is metbecause over 260,000 putative Class Members receivedNotice. See Ford Motor, 2006 WL 1984363 at *19(holding that class of over 170,000 satisfied the numerosityrequirement);

(2) “The requirement of commonality requires only acommon question of law or fact.” Ford Motor, 2006 WL1984363 at * 19 (citing Bittinger v. Tecumseh Prods. Co.,123 F.3d 877, 884 (6th Cir.1997)). There exist commonquestions of law and fact to satisfy Rule 23(a)(2), i.e. whetherDefendants conspired to allocate territories and customersand whether their unlawful conduct caused Packaged Iceprices to be higher than they would have been absent suchillegal behavior and whether the conduct caused injury to theClass Members;

(3) The claims of the Class Representatives are typical of theSettlement Class in satisfaction of Rule 23(a)(3). “If thereis a strong similarity of legal theories, the requirement [oftypicality] is met, even if there are factual distinctions amongnamed and absent class members.” Ford Motor, 2006 WL1984363 at * 19. Because all Class Members' claims arisefrom the same course of conduct, i.e. a conspiracy to allocatemarkets in violation of the Sherman Act, their claims arebased on the same legal theory and the typicality requirement,which is not onerous, is met.

(4) The named Plaintiffs will fairly and adequately representthe interests of the Settlement Class Members in satisfactionof Rule 23(a)(4). “The two criteria for determining whetherclass representatives are adequate are ‘(1) the representativesmust have common interests with unnamed members ofthe class, and (2) it must appear that the representativeswill vigorously prosecute the interests of the class throughqualified counsel.’ “ Ford Motor, 2006 WL 1984363 at * 19(quoting Senter v. General Motors Corp., 532 F.2d 511, 525(6th Cir.1976)). Plaintiffs' interests are aligned with the ClassMembers because they all possess the same interests and havesuffered the same type of injury and the class is representedby competent and experienced Class Counsel. There is noindication that the named Plaintiffs' interests are unjustifiablyadvanced at the expense of unnamed Class Members or thatthe named Plaintiffs' interests conflict in any way with thoseof the Class Members. Lessard v. Allen Park, 372 F.Supp.2d1007, 1009 (E.D.Mich.2007) ( “In determining fairness,a court should consider whether the interests of counseland the named plaintiffs are ‘unjustifiably advanced at theexpense of unnamed class members.”) (quoting Williams v.

Vukovich, 720 F.2d 909, 921–923 (6th Cir.1983)). To date,there has been no request for an incentive award for the namedPlaintiffs and any such request would be subject to furthernotice and an opportunity to object by the Class Members.

*7 Finally, the Court concludes that the Settlement Classsatisfies the requirements of Fed.R.Civ.P. 23(b)(3) becausefor purposes of this Settlement Agreement “questions of lawor fact common to the members of the class predominate overany questions affecting only individual members, and ... aclass action is superior to other available methods for the fairand efficient adjudication of the controversy.” Fed.R.Civ.P.23(b)(3). “ ‘Predominance is a test readily met in certaincases alleging ... violations of the antitrust laws, because proofof the conspiracy is a common question that is thought topredominate over the other issues of the case.” In re ScrapMetal Antitrust Litig., 527 F.3d 517, 535 (6th Cir.2008)(quoting Amchem Prods, Inc. v. Windsor, 521 U.S. 591,625(1997)) (finding that allegations of price fixing and marketallocation will not vary among the class members). Theallegations of market and customer allocation will not varyamong the class members and issues regarding the amountof damages do not destroy predominance. In re Scrap Metal,527 F.3d at 535–536. The evidence that will prove a violationas to one member will be sufficient to prove it as to all—the anticompetitive conduct is not dependent on the separateconduct of the individual Class Members. Meijer Inc. v.3M, No. 04–5871, 2006 WL 2382718 at * 8 (E.D.Pa. Aug.14, 2006). Class Counsel represents that the superiorityrequirement is met because no Class Members have exhibitedan interest in individually pursuing separate actions. (Pls.Mot. for Final Approval, 19.)

As the Court noted in its Opinion and Order denying thenon-settling Defendants' motion to stay preliminary approvalof the Home City Settlement Agreement, the ability of thenon-settling Defendants to contest certification of a litigationclass will be unimpaired by the certification of a Home Citysettlement-only class. (Dkt. No. 274, Order Denying Mot. toStay, 8–9). The Court's certification of the Settlement Class iswithout prejudice to, or waiver of, the rights of any Defendantother than Home City to contest certification of any otherclass proposed by Plaintiffs. The Court's findings in this FinalApproval Order will have no effect on the Court's ruling onany motion to certify any class in this litigation and no partymay cite or refer to the Court's approval of the SettlementClass as persuasive or binding authority with respect to anymotion to certify such a class.

































D. The Settlement Agreement With Home City is Fair,Reasonable and AdequateThe Sixth Circuit and courts in this district have recognizedthat the law favors the settlement of class action lawsuits.UAW, 497 F.3d at 631 (noting “the federal policy favoringsettlement of class actions”); IUE–CWA v. General MotorsCorp., 238 F.R.D. 583, 593 (E.D.Mich.2006) (noting “thegeneral federal policy favoring the settlement of classactions”). This policy applies with equal force whether thesettlement is partial, involving only some of the defendants,or complete. See In re Beef Ind. Antitrust Litig., 607 F.2d167, 177 (5th Cir.1979) (finding nothing in the cases or thecommentaries to suggest that approval of a pre-certificationsettlement is dependent upon the settlement being completeas to all parties); Newby v. Enron Corp., 394 F.3d 296 (5thCir.2004) (affirming approval of partial settlement whereclass certified for settlement purposes only).

*8 The evaluation and approval of a class settlement iscommitted to the sound discretion of the district court and thedistrict court “should approve a class settlement if, followinga hearing, the court determines that the settlement ‘is fair,reasonable, and adequate.’ “ IUE–CWA, 238 F.R.D. at 593.“In exercising that discretion, the Court may limit the fairnesshearing to whatever is necessary to aid it in reaching aninformed, just and reasoned decision” and “the settlement orfairness hearing is not to be turned into a trial or rehearsal fortrial on the merits.” Id. at 594 (internal quotation marks andcitations omitted). “Given that class settlements are favored,the role of the district court is limited to the extent necessaryto reach a reasoned judgment that the agreement is not theproduct of fraud or overreaching by, or collusion between, thenegotiating parties, and that the settlement taken as a whole,is fair, reasonable and adequate to all concerned.” Id. at 594(internal quotation marks and citations omitted). In evaluatinga proposed settlement, the district court judge “must respectthe parties' compromise and may not substitute his or herjudgment for that of the litigants and their counsel.” Id.(internal quotation marks and citation omitted). “Settlementembodies a bargained give and take between the litigantsthat is presumptively valid about which the Court should notsubstitute its judgment for that of the parties.” Ford, 2006WL 1984363 at * 21 (internal quotation marks and citationomitted). In evaluating the fairness of a proposed settlement,the Court must remain mindful of its primary role as guardianof the interests of the absent class members in its evaluationof the Rule 23 requirements. Amchem, 521 U.S. at 620.

The Sixth Circuit has identified a number of factors thatare relevant in determining whether a settlement is fair,reasonable and adequate: “(1) the likelihood of success on themerits weighed against the amount and form of relief in thesettlement; (2) the complexity, expense and likely durationof the litigation; (3) the opinions of class counsel and classrepresentatives; (4) the amount of discovery engaged in bythe parties; (5) the reaction of absent class members; (6) therisk of fraud or collusion; and (7) the public interest.” UAW,497 F.3d at 631. “The Court may choose to consider onlythose factors that are relevant to the settlement at hand andmay weigh particular factors according to the demands of thecase.” Ford, 2006 WL 1984363 at * 22.

Consideration of the factors relevant to the Home CitySettlement Agreement leads the Court to conclude that, giventhe complexity of the litigation, the multitude of factual andlegal hurdles which remain in this case which is still at anearly stage, the potential for significant cooperation fromthe settling Defendant in Plaintiffs' continued prosecutionof its claims against the non-settling Defendants and thefinancial struggles of all of the Defendants, the SettlementAgreement falls within the range of reasonableness, fairnessand adequacy required under Fed.R.Civ.P. 23.

1. The likelihood of Plaintiffs' success on the meritsweighed against the amount and form of relief offered inthe settlement supports approval.*9 In determining whether the relief offered in a settlement

outweighs the plaintiffs' chances of ultimate success on themerits, the Court “recognizes the uncertainties of law andfact in any particular case and the concomitant risks andcosts inherent in taking any litigation to completion.” IUE–CWE, 238 F.R.D. at 594. The Court “is not to decide whetherone side is right or even whether one side has a better ofthese arguments.... The question rather is whether the partiesare using settlement to resolve a legitimate legal and factualdispute.” UAW, 497 F.3d at 632.

The Court concludes that the Settlement Agreement withHome City seeks to resolve a legitimate legal and factualdispute over the alleged nationwide allocation of marketsin the packaged ice industry. Plaintiffs state that theyremain optimistic about their ultimate chance of success butacknowledge that there is always a risk that Defendants couldprevail with respect certain legal or factual issues. Plaintiffspoint out, and the Court notes, that the Department of Justicehas closed its investigation of the Packaged Ice industryand, while certainly not dispositive of Plaintiffs' claims,

























this is a factor which favors settlement. See In re PressureSensitive Labelstock Antitrust Litig., 584 F.Supp.2d 697, 702(M.D.Pa.2008) (“Risks of establishing liability and damagesare substantial .... [and] the criminal investigation that likelyinstigated this antitrust litigation was concluded without theissuance of any indictments.”); Rodriguez v. West PublishingCorp., 563 F.3d 948, 964 (9th Cir.2009) (finding that districtcourt did not abuse its discretion in considering that “therewere no government coattails for the class to ride”). Plaintiffsalso note that their case alleges a nationwide conspiracy,while certain Defendants have pled guilty only to antitrustviolations in Southeastern Michigan. Plaintiffs also state thatthe November 15–17, 2010 deposition of Keith Corbin, aretired Arctic Glacier executive who features prominently inthe allegations of the CAC, did not change their analysis oftheir chances of success.

Weighing against these potential weaknesses is the immediateavailability of a $13.5 million cash settlement, whichrepresents approximately 2.5% of the total commerce ofHome City throughout all of their territories in the SettlementClass Period. (Fairness Hr'g Tr. 8.) As a percentage of salesallegedly affected by Home City's conduct, the SettlementAmount is on par with other antitrust class action settlementsthat have been approved by other courts. See, e.g. In reLabelstock Antitrust Litig., 584 F.Supp.2d at 702 ($8 .25million settlement equal to 1.5% of settling defendant'ssales during the class period); Meijer, 2006 WL 2382718at * 20 ($28.9 million settlement represented 2% of settlingdefendant's sales to class members); In re LinerboardAntitrust Litig., 321 F.Supp.2d 619, 627 (E.D.Pa.2004) ($34million and $92.5 million represented 2.0% and 1.62% ofsettling defendants' sales); In re Automotive Refinishing PaintAntitrust Litig., MDL No. 1426, 2004 WL 1068807 (E.D.Pa.May 11, 2004) ($48 million settlement represented 2% ofsales). Class Counsel also represented at the Fairness Hearingthat negotiations of the Settlement Agreement with HomeCity were vigorous, arm's length and conducted in good faithwith counsel on all sides who were well informed, includingdiscussions with Mr. Sanford Litvack, a former head of theantitrust division of the United States Department of Justice.(Fairness Hr'g Tr. 11.)

*10 Also of significant value is the fact that the SettlementAgreement with Home City can serve as an “ice-breaker”settlement and includes the promise of cooperation fromHome City which, as discussed above, has already beenbeneficial to the Plaintiffs in their continued prosecutionof their claims against the non-settling Defendants. With

the Court's Final Approval Order today, that cooperationenters its next phase, per the terms of the SettlementAgreement, under which Home City will now be obligated toprovide actual witnesses and continued document production.(Fairness Hr'g Tr. 9.) See In re Linerboard Antitrust Litig.,321 F.Supp.2d at 643 (finding that the provision of suchcooperation provides “a substantial benefit to the classesand strongly militates toward approval of the SettlementAgreement”); In re Labelstock Antitrust Litig., 584 F.Supp.2dat 702 (“the benefit of obtaining the cooperation of theSettling Defendants tends to offset the fact that they would beable to withstand a larger judgment.”).

“As is true in any case, the proposed Settlement representsa compromise in which the highest hopes for recovery areyielded in exchange for certainty and resolution.” Ford,2006 WL 1984363 at * 23 (internal quotation marks andcitation omitted). Class Counsel indicated to the Court atthe Fairness Hearing that, while still confident in the claimsasserted in the CAC, the risk and uncertainty of litigatingthose claims cannot be understated. Of note, as Class Counselacknowledged, is the fact that the government has closed itsinvestigation into the packaged ice industry without filingfurther criminal charges against any of the Defendants.(Fairness Hr'g Tr. 10.) Class Counsel also noted that animportant witness from Home City recently passed away andthat other witnesses can move away, be lost or meet a similarfate. (Fairness Hr'g Tr. 11.) Also significant in this case arequestions surrounding the continued financial health of theDefendants and the specter of possible bankruptcies. (Id.) TheCourt concludes that consideration of this factor weighs infavor of final approval of the Settlement Agreement.

2. The complexity, expense and likely duration of thelitigation favor approval.“[T]he prospect of a trial necessarily involves the risk thatPlaintiffs would obtain little or no recovery.” In Re CardizemCD Antitrust Litig., 218 F.R.D. 508, 523 (E.D.Mich.2003).“Experience proves that, no matter how confident trialcounsel may be, they cannot predict with 100% accuracya jury's favorable verdict, particularly in complex antitrustlitigation.” Id. Although reluctant to disclose their analysisof the risks of litigation because of their pending actionagainst the remaining non-settling Defendants, Plaintiffsconcede that an antitrust litigation of this scope has greatcomplexity and undeniable inherent risks, such as whetherthe class will be certified and upheld on appeal, whether theconspiracy as alleged in the Complaint can be established,whether Plaintiffs will be able to demonstrate class wide

























antitrust impact and ultimately whether Plaintiffs will be ableto prove damages. These risks are wholly eliminated withrespect to a recovery from Home City and the SettlementAgreement provides Plaintiffs with a sum certain recoveryand cooperation against the non-settling Defendants whichcould bear substantial fruit.

*11 Plaintiffs also point to the fact that risk of the SettlementClass receiving little or nothing if the litigation continuesand trial expenses mount, due to the financial health of allof the Defendants, including Home City, is a significantconsideration. Plaintiffs point out that Home City has paid$22.5 million as a result of the antitrust claims, includingthe $13.5 million settlement amount paid into escrow. Thisamount does not include the costs of its criminal and civilcounsel and any settlements or judgments that might resultfrom the pending litigations. Plaintiffs also note that ArcticGlacier and Reddy Ice face financial hurdles, with high debtand significantly decreased stock prices since the inception ofthe Packaged Ice investigations and litigation. (Pls.' Mot. forFinal Approval, 11 n. 5.)

This factor weighs in favor of final approval, given the realpossibility that Plaintiffs could ultimately be left with nothingat all. Sheick v. Automotive Component Carrier, LLC., No.09–14429, 2010 WL 4136958 at *18 (E.D.Mich. Oct. 18,2010) (finding that the potential that a full blown trial mightleave plaintiffs with “absolutely nothing” was a significantfactor favoring final approval).

3. The opinions of class counsel and classrepresentatives.The Court appointed Kohn, Swift & Graf, P.C. as InterimLead counsel and Gurewitz & Raben, PLLC as interim liaisoncounsel after thorough review of the credentials and abilitieswhich are discussed in greater detail in the Court's June 1,2009 Opinion and Order Appointing Interim Class Counseland also appointed both firms as Class Counsel in its Opinionand Order preliminarily approving the Home City SettlementClass. (Dkt.Nos.175, 285.) Class Counsel's judgment thatsettlement is in the best interests of the class “is entitledto significant weight, and supports the fairness of the classsettlement.” Sheick, 2010 WL 4136958 at * 18 (citationomitted). Class Counsel represents to the Court that they havenegotiated this deal with Home City's counsel at arm's lengthover a number of months. Class Counsel believes that theSettlement Agreement constitutes an excellent result. ClassCounsel base their analysis of the fairness of the SettlementAgreement on information provided by Home City counsel,

consultation with damage experts, the guilty pleas by ArcticGlacier and its officers, and the document discovery providedboth by Home City and the non-settling Defendants incidentto the November, 2010 deposition of Keith Corbin, and thedeposition of Mr. Corbin itself.

4. The amount of discovery conducted to date in themulti-district litigation.The Settlement Agreement with Home City comes at an earlystage of the multi-district antitrust litigation, in fact beforeclass certification and before the initiation of discovery inearnest. While the parties have proceeded with documentdiscovery, written discovery and depositions were stayed bythe Court pending class certification. (Dkt. No. 296, CaseManagement Order No. 2.) However, as the Court notedin its Opinion and Order preliminarily approving the HomeCity settlement, “the contours of this litigation are not amystery and are informed by government investigations,internal corporate investigations that have been made public,state attorney general investigations, the related securitiesand whistleblower cases and importantly Plaintiffs' counsels'discussions with Home City's counsel in the course of theirarms length negotiations.” In re Packaged Ice Antitrust Litig.,No. 08–01962, 2010 WL 3070161, at * 6 (E.D.Mich. Aug.2, 2010) (citing Newby v. Enron Corp., 394 F.3d 296, 306(6th Cir.2004) (“[T]he absence of formal discovery is not anobstacle [to settlement approval] so long as the parties andthe Court have adequate information in order to evaluate therelative position of the parties.”)). See also Sheick, 2010 WL4136958 at * 19 n. 3 (noting that “courts do not require formaldiscovery so long as the parties have adequate informationin order to evaluate the relative positions.”) (quoting Newby,394 F.3d at 306 (“Formal discovery [is not] a necessaryticket to the bargaining table”)). Moreover, Plaintiffs havenow had the opportunity to depose Keith Corbin, an allegedmajor player in the market allocation scheme, and to examinedocuments that were produced in advance of Mr. Corbin'sdeposition. Class Counsel represents that their evaluation ofthe reasonableness of the Settlement Agreement with HomeCity has not changed as a result of that deposition.

*12 Class Counsel has been provided information byHome City's attorneys in the process of negotiations and inconsultation with outside experts that have led Class Counselto the conclusion that this settlement is in the best interests ofthe Settlement Class. Particularly where, as here, there is thepotential for a significant benefit to the Settlement Class in theform of cooperation on the part of the settling Defendant, the


















absence of extensive discovery does not weigh against finalapproval of the Settlement Agreement.

5. The reaction of absent Class Members.A distribution plan for the $13.5 million settlement amounthas not been finalized but Class Counsel anticipate that theSettlement Funds will be distributed among the SettlementClass Members pro-rata, based on the dollar amount oftheir purchases of Packaged Ice during the Settlement ClassPeriod. The reaction of the Settlement Class membersweighs in favor of final approval. Only 19 (nineteen) of the264,762 Settlement Class Members who were sent noticehave requested exclusion and none of the Settlement ClassMembers has filed an objection. According to Class Counsel,the opt-out percentage is minuscule. (Pls.' Mot. for FinalApproval, 13 .) “[U]nanimous approval of the proposedsettlement [ ] by the class members is entitled to nearlydispositive weight in the court's evaluation of the proposedsettlement.” Linerboard, 321 F.Supp.2d at 629.

The Court recognizes that in certain circumstances, theabsence of objections can speak more to the lack ofsophistication of the class members than to the fairness of thesettlement. However, Class Counsel informed the Court at theFairness Hearing that while the Settlement Class includes anumber of smaller entities, it also includes a number of fairlylarge entities (some “Fortune 100, 50 and 20” companies—including large retail chains, large energy companies) all ofwhom opted to remain in the Settlement Class and did notobject to the Settlement Agreement. (Fairness Hr'g Tr. 7–8.)

6. The risk of fraud or collusion.“Courts respect the integrity of counsel and presume theabsence of fraud or collusion in negotiating the settlement,unless evidence to the contrary is offered.” Ford, 2006 WL1984363 at * 26. There is no evidence or even an allegation inthis case of any collusion between Class Counsel on the onehand and the Graydon Head law firm or any of the parties tothe negotiations and all are presumed to have acted in goodfaith. This factor weighs in favor of final approval.

7. The public interest.“[T]here is a strong public interest in encouraging settlementof complex litigation and class action suits because theyare ‘notoriously difficult and unpredictable’ and settlementconserves judicial resources.” In re Cardizem, 219 F.R.D. at530. There do not appear to the Court to be any countervailing

public interests that would suggest that the Court shoulddisapprove the Settlement Agreement and significantly noone has come forward to suggest one to the Court. This factorweighs in favor of final approval.

E. The Court Authorizes the Expenditure of Up To$750,000 of the Settlement Fund for Costs and ExpensesReasonably Incurred in Continued Prosecution of thisLitigation*13 As set forth in their Motion for Preliminary Approval

of the Home City Settlement, and as explained in theNotice to Class Members, Plaintiffs have moved the Courtto authorize Class Counsel to utilize up to $750,000 of theSettlement Fund to pay expenses incurred in the litigationgoing forward. (Dkt. No. 310.) The Settlement Agreementprovides that Class Counsel intends to seek an order fromthe Court permitting the expenditure of up to $750,000from the Settlement Fund for costs and expenses incurredin prosecuting the claims against the remaining non-settlingDefendants. (Settlement Agreement ¶ 26.) Significantly, itappears that none of the Class Members has objected tothis, or any other, provision of the Settlement Agreement.Such requests are not unusual, as evidence by a numberof cases collected by Plaintiffs in their motion for approvalof the use of Settlement Funds. (Dkt. No. 310.) See In reLinerboard Antitrust Litig., 292 F.Supp.2d at 643 (notingthat a partial settlement “provides class plaintiffs withan immediate financial recovery that ensures funding topursue the litigation against the non-settling defendants”);In re Corrugated Container Antitrust Litig., 556 F.Supp.1117, 1146 (S.D.Tex.1982) (“the non-refundable amountof $187,500 made available to plaintiffs by this settlementprovided a substantial sum to help defray plaintiffs' expensesat a time when their trial preparation costs were mountingrapidly”); In re M.D.C. Holdings Sec. Litig., No. CV89–0090,1990 WL 454747 at * 10 n. 10 (S.D.Cal. Aug. 30, 1990)(noting that the establishment in the stipulated settlementof a $1 million fund to pay expenses likely to be incurredin prosecuting the action against the non-settling defendantsinsures adequate funding “for the vigorous prosecution of thecase for the class” and is “of obvious benefit to the class”);Newby, 394 F.3d at 302–303 (affirming an order providingfor establishment of a $15 million litigation expense fundform the proceeds of a partial settlement); In re BrandName Prescription Drugs Antitrust Litig., No. 94 cv 897,MDL 997 (N.D.Ill. Feb. 18, 1998) (authorizing disbursementof $6 million from settlement funds to pay anticipatedtrial preparation expenses of class counsel) (Pls.' Mot. forFunds, Ex. 3); In re WorldCom, Inc. Sec. Litig., No. 02–
















CIV–3288, 2004 WL 2591402, at * 22 (S.D.N.Y. Nov.12, 2004) (authorizing a $5 million fund for continuationof the litigation against non-settling defendants); In reMicrocrystalline Cellulose Antitrust Litig., No. 01–cv–111,MDL No. 1402 (E.D. Pa. June 15, 2005) (granting classcounsel's request to use up to $2.5 million of a settlementfund to pay litigation expenses against remaining defendant)(Pls.' Mot. for Funds, Ex. 4); In re Plastics Additives AntitrustLitig., No. 03–cv–2038 (E.D.Pa. Feb. 17, 2006) (permittinglead counsel to withdraw $750,000 of the settlement proceedsfor use in paying litigation expenses incurred in furtherprosecution of the class action) (Pls.' Mot. for Funds, Ex.5); High Fructose Corn Syrup Antitrust Litig., No. 95–1477,MDL No. 1087 (C.D.Ill. Feb. 15, 1997) (authorizing classcounsel to use $500,000 of settlement proceeds for paymentof future litigation expenses on behalf of the class) (Pls.' Mot.for Funds, Ex. 6); In re Automotive Refinishing Paint AntitrustLitig., MDL No. 1426 (E.D.Pa. Oct. 13, 2004) (ordering that$1 million be set aside for payment of expenses incurredin continued prosecution of the claims and administrativeexpenses of the settlement fund) (Pls.' Mot. for Funds, Ex.7); In re Graphite Electrodes Antitrust Litig., No. 97–cv–4182 (E.D.Pa. Nov. 20, 2002) (permitting class counsel touse $450,000 from proceeds of partial settlement for futurepretrial and trial expenses) (Pls.' Mot. for Funds, Ex. 8).

*14 In addition to the above-cited authorities, the Courtnotes that there has been no opposition to the request toutilize a portion of the Settlement Funds for ongoing litigationexpenses by any party to the litigation or by any SettlementClass Member. Thus, the facts of this case—that the two non-settling Defendants will continue to be in litigation—providesparticular support for this request.

The Court, therefore, will authorize Plaintiffs' request forauthorization to use up to $750,000 of the $13.5 millionSettlement Amount to pay the reasonable expenses incurredin continued prosecution of this action against the non-settling Defendants. The Court imposes on Class Counselthe obligation to submit to the Court in camera every 90(ninety) days, beginning on the date that Class Counselestablishes a separate escrow account for these funds, anaccounting of Settlement Funds withdrawn and expensesincurred, including a detailed explanation of the utilization ofthe funds withdrawn.

III. CONCLUSIONFor the foregoing reasons, the Court concludes that theSettlement Class meets the certification requirements of

Federal Rule of Civil Procedure 23 and the Court finallycertifies the Settlement Class for purposes of the HomeCity Settlement only. The Court also concludes that theSettlement Agreement is fair, adequate and reasonable andfinally approves the terms of the Settlement Agreement.The Court therefore GRANTS Plaintiffs' Motion for FinalApproval of Proposed Settlement With Defendant the HomeCity Ice Company. (Dkt. No. 309.)

The Court further GRANTS Plaintiffs' Motion forAuthorization to Use a Portion of the Home City Ice Companyas Settlement Funds for Litigation Expenses and authorizesPlaintiffs to utilize up to $750,000 of the Settlement Fundsfor this purpose. (Dkt. No. 310.) This authorization of fundsis subject to periodic reporting by Class Counsel to the Courtin camera, beginning on the date that an escrow account forthis purpose is created, and continuing every 90 (ninety) daysthereafter, of the funds so utilized.

The Court's Final Order and Judgment follow.

Rule 54(b) Final Order and Judgmentas to The Home City Ice Company

The Court, having considered Plaintiffs' Motion for FinalApproval of Class Action Settlement with Defendant theHome City Ice Company (“Home City”) and having helda final Fairness Hearing on February 10, 2011, and for thereasons stated more fully in the preceding Opinion and Order,IT IS ORDERED THAT:

1. The Court has jurisdiction over the subject matter of thisaction, which Plaintiffs bring under section 1 of the ShermanAct, 15 U.S.C. § 1, pursuant to 15 U.S.C. §§ 15 and 26 and28 U.S.C. §§ 1331 and 1337.

2. Terms used in this Final Order and Judgment that aredefined in the Settlement Agreement between the Plaintiffsand the Settlement Class on the one hand and Home City onthe other dated October 30, 2009, unless otherwise definedherein, have the same meanings in this Final Order andJudgment as in the Settlement Agreement.

*15 3. The Court finds, as more thoroughly discussed inthe preceding Opinion, that the Settlement Agreement wasattained following an extensive investigation of the factsand assessment of damages. It resulted from vigorous arm's-length negotiations which were undertaken in good faith by





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counsel with significant experience litigating antitrust classactions.

4. The Court finds, as more thoroughly discussed inthe preceding Opinion, that due and adequate notice wasprovided pursuant to Rule 23 of the Federal Rules of CivilProcedure to all members of the Settlement Class certifiedin this Final Order and Judgment. The Notice advised theproposed Settlement Class Members of the pendency of thisaction and the proposed Settlement Agreement with HomeCity. The Notice provided was the best notice practicableunder the circumstances and included individual notice byfirst class mail to all members of the Settlement Class whocould be identified through reasonable effort as well as noticepublished in the national edition of the Wall Street Journaland on the Internet. The Notice fully complied in all respectswith the requirements of Federal Rule of Civil Procedure 23.

5. The Court finds that notice of the Settlement Agreementwas properly provided to all persons entitled to receive suchnotice, including the federal and state attorneys general, infull compliance with the Class Action Fairness Act.

6. The Court certifies the following Settlement Class (the“Settlement Class”):

All purchasers of Packaged Icewho purchased Packaged Ice inthe United States directly fromany of the Defendants or theirsubsidiaries or affiliates (includingall predecessors thereof) at anytime during the period fromJanuary 1, 2001 to March 6,2008. Excluded from the SettlementClass are governmental entitiesand Defendants, including theirparents, subsidiaries, predecessorsor successors, and Defendants' co-conspirators.

7. The Court finds, as discussed more thoroughly in thepreceding Opinion, that certification of the Settlement Classis appropriate because:

a. The Settlement Class is so numerous that joinder of allmembers is impracticable, satisfying the requirement ofRule 23(a) (1);

b. There are questions of law or fact common to theSettlement Class, satisfying the requirement of Rule23(a)(2);

c. Alvin's Enterprises, Inc. d/b/a Party King, Suzie'sInvestments, Inc. d/b/a Checker Drugs and Food,Arkansas Garden Center West, LLC, Arkansas GardenCenter North, LLC, Chi–Mar Enterprises, Inc.,Kingsway Enterprises, Polly's Food Service, Inc.,Kenco, Inc. and Thomas Beverages Co., Inc. d/b/a Thomas Liquors (“Plaintiffs”) are appointed ClassRepresentatives for the Settlement Class. Plaintiffs'claims are typical of the claims of the Settlement Class,satisfying the requirement of Rule 23(a)(3);

d. The Plaintiffs will fairly and adequately protectthe interests of the Settlement Class, satisfying therequirements of Rule 23(a)(4);

*16 e. For purposes of settlement only, questions of lawor fact common to the members of the Settlement Classpredominate over questions affecting only individualmembers and a class action is superior to other methodsavailable for the fair and efficient adjudication of thecontroversy, satisfying the requirements of Rule 23(b)(3).

8. The Court's certification of the Settlement Class asprovided herein is without prejudice to, or waiver of, therights of any Defendant other than Home City to contestcertification of any other class proposed by Plaintiffs. TheCourt's findings in this Final Order and Judgment shall haveno effect on the Court's ruling on any motion to certify anyclass in this litigation and no party may cite or refer to theCourt's approval of the Settlement Class as persuasive orbinding authority with respect to any motion to certify suchclass.

9. The court finds that the persons and entities on theschedule attached hereto as Exhibit “A,” and no others, havetimely requested to be excluded from the Settlement Classand accordingly are not included in or bound by the FinalJudgment being entered pursuant to this Order.

10. The Court finds, as more thoroughly discussed in thepreceding Opinion, that the Settlement Agreement is fair,reasonable and adequate and the Settlement Agreement withHome City is hereby approved pursuant to Federal Rule ofCivil Procedure 23(e).

















11. All Released Claims (as defined in the SettlementAgreement) of Plaintiffs and the Settlement Class that wereasserted against Home City and the other Releasees (asdefined in the Settlement Agreement) in the ConsolidatedAmended Class Action Complaint are dismissed withprejudice, and, except as provided for in the SettlementAgreement, without costs.

12. Upon the occurrence of the Effective Date of theSettlement Agreement, the Releasees shall be completelyreleased, acquitted, and forever discharged from any andall claims, demands, actions, suits, and causes of action,damages, liabilities of any nature, including costs, expenses,penalties, and attorneys' fees, whether class, individual, orotherwise in nature, that Releasors, or any one of them, everhad, now has, or hereafter can, shall or may have directly,representatively, derivatively or in any other capacity againstthe Releasees or any of them, whether known or unknown,suspected or unsuspected, in law or equity, on account ofor arising out of or resulting from the purchase of PackagedIce in the United States during the Class Period or fromconduct that occurred prior to the Effective Date of thisSettlement Agreement concerning the sale of Packaged Icein the United States, based in whole or in part on thefacts, occurrences, transactions, or other matters alleged inthe Consolidated Amended Class Action Complaint filed inthis Action (including any allegations of collusion amongDefendants and/or any other manufacturers of PackagedIce in the United States relating to the sale of PackagedIce in the United States), and which arise under anyfederal or state antitrust, unfair competition, unfair practices,price discrimination, unitary pricing, trade practice, or civilconspiracy law, including, without limitation, the ShermanAntitrust Act, 15 U.S.C. § 1 et seq. (the “Released Claims”);provided, however, that nothing herein shall release anyclaims made by indirect purchasers of Packaged Ice as totheir indirect purchases, or any product defect or similar claimbetween the parties relating to Packaged Ice.

*17 13. Each member of the Settlement Class shall not,after the Effective Date of the Settlement Agreement, seekto institute, maintain, prosecute or continue or prosecute anysuit or action, or collect from or proceed against the Releaseesbased on the Released Claims.

14. Home City shall have no obligation for attorneys' fees,costs or expenses, including, but not limited to, expensesof administering and distributing the Settlement fund, which

expenses are to be paid out of the Settlement Fund subject tofurther order of this Court.

15. This Final Order and Judgment does not settle orcompromise any claims by Plaintiffs or the Settlement Classagainst any other Defendant or person or entity other thanthe Releasees, and all rights against any other Defendant orother person or entity are specifically reserved. The sales ofpackaged ice to members of the Settlement Class by HomeCity shall remain in this action and shall be part of any jointand several liability against any non-settling Defendant orother person or entity other than the Releasees.

16. Nothing in this Final Order and Judgment or theSettlement Agreement and no aspect of the SettlementAgreement or negotiation thereof is or shall be deemed orconstrued to be an admission or concession of any violation ofany statute or law or of any liability or wrongdoing by HomeCity or of the truth of any of the claims or allegations in anyof the complaints in the Action or any other pleading, andevidence thereof shall not be discoverable or used, directly orindirectly, in any way, whether in the Action or in any otheraction or proceeding, other than to enforce the terms of thisFinal Order and Judgment, or the Settlement Agreement.

17. The Court further finds that the escrow account describedin the Settlement Agreement is a qualified settlement fund(“QSF”) pursuant to the Internal Revenue Code Section 468Band the Treasury Regulations promulgated thereunder.

18. The Court authorizes Class Counsel to create a separateescrow account, to which up to $750,000 of the SettlementFunds may be transferred to pay expenses reasonably incurredin the continued prosecution of this litigation. Class Counselshall inform the Court when such an account has beenestablished and shall submit to the Court in camera periodicreports (every 90 (ninety) days beginning on the day on whichthe account is established) disclosing the amount of any fundstransferred to the account and detailing the expenses paid withthe funds transferred.

19. Without affecting the finality of this Final Order andJudgment, the Court retains jurisdiction for the purposesof, among other things, implementing and enforcing theSettlement Agreement, entering any Orders or conductingany hearings in connection with any final plan of distributionor claims submission process, overseeing and receivingperiodic reporting on the utilization of Settlement Fundsby Class Counsel for expenses reasonably incurred in the


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prosecution of this litigation as authorized in this FinalOrder and Judgment and any other matters that mayarise in connection with the effectuation of the SettlementAgreement.

*18 20. The court expressly finds, pursuant to Federal Ruleof Civil Procedure 54(b) that there is no just reason for delay,and expressly directs entry of Final Judgment as to HomeCity.

IT IS SO ORDERED.

EXHIBIT A

RD Supermarket

Blue River Inn

Ice House Inc.

Midwest Laboratories, Inc.

American Business Women's Association

Veronica Gibbons

Midlake Trading Posts

The Harbor Club at Teet's Landing

Margaret Rowley

Aldo's Deli and Supermarket

Carniceria El Tio, LLC

LLB Liquors, Inc.

Koch Engineering Company, Inc.

Koch–Glitsch, Inc.

KGI, Inc.

KG Holding, LLC

F.A. Sims Oil Co.

Conocco Phillips

Sunshine Acres Family Farm

Parallel Citations


Footnotes

1 The only change in this Amended Order is the attachment of Exhibit A.










Southern Division.

In re PACKAGED ICE ANTITRUST LITIGATION.This Order Relates To: Direct Purchasers Action.

No. 08–MDL–01952. | Dec. 13, 2011.

Opinion

OPINION AND ORDER (1) GRANTING DIRECTPURCHASER PLAINTIFFS' MOTION FOR FINAL

APPROVAL OF PROPOSED SETTLEMENTWITH ARCTIC GLACIER INCOME FUND,

ARCTIC GLACIER. INC., AND ARCTIC GLACIERINTERNATIONAL, INC. (DKT. NO. 394); (2)

GRANTING DIRECT PURCHASER PLAINTIFFS'MOTION FOR APPROVAL OF PROPOSED PLAN

OF DISTRIBUTION OF FUNDS RECEIVEDIN SETTLEMENTS WITH HOME CITY ICE

COMPANY. ARCTIC GLACIER INCOME FUND.ARCTIC GLACIER, INC., AND ARCTIC GLACIER

INTERNATIONAL, INC. (DKT. NO. 395); and(3) GRANTING IN PART DIRECT PURCHASER

PLAINTIFFS' COUNSEL'S MOTION FOR AN AWARDOF ATTORNEYS' FEES AND REIMBURSEMENT OFLITIGATION COSTS AND EXPENSES (DKT. NO. 396)


*1 This matter is before the Court on Direct PurchaserPlaintiffs' Motion for Final Approval of Proposed Settlementwith Arctic Glacier Income Fund, Arctic Glacier, Inc., andArctic Glacier International, Inc. (Dkt. No. 394), DirectPurchaser Plaintiffs' Motion for Approval of Proposed Planof Distribution of Funds Received in Settlements with HomeCity Ice Company, Arctic Glacier Income Fund, ArcticGlacier, Inc. and Arctic Glacier International, Inc. (Dkt. No.395) and Direct Purchaser Plaintiffs' Counsel's Motion for anAward of Attorneys' Fees and Reimbursement of LitigationCosts and Expenses (Dkt. No. 396). A Final Fairness Hearingwas held on October 28, 2011. For the reasons that follow, theCourt GRANTS the motion for final approval of the ArcticGlacier settlement, GRANTS the motion for approval of theproposed plan of distribution of funds received in the Home

City and Arctic Glacier settlements and GRANTS IN PARTthe motion for an award of attorneys' fees and expenses.

INTRODUCTIONThis action is the lead case in the consolidated classaction In re Packaged Ice Antitrust Litig., No. 08–MDL–1952 (E.D.Mich.2008). In this multidistrict litigationinvolving some 68 consolidated actions, Plaintiffs areboth direct purchasers (retail stores and gas stations whopurchased directly from Defendants) and indirect purchasers(individuals who purchased from retail stores and gasstations) of packaged ice from Defendants in the UnitedStates.

This Opinion and Order relates to the Direct Purchaser action,which alleges that Defendants Reddy Ice Holdings, Inc.and Reddy Ice Corporation (the “Reddy Ice Defendants”),Defendants Arctic Glacier Income Fund, Arctic Glacier,Inc. and Arctic Glacier International, Inc. (collectively the“Arctic Glacier Defendants”) and Defendant Home City IceCompany (“Home City”) conspired to allocate customersand markets throughout the United States, in violation ofSection 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. TheDirect Purchaser Plaintiffs now move for final approval ofa settlement agreement with the Arctic Glacier Defendants,for authorization of a plan of distribution of the settlementfunds from the settlement with Arctic Glacier and the priorsettlement with Home City and for an award of attorneys' fees

and reimbursement of expenses. 1 Direct Purchaser Plaintiffs'litigation against Reddy Ice continues. For the reasons thatfollow, the Court approves the settlement with Arctic Glacier,approves the plan of distribution and approves in part therequested legal fees and expenses.

I. BACKGROUND

A. The Multidistrict Packaged Ice LitigationIn 2008, the Department of Justice (“DOJ”) executed asearch warrant against Reddy Ice, thereby going publicwith an investigation into the packaged ice industry in theUnited States. Packaged ice is sold from freezers placed bymanufacturers in retail stores. Multiple civil antitrust actionswere subsequently filed against the Reddy Defendants, theArctic Glacier Defendants and Home City. On June 5, 2008,Pursuant to 28 U.S.C. § 1407, the United States Judicial Panelon Multidistrict Litigation (“JPML”) transferred all pendingand subsequent related civil actions to this District, andordered that they be assigned to this Court for coordinated or


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consolidated pretrial proceedings. (Transfer Order, Dkt. No.1.) A total of 68 cases have been transferred and consolidatedin accordance with the MDL Order, the majority of thetransferred cases being direct purchaser actions. (TransferOrder, Conditional Transfer Orders 1–6, Dkt. Nos. 1, 9, 47,70, 85, 356, 384.)

*2 On June 1, 2009, this Court appointed Kohn, Swift &Graft, P.C. as interim lead counsel and Gurewitz & Raben,PLLC as liaison counsel for the proposed Direct Purchaserclass. (Dkt. No. 175.) On September 15, 2009, the DirectPurchaser Plaintiffs filed their Consolidated Amended ClassAction Complaint (“CAC”). (Dkt. No. 198.) On October30, 2009, the Reddy Ice Defendants and the Arctic GlacierDefendants filed motions to dismiss the CAC. (Dkt.Nos.202,203.) On July 1, 2010, this Court issued an Opinion and OrderDenying Defendants Reddy Ice and Arctic Glacier's Motionsto Dismiss, finding that the CAC stated a plausible claim forrelief as to both Reddy Ice and Arctic Glacier under section 1of the Sherman Antitrust Act. (Dkt. No. 260).

On November 13, 2009, Direct Purchaser Plaintiffsfiled a motion for preliminary approval of a settlementagreement dated October 30, 2009 between Direct PurchaserPlaintiffs and Defendant Home City (“the HC SettlementAgreement”). On August 26, 2010, the Court held apreliminary fairness hearing on the proposed HC SettlementAgreement. In an Opinion and Order dated September 2,2010, the Court preliminarily approved the proposed HCSettlement Agreement, authorized Direct Purchaser Plaintiffsto disseminate notice, and set February 10, 2011 as the datefor the Final Fairness Hearing on the proposed SettlementAgreement. (Dkt. No. 285.) The Court held a Final FairnessHearing on February 10, 2011 and, in an Amended Opinionand Order dated February 22, 2011, the Court granted finalapproval of the HC Settlement Agreement and granted classcounsel's request to use a portion of the HC Settlement fundsfor litigation expenses incurred in the continued prosecutionof the action against the remaining non-settling Defendants.(Dkt. No. 329.)

On April 7, 2011, Direct Purchaser Plaintiffs filed amotion for preliminary approval of a settlement agreementdated March 30, 2011 between Direct Purchaser Plaintiffsand the Arctic Glacier Defendants (“the AG SettlementAgreement”). The motion sought preliminary approval of theAG Settlement Agreement and approval to disseminate noticeto the proposed AG Settlement Class. (Dkt. No. 351.) OnMay 20, 2011, the Court held a preliminary fairness hearing

on the proposed AG Settlement Agreement. On July 12 andJuly 19, 2011, the Court received revised proposed classnotices, which better explained to class members the potentialimpact of the Most Favored Nation Clause in the Home CitySettlement Agreement on the AG Settlement Agreement.

In an Opinion and Order dated July 20, 2011, theCourt preliminarily approved the proposed AG SettlementAgreement, appointed Kohn, Swift & Graf, P.C. andGurewitz & Raben, PLLC (“Class Counsel”) as ClassCounsel for the AG Settlement Class, authorized DirectPurchaser Plaintiffs to disseminate notice, and set October28, 2011 as the date for the Final Fairness Hearing on theproposed AG Settlement Agreement. (Dkt. No. 285.)

B. The Terms of the Settlement Agreement with theArctic Glacier Defendants*3 The principal terms of the AG Settlement Agreement are

as follows:

(1) The Settlement Amount. The AG Settlement Agreementprovides that Arctic Glacier will pay $12.5 million in twoinstallments. (AG Settlement Agreement ¶ 19.) The firstinstallment of $2.5 million was paid on August 4, 2011. In theoriginal Settlement Agreement, the second installment was tobe paid on the later of November 1, 2011 or 30 days after thisCourt entered its Final Order approving the AG SettlementAgreement. By an Amendment dated October 26, 2011,the Direct Purchaser Plaintiffs and Arctic Glacier agreed tomodify the date on which the second installment paymentwould be due to “the later of April 2, 2012 or thirty (30) daysafter entry of the final judgment order” approving the AGSettlement. (Dkt. No. 400.) All other terms and conditions ofthe AG Settlement Agreement remain the same. Interest is tobe paid on each installment, with interest accruing 30 daysfollowing the date on which the AG Settlement Agreementwas executed. The Settlement Funds have been, and are to be,invested in United States Government Treasury securities orUnited States Treasury money market funds.

An issue remains regarding whether Home City will claima refund from the amount that it paid in the HC SettlementAgreement, pursuant to a Most Favored Nation (“MFN”)clause in the HC Settlement Agreement. Home City and theDirect Purchaser Plaintiffs continue to discuss whether theMFN clause has been triggered and, if so, how much of arefund Home City is due. If a refund is due, this amount willbe withdrawn from the total Settlement Fund and the amountavailable to the class reduced accordingly. The potential for





this reduction in the Settlement Fund was fully disclosed topotential class members in both the Notice and SummaryNotice of the AG Settlement.

In their efforts to analyze the reasonableness of the AGSettlement amount, the Direct Purchaser Plaintiffs reviewedArctic Glacier's financial information and had discussionswith Arctic Glacier and its counsel regarding Arctic Glacier'sprecarious financial condition, its significant debt load andthe extensive control of its lenders over its financial affairs.Based on their review of Arctic Glacier's financial affairs,Direct Purchaser Plaintiffs have concluded that the amountthat Arctic Glacier has agreed to pay in settlement representsthe limit that Arctic Glacier could pay given its financialrestraints.

(2) Rights to Reduce the Settlement Amount or WithdrawFrom the Settlement. The Settlement Agreement provides thatArctic Glacier may reduce its settlement payment based oncertain thresholds being crossed regarding the percentage ofpurchases of packaged ice from Arctic Glacier during theclass period from customers that elected to be excluded fromthe Settlement Class. (AG Settlement Agreement ¶ 20.) Ifthe dollar amount of purchases by Settlement Class membersrequesting exclusion exceeds a certain percentage of eitherArctic Glacier's total sales, or the total sales of the otherDefendants, during the class period, Arctic Glacier has a rightto withdraw from the settlement altogether.

*4 Only 15 potential class members, a minimal number,have exercised their right to be excluded from the Settlement.These opt-outs, according to counsel for the Direct PurchaserPlaintiffs, include a few larger entities but are predominantly“mom and pop entities.” Three of the larger entities, the Kochcompanies, also opted out of the HC Settlement. A list ofthose entities who filed timely notices of their intent to opt-out of the AG Settlement is attached to this Order as ExhibitA. The percentage of sales represented by those membersseeking exclusion has not triggered any of the provisions ofparagraph 20 of the Settlement Agreement.

(3) Cooperation. In addition to paying the $12.5 million,Arctic Glacier agreed to cooperate with the Direct PurchaserPlaintiffs' Counsel in connection with the prosecution ofclaims against the remaining Defendant, Reddy Ice. ArcticGlacier, per the terms of the AG Settlement Agreement,has already produced to the Direct Purchaser Plaintiffs thedocuments that it produced to the Department of Justice.Arctic Glacier has also arranged a meeting between outside

counsel for Arctic Glacier and Class Counsel. Arctic Glacierwill also provide declarations and testimony as necessary toestablish the admissibility of its documents and to use its bestand good faith efforts to make present and former officersavailable for interviews, depositions or trial testimony.

(4) Releases. Upon the occurrence of the Effective Date ofthe AG Settlement Agreement, as defined in paragraph 17of the Settlement Agreement, the named Plaintiffs and theSettlement Class members (as defined in paragraph 7 ofthe Settlement Agreement) release all claims (as defined inparagraph 18 of the Settlement Agreement) against ArcticGlacier (and additional “releasees” as defined in paragraph6 of the Settlement Agreement). Specifically excluded fromthe category of “releasees” are the non-settling ReddyIce Defendants. (Settlement Agreement ¶ 6.) Specificallyexcluded from the claims released are any claims madeby indirect purchasers of Packaged Ice as to their indirectpurchases, or any product defect or similar claim between theparties relating to Package Ice. (Settlement Agreement ¶ 18.)

(5) Sales by Arctic Glacier Remain in the Case Againstthe Reddy Ice Defendants. The proposed AG SettlementAgreement will not affect the non-settling Defendant's jointand several liability for the alleged conspiracy. Arctic Glaciersales will remain in the case as a basis for damage claimsand the non-settling Defendant remains jointly and severallyliable for damages on those sales. (Settlement Agreement ¶34.)

(6) Stipulation to Class Certification. The parties to theSettlement Agreement have stipulated that the requirementsof Fed.R.Civ.P. 23(a) and 23(b)(3) have been satisfied andhave stipulated to certification of the following SettlementClass, which is identical to the class certified by the Courtfor purposes of the HC Settlement, for purposes of settlementwith Arctic Glacier:

*5 All purchasers of PackagedIce who purchased Packaged Icein the United States directly fromany of the Defendants or theirsubsidiaries or affiliates (includingall predecessors thereof) at any timeduring the period from January 1,2001 to March 6, 2008. Excludedfrom the Settlement class aregovernmental entities and Defendants,including their parents, subsidiaries,


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predecessors or successors, andDefendants' co-conspirators.

C. Notice to the Class and Requests for Exclusion and/orObjectionsThe Direct Purchaser Plaintiffs, in compliance with theNotice provisions of this Court's July 20, 2011 PreliminaryApproval Order, mailed 208,862 notices on August 3, 2011to potential class members whose addresses were providedby Defendants. (Dkt. No. 393, Notice of Filing Affidavitsof Mailing and Publication, Ex. A.) The firm responsiblefor mailing the notices, Smith–Edwards–Dunlap PrintingCompany, also published a Summary Notice in the NationalEdition of the Wall Street Journal. The Notice, SettlementAgreement and a copy of the Consolidated Class ActionComplaint were also made available at www.kohnswift.com.(Dkt. No. 393, Notice of Filing Affidavits of Mailing andPublication.)

The Court finds that the method, form and content of theclass notice by mail and publication approved by the Court onJuly 20, 2011 (Dkt. No. 285, Preliminary Approval Order),mailed to the Class Members by Smith Edwards–DunlapPrinting Company first class U.S. Mail on August 3, 2011and published in the Wall Street Journal on August 11, 2011,satisfied Rule 23(e)(1) notice requirements. “The contents ofa Rule 23(e) notice are sufficient if they inform the classmembers of the nature of the pending action, the general termsof the settlement, that complete and detailed information isavailable from the court files, and that any class member mayappear and be heard at the hearing.” 3 Newberg on ClassActions, § 8.32 (4th ed.2010). Plaintiffs obtained the namesand addresses of potential Class Members from customer listsprovided by the Defendants, and the Notice explained thelitigation and the terms of the Settlement Agreement in detailand also provided the Class Members access to the relevantdocuments, i.e. the Settlement Agreement and the Complaint,via the Kohn Swift website. The Notice explained in detail,and highlighted in bold print, the process for requestingexclusion and for filing objections with the Court and alsoinformed Class Members of their right to attend the hearingupon proper notice to the Court. The Notice explains thatthe previously-approved HC Settlement amount of $13.5million will be combined with the $12.5 million ArcticGlacier Settlement amount into a single Settlement Fund.The Notice also informed Class Members of the potentialfor the Settlement Amount to decrease in the event thatthe HC Settlement Agreement MFN provision is triggered.

The Notice also explained the process for submitting ClaimsForms in great detail, attaching easy-to-follow worksheets tofacilitate the submission of claims.

*6 The Court concludes that the notice was “reasonablycalculated, under all the circumstances, to apprise [the ClassMembers] of the pendency of the action and afford theman opportunity to present their objections.” UAW v. GeneralMotors Corp., 497 F.3d 615, 631 (6th Cir.2007) (citationsomitted). The Court finds that the Notice fully complied inall respects with the requirements of Federal Rule of CivilProcedure 23 and the requirements of due process.

D. The Proposed Plan of DistributionThe Direct Purchaser Plaintiffs seek approval for distributionof the proceeds of the HC and the AG Settlement Agreementson a pro rata basis to those members of the Settlement Classwho filed valid and timely claims. The deadline for filingclaims was November 26, 2011. (Dkt. No. 394, Mot. for FinalApproval, Ex. C, Notice and Claim Form.) In connection withthe HC Settlement, the Notice that was sent to Class Memberson November 2, 2010 did not explain the claims process,but explained to Class Members that if they remained in theHC Settlement Class, they would receive a second noticesetting forth the process for submitting claims. (Dkt. No. 395,Mot. for Approval of Plan of Distribution, Ex. A, Home CityNotice.)

In connection with the AG Settlement, the August 3, 2011Notice that was sent to 208,862 Class Members (largely thesame individuals that received the HC Settlement AgreementNotice) explained the claims process and attached an easy-to-follow claim form for listing all information that would benecessary to process a valid claim and obtain their share ofthe net settlement funds. On December 7, 2011, in responseto a request from the Court, the Direct Purchaser Plaintiffsinformed the Court that “there has been a positive and robustresponse to the Notice by the class member purchasers, andthat claims have been submitted setting forth purchases ofover $1.4 billion, constituting approximately 46% of the totalpackaged ice sales in the United States by Defendants duringthe seven year and two month settlement period.” (Dkt. No.404, Direct Purchaser Plaintiffs' Report Regarding the ClaimsSubmission Process, 1.) “Claims have been received frompurchasers across the board, from Fortune 100 companies andnational chains, to “mom and pops” with claims of less than$100.” Id. By way of example, Direct Purchaser Plaintiffsnote that four claimants filed claims for purchases of $100million or more; an additional 17 filed claims for purchases













of $10 million or more, and an additional 93 filed claimsfor purchases greater than $ 1 million. At the other end ofthe spectrum, 166 claims are for less than $1,000 and theremaining 2,480 claims are for purchases between $1,000and $1 million. Id. at 2. Direct Purchaser Plaintiffs state thatcollectively, the Defendants' relevant sales during the classperiod total approximately $3.1 billion (Home City's saleswere $527 million, Arctic Glacier's were $563 million andReddy Ice's were $2 billion) so the amount represented bythe claims filed is approximately 46% of the Defendants'sales during the class period. The Direct Purchaser Plaintiffsfurther informed the Court that as of December 5, 2011, theclaims administrator had received 2,760 timely filed claimswith total claimed purchases of $1,431,127,786.40. Id. at 1–2. All of the claims are subject to further review by the claimsadministrator. Direct Purchaser Plaintiffs' counsel representsthat from his “experience, the amount of purchases in thefiled claims represents a significant percentage of the effected[sic] market participating in the claims process and proposeddistribution.” Id. at 2.

II. ANALYSIS*7 The Sixth Circuit and courts in this district have

recognized that the law favors the settlement of class actionlawsuits. UAW, 497 F.3d at 632 (noting “the federal policyfavoring settlement of class actions”); IUE–CWA v. GeneralMotors Corp., 238 F.R.D. 583, 593 (E.D.Mich.2006) (noting“the general federal policy favoring the settlement of classactions”). This policy applies with equal force whether thesettlement is partial, involving only some of the defendants,or complete. See In re Beef Ind. Antitrust Litig., 607 F.2d167, 172 (5th Cir.1979) (finding nothing in the cases or thecommentaries to suggest that approval of a pre-certificationsettlement is dependent upon the settlement being completeas to all parties); Newby v. Enron Corp., 394 F.3d 296 (5thCir.2004) (affirming approval of partial settlement whereclass certified for settlement purposes only).

“The evaluation and approval of a class settlement iscommitted to the sound discretion of the district court” and thedistrict court “should approve a class settlement if, followinga hearing, the court determines that the settlement ‘is fair,reasonable, and adequate.’ “ IUE–CWA, 238 F.R.D. at 593,594. “In exercising that discretion, the Court may limit thefairness hearing to whatever is necessary to aid it in reachingan informed, just and reasoned decision” and “the settlementor fairness hearing is not to be turned into a trial or rehearsalfor trial on the merits.” Int'l Union v. Ford Motor Co., No. 05–74730, 2006 WL 1984363, at *21 (E.D.Mich. July 13, 2006)

(internal quotation marks and citations omitted). “Given thatclass settlements are favored, the role of the district court islimited to the extent necessary to reach a reasoned judgmentthat the agreement is not the product of fraud or overreachingby, or collusion between, the negotiating parties, and that thesettlement taken as a whole, is fair, reasonable and adequateto all concerned.” IUE–CWA, 238 F.R.D. at 594 (internalquotation marks and citations omitted); Sheick v. AutomotiveComponent Carrier LLC, No. 09–14429, 2010 WL 4136958,at *14 (E.D.Mich. Oct. 18, 2010) (“In assessing a proposedsettlement, the district court judge ‘may not substitute his orher judgment for that of the litigants and their counsel’ and‘should approve a class settlement if, following a hearing, thecourt determines that the settlement ‘is fair, reasonable, andadequate.’ ”) (quoting IUE–CWA, 238 F.R.D. at 593, 593).“Settlement embodies a bargained give and take between thelitigants that is presumptively valid about which the Courtshould not substitute its judgment for that of the parties.”Ford, 2006 WL 1984363, at *21 (internal quotation marksand citation omitted).

A. Final Certification of the AG Settlement ClassIn its order preliminarily approving the AG Settlement Class,the Court conditionally certified the AG Settlement Class,as defined in the proposed AG Settlement Agreement, andidentical to the class finally approved by the Court forpurposes of the HC Settlement, as follows:

*8 All purchasers of PackagedIce who purchased Packaged Icein the United States directly fromany of the Defendants or theirsubsidiaries or affiliates (includingall predecessors thereof) at any timeduring the period from January 1,2001 to March 6, 2008. Excludedfrom the Settlement Class aregovernmental entities and Defendants,including their parents, subsidiaries,predecessors or successors, andDefendants' co-conspirators.

Certification of a class must satisfy the requirements ofFederal Rule of Civil Procedure 23(a) and one of thesubsections of Federal Rule of Civil Procedure 23(b). FordMotor, 2006 WL 1984363, at *18 (citing Sprague v. GeneralMotors Corp., 133 F.3d 388, 397 (6th Cir.1998)). The Courtdiscussed each of the relevant factors in its prior Opinion andOrder finally approving the HC Settlement Agreement, which




























approved the identical class for purposes of that settlement.See In re Packaged Ice Antit. Litig., No. 08–MDL–1952,2011 WL 717519, at *5–6 (E.D.Mich. Feb. 22, 2011). Forthe reasons that follow, which are many of the same reasonsdiscussed with respect to approval of this same class forpurposes of the HC Settlement, the Court finds that the AGSettlement Class likewise satisfies the Rule 23 requirements.

1. The AG Settlement Class satisfies the requirements ofRule 23(a).Federal Rule of Civil Procedure 23(a) provides that classmembers may represent a class if the following prerequisitesare satisfied:

(1) the class is so numerous that joinder of all members isimpracticable;

(2) there are questions of law or fact common to the class;

(3) the claims or defenses of the representative parties aretypical of the claims or defenses of the class;

(4) the representative parties will fairly and adequatelyprotect the interests of the class.

Fed.R.Civ.P. 23(a). These four prerequisites are met here:

a. Rule 23(a)(1): The numerosity requirement of Rule 23(a)(1) is met because the Notice was mailed to 208,862 putativeClass Members. See Ford Motor, 2006 WL 1984363, at *19(holding that class of over 170,000 satisfied the numerosityrequirement). The Settlement Class is too large for joinder tobe practicable;

b. Rule 23(a)(2): “The requirement of commonality requiresonly a common question of law or fact.” Ford Motor, 2006WL 1984363, at *19 (citing Bittinger v. Tecumseh Prods.Co., 123 F.3d 877, 884 (6th Cir.1997)). There exist commonquestions of law and fact to satisfy Rule 23(a)(2), i.e. whetherDefendants conspired to allocate territories and customersand whether their unlawful conduct caused packaged iceprices to be higher than they would have been absent suchillegal behavior and whether the conduct caused injury to theClass Members;

c. Rule 23(a)(3): The claims of the Class Representativesare typical of the Settlement Class in satisfaction of Rule23(a) (3). “If there is a strong similarity of legal theories,the requirement [of typicality] is met, even if there arefactual distinctions among named and absent class members.”

Ford Motor, 2006 WL 1984363, at *19. Because all ClassMembers' claims arise from the same course of conduct, i.e.a conspiracy to allocate markets in violation of the ShermanAct, their claims are based on the same legal theory and thetypicality requirement, which is not onerous, is met.

*9 d. Rule 23(a)(4): The named Plaintiffs will fairlyand adequately represent the interests of the SettlementClass Members in satisfaction of Rule 23(a)(4). “The twocriteria for determining whether class representatives areadequate are ‘(1) the representatives must have commoninterests with unnamed members of the class, and (2) itmust appear that the representatives will vigorously prosecutethe interests of the class through qualified counsel.’ “ FordMotor, 2006 WL 1984363, at *19 (quoting Senter v. GeneralMotors Corp., 532 F.2d 511, 525 (6th Cir.1976)). Plaintiffs'interests are aligned with the Class Members because theyall possess the same interests and have suffered the sametype of injury and the class is represented by competentand experienced Class Counsel. There is no indication thatthe named Plaintiffs' interests are unjustifiably advanced atthe expense of unnamed Class Members or that the namedPlaintiffs' interests conflict in any way with those of theClass Members. Lessard v. Allen Park, 372 F.Supp.2d 1007,1009 (E.D.Mich.2005) (“In determining fairness, a courtshould consider whether the interests of counsel and thenamed plaintiffs are ‘unjustifiably advanced at the expense ofunnamed class members.’ ”) (quoting Williams v. Vukovich,720 F.2d 909, 921–923 (6th Cir.1983)). To date, therehas been no request for an incentive award for the namedPlaintiffs and any such request would be subject to furthernotice and an opportunity to object by the Class Members.

2. The AG Settlement Class satisfies the requirements ofRule 23(b)(3).Finally, the Court concludes that the Settlement Classsatisfies the requirements of Fed.R.Civ.P. 23(b)(3) becausefor purposes of this Settlement Agreement “questions of lawor fact common to the members of the class predominate overany questions affecting only individual members, and ... aclass action is superior to other available methods for the fairand efficient adjudication of the controversy.” Fed.R.Civ.P.23(b)(3). “ ‘Predominance is a test readily met in certaincases alleging ... violations of the antitrust laws, becauseproof of the conspiracy is a common question that is thoughtto predominate over the other issues of the case.’ “ In reScrap Metal Antitrust Litig., 527 F.3d 517, 535 (6th Cir.2008)(quoting Amchem Prods., Inc. v. Windsor, 521 U.S. 591,625, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997)) (finding that











































allegations of price fixing and market allocation will not varyamong the class members). The allegations of market andcustomer allocation will not vary among the class membersand issues regarding the amount of damages do not destroypredominance. In re Scrap Metal, 527 F.3d at 535–36. Theevidence that will prove a violation as to one member will besufficient to prove it as to all—the anticompetitive conductis not dependent on the separate conduct of the individualClass Members. Meijer Inc. v. 3M, No. 04–5871, 2006WL 2382718, at *8 (E.D.Pa. Aug.14, 2006). Class Counselrepresents that the superiority requirement is met becauseno Class Members have exhibited an interest in individuallypursuing separate actions. (Pls. Mot. for Final Approval, 19.)

*10 The Court hereby certifies the proposed AG SettlementClass. The Court further concludes that the persons andentities identified on the schedule attached to this Opinion andOrder as Exhibit A, and no others, have timely requested to beexcluded from the AG Settlement Class and accordingly arenot included in or bound by this Opinion and Order. As theCourt noted in its Opinion and Order approving this identicalclass for purposes of the HC Settlement, the ability of the non-settling Defendant to contest certification of a litigation classwill be unimpaired by the certification of an AG Settlement-only class. In re Packaged Ice Antit. Litig., 2011 WL 717519,at *5–6. The Court's findings in this Final Approval Order willhave no effect on the Court's ruling on any motion to certifyany class in this litigation and no party may cite or refer to theCourt's approval of the AG Settlement Class as persuasive orbinding authority with respect to any motion to certify sucha class.

B. The AG Settlement Agreement is Fair, Reasonableand AdequateThe Sixth Circuit has identified a number of factors thatare relevant in determining whether a settlement is fair,reasonable and adequate: “(1) the likelihood of success on themerits weighed against the amount and form of relief in thesettlement; (2) the complexity, expense and likely durationof the litigation; (3) the opinions of class counsel and classrepresentatives; (4) the amount of discovery engaged in bythe parties; (5) the reaction of absent class members; (6) therisk of fraud or collusion; and (7) the public interest.” UAW,497 F.3d at 631. “The Court may choose to consider onlythose factors that are relevant to the settlement at hand andmay weigh particular factors according to the demands of thecase.” Ford Motor, 2006 WL 1984363, at *22.

Consideration of the factors most relevant to the instantcase leads the Court to conclude that, given the complexityof the litigation, the multitude of factual and legal hurdleswhich remain in this case which is still at an earlystage, and the financial struggles facing the Arctic GlacierDefendants, the AG Settlement Agreement falls within therange of reasonableness, fairness and adequacy requiredunder Fed.R.Civ.P. 23.

1. The likelihood of Plaintiffs' success on the meritsweighed against the amount and form of relief offered inthe settlement supports approval.In determining whether the relief offered in a settlementoutweighs the plaintiffs' chances of ultimate success on themerits, the Court “recognizes the uncertainties of law andfact in any particular case and the concomitant risks andcosts inherent in taking any litigation to completion.” IUE–CWA, 238 F.R.D. at 594. The Court “is not to decide whetherone side is right or even whether one side has a better ofthese arguments.... The question rather is whether the partiesare using settlement to resolve a legitimate legal and factualdispute.” UAW, 497 F.3d at 632.

*11 The Court concludes that the AG Settlement Agreementseeks to resolve a legitimate legal and factual dispute. DirectPurchaser Plaintiffs state that they remain optimistic abouttheir ultimate chance of success but acknowledge that thereis always a risk that Defendants could prevail with respectcertain legal or factual issues. Plaintiffs point out, and theCourt notes, that the Department of Justice has closed itsinvestigation of the Packaged Ice industry. See In re PressureSensitive Labelstock Antit. Litig., 584 F.Supp.2d 697, 702(M.D.Pa.2008) (“Risks of establishing liability and damagesare substantial .... the criminal investigation that likelyinstigated this antitrust litigation was concluded without theissuance of any indictments.”); Rodriguez v. West Publishing

Corp., 563 F.3d 948, 964 (9th Cir.2009) (finding that districtcourt did not abuse its discretion in considering that “therewere no government coattails for the class to ride”). Plaintiffsalso note that their case alleges a nationwide conspiracy,while certain Defendants have pled guilty only to antitrustviolations in Southeastern Michigan.

Weighing against these potential weaknesses is the immediateavailability of a $12.5 million cash settlement, whichrepresents approximately 2.2% of Arctic Glacier's UnitedStates sales of Packaged Ice during the proposed SettlementClass Period. Like the HC settlement amount, the AGSettlement Amount, as a percentage of sales allegedly






















affected by Arctic Glacier's conduct, is on par with otherantitrust class action settlements that have been approvedby other courts. See, e.g. In re Labelstock Antit. Litig.,584 F.Supp.2d at 702 ($8.25 million settlement equalto 1.5% of settling defendant's sales during the classperiod); Meijer, 2006 WL 2382718, at *20 ($28.9 millionsettlement represented 2% of settling defendant's sales toclass members); In re Linerboard Antit. Litig ., 321 F.Supp.2d619, 627 (E.D.Pa.2004) ($34 million and $92.5 millionrepresented 2.0% and 1.62% of settling defendants' sales); Inre Automotive Refinishing Paint Antit. Litig., MDL No. 1426,2004 WL 1068807 (E.D.Pa. May 11, 2004) ($48 millionsettlement represented 2% of sales).

Also of significant value is the fact that the SettlementAgreement with Arctic Glacier can serve as a further sourceof cooperation against the non-settling Defendant as to thenationwide conspiracy allegations. See In re LinerboardAntitrust Litig., 321 F.Supp.2d at 643 (finding that theprovision of such cooperation provides “a substantial benefitto the classes and strongly militates toward approval ofthe Settlement Agreement”); In re Labelstock AntitrustLitig., 584 F.Supp.2d at 702 (“the benefit of obtaining thecooperation of the Settling Defendants tends to offset the factthat they would be able to withstand a larger judgment.”).“As is true in any case, the proposed Settlement representsa compromise in which the highest hopes for recovery areyielded in exchange for certainty and resolution.” Ford, 2006WL 1984363, at *23 (internal quotation marks and citationomitted). The Court concludes that consideration of thisfactor weighs in favor of final approval of the AG SettlementAgreement.

2. The complexity, expense and likely duration of thelitigation favor approval.*12 “[T]he prospect of a trial necessarily involves the

risk that Plaintiffs would obtain little or no recovery.”In Re Cardizem CD Antitrust Litig., 218 F.R.D. 508,523 (E.D.Mich.2003). “Experience proves that, no matterhow confident trial counsel may be, they cannot predictwith 100% accuracy a jury's favorable verdict, particularlyin complex antitrust litigation.” Id. Although reluctant todisclose their analysis of the risks of litigation becauseof their pending action against the remaining non-settlingDefendant, Plaintiffs concede that an antitrust litigation ofthis scope has undeniable inherent risks, such as whetherthe class will be certified and upheld on appeal, whether theconspiracy as alleged in the Complaint can be established,whether Plaintiffs will be able to demonstrate class wide

antitrust impact and ultimately whether Plaintiffs will be ableto prove damages. These risks are wholly eliminated withrespect to a recovery from Arctic Glacier and the SettlementAgreement provides Plaintiffs with a sum certain recoveryand cooperation against the non-settling Defendant whichcould bear substantial fruits.

Plaintiffs also point to the fact that there is a significant risk ofthe Settlement Class receiving little or nothing if the litigationcontinues due to the financial health of all of the ArcticGlacier entities. Class counsel represents that they have hadsubstantial discussions with Arctic Glacier and its counselregarding the financial health of the Arctic Glacier entitiesand have concluded that the precarious financial future ofthese entities weighs heavily in favor of settlement at thispoint. Direct Purchaser Plaintiffs point out that the risk ofthe settlement class receiving little or nothing if the litigationcontinues against Arctic Glacier is an important considerationfavoring settlement. Arctic Glacier remains debt laden and itsshare price is down to $.70 cdn as of September 27, 2011,down from $11.69 on March 6, 2008. (Pls.' Mot. 12 n. 5.)

The Court concludes that this factor weighs in favor offinal approval, given the real possibility that Plaintiffs couldultimately be left with nothing at all in recovery from ArcticGlacier. Sheick, 2010 WL 4136958, at *18 (finding that thepotential that a full blown trial might leave plaintiffs with“absolutely nothing” was a significant factor favoring finalapproval).

3. The opinions of class counsel and classrepresentatives.The Court appointed Kohn, Swift & Graf, P.C. as InterimLead counsel and Gurewitz & Raben, PLLC as interim liaisoncounsel after thorough review of their credentials and abilitieswhich are discussed in greater detail in the Court's June 1,2009 Opinion and Order Appointing Interim Class Counsel.(Dkt. No. 175.) Class Counsel's judgment that settlement is inthe best interests of the class “is entitled to significant weight,and supports the fairness of the class settlement.” Sheick,2010 WL 4136958, at *18 (citation omitted). Class Counselrepresents to the Court that they have negotiated this deal withArctic Glacier at arm's length over many months, that theyhave met with Arctic Glacier's top executives to discuss thefinancial health of the Arctic Glacier entities and that ArcticGlacier rejected many offers before agreeing to the terms ofthe instant Settlement Agreement. Class Counsel believes thatthe AG Settlement Agreement constitutes an excellent result.






















The Court concludes that this factor weighs in favor of finalapproval of the AG Settlement Agreement.

4. The amount of discovery conducted to date in themulti-district litigation.*13 As did the HC Settlement Agreement, the Settlement

Agreement with Arctic Glacier comes at what is still arelatively early stage of this multi-district antitrust litigation,before class certification and before the initiation of discoveryin earnest. While the parties have proceeded with documentdiscovery, written discovery and depositions were stayedby the Court pending class certification. (Dkt. No. 296,Case Management Order No. 2.) However, as the Courtnoted in its Opinion and Order preliminarily approving theHC Settlement, “the contours of this litigation are not amystery and are informed by government investigations,internal corporate investigations that have been made public,state attorney general investigations, the related securitiesand whistleblower cases and importantly Plaintiffs' counsels'discussions with Home City's counsel in the course of theirarms length negotiations.” In re Packaged Ice Antitrust Litig.,No. 08–MDL–1952, 2010 WL 3070161, at *6 (E.D.Mich.Aug. 2, 2010) (quoting Newby v. Enron Corp., 394 F.3d 296,306 (6th Cir.2004) (“[T]he absence of formal discovery is notan obstacle [to settlement approval] so long as the parties andthe Court have adequate information in order to evaluate therelative position of the parties.”)). See also Sheick, 2010 WL4136958, at *19 n. 3 (noting that “courts do not require formaldiscovery so long as the parties have adequate informationin order to evaluate the relative positions.”) (quoting Newby,394 F.3d at 306 (“Formal discovery [is not] a necessary ticketto the bargaining table”)).

Plaintiffs' Counsel has been provided information by ArcticGlacier's attorneys, and has met with top executives atArctic Glacier, in the process of negotiating the AGSettlement Agreement, which lead counsel to conclude thatthis settlement is in the best interests of the settlementclass. Particularly where, as here, there is the potential for asignificant benefit to the class in the form of cooperation onthe part of the settling Defendant, the absence of extensivediscovery does not weigh against final approval of the AGSettlement Agreement.

5. The reaction of absent Class Members.Plaintiffs propose that the combined HC and AG SettlementFunds will be distributed among the Settlement ClassMembers pro-rata, based on the dollar amount of their

purchases of Packaged Ice during the Settlement ClassPeriod. The Notice and Claim Forms that were sentto potential Class Members on August 3, 2011 requestinformation detailing purchases made by Class Members whoelect to file a claim for their portion of the Settlement Fund.The reaction of the Settlement Class members weighs in favorof final approval. Only 15 of the 208,862 AG Settlement ClassMembers who were sent Notice have requested exclusionand, as with the HC Settlement, none of the AG SettlementClass Members has filed an objection. According to ClassCounsel, the opt-out percentage is “minuscule.” (Pls.' Mot.14.) “[U]nanimous approval of the proposed settlement [ ]by the class members is entitled to nearly dispositive weightin the court's evaluation of the proposed settlement.” In reLinerboard, 321 F.Supp.2d at 629.

*14 Further, the claims response rate, representing 46% ofDefendants' total sales of packaged ice in the United Statesduring the relevant class period, suggests good participationand is a positive indication as to the favorable reaction ofabsent class members. Although the number of responsesfiled represents just under 1 % of the total number of Noticesmailed, this ratio is not dispositive and is frequently lessthan 5%. See Touhey v. United States, No. EDCV 08–01418,2011 WL 3179036, at *7–8 (C.D.Cal. July 25, 2011) (findinga 2% response rate acceptable–38 responses out of 1,875notices mailed—where there were no objections and theoverall recovery was fair and reasonable); In re Cardizem,218 F.R.D. at 526 (finding favorable class reactions in a 6.9%response rate (1800 proofs of claim out of 26,000 noticessent) and a 9% response rate (37,000 proofs of claim out of400,000+ notices sent); In re New Motor Vehicles CanadianExport Antit. Litig., MDL No. 1532, 2011 WL 1398485, at*3 (D.Maine April 13, 2011) (finding favorable class reactionin a 3.9% response rate (438,169 claims out of 11.3 millioneligible claimants). As the court recognized in In re SerzonePdcts. Liability Action, 231 F.R.D. 221 (S.D.W.Va.2005),many factors affect response rates and this ratio should not begiven great significance:

Objectors also assert that because the settlement class couldhave potentially included millions of Class Members,and only 6,524 have “shown their hands” to be includedin the class by filing an inventory form, the notice isinadequate. However, many factors contribute to the claimsresponse rate. See, e.g, Zimmer Paper Prod., Inc. v. Berger& Montague, P.C., 758 F.2d 86, 92–93 (3d Cir.1985)(holding that where defendant engaged in customary andcourt approved notice procedure, the response rate wasnot determinative of the adequacy of the class notice.);



























3 Alba Conte & Herbert Newberg, Newberg on ClassActions § 8.45 (4th ed. 2002) (“Claims response levelswill tend to vary with the circumstances, types of classnotices employed, and size of individual claims involvedin each case.”).... [T]he adequacy of notice is measured bywhether notice reached Class Members and gave them anopportunity to participate, not by actual participation.

231 F.R.D. at 235–36. In this case, few class members haveelected to be excluded, no objections have been filed andthose claimants responding represent nearly 50% of the totalrelevant sales. These facts speak strongly to the positivereaction of affected class members. Consideration of thisfactor weighs in favor of approval of the AG Settlement.

6. The risk of fraud or collusion.“Courts respect the integrity of counsel and presume theabsence of fraud or collusion in negotiating the settlement,unless evidence to the contrary is offered.” Ford, 2006 WL1984363, at *26. There is no evidence in this case of anycollusion and Kohn Swift on the one hand and Arctic Glacier'scounsel on the other can be presumed to have acted in goodfaith. This factor weighs in favor of final approval.

7. The Settlement Agreement is consistent with thepublic interest.*15 “[T]here is a strong public interest in encouraging

settlement of complex litigation and class action suitsbecause they are ‘notoriously difficult and unpredictable’ andsettlement conserves judicial resources.” In re Cardizem, 218F.R.D. at 530. There do not appear to the Court to be anycountervailing public interests that would suggest that theCourt should disapprove the AG Settlement Agreement and,significantly, no one has come forward to suggest one to theCourt. This factor weighs in favor of final approval.

In sum, having considered all of the relevant factors, eachof which weighs in favor of final approval, the Courtconcludes that the proposed AG Settlement Agreement is fair,reasonable and adequate and merits Final Approval.

C. The Proposed Plan of Distribution is ReasonableThe Direct Purchaser Plaintiffs seek approval for distributionof the combined HC and AG Settlement amounts, plusaccrued interest and less notice and claims administrationcosts and any amounts approved by the Court for attorneys'fees and reimbursement of expenses (the “Net Settlement

Fund”) on a pro rata basis, each claimants share calculatedbased on the ratio that the claimants' total purchases ofPackaged Ice from any of the Defendants bears to the totalpurchases of all Settlement Class Members' purchases duringthe Settlement Class period, to class members who havesubmitted timely and valid claim forms. “ ‘Approval of a planof allocation of a settlement fund in a class action is governedby the same standards of review applicable to approval ofthe settlement as a whole; the distribution plan must be fair,reasonable and adequate.’ “ Meijer, 2006 WL 2382718, at*17(quoting In re Ikon Office Solutions Sec. Litig., 194 F.R.D.166, 184(E.D.Pa.2000)). “ ‘Courts generally consider plans ofallocation that reimburse class members based on the type andextent of their injuries to be reasonable.’ “ Id. (quoting In reAetna, Inc., No. Civ. A. MDL 1219, 2001 WL 20928, at *12(E.D.Pa. Jan.4, 2001)). See also In re Cardizem, 218 F.R.D.at 531 (approving a plan as fair and reasonable that adopteda pro rata method for calculating each class member's shareof the settlement fund).

Direct Purchaser Plaintiffs submit that a pro rata distributionis fair and reasonable here because it is consistent withthe allegations that Defendants' anticompetitive conductenabled them to charge higher prices to the Direct PurchaserPlaintiffs than they would have been able to charge absent theagreement to allocate territories, each class member havingbeen charged an increased price with damages suffered inproportion to their share of purchases. “Typically, a classrecovery in antitrust or securities suits will divide the commonfund on a pro rata basis among all who timely file eligibleclaims, thus leaving no unclaimed funds.” 3 Newberg onClass Actions, § 8:45 (4th ed.2011).

The Direct Purchaser Plaintiffs direct the Court to severalcomparable antitrust cases where the pro rata distributionhas been employed. In In re Brand Name Prescription DrugsAntit. Litig., No. 94 C 897, 1999 WL 639173 (N.D.Ill.Aug.17, 1999) the court approved a pro rata distributionin a case involving class member pharmacies of all sizes,ranging from small, independent pharmacies to large chainpharmacies, including CVS, Walgreens and Walmart:

*16 Of the distribution methodsproposed, we think the pro rataor proportional method is the mostappropriate here. The Class Plaintiffsalleged that they paid inflated pricesfor brand name prescription drugs.Assuming the truth of this allegation,for purposes of distribution only,

























each class member's damages arein direct proportion to the amountof brand name prescription drugseach purchased. Each class member,therefore, is entitled to damagesmeasured as follows: its purchases ofbrand name prescription drugs as apercentage of all class members' brandname prescription drug purchases forthe relevant time period. We notethat courts have utilized the prorata distribution method in severalprior price-fixing class actions. See,e.g., In re Airline Ticket CommissionAntitrust Litig., 953 F.Supp. 280,284–85 (D.Minn.1997) (proposed prorata distribution plan was “cost-effective, simple and fundamentallyfair.”); In re Corrugated ContainerAntitrust Litig., 556 F.Supp. 1117,1129 (S.D.Tex.1982) (approval ofclass action settlement that providedfor pro rata distribution based uponvalid claims of allowable purchases),aff'd, 687 F.2d 52 (5th Cir.1982)....We think this method will provide themost accurate measure of the damagessuffered by each class member and, forthis reason, we endorse the pro ratadistribution method.

1999 WL 639173, at *4. See also In re Plastic Additives Antit.Litig., No. 03–cv–2038, MDL No. 1684 (E.D.Pa. Feb. 10,2009) (distributing $26,368,000 from a settlement fund prorata among 175 approved claimants, to the extent of theirallowed purchases).

The Court also notes that at the Final Fairness hearing,counsel for the Direct Purchaser Plaintiffs informed the Courtthat those filing claims will have a further opportunity toobject to the final calculation of their share of the settlementproceeds at the conclusion of the claims administrationprocess. Additionally, counsel for the Direct PurchaserPlaintiffs indicated to the Court that before any “checksare cut” from the Settlement Fund, Plaintiffs will file asupplemental submission to the Court indicating the finaldisposition. See Lessard, 422 F.Supp.2d at 790 (proposedfinal distribution list submitted to court, in camera to protectthe privacy of the claimants, for approval prior to distributionof settlement funds).

The Court concludes that the pro rata plan of distribution isfair, reasonable and adequate.

D. The Request for Attorneys' Fees and Reimbursementof Expenses is Largely ReasonableAn award of attorneys' fees in common fund cases needonly be “reasonable under the circumstances.” Rawlingsv. Prudential–Bache Properties, Inc., 9 F.3d 513,516 (6thCir.1993). The Court must consider and discuss the relevantfactors that determine reasonableness, which include: ‘ “(1)the value of the benefit rendered to the plaintiff class; (2)the value of the services on an hourly basis; (3) whetherthe services were undertaken on a contingent fee basis; (4)society's stake in rewarding attorneys who produce suchbenefits in order to maintain an incentive to others; (5) thecomplexity of the litigation; and (6) the professional skill andstanding of counsel involved on both sides.’ “ Moulton v.United States Steel Corp., 581 F.3d 344, 352 (6th Cir.2009)(holding that a district court's award of attorneys' fees ina common fund case need only be reasonable under thecircumstances but remanding for an on-the-record discussionof these factors) (quoting Bowling v. Pfizer, Inc., 102 F.3d777, 780 (6th Cir.1996)).

*17 The Sixth Circuit permits calculation of attorneys' feesunder either the lodestar method (multiplying the number ofhours spent on the litigation by certain attorneys by theirhourly rate) or the percentage of the fund method (counselreceive a set percentage of the total settlement fund). Inweighing the benefits and shortcomings of each method, theSixth Circuit in Rawlings concluded: “For these reasons, it isnecessary that district courts be permitted to select the moreappropriate method for calculating attorney's fees in light ofthe unique characteristics of class actions in general, and ofthe unique circumstances of the actual cases before them.”9 F.3d at 516. The Sixth Circuit has observed that “[t]hepercentage of the fund method has a number of advantages; itis easy to calculate; it establishes reasonable expectations onthe part of plaintiffs' attorneys as to their expected recovery;and it encourages early settlement, which avoids protractedlitigation.” Rawlings, 9 F.3d at 516.

The Direct Purchaser Plaintiffs employ the percentage ofthe fund method, but offer the lodestar calculation as acheck on the reasonableness of their request. They requestan award of $6.9 million, which represents between 26.5%to 29% (depending on the resolution of the Home City MFNdispute—the maximum amount of the refund if due will

















be $2,000,000 and the fee award will remain a set $6.9million regardless of the resolution of the dispute—thus thevariance in the percentage of 26.5% to 29%) of the $26million settlement fund. The fee percentage is applied to thesettlement fund before the separate award of litigation costsand expenses are deducted from the fund. See In re Cardizem,218 F.R.D. at 531–35 (attorneys' fees awarded based on thegross settlement); In re Delphi Corp. Sec. Litig., 248 F.R.D.483, 505 (E.D.Mich.2008) (awarding attorneys' fees based ongross settlement fund).

Direct Purchaser Plaintiffs submit that this percentage, withor without the MFN refund, is less than the 30% figureset forth in the Notices to the Class and is also in therange of awards made in recent similar antitrust cases.See In re Foundry Resins Antit. Litig., No. 04–mdl–1638(S.D.Ohio March 31, 2008) (awarding 33 #% of a $14.1million settlement); In re Automotive Refinishing Paint Antit.Litig., MDL No. 1426, 2008 WL 63269 (E.D.Pa. Jan.3, 2008)(awarding 32% of a $39 million settlement). See Pls. Mot.,Dkt. No. 396, pp. 11–13 (collecting multiple cases awardingfees in the range of 30%).

Of the factors recognized by the Sixth Circuit as relevant toa determination of the reasonableness of a fee request, allfully support the requested award in the instant case. Thevalue of the benefit to the class members appears substantial.Direct Purchaser Plaintiffs point out that the Settlement Fundof $26 million amounts to 2.5% of Home City's and 2.2%of Arctic Glacier's sales in the United States, which classcounsel considers an “excellent recovery .” As the Courtnoted in its Order approving the HC Settlement, severalcases support the claim that a percentage of total sales in theneighborhood of 2.0% is generally accepted as an excellentresult when measuring the total amount of the settlement. Inthis regard, clearly class counsel has obtained a good result forthe settlement class. Additionally, it appears that nearly 50%of the total affected sales are represented by the claims thathave been filed by class members, further indicating that thesettlement funds will reach a significant portion of affectedclass members.

*18 Regarding the value of the services on an hourly basis,the Direct Purchaser Plaintiffs assert that a lodestar cross-check confirms that the $6.9 million fee request is reasonable.Direct Purchaser Plaintiffs attach to their fee motion severalaffidavits from the numerous attorneys that have workedon the case. In total, counsel collectively have expended10,083 hours since June 1, 2009. Applying the historical rates

charged by counsel (lead counsel placed a cap of $375 perhour spent on document review and coding) to the hoursexpended yields a “lodestar” figure of $4.54 million. Thisdoes not include amounts that Lead Counsel expended beforetheir appointment or since August 31, 2011. The $6.9 millionfee request then represents a multiplier of 1.5% applied to thelodestar figure. See In re Cardinal Health Inc. Sec. Litig., 528F.Supp.2d 752, 767–68 (S.D.Ohio 2007) (“Most courts agreethat the typical lodestar multiplier” in a large class action“ranges from 1.3 to 4.5.”); In re Cardizem, 218 F.R.D. at533 (approving a lodestar multiplier of approximately 1.2%as “both reasonable and well within the range of multipliersawarded by courts in complex cases such as this”).

Although the Court agrees that the 1.5% multiplier applied tothe lodestar figure is within the range of multipliers applied byother courts in similarly complex cases, the Court is troubledby one particular category of attorney's fees for which LeadCounsel seeks to recover. Although Lead Counsel state thatthey have excluded from the total request those hours thatLead Counsel expended prior to their appointment by theCourt on June 1, 2009, the award request does includeamounts for time expended by other counsel prior to theappointment of Kohn, Swift as Lead Counsel. At the hearingon this matter, Mr. Kohn explained to the Court that includedin the total proposed fee award are requests submitted by twofirms, Boies, Schiller & Flexner, LLP and Spector RosemanKodroff & Willis, P.C., both of whom competed with KohnSwift to be appointed as Lead Counsel, for time spent by thosefirms before this Court appointed Kohn Swift lead counselfor the Direct Purchaser Plaintiffs. These amounts were notexpended at Kohn Swift's request or direction on behalf of theSettlement Class. The Court feels that amounts included inthe fee request for services provided by these firms, for hoursspent and expenses incurred prior to the time that the Courtappointed Kohn, Swift as lead counsel, are not appropriatelyincluded in the fee award. This would include the request for$260,363.50 in fees charged by Boies, Schiller (Dkt. No. 396,Ex. A–5) and the request for $160,905.00 in fees charged bySpector Roseman (Dkt. No. 396, Ex. A–19). Accordingly, theCourt will reduce the overall fee request of $6.9 million by$421,268.50, which represents the total amount requested onbehalf of these two firms, and will approve a total fee award of$6,478,731.50. This in no way reflects a diminished respectfor the excellent work that the Court feels Lead Counsel haveperformed in this case and the good result that they haveachieved for the class members.















*19 As to the risk of non-payment, it appears from theDirect Purchaser Plaintiffs' brief that counsel has undertakenthis case on a contingency fee basis. Attorneys who take onsuch a massive task with a significant risk of nonpayment(all the more so, Lead Counsel suggests, since the DOJhas decided not to seek further indictments in the matter)should be compensated “both for services rendered and forthe risk of loss or nonpayment assumed by accepting andprosecuting the case.” In re Automotive Refinishing, 2008 WL63269, at *5 (finding that “the risk of nonpayment is evenhigher when a defendant's prima facie liability has not beenestablished by the government in a criminal action”) (citingIn re Linerboard, 2004 WL 1221350).

There were no objections to the fee request of 30% that wasdisclosed in the Notice to settlement class members and thereis no question as to the skill and efficiency of class counsel—both the Kohn Swift and Gurewitz firms have handled matterswith extreme professionalism, expediency and competencyand the Court has no hesitation concluding that this factorweighs in favor of approving the fee request. This antitrustlitigation, like all litigation of its species, promises to beextremely complex and time intensive and there is no questionthat if settlement fails, the Defendants will mount a strongdefense. See In re Cardizem, 292 F.Supp.2d at 639 (“Anantitrust class action is arguably the most complex action toprosecute. The legal and factual issues involved are alwaysnumerous and uncertain in outcome.”) As to the amountof time expended on the case, it is significant. Counselrepresent that collectively they have spent 10,083 hours onthis litigation since the Court appointed Kohn Swift leadcounsel on June 1, 2009.

Importantly, the requested award of close to 30% appearsto be a fairly well-accepted ratio in cases of this typeand generally in complex class actions. See In re FoundryResins Antit. Litig., No. 04–MDL–1638 (S.D.Ohio March31, 2008) (Order attached to Plaintiffs' Mot. for Award ofFees, Ex. B, awarding 33#% of $14.1 million settlement);In re Automotive Refinishing, 2008 WL 63269 (awarding32% of a $39 million settlement); Disposaable ContactLens Litig., MDL No. 1030 (M.D.Fla.2001) (approvingfees of 31.5% of a $92 million settlement for a totalof $29 million in attorneys' fees) (Order attached to Pls.'Fee Mot. Ex. E); In re Polypropylene Carpet Antit. Litig.,MDL No. 1075 (N.D.Ga.2001) (approving award of fees of331/3% of a $37.7 million settlement) (Order attached toPls.' Fee Mot. Ex. F); Thacker v. Chesapeake Appalachia,L.L.C., 695 F.Supp.2d 521, 528 (E.D.Ky.2010) (“Using

the percentage approach, courts in this jurisdiction andbeyond have regularly determined that 30% fee awards arereasonable.”); Alba Conte & Herbert Newberg, Newberg onClass Actions (4th ed. 2002) (“Empirical studies show that,regardless whether the percentage method or the lodestarmethod is used, fee awards in class actions average aroundone-third of the recovery.”)

*20 On October 26, 2011, as discussed above, counsel forthe Direct Purchaser Plaintiffs and Arctic Glacier executed anamendment to paragraph 19 of the AG Settlement Agreement,giving Arctic Glacier an extension of time, until the laterof April 2, 2012 or 30 days following this Court's finalapproval of the AG Settlement, to make its second installmentpayment of $10 million dollars into the Settlement Fund.Also on October 26, 2011, consistent with this amendment,Direct Purchaser Plaintiffs submitted a revised proposedorder on the fee request clarifying that, in the event the Courtawards fees, any disbursement of fees would be limited tothe proportionate amount of funds paid into the SettlementFund—Lead Counsel would be permitted to disburse fromthe $16 million paid into the Settlement Fund ($13.5 fromHome City and $2.5 from Arctic Glacier) 66.6% of the feesapproved by the Court with the remainder to be disbursed onlywhen Arctic Glacier makes its subsequent second installmentpayment under the AG Settlement Agreement on the later ofApril 2, 2012 or 30 days following this Court's entry of afinal order approving the AG Settlement. Accordingly, theCourt approves at this time the payment of 66.6% of theattorneys' fee award approved by the Court, i.e. as adjustedby the Court from $6.9 million to $6,478,731.50, from the$16 million that has been paid into the Settlement Fund, withthe remainder to be disbursed upon the payment by ArcticGlacier under the Settlement Agreement as amended of theadditional settlement amount. The Court will aggregate theamount of fees, leaving the specific allocation among thevarious contributing counsel to Lead Counsel.

E. The Request for Reimbursement of LitigationExpensesFinally, Direct Purchaser Plaintiffs request reimbursementof litigation expenses in the amount of $150,000 to coveramounts expended out-of-pocket in the prosecution of thecase by the participating law firms and in the settlementprocess. This amount is separate from the funds in theamount of $750,000 that this Court approved for thepurposes of covering future litigation expenses against theremaining Defendant(s). Direct Purchaser Plaintiffs havetwice received reimbursement from that $750,000 fund, for











a total expenditure thus far of $240,786.52. At the FinalFairness hearing, counsel for the Direct Purchaser Plaintiffsexplained to the Court that the request for reimbursementof $150,000 in litigation expenses is for amounts incurredprior to the time that the Court authorized disbursements upto $750,000 from the HC Settlement Fund. The Court willapprove reimbursement of $150,000 in expenses, minus the$32,091.00 in expenses submitted by the Boies Schiller firmfor work performed prior to the date on which this Courtappointed Kohn Swift lead counsel for the Direct PurchaserPlaintiffs.

IV. CONCLUSIONThe Court:

(1) GRANTS the motion for final approval of the AGSettlement Agreement and enters Final Judgment as to ArcticGlacier as set forth below;

*21 (2) GRANTS the motion for approval of the plan ofdistribution and authorizes Lead Counsel to distribute theproceeds of the settlements with Home City Ice Company andArctic Glacier on a pro rata basis to those members of theSettlement Class who timely file a Claim Form, as describedin the Notice of Settlement with Arctic Glacier that wentto all members of the Settlement Class on August 3, 2011,subject to submission to the Court, in camera, of the finaldisbursement plan;

(3) GRANTS IN PART the motion for an award of feesand expenses, awarding attorneys' fees in the amount of$6,478,731.50 from the Settlement Funds obtained in thesettlements with Home City and Arctic Glacier, plus accruedinterest. The Court finds that the fee is fair and reasonableunder the percentage of the recovery method of analyzingattorneys' fees award in common fund class actions, with thecaveat that the lodestar check compels the Court to decreasethe award by amounts incurred by outside firms before thedate on which the Court appointed Kohn Swift lead counsel.

The attorneys' fees approved herein may be disbursed ona proportional basis from the Settlement Funds that havebeen paid by Home City and Arctic Glacier. Accordingly,Lead Counsel may disburse from the $16 million paid to theSettlement Fund from Home City ($13.5 million) and ArcticGlacier ($2.5 million) a total of 66 .6% of the attorneys' feesawarded herein, with the remainder to be disbursed upon thepayment by Arctic Glacier under the Amended SettlementAgreement of the additional AG Settlement Amount. Lead

counsel shall be responsible for allocating the attorneys' feesawarded; and

(4) GRANTS IN PART the motion for reimbursement oflitigation costs and expenses, approving the payment of$117,909.00 from the Settlement Fund to Plaintiffs' counsel.Lead Counsel shall be responsible for allocating the expensereimbursement.

IT IS SO ORDERED.

Rule 54(b) Final Order and Judgment as toArctic Glacier Income Fund, Arctic GlacierInc. and Arctic Glacier International, Inc.

The Court, having considered Plaintiffs' Motion for FinalApproval of Class Action Settlement with Defendants ArcticGlacier Income Fund, Arctic Glacier Inc. and Arctic GlacierInternational, Inc. (“Arctic Glacier”) and having held a finalFairness Hearing on October 28, 2011, and for the reasonsstated more fully in the preceding Opinion and Order, IT ISORDERED THAT:

1. The Court has jurisdiction over the subject matter of thisaction.

2. Terms used in this Final Order and Judgment that aredefined in the Settlement Agreement between the Plaintiffsand the Settlement Class on the one hand and ArcticGlacier on the other dated March 30, 2011, as amended onOctober 26, 2011, unless otherwise defined herein, have thesame meanings in this Final Order and Judgment as in theSettlement Agreement.

3. The Court finds, as more thoroughly discussed in thepreceding Opinion, that the Settlement Agreement wasattained following an extensive investigation of the factsand assessment of damages. It resulted from vigorous arm's-length negotiations which were undertaken in good faith bycounsel with significant experience litigating antitrust classactions.

*22 4. The Court finds, as more thoroughly discussed inthe preceding Opinion, that due and adequate notice wasprovided pursuant to Rule 23 of the Federal Rules of CivilProcedure to all members of the Settlement Class certifiedin this Final Order and Judgment. The Notice advised theproposed Settlement Class Members of the pendency of







this action, the Settlement Agreement with Home City, theproposed Settlement Agreement with Arctic Glacier, thepossibility of the triggering of the Most Favored Nationprovision of the Home City Settlement Agreement and theclaims filing process. The Notice provided was the best noticepracticable under the circumstances and included individualnotice by first class mail to all members of the SettlementClass who could be identified through reasonable effort aswell as notice published in the national edition of the WallStreet Journal and on the Internet. The Notice fully compliedin all respects with the requirements of Federal Rule of CivilProcedure 23.

5. The Court finds that notice of the Settlement Agreementwas properly provided to all persons entitled to receive suchnotice, including the federal and state attorneys general, infull compliance with the Class Action Fairness Act.

6. The Court certifies the following Settlement Class (the“Settlement Class”):

All purchasers of Packaged Icewho purchased Packaged Ice inthe United States directly fromany of the Defendants or theirsubsidiaries or affiliates (includingall predecessors thereof) at anytime during the period fromJanuary 1, 2001 to March 6,2008. Excluded from the SettlementClass are governmental entitiesand Defendants, including theirparents, subsidiaries, predecessorsor successors, and Defendants' co-conspirators.

7. The Court finds, as discussed more thoroughly in thepreceding Opinion, that certification of the Settlement Classis appropriate because:

a. The Settlement Class is so numerous that joinder of allmembers is impracticable, satisfying the requirement ofRule 23(a) (1);

b. There are questions of law or fact common to theSettlement Class, satisfying the requirement of Rule23(a)(2);

c. Alvin's Enterprises, Inc. d/b/a Party King, Suzie'sInvestments, Inc. d/b/a Checker Drugs and Food,

Arkansas Garden Center West, LLC, Arkansas GardenCenter North, LLC, Chi–Mar Enterprises, Inc.,Kingsway Enterprises, Polly's Food Service, Inc.,Kenco, Inc. and Thomas Beverages Co., Inc. d/b/a Thomas Liquors (“Plaintiffs”) are appointed ClassRepresentatives for the Settlement Class. Plaintiffs'claims are typical of the claims of the Settlement Class,satisfying the requirement of Rule 23(a)(3);

d. The Plaintiffs will fairly and adequately protectthe interests of the Settlement Class, satisfying therequirements of Rule 23(a)(4);

e. For purposes of settlement only, questions of law orfact common to the members of the Settlement Classpredominate over questions affecting only individualmembers and a class action is superior to other methodsavailable for the fair and efficient adjudication of thecontroversy, satisfying the requirements of Rule 23(b)(3).

*23 8. The Court's certification of the Settlement Class asprovided herein is without prejudice to, or waiver of, therights of any Defendant other than Arctic Glacier to contestcertification of any other class proposed by Plaintiffs. TheCourt's findings in this Final Order and Judgment shall haveno effect on the Court's ruling on any motion to certify anyclass in this litigation and no party may cite or refer to theCourt's approval of the Settlement Class as persuasive orbinding authority with respect to any motion to certify suchclass.

9. The court finds that the persons and entities on theschedule attached hereto as Exhibit “A,” and no others, havetimely requested to be excluded from the Settlement Classand accordingly are not included in or bound by the FinalJudgment being entered pursuant to this Order.

10. The Court finds, as more thoroughly discussed in thepreceding Opinion, that the Settlement Agreement is fair,reasonable and adequate and the Settlement Agreement withArctic Glacier is hereby approved pursuant to Federal Ruleof Civil Procedure 23(e).

11. All Released Claims (as defined in the SettlementAgreement) of Plaintiffs and the Settlement Class that wereasserted against Arctic Glacier and the other Releasees (asdefined in the Settlement Agreement) in the ConsolidatedAmended Class Action Complaint are dismissed with
















prejudice, and, except as provided for in the SettlementAgreement, without costs.

12. Upon the occurrence of the Effective Date of theSettlement Agreement, the Releasees shall be completelyreleased, acquitted, and forever discharged from any andall claims, demands, actions, suits, and causes of action,damages, liabilities of any nature, including costs, expenses,penalties, and attorneys' fees, whether class, individual, orotherwise in nature, that Releasors, or any one of them, everhad, now has, or hereafter can, shall or may have directly,representatively, derivatively or in any other capacity againstthe Releasees or any of them, whether known or unknown,suspected or unsuspected, in law or equity, on account of orarising out of or resulting from the purchase of Packaged Icein the United States during the Class Period or from conductthat occurred prior to the Effective Date of this SettlementAgreement concerning the sale of Packaged Ice in the UnitedStates, based in whole or in part on the facts, occurrences,transactions, or other matters alleged in the ConsolidatedAmended Class Action Complaint filed in this Action,and which arise under any federal or state antitrust, unfaircompetition, unfair practices, price discrimination, unitarypricing, trade practice, or civil conspiracy law, including,without limitation, the Sherman Antitrust Act, 15 U.S.C. §1 et seq. (the “Released Claims”); provided, however, thatnothing herein shall release any claims made by indirectpurchasers of Packaged Ice as to their indirect purchases,or any product defect or similar claim between the partiesrelating to Packaged Ice.

*24 13. Each member of the Settlement Class shall not,after the Effective Date of the Settlement Agreement, seekto institute, maintain, prosecute or continue or prosecute anysuit or action, or collect from or proceed against the Releaseesbased on the Released Claims.

14. Arctic Glacier shall have no obligation for attorneys' fees,costs or expenses, including, but not limited to, expenses ofadministering and distributing the Settlement Fund, whichexpenses are to be paid out of the Settlement Fund subject tofurther order of this Court.

15. This Final Order and Judgment does not settle orcompromise any claims by Plaintiffs or the Settlement Classagainst any other Defendant or person or entity other thanthe Releasees, and all rights against any other Defendant orother person or entity are specifically reserved. The sales ofpackaged ice to members of the Settlement Class by Arctic

Glacier shall remain in this action and shall be part of anyjoint and several liability against any non-settling Defendantor other person or entity other than the Releasees.

16. Nothing in this Final Order and Judgment or theSettlement Agreement and no aspect of the SettlementAgreement or negotiation thereof is or shall be deemed orconstrued to be an admission or concession of any violation ofany statute or law or of any liability or wrongdoing by ArcticGlacier or of the truth of any of the claims or allegations inany of the complaints in the Action or any other pleading, andevidence thereof shall not be discoverable or used, directly orindirectly, in any way, whether in the Action or in any otheraction or proceeding, other than to enforce the terms of thisFinal Order and Judgment, or the Settlement Agreement.

17. The Court further finds that the escrow account describedin the Settlement Agreement is a qualified settlement fund(“QSF”) pursuant to the Internal Revenue Code Section 468Band the Treasury Regulations promulgated thereunder.

18. Without affecting the finality of this Final Order andJudgment, the Court retains jurisdiction for the purposesof, among other things, implementing and enforcingthe Settlement Agreement, entering orders regarding thedisbursement of the Settlement Fund and any other mattersthat may arise in connection with the effectuation of theSettlement Agreement.

19. The court expressly finds, pursuant to Federal Rule ofCivil Procedure 54(b) that there is no just reason for delay,and expressly directs entry of Final Judgment as to ArcticGlacier.

IT IS SO ORDERED.

EXHIBIT A

1. B.J's Service

2. Cedar–Knox Public Power District

3. Dorothy Lugibihl

4. Hi–Way Motel

5. In–n–Out Food Inc.

6. Koch Chemical Technology Group, LLC


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7. Koch Engineering

8. Koch Glitsch, Inc.

9. Mellinger's Beer Distributor, Inc.

10. Middletown's Supermarket

11. MMR Mobile Medical Response, Inc

12. Port Cicero Liquors

13. Rocky Point Resort

14. Taing, Inc. d/b/a Mr. T's Market

*25 15. Vincentian Regency

Parallel Citations


Footnotes

1 Direct Purchaser Plaintiffs Alvin's Enterprises, Inc. d/b/a Party King, Suzie's Investments, Inc. d/b/a Checker Drugs and Food,

Arkansas Garden Center West, LLC, Arkansas Garden Center North, LLC, Chi–Mar Enterprises, Inc., Kingsway Enterprises,

Polly's Food Service, Inc., Kenco, Inc. and Thomas Beverages Co., Inc. d/b/a Thomas Liquors have been appointed as the class

representatives for the Proposed Settlement Class.



In re Automotive Refinishing Paint Antitrust Litigation, Not Reported in F.Supp.2d (2004)



United States District Court,E.D. Pennsylvania.

In re: AUTOMOTIVE REFINISHINGPAINT ANTITRUST LITIGATION

No. MDL NO. 1426. | May 11, 2004.

Opinion

MEMORANDUM & ORDER

SURRICK, J.

*1 Plaintiffs filed a Consolidated and Amended ClassAction Complaint (the “Amended Complaint”) on behalfof all individuals and entities who purchased automotiverefinishing paint in the United States directly fromDefendants, their predecessors or their controlled subsidiariesfrom at least as early as January 1, 1993, to at least December31, 2000 (the “Class Period”). The Amended Complaintalleges that during that period, Defendants conspired to fix,raise, maintain or stabilize prices for automotive refinishingpaint sold in the United States, thereby artificially inflatingprices for automotive refinishing paint in violation of Section1 of the Sherman Act, 15 U.S.C. § 1. Plaintiffs seek damagesand injunctive relief pursuant to Sections 4 and 16 of theClayton Act, 15 U.S.C. §§ 15, 26. The Court certified a Classby stipulation of the parties on October 9, 2002.

Presently before the Court is Plaintiffs' Motion forPreliminary Approval of a Proposed Settlement with E.I.DuPont de Nemours and Company, DuPont PerformanceCoatings, Inc. (collectively “DuPont”), and BASFCorporation, and for Authorization to Disseminate Notice(Doc. No. 120).

I. The Terms of the SettlementThe Settlement Agreement (Doc. No. 120 Ex. 1) providesthat in exchange for settlement of the Class's claims, DuPontand BASF will pay the class a total of $48,000,000, as wellas provide certain discovery to Plaintiffs. Specifically, BASFwill pay $12,000,000 and DuPont will pay $36,000,000. Inaddition to the cash payment, BASF and DuPont will providePlaintiffs copies of certain documents; provide Plaintiffs withsales transactional data from 1990 to 2002; permit Plaintiffs

to interview and depose former employees; and provide,upon request, written declarations with respect to documentsprovided during litigation, and if necessary, produce a witnessat trial to authenticate those documents.

II. Standard for Partial ApprovalPursuant to Federal Rule of Civil Procedure 23, “thecourt must approve any settlement, voluntary dismissal, orcompromise of the claims, issues, or defenses of a certifiedclass.” FED. R. CIV. P. 23(e)(1)(A). Final approval of aclass action settlement requires the district court to determinewhether “the settlement is fair, adequate, and reasonable.”Stoetzner v. United States Steel Corp., 897 F.2d 115, 118(3d Cir.1990) (citing Walsh v. Great Atlantic and PacificTea Co., Inc., 726 F.2d 956, 965 (3d Cir.1983); see also Inre Cendant Corp. Litig., 264 F.3d 201, 231 (3d Cir.2001).Prior to granting final approval, however, we must firstdecide whether preliminary approval should be granted.The MANUAL FOR COMPLEX LITIGATION (Fourth) §21.632 (2004) describes this process:

Review of a proposed class actionsettlement generally involves twohearings. First, counsel submit theproposed terms of settlement and thejudge makes a preliminary fairnessevaluation. In some cases, this initialevaluation can be made on thebasis of information already known,supplemented as necessary by briefs,motions, or informal presentationsby parties.... The judge mustmake a preliminary determinationon the fairness, reasonableness, andadequacy of the settlement terms andmust direct the preparation of notice ofthe ... proposed settlement, and date ofthe fairness hearing.

*2 “In evaluating a settlement for preliminary approval,the court need not reach any ultimate conclusions on theissues of fact and law that underlie the merits of the dispute.”Thomas v. NCO Financial Systems, No. Civ. A. 00–5118,2002 WL 1773035, at *5 (E.D.Pa. July 31, 2002) (quotingDetroit v. Grinnell Corp., 495 F.2d 448, 456 (2d Cir.1974)).Instead, the court must determine whether “the proposedsettlement discloses grounds to doubt its fairness or otherobvious deficiencies, such as unduly preferential treatmentof class representatives or of segments of the class, or


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excessive compensation for attorneys, and whether it appearsto fall within the range of possible approval....” Id. (citingIn re Prudential Sec. Inc. Limited P'ship Litig., 163 F.R.D.200, 209 (S .D.N.Y.1995); MANUAL FOR COMPLEXLITIGATION (Third) § 30.41 (1995)). This analysis oftenfocuses on whether the settlement is the product of “arms-length negotiations.” See, e.g. Thomas, 2002 WL 1773035,at *5; Tenuto v. Transworld Sys., Inc., No. Civ. A. 99–4228,2001 WL 1347235, at *1 (E.D.Pa. Oct. 31, 2001).

The proposed partial settlement presently before us providesfor the payment of $12,000,000 by BASF and $36,000,000by DuPont. The $48,000,000 in cash payments representsapproximately two percent of BASF's and DuPont's salesof automotive refinishing paint in the United States for thefour years during the Class Period in which they registeredtheir highest sales totals. (Doc. No. 120 at 10.) The partialsettlement that we recently approved between Plaintiff Classand Akzo in the amount of $18,750,000 represented 4.2%of Akzo's sales of automotive refinishing paint in the UnitedStates for the four years during the Class Period in which

Akzo had its highest sales. 1 (Mem. and Order of March17, 2003.) This settlement amount is also within a rangeof settlements reached in other antitrust class actions. SeeIn re Linerboard Antitrust Litig., MDL No.1261, 2004 WL870685, at *4 (E.D.Pa. Apr. 21, 2004) (settlement represents1.62% of sales from class period); See In re Plastic TablewareAntitrust Litig., No. 94–CV–3564, 1995 WL 723175, at *1(E.D.Pa. Dec. 4, 1995) (3.5% of sales); Fischer Bros., Inc.v. Mueller Brass Co., 630 F.Supp. 493, 499 (E.D.Pa.1985)(0.2% of sales); Axelrod v. Saks & Co., Civil Action Nos. 76–3805, 76–4011, 77–172, 1981 WL 2031, at *1 (E.D.Pa. Feb.23, 1981) (3.7% of sales).

At this juncture, we see no reasons to doubt the fairness of thissettlement. The settlement was reached after extensive arms-length negotiation between very experienced and competentcounsel for Plaintiff Class, BASF and DuPont. Moreover,this settlement does not affect the joint and several liability

of the remaining Defendants in this alleged conspiracy. 2

In addition, the settling Defendants have agreed to provideassistance to Plaintiffs in pursuing this case against theremaining Defendants as referenced hereinabove. Under allthe circumstances, we will grant preliminary approval of thissettlement.

III. Notification of the Class

*3 Rule 23(e)(1)(B) provides that “[t]he Court must directnotice in a reasonable manner to all class members whowould be bound by the proposed settlement, voluntarydismissal, or compromise.” FED. R. CIV. P. 23(e)(1)(B).Here, Plaintiffs' proposed method for notifying the class isidentical to the method used for notification of the classwith regards to the Akzo settlement. Specifically, Plaintiffspropose providing individual, first-class mailed notice tothe extent practicable. Plaintiffs propose that this Noticebe mailed, postage prepaid, to all entities identified byDefendants within fourteen (14) days of the granting of thePreliminary Approval. Furthermore, Summary Notice will bepublished in the Wall Street Journal and in the automotiverefinishing paint industry trade journal Hammer & Dolly.This method of notice conforms with Rule 23. See In rePrudential Ins. Co Am. Sales. Litig., 148 F.3d 283, 326–27 (3d Cir.1998). Moreover, we approved this method fornotifying the class regarding the Akzo Settlement. We see noreason to find fault with it now. The proposed forms of noticeto class members attached to the request for preliminaryapproval are approved subject to any modifications containedwithin the attached order, and we will direct that noticeto the Class members regarding the proposed settlement bedisseminated.

Plaintiffs and settling Defendants agree that there is no needfor an additional opt-out period pursuant to Rule 23(e)(3)because Class members were already given the opportunity toopt-out prior to approval of the Akzo Settlement. (Doc. No.120 at 13 n. 4.) Plaintiffs point to the In re Linerboard classaction, where the Court approved three partial-settlementsbut only allowed one opportunity to opt-out. See In reLinerboard, 2004 WL 870685 (approval of third partialsettlement); 296 F.Supp.2d 568 (E.D.Pa.2003) (approval ofsecond partial settlement); 292 F.Supp.2d 631 (E.D.Pa.2003)(approval of first partial settlement). We agree with Plaintiffsand settling Defendants that it is not necessary to havea second opt-out period here. The determination of thenecessity for an additional opt-out under Rule 23(e)(3)is within the discretion of the Court. We are aware ofno significant developments since the original opt-out thatwould require us to provide for a second opt-out period.See MANUAL FOR COMPLEX LITIGATION (Fourth)§ 21.611 (2004). Moreover, Class members still have theopportunity to object to the terms of the Settlement.

An appropriate Order follows.































ORDER

AND NOW, this ______ day of May, 2004, uponconsideration of Plaintiffs' Motion for Preliminary Approvalof Agreement of a Proposed Settlement With E.I. DuPontde Nemours and Company, DuPont Performance Coatings,Inc. (collectively “DuPont”), and BASF Corporation andfor Authorization to Disseminate Notice (Doc. No. 120), aMotion to which DuPont and BASF consent, it is ORDEREDthat the Motion is GRANTED. It is further ORDERED asfollows:

*4 1) The Agreement of Settlement between the PlaintiffClass and DuPont and BASF is hereby preliminarily approvedand the Class shall receive notice of the proposed settlementin accordance with the terms of this Order.

2) The Court previously certified the Class, and pursuant toour Order of March 17, 2003, a Notice of Pendency andProposed Partial Settlement of Class Action and Hearing onSettlement Approval was sent to Class Members in April,2003, advising them of their right to be excluded fromthe Class. This opportunity to opt-out complied with therequirements of Fed.R.Civ.P. 23(e)(3). There is no need foran additional opt-out period.

3) The Forms of Notice attached to the Agreement ofSettlement as Exhibits “B” and “C” are approved, subjectto the deadline modifications stated herein, pursuant toFed.R.Civ.P. 23. On or before May 24, 2004, Plaintiffs'counsel shall send via first class mail a long form Notice,in substantially the same form as Exhibit “B,” to all direct

purchasers identified by Defendants in response to paragraph2 of our Order of March 17, 2003. Plaintiffs' counsel shallretain a record of those so notified.

4) Within ten (10) days after mailing the long form Noticereferred to in paragraph 3 above, Plaintiffs' counsel shallpublish a Summary Notice, in substantially the same formas Exhibit “C,” in one national edition of The Wall StreetJournal and shall initiate publication of the Summary Noticein the next edition of the Automotive Refinishing Paint tradepublication Hammer & Dolly.

5) Any member of the Class who wishes to object to theterms of the Agreement of Settlement between the Classand the DuPont Defendants and the BASF Defendants mustdo so in writing, postmarked no later than August 9, 2004,and shall otherwise comply with the requirements set forthin the Notices. Plaintiff Class shall provide the non-settlingDefendants with a copy of each objection received.

7) The litigation against Dupont and BASF is stayed exceptas required by the Agreement of Settlement.

8) The Court will hold a hearing on September 1, 2004, inCourtroom 8A, United States Courthouse, 6th and MarketStreets, Philadelphia, PA at 2:00 p.m. to consider whetherthe Agreement of Settlement should be approved as fair,reasonable and adequate to the Class. The date and time of thehearing shall be subject to adjournment by the Court withoutfurther notice to members of the Class other than that whichmay be posted at the United States Courthouse.

IT IS SO ORDERED.

Footnotes

1 The Azko settlement was reached before termination without indictment of the grand jury investigation by the Department of Justice.

2 We are advised that the remaining Defendants, PPG Industries and the Sherwin–Williams Defendants, represent approximately one-

half of the combined market share of all Defendants for automobile refinishing paint products in the United States.





Griffin v. Flagstar Bancorp, Inc., Slip Copy (2013)




Southern Division.

Debra GRIFFIN and Joy Gardner, onBehalf of Themselves and a Class of

Persons Similarly Situated, Plaintiffs,v.

FLAGSTAR BANCORP, INC.; RebeccaA. Lucci; Erin England; John Does 1–

10, and; Richard Roes 1–20, Defendants.

No. 2:10–cv–10610. | Dec. 12, 2013.


Robert A. Izard, Izard Nobel LLP, West Hartford, CT,Michael J. Klein, Stull, Stull & Brody, New York, NY,Stephen F. Wasinger, Stephen F. Wasinger PLC, Royal Oak,MI, for Plaintiffs.

Jon R. Steiger, Quinn, Emanuel, Los Angeles, CA, MatthewF. Leitman, Thomas W. Cranmer, Miller Canfield Paddock &Stone, PLC, Troy, MI, for Defendants.

Opinion

OPINION AND ORDER (1) GRANTING PLAINTIFFS'MOTION FOR FINAL APPROVAL OF CLASS ACTIONSETTLEMENT, CERTIFICATION OF SETTLEMENTCLASS AND APPROVAL OF PLAN OF ALLOCATION

(ECF NO. 48) AND (2) GRANTING PLAINTIFFS'MOTION FOR AWARD OF ATTORNEYS'

FEES, REIMBURSEMENT OF EXPENSES ANDCASE CONTRIBUTION AWARDS (ECF NO. 49)


*1 This matter is before the Court on Plaintiffs' Motionfor Final Approval of Class Action Settlement, Certificationof Settlement Class and Approval of Plan of Allocation(ECF No. 48) and Plaintiffs' Motion for Award of Attorneys'Fees, Reimbursements of Expenses and Case ContributionAwards (ECF No. 49). The Court conducted a Final FairnessHearing on December 3, 2013. For the reasons that follow, theCourt GRANTS final approval of the Settlement Agreementand Settlement Class, approves the Plan of Allocation and

GRANTS the requested award of fees, expenses and casecontribution awards. A separate Order and Judgment is filedcontemporaneously with this Opinion and Order.

INTRODUCTIONIn this ERISA class action, the parties have proposed, andthe Court has preliminarily approved, a $3,000,000 cashsettlement for a non-opt-out class of all participants orbeneficiaries in the Flagstar Bank 401(k) Plan for whoseindividual accounts the Plan purchased and/or held interestsin the Flagstar Stock Fund. The parties now move for finalapproval of the Settlement Agreement, Settlement Class andthe Plan of Allocation and also seek an award of attorneys'fees in the amount of $900,000, reimbursement of expensesof $62,473.72 and case contribution awards to the two namedPlaintiffs each in the amount of $5,000.

I. BACKGROUNDThis action arises from Debra Griffin and Joy Gardner's(“Plaintiffs”) claim, on behalf of themselves and aclass of persons similarly situated (the “Participants”or “Employees”), that their former employer FlagstarBancorp, Inc. (“Flagstar”) breached its fiduciary duties underthe Employee Retirement Income Security Act of 1974(“ERISA”), 29 U.S.C. § 1001, et seq., by failing to prudentlyand independently administer the Flagstar Bank 401(k) Plan(the “Plan”) from December 31, 2006 to May 2, 2013,inclusive (the “Class Period”). (ECF No. 16, ConsolidatedComplaint for Breach of Fiduciary Duty and Violation

of ERISA Disclosure Requirements, (“Compl.”) ¶ 1–4.) 1

Plaintiffs bring this action under § 502(a)(2) and (3) ofERISA, 29 U.S.C. § 1132(a)(2) and (3). (Id. ¶ 1.) Specifically,Plaintiffs allege that Defendants violated the duties imposedupon plan fiduciaries under ERISA section 404, 29 U.S.C. §1104. (Id.) Plaintiffs allege that Defendants violated ERISAby continuing to offer Flagstar stock as an investment optionto Plan participants when it was imprudent to do so becauseof Flagstar's precarious financial condition and prospects.

On March 31, 2011, this Court granted Defendants' motionto dismiss, finding in part that Plaintiffs had not sufficientlyovercome the legal presumption, to which the Courtconcluded Defendants were entitled, that investment inthe stock of their employer corporation is prudent andin accordance with their fiduciary duties under ERISA.Griffin v. Flagstar Bancorp, Inc., No. 10–cv10610, 2011 WL1261196 (E.D.Mich. March 31, 2011). In Griffin v. FlagstarBancorp, Inc., 492 F. App'x 598 (6th Cir.2012), the Sixth


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Circuit reversed and remanded the case, based in part uponintervening circuit precedent, Pfeil v. State Street Bank andTrust Co., 671 F.3d 585 (6th Cir.2012), which held that thepresumption of prudence is “evidentiary in nature and thusdoes not apply at the pleading stage.” 492 F. App'x at 602.The Sixth Circuit further concluded that Plaintiffs' Complaint“raised a plausible claim [under the pleading standards ofTwombly and Iqbal ] that a prudent fiduciary would havediscontinued offering Flagstar stock at some point during theclass period.” Id. at 605 (emphasis in original).

*2 Following remand, in October, 2012, the parties began todiscuss engagement of an independent mediator and agreedupon David Geronemus of JAMS to conduct mediation.(Pls.' Mot. Final Approval 4.) The parties exchanged expertreports and mediation submissions and met with the mediatoron January 10, 2013. The parties were unable to agreeamong themselves but after further individual deliberation,each party ultimately accepted the mediator's independentproposal that Flagstar pay $3,000,000 to the Plan, to beallocated to Plan Participants pursuant to a Court approvedPlan of Allocation, after payment of fees and expenses.(Id. at 5.) Flagstar also obtained an Independent Fiduciary'sReport prepared by Nicholas L. Saakvitne, which foundthat the settlement “is reasonable and provides a meaningfulrecovery in the aggregate and individually to participants andbeneficiaries taking into account the very substantial hurdlesPlaintiffs would have to overcome to prove their case and thesmall likelihood of full recovery by the Plan....” (ECF No.42, Supplemental Declaration of Michael J. Klein in Supportof Plaintiffs' Motion for Preliminary Approval of Settlement,Exhibit D, July 15, 2013 Report of Independent FiduciaryNicholas L. Saakvitne 7.)

On July 29, 2013, this Court granted preliminary approval ofthe proposed Settlement Agreement, preliminarily certified aSettlement Class and approved the form and manner of Noticeproposed by the parties. Griffin v. Flagstar Bancorp, Inc.,No. 10–cv–10610, 2013 WL 4779017 (E.D.Mich. July 29,2013). The Court established a date of December 3, 2013 forthe Final Fairness Hearing. No objections to the proposedSettlement Agreement have been filed with the Court andno objectors appeared at the Final Fairness Hearing. Theparties are presently before the Court seeking final approvalof the Settlement Agreement, Settlement Class and Plan ofAllocation and requesting an award of attorneys' fees andexpenses and case contribution awards for the two leadPlaintiffs. For the reasons that follow, the Court GRANTS themotions.

II. ANALYSISThe Sixth Circuit and courts in this district have recognizedthat the law favors the settlement of class action lawsuits.UAW v. General Motors Corp., 497 F.3d 615, 632 (6thCir.2007) (noting “the federal policy favoring settlementof class actions”); IUE–CWA v. General Motors Corp.,238 F.R.D. 583, 593 (E.D.Mich.2006) (noting “the generalfederal policy favoring the settlement of class actions”). “Theevaluation and approval of a class settlement is committed tothe sound discretion of the district court” and the district court“should approve a class settlement if, following a hearing,the court determines that the settlement ‘is fair, reasonable,and adequate.’ ” IUE–CWA, 238 F.R.D. at 593, 594. “Inexercising that discretion, the Court may limit the fairnesshearing to whatever is necessary to aid it in reaching aninformed, just and reasoned decision” and “the settlement orfairness hearing is not to be turned into a trial or rehearsal fortrial on the merits.” Int'l Union v. Ford Motor Co., No. 05–74730, 2006 WL 1984363, at *21 (E.D.Mich. July 13, 2006)(internal quotation marks and citations omitted). “Given thatclass settlements are favored, the role of the district court is‘limited to the extent necessary to reach a reasoned judgmentthat the agreement is not the product of fraud or overreachingby, or collusion between, the negotiating parties, and that thesettlement taken as a whole, is fair, reasonable and adequateto all concerned.” IUE–CWA, 238 F.R.D. at 594 (citationsomitted); Sheick v. Automotive Component Carrier, LLC.,No. 09–14429, 2010 WL 4136958, at *14 (E.D.Mich. Oct.18, 2010) (“In assessing a proposed settlement, the districtcourt judge ‘may not substitute his or her judgment for thatof the litigants and their counsel’ and ‘should approve a classsettlement if, following a hearing, the court determines thatthe settlement ‘is fair, reasonable, and adequate.’ ”) (quotingIUE–CWA, 238 F.R.D. at 593) (internal quotation marksomitted). “Settlement embodies a bargained give and takebetween the litigants that is presumptively valid about whichthe Court should not substitute its judgment for that of theparties.” Ford Motor, 2006 WL 1984363, at *21 (internalquotation marks and citation omitted).

A. The Settlement Agreement is Fair, Reasonable andAdequate*3 The Sixth Circuit has identified a number of factors

that are relevant in determining whether a settlement isfair, reasonable and adequate: “(1) the risk of fraud orcollusion; (2) the complexity, expense and likely durationof the litigation; (3) the amount of discovery engaged in
























by the parties; (4) the likelihood of success on the merits;(5) the opinions of class counsel and class representatives;(6) the reaction of absent class members; and (7) the publicinterest.” UAW, 497 F.3d at 631. “The Court may choose toconsider only those factors that are relevant to the settlementat hand and may weigh particular factors according to thedemands of the case.” Ford Motor, 2006 WL 1984363, at*22. Consideration of the relevant factors here favors finalapproval of the settlement agreement.

1. There is no risk of fraud or collusion.“Courts respect the integrity of counsel and presume theabsence of fraud or collusion in negotiating the settlement,unless evidence to the contrary is offered.” Ford Motor, 2006WL 1984363, at *26. There is no evidence of any collusionin this case. Both the mediator's proposal, which neitherparty initially was prepared to accept, and the independentfiduciary's opinion, are strong evidence that the negotiationswere vigorous, were conducted at arm's length and werewithout any fraud or collusion.

2. The complexity, expense and likely duration of thelitigation favor settlement.Settlements should represent “a compromise which has beenreached after the risks, expense and delay of further litigationhave been assessed.” Williams v. Vukovich, 720 F.2d 909,922 (6th Cir.1983). Conducting merits and expert discoveryin this ERISA action would be time consuming and costly andwould be followed by expensive and burdensome dispositivemotions, trial and appeals. Settlement provides a certain andimmediate benefit to the class members and outweighs therisk and cost of a trial on the merits. “[T]he prospect of atrial necessarily involves the risk that Plaintiffs would obtainlittle or no recovery.” In Re Cardizem CD Antitrust Litig.,218 F.R.D. 508, 523 (E.D.Mich.2003). “Experience provesthat, no matter how confident trial counsel may be, theycannot predict with 100% accuracy a jury's favorable verdict,particularly in complex antitrust litigation.” Id.

3. The absence of formal discovery does not disfavorsettlement.“[T]he absence of formal discovery is not an obstacle [tosettlement approval] so long as the parties and the Courthave adequate information in order to evaluate the relativeposition of the parties.” Newby v. Enron Corp., 394 F.3d296, 306 (5th Cir.2004). See also In re Global CrossingSec. & ERISA Litig., 225 F.R.D. 436, 458 (S.D.N.Y.2004)

(“Formal discovery is not a prerequisite; the question iswhether the parties had adequate information about theirclaims.”); Sheick, 2010 WL 4136958, at * 19 n. 3 (notingthat “courts do not require formal discovery so long as theparties have adequate information in order to evaluate therelative positions”) (quoting Newby, 394 F.3d at 306 (“Formaldiscovery [is not] a necessary ticket to the bargaining table”)).

*4 In this public information case, prior to filing theirclaims, Class Counsel extensively investigated the publiclyavailable information and investigated the facts, includingreview and analysis of Plan-related documentation, reviewof Flagstar's SEC disclosures, analysis of Flagstar's publiclyavailable financial statements, and interviews of Planparticipants. (ECF No. 50, Joint Declaration in Supportof Motions for Final Approval and Award of Fees andExpenses, ¶ 9.) Class Counsel also responded to a motionto dismiss and successfully appealed this Court's dismissalof Plaintiffs' claims. (Id. ¶ 6.) Additionally, in anticipationof mediation, Flagstar produced and Plaintiffs revieweddetailed Plan records sufficient to calculate hypotheticaldamages for the class period. (Id. ¶¶ 16–19.) The absenceof formal discovery in this case in no way undermines theintegrity of the settlement given the extensive investigationthat has occurred as a result of proceedings thus far whichdemonstrates that counsel have a full understanding of thestrengths and weaknesses of their case.

4. Balancing the likelihood of success on the meritsagainst the amount and form of relief achieved throughsettlement favors final approval.In determining whether the relief offered in a settlementoutweighs the plaintiffs' chances of ultimate success on themerits, the Court “recognizes the uncertainties of law andfact in any particular case and the concomitant risks andcosts inherent in taking any litigation to completion.” IUE–

CWE, 238 F.R.D. at 594. The Court “is not to decide whetherone side is right or even whether one side has a better ofthese arguments.... The question rather is whether the partiesare using settlement to resolve a legitimate legal and factualdispute.” UAW, 497 F.3d at 632.

Plaintiffs recognize that substantial hurdles remain toobtaining a damage award in this complex ERISA case. Whilethe Sixth Circuit found that the Complaint stated a plausibleclaim for imprudence, the Sixth Circuit also suggested thatthe period of imprudence was likely to be determined to besomething less than the entire class period. 492 F. App'xat 605 (noting the plausibility of a claim that “a prudent

























fiduciary would have discontinued offering Flagstar stockat some point during the class period”) (emphasis added).Plaintiffs submit that they might well have a difficult timeproving damages for the full duration of the class period-pinpointing when the fund became “imprudent” will bedifficult for them, particularly given the fact that it did notbecome known to the market until December, 2008, thatthe only bidder responding to Flagstar's efforts to raise newcapital would be a distressed debt investor. (ECF No. 48, Pls.'Mot. Final Approval 14 n. 11.) Plaintiffs' own calculationsdisclosed that the range of damages depending on the proven“date of imprudence” was $17.8 million (December 2006)to $3.5 million (December 2008) to $1.8 million (December2009). Thus, the $3 million settlement represents 85% ofwhat Plaintiffs would have been awarded had they been ableto establish at trial what they describe as the “more likelyscenario of success on the merits.” Also, of course, the costsof going through a full blown trial must be added to thebalance. Moreover, as the Independent Fiduciary recognizedin his report, while the Sixth Circuit has concluded that thepresumption of prudence is not to be applied at the pleadingsstage, the presumption arguably remains available at trial.(ECF No. 42–1, Report of Independent Fiduciary at 7, ¶ 1.)This factor favors final approval of the settlement agreement.

5. The recommendations of experienced counsel favorfinal approval.*5 Class Counsel's judgment that settlement is in the best

interests of the class “is entitled to significant weight, andsupports the fairness of the class settlement.” Sheick, 2010WL 4136958, at * 18 (citation omitted). Class counsel inthis case have extensive experience in handling complexERISA claims, and other complex class action litigation.See ECF No. 40–4, Joint Declaration of Robert A. Izardand Michael J. Klein in Support of Plaintiffs' Motion forPreliminary Approval of Class Settlement. Class counsel'srecommendation of this settlement is entitled to significantweight. This factor favors final approval.

6. Objections by absent class members.There have been no objections from any of the class membersand no objectors appeared at the Final Fairness Hearing.Such unanimous approval is entitled to great weight andfavors final approval, particularly where the Notice is knownto have been mailed to each of the class members. Of the2,952 Notices that were sent, 260 were returned and 7 hadforwarding addresses. Through the use of a database thatfacilitates locating new addresses of people who have moved,

of the 253 that had not been delivered the first time around,230 were sent to new addresses. (ECF No. 50–2, Affidavitof Christina PetersStasiewicz ¶¶ 6–10.) Accordingly, Noticeis known to have been successfully mailed to 99% of theSettlement Class.

7. Public policy favors final approval.“[T]here is a strong public interest in encouraging settlementof complex litigation and class action suits because theyare ‘notoriously difficult and unpredictable’ and settlementconserves judicial resources.” In re Cardizem, 218 F.R.D. at530. There do not appear to the Court to be any countervailingpublic interests that would suggest that the Court shoulddisapprove the settlement agreement and significantly no onehas come forward to suggest one to the Court. This factorweighs in favor of final approval.

B. Certification of the Settlement Class is AppropriateCertification of a class must satisfy the requirements ofFederal Rule of Civil Procedure 23(a) and one of thesubsections of Federal Rule of Civil Procedure 23(b). FordMotor, 2006 WL 1984363, at * 18 (citing Sprague v. GeneralMotors Corp., 133 F.3d 388, 397 (6th Cir.1998)). Thisis a “non-opt-out” settlement, meaning class members donot have the opportunity to opt out but will be bound bythe releases contained in the settlement agreement. This iscommon in this type of ERISA case. See McCluskey v.Trustees of Red Dot Corp. Employee Stock Ownership Planand Trust, 268 F.R.D. 670, 677 (W.D.Wash.2010) (Because“adjudications with respect to any individual member ofthe class would, as a practical matter, alter the interests ofother members of the class .... classes in ERISA actionsare typically certified under Rule 23(b) (1) and/or (b)(2) asmandatory, non-opt-out classes.”) (collecting cases).

1. The class satisfies the requirements of Rule 23(a).*6 Federal Rule of Civil Procedure 23(a) provides that class

members may represent a class if the following prerequisitesare satisfied:









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a. The class is sufficiently numerous.Notice was mailed to 2,952 Settlement Class Members. (ECFNo. 50–1, Joint Decl. Ex. 1, Oct. 2, 2013 Affidavit ofChristina PetersStasiewicz ¶ 8.) The numerosity requirementis satisfied here. See Ford Motor, 2006 WL 1984363, at *19(citing Bittinger v. Tecumseh Prods. Co., 123 F.3d 877, 884n. 1 (6th Cir.1997) (finding objection based on numerosityfrivolous where class consisted of 1,100 members)).

c. Common questions of law or fact exist.“The requirement of commonality requires only a commonquestion of law or fact.” Ford Motor, 2006 WL 1984363,at *19 (citing Bittinger, 123 F.3d at 884). Here there areseveral common issues of law and fact such as whetherDefendants owed a duty to the Plan participants and whetherDefendants breached their fiduciary duties by continuingto offer investment in Flagstar stock. The commonalityrequirement is met.

c. Plaintiffs' claims are typical of the class.“If there is a strong similarity of legal theories, therequirement [of typicality] is met, even if there are factualdistinctions among named and absent class members.” FordMotor, 2006 WL 1984363, at * 19. Plaintiffs allege that allClass Members suffered the same type of injury from theDefendants' breaches of their fiduciary duties. The typicalityrequirement is met.

d. Plaintiffs are adequate class representatives.“The two criteria for determining whether classrepresentatives are adequate are ‘(1) the representatives musthave common interests with unnamed members of the class,and (2) it must appear that the representatives will vigorouslyprosecute the interests of the class through qualified counsel.’” Ford Motor, 2006 WL 1984363, at * 19 (quoting Senterv. General Motors Corp., 532 F.2d 511, 525 (6th Cir.1976)).These requirements are satisfied here as the claims andinterests of the Plaintiffs are the same as those of the absentclass members and the vigorous prosecution of the action hasalready been established by class counsel's conduct in the caseto date, both in negotiating the Settlement Agreement and

in defending against, and successfully appealing an adversedecision on, Defendants' motion to dismiss.

2. Rule 23(b)(1)'s requirements are satisfied.“In light of the derivative nature of ERISA § 502(a)(2) claims,breach of fiduciary duty claims brought under § 502(a)(2) areparadigmatic examples of claims appropriate for certificationas a Rule 23(b)(1) class, as numerous courts have held.” Inre Schering Plough Corp. ERISA Litig., 589 F.3d 585, 604(3d Cir.2009) (citing cases). “Given that [this] is an ERISA§ 502(a)(2) claim brought on behalf of the Plan and allegingbreaches of fiduciary duty on the part of defendants that will,if true, be the same with respect to every class member, Rule23(b)(1)(B) is clearly satisfied.” Id. at 604–05. Certificationof the settlement class satisfies the requirements of Rule 23(b)(1).

C. The Proposed Plan of Allocation Warrants Approval*7 “Approval of a plan of allocation of a settlement fund in

a class action is governed by the same standards of reviewapplicable to approval of the settlement as a whole; thedistribution plan must be fair, reasonable and adequate.” Inre Ikon Office Solutions Sec. Litig., 194 F.R.D. 166, 184(E.D.Pa.2000)). See also In re Cardizem, 218 F.R.D. at 531(approving a plan as fair and reasonable that adopted a prorata method for calculating each class member's share of thesettlement fund).

The proposed Plan of Allocation awards damages on a prorata basis, calculating relative loss based upon calculationof each settlement class member's “net stock fund loss,”calculated as follow: (1) the value of the participant's Planaccount interest in the Fund at the beginning of the ClassPeriod plus (2) the amount invested in the Fund duringthe Class Period minus (3) the amount withdrawn from theFund during the Class Period minus (4) the value of Fundholdings in the participant's Plan account at the end of theclass period. (ECF No. 48, Pls.' Mot. Final Approval 23;ECF 40–1, Flagstar Settlement Agreement, Ex. C, Plan ofAllocation.) The net stock fund losses of all participantsare totaled to yield the loss of the participants as a whole.The pro rata share of each participant is then calculated bydividing each participant's net stock fund loss by the Plan'stotal stock fund loss and then multiplying that percentage bythe Settlement Amount net of the disbursements approvedby the Court. (Plan of Allocation Section IIA.) Thus, eachclass member will receive a share of the net proceeds thatreflects the decline in value of Fund shares that he or she






























held/purchased/sold during the class period in comparisonto the decline experienced by other class members and thedistribution is through the Plan so that class members realizethe tax advantage of their investment in the Plan. AnyPlan participant whose initial net stock fund distribution isless than ten dollars ($10) shall be excluded from furthercalculation and shall recover zero. (Plan of Allocation SectionIIB.)

This Plan of Allocation is similar to plans used and approvedin many ERISA company stock fund cases. See, e.g.In re Delphi Corp. Sec. Litig., 248 F.R.D. 483, 491–93(E.D.Mich.2008). Finally, the Plan of Allocation excludesthose employees of Flagstar who held the position ofExecutive Vice President or above on the notion that thesehigher ranked employees were in a far better position to haveprotected the Fund and their own investments.

D. The Court Approves the Request for Attorneys' Fees,Expenses and Case Contribution AwardsAn award of attorneys' fees in common fund cases needonly be “reasonable under the circumstances.” Rawlings v.Prudential–Bache Properties, Inc., 9 F.3d 513, 516 (6thCir.1993). The Court must consider and discuss the relevantfactors that determine reasonableness, which include: “ ‘(1)the value of the benefit rendered to the plaintiff class; (2)the value of the services on an hourly basis; (3) whetherthe services were undertaken on a contingent fee basis; (4)society's stake in rewarding attorneys who produce suchbenefits in order to maintain an incentive to others; (5) thecomplexity of the litigation; and (6) the professional skill andstanding of counsel involved on both sides.’ ” Moulton v.United States Steel Corp., 581 F.3d 344, 352 (6th Cir.2009)(holding that a district court's award of attorneys' fees ina common fund case need only be reasonable under thecircumstances but remanding for an on-the-record discussionof these factors) (quoting Bowling v. Pfizer, Inc., 102 F.3d777, 780 (6th Cir.1996)).

*8 The Sixth Circuit permits calculation of attorneys' feesunder either the lodestar method (multiplying the number ofhours spent on the litigation by certain attorneys by theirhourly rate) or the percentage of the fund method (counselreceive a set percentage of the total settlement fund). Inweighing the benefits and shortcomings of each method, theSixth Circuit in Rawlings concluded: “For these reasons, it isnecessary that district courts be permitted to select the moreappropriate method for calculating attorney's fees in light ofthe unique characteristics of class actions in general, and of

the unique circumstances of the actual cases before them.”9 F.3d at 516. The Sixth Circuit has observed that “[t]hepercentage of the fund method has a number of advantages; itis easy to calculate; it establishes reasonable expectations onthe part of plaintiffs' attorneys as to their expected recovery;and it encourages early settlement, which avoids protractedlitigation.” Rawlings, 9 F.3d at 516.

Plaintiffs employ the percentage of the fund method andrequest an award of $900,000 in attorneys' fees whichrepresents 30% of the $3,000,000 settlement fund. Thisrequested fee is consistent with standard fee awards as apercentage of the fund in ERISA actions which typicallyaward between 30% and 33% on a percentage of the fund feecalculation. See In re Marsh ERISA Litig., 265 F.R.D. 128,149 (S.D.N.Y.2010) (“Courts have also awarded percentagefees of one-third or higher in ERISA company stock cases inappropriate circumstances, and especially when, as here, thefund is not a “mega” recovery.”). Cross checking this amountusing the lodestar method in this case also demonstratesthat the fee request falls within the range of reasonableness.Counsel spent nearly 1,500 hours prosecuting this case andtheir combined lodestar is approximately $1,042,188.90.(ECF No. 50, Joint Decl. ¶¶ 43–58.) The requested percentageof the fund award thus represents a more than reasonablemultiplier of the lodestar (0.864), actually resulting in adiscount of Counsel's normal fees. See In re Marsh, 265F.R.D. at 149 (recognizing numerous ERISA cases awardedfees yielding multipliers well above 1%).

Evaluating the Moulton factors in this case favors approvalof the fee request. The $3 million settlement appears to bean excellent result given the uncertainties of the Plaintiffs'chances of ultimately prevailing on the issue of liability in thisvery uncertain area of ERISA and also given the challengesthey face in establishing the operative date of imprudence.The case was taken on a contingent fee basis, a significantrisk for counsel who would be standing with nothing to showfor their efforts had this Court's dismissal been upheld onappeal. The complexity of this ERISA litigation cannot bequestioned, nor can the skill and expertise of counsel whoare known nationally for their successful representation ofERISA clients in class action matters. (ECF No. 50, JointDecl. ¶¶ 39–41.)

*9 Plaintiffs also seek reimbursement of expenses inthe amount of $62,473.72. These expense amounts aredocumented by firm and by category of expense in the Joint



















Declaration and appear reasonable. (ECF No. 50, Joint Decl.¶¶ 48, 56, 58.)

Finally, Plaintiffs seek “case contribution” awards for thenamed Plaintiffs in the amount of $5,000 each for theirsignificant time and effort spent prosecuting this action overthe course of three and a half years. Such awards have beenapproved by the Sixth Circuit. See Hadix v. Johnson, 322F.3d 895, 897 (6th Cir.2003) (“Incentive awards are typicallyawards to class representatives for their often extensiveinvolvement with a lawsuit .”) The $5,000 payments to thetwo class representatives in this case seems reasonable giventheir involvement in assisting in collecting documents fromFlagstar and providing information to class counsel to assistin the preparation and litigation of the case.

III. CONCLUSIONFor the foregoing reasons, and as set forth in theaccompanying Order and Judgment filed herewith this day,the Court (1) GRANTS final approval of the SettlementAgreement as fair, reasonable and adequate, (2) GRANTSfinal certification of the Settlement Class, (3) GRANTS finalapproval of the Plan of Allocation, (4) AWARDS Plaintiffs$900,000 in attorneys' fees and $62,473.72 in expenses, and(5) APPROVES case contribution awards of $5,000 for eachof the two named Plaintiffs.

IT IS SO ORDERED.

Footnotes

1 Debra Griffin and Joy Gardner initiated independent putative class actions that were later consolidated. (ECF No. 15, Stipulated

Order Granting Plaintiffs Leave to File Consolidated Amended Complaint.)





Fussell v. Wilkinson, Not Reported in F.Supp.2d (2005)



United States District Court,S.D. Ohio, Western Division.

Rodney FUSSELL, et al., Plaintiffs,v.

Reginald WILKINSON, et al., Defendants,

No. 1:03-CV-704. | Nov. 22, 2005.


Alphonse Adam Gerhardstein, Gerhardstein Branch &Laufman Co. LPA, David A. Singleton, Cincinnati, OH, forPlaintiffs.

Marianne Pressman, Ohio Attorney General, Cincinnati, OH,Mark David Landes, J. Eric Holloway, Isaac Brant Ledman& Teetor, Joseph M. Mancini, Ohio Attorney General,Columbus, OH, for Defendants.

Opinion

OPINION and ORDER APPROVINGSETTLEMENT and DENYING OBJECTIONS

BECKWITH, Chief J.

*1 This matter came on for hearing on the proposedsettlement of this class action on November 16, 2005. Theproposed settlement agreement was executed by counselfor the Plaintiff Class, the Ohio Justice & Policy Center,Defendants, and the Ohio Department of Rehabilitation andCorrection on November 15 and 26, 2005. On October7, 2005, the Court preliminarily approved the proposedsettlement and set November 16, 2005, for a hearing as to thefairness and adequacy of the proposed settlement. Notice ofthe hearing on the parties' joint motion for approval of thesettlement agreement was given in the manner specified bythe Court in the October 7 order.

A hearing was conducted on November 16, 2005, at whicharguments in support of the fairness and adequacy of theproposed settlement were heard. The Court has thoroughlyconsidered the arguments of counsel and the submissions ofthe various objectors to the proposed settlement.

The Plaintiff Class was certified as a mandatory class underRule 23(a) and (b)(2) of the Federal Rules of Civil Procedureon March 8, 2004. The certified class is defined as follows:

All inmates with serious medicaland dental needs who are or willbe incarcerated in prisons operatedby or under the jurisdiction of theOhio Department of Rehabilitation andCorrection who, while so incarcerated,are or will be in need of medical anddental care.

This is the class whose claims are to be settled by the proposedagreement.

The settlement agreement, entitled Stipulation for InjunctiveRelief, provides unimpeded access to health and dentalservices consistent with generally accepted medical science,health education, healthy food choices for inmates, andeducation regarding effects of smoking and second-handsmoke with the ultimate goal of achieving a smoke-freeenvironment. The settlement agreement further providesmedical staffing guidelines and training requirements formedical staff, as well as, specific requirements and standardspertaining to the provision of medical and dental careservices. Included in the settlement agreement are a detailedplan for ongoing oversight of the Stipulation by a professionalmonitoring team and provisions for the resolution of disputesarising under, or relating to, the Stipulation.

The Court received 29 timely filed objections to the proposedsettlement. One of those objections (Doc. 108), by counsel forthe plaintiff class in Civil Action 4:01-CV-071 in the UnitedStates District Court for the Northern District of Ohio, waswithdrawn on the record at a November 15, 2005, telephoneconference. The other 28 timely objections were filed byinmates. Nine other inmate objections were filed after theNovember 1 deadline. The Court has considered all of theobjections, timely or otherwise.

Class counsel has discussed the substance of the objectionswith the inmates who filed them and, with one exception,those inmates do not oppose the joint motion for approvalof the settlement agreement. The purpose of the objections,as represented by those inmates, is to place issues relating tomedical care in the record in this matter. The Court does notperceive any of the inmate objections as an impediment toapproval of the settlement agreement.


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*2 With respect to the one objector who opposes approvalof the settlement agreement, identified by class counselas Class Member # 3, the basis for opposition is distrustof the Ohio Department of Rehabilitation and Correctionand not opposition to any of the terms of the settlementagreement itself. The Court is wholly unpersuaded, given theenforcement mechanisms provided by the Stipulation, thatsuch a concern is an impediment to approval of the settlementagreement.

For those reasons, the objections of Douglas A. Ankrom(Doc. 82); William Ridenour, George Bannister, CharlesBoussom, Art Schipper (Doc. 83); Charles Richard VonSchriltz (Doc. 84); John F. Johnson (Doc. 85); Paul Nelson(Doc. 86); John T. Bragg (Doc. 87); Anthony Hoepf (Doc.89); Yaqub A. Nur (Doc.94); R. Martin (Doc. 95); DariesSherrills (Doc. 96); William O. Harris (Doc. 97); Carl A.Nelson (Doc. 98); Jerome E. Barnett (Doc. 99); DavidZion Shie (Doc. 100); Brent L. Grace (Doc. 101); LouisMerriweather (Doc. 102); Richard J. Lemker (Doc. 104);Phillip Tate (Doc. 105); Robert D. Hunter (Doc. 106 and Doc.110); Joe L. Deavors (Doc. 109); Edward Mayrides (Doc.111); Shad D. Mills (Doc. 112); Arkmael Ray Stiles (Doc.113); Lawrence E. Stewart (Doc. 114); Ronnie Lee Wallace(Doc. 115); Andre Wells (Doc. 116); Reubin J. Beavers(Doc. 118); Jeffrey Hackle (Doc. 119); Theodore B. Hoffert(Doc. 120 and Doc. 121); Tyrias Johnson (Doc. 122); BillyRenshaw (Doc. 123); Gary Roberts (Doc. 124); Wayne AllenTimmons (Doc. 126); Charles F. Stocks (Doc. 127) are herebyOVERRULED.

In addition to the above-referenced objections, the Court hasreceived a motion to join parties (Doc. 103) by William E.Martin and Shannon Haynes. That motion is in the form ofan objection to the proposed settlement agreement, which ishereby OVERRULED as not, in fact, being an objection toapproval of the agreement but a request for greater levels ofcare than the agreement provides. In the event that the Courtconcludes that the agreement provides fair and adequate reliefto the members of the class, that conclusion amounts to arejection of the contention of Messrs. Martin and Hayes thatthe terms of the Stipulation are inadequate. On the otherhand, the Court's denial of the joint motion for approval ofthe settlement agreement would moot the concerns of theobjectors with respect to that agreement. The Court DENIESthe motion, in the alternative, of Messrs. Martin and Hayes tobe joined as parties in this litigation. That motion is untimely,having been filed three weeks before the scheduled hearing

on the joint motion for approval of the settlement agreement.The Court is not persuaded that the joinder of Messrs. Martinand Hayes is required for a just adjudication of this matter.See Fed.R.Civ.P. 19.

Counsel for the Plaintiff Class, three of the Class

representatives, 1 and counsel for the Defendants urge thisCourt to approve this settlement because they perceive it tobe fair, adequate and reasonable.

Standard For Court Approval of Class Action Settlement

*3 Pursuant to Fed.R.Civ.P. 23(e) a class action settlementmust be approved by the Court before the case may bedismissed or compromised. Three specific steps must befollowed: (1) the Court must preliminarily approve theproposed settlement; (2) members of the class must be givennotice of the proposed settlement; and (3) a hearing mustbe held, after which the Court must determine whetherthe proposed settlement is fair, reasonable, and adequate.Williams v. Vukovich, 710 F.2d 909 (6th Cir.1983); Bronsonv. Board of Education of the City School District of the Cityof Cincinnati, 604 F.Supp. 68 (S.D. Ohio 1984; In Re Fernaldlitigation, 1989 WL 267039, 2-3 (S.D.Ohio W.D.). Thosethree requirements have been satisfied as of this date.

The proposed settlement of this action was preliminarilyapproved by this Court in October of this year. Preliminaryapproval gives rise to a presumption that the settlement isfair, reasonable and adequate. Objectors, therefore, have theburden of persuading this Court that the proposed settlementis unreasonable. See Stotts v. Memphis Fire Dept., 679F.2d 542, 551 (6th Cir.), rev'd. on other grounds sub nom.Firefighters Local Union No. 1784 v. Stotts, 467 U.S. 561,104 S.Ct. 2576, 81 L.Ed.2d 483 (1982); Bronson, 604 F.Supp.at 71.

Provisions for Notice to the members of the class, both ofthe proposed settlement and the fact that a hearing would beheld to determine whether the settlement was fair, adequateand reasonable, were approved by this Court on October7, 2005. Class counsel provided notice in accordance withthose provisions. The Court conducted the fairness hearing onNovember 16, 2005, in accordance with the notice. This Courtfinds that the provision of notice allowed members of the classa full and fair opportunity to consider the proposed settlementand to develop their respective responses. See Williams v.Vukovich, 720 F.2d 909 (6th Cir.1983).

















There are six factors to be considered in assessing the fairness,adequacy and reasonableness of the proposed settlement.They are (1) the potential relief that plaintiffs may realizefollowing a full trial on the merits balanced against therelief offered by the settlement; (2) the complexity of thelitigation; (3) the status of the proceedings and the amountof discovery completed; (4) the nature of the negotiations;(5) the objections of the class members; and (6) the publicinterest. See Williams v. Vukovich, 720 F.2d 909, 922 (6thCir.1983); Bronson v. Board of Education of the City SchoolDistrict of Cincinnati, 604 F.Supp. 68, 73 (S.D.Ohio 1984).

The Court finds that this case presents substantial obstaclesto the Plaintiff class if it were to proceed to a full trial onthe merits. In particular, the discovery required to support theclaims of the class as they pertain to the prison system on astate-wide basis would have been well-nigh impossible, giventhe number of institutions involved and the likely expenseof hiring the personnel required. By contrast, the proposedsettlement provides timely prospective relief on a state-widebasis without the necessity of significant discovery. On asimilar note, the complexity of the litigation of this matter,were it to have proceeded with respect to all of the institutionsin this state, would likely have served as an insurmountableobstacle to the prosecution of the claims. This is particularlytrue when the fact that the members of the class are, forall relevant purposes, impecunious and without means tobear any of the costs of litigation, which would have beenextremely substantial.

*4 The proposed settlement agreement was reached througharm's-length negotiations between counsel after very littlediscovery. The necessity of conducting litigation wasminimized by the parties' agreement to engage the services ofconsultants to investigate and report on the status of medicaland dental care in the prison system state-wide. The fact thatthe “discovery” process was not contentious resulted in asignificant cost-savings and a view of the deficiencies in thesystem that is accepted by the parties and trusted by the Court.

The Court finds little in the way of substantive opposition tothe proposed settlement agreement in the above-referenced

objections. As the Court has noted, counsel for the Plaintiffclass represents that only one of the inmate objectorsopposes the joint motion for approval of the settlementagreement. The basis for that opposition, however, is notrelated to the substantive terms of the Stipulation. Rather,the objector opposes approval because of distrust in theOhio Department of Rehabilitation and Correction. The Courtcannot assuage that distrust, either by sustaining or overrulingthe objection. Moreover, the Court is convinced that theagreement itself provides mechanisms for enforcement andfor dispute resolution. Those provisions address, to the extentpossible, the distrust expressed by the inmate objector.

Finally, the Court is convinced that approval of the settlementof this action serves the public interest. The provision ofadequate and appropriate medical and dental care to inmatesin the state's penal institutions is a legitimate public concern.The Stipulation provides mechanisms for assuring all citizensof Ohio that those needs are met responsibly and adequately.Moreover, it reassures the public that public funds will beused for medical and dental care of inmates wholly dependentupon the State for their health needs rather than for legalexpenses of the state.

Conclusion

Having considered each of the requisite factors fordetermining the fairness, reasonableness, and adequacy of themodified proposed settlement, the Court is satisfied that it isfair, reasonable and adequate and does address the settlementof Plaintiffs' claims against Defendants. Consequently, theCourt hereby APPROVES the settlement of the claimsproposed by the parties, as described in the Stipulation forInjunctive Relief. The joint motion for approval of thatagreement (Doc. 74) is hereby GRANTED, and the parties areDIRECTED to perform their obligations under the agreementbetween them.

IT IS SO ORDERED.

Footnotes

1 A fourth class representative has yet to be named. Class counsel and counsel for the Defendants in this matter agreed at the November

15, 2005, telephone conference with the Honorable James Gwin and counsel for the parties in Civil Action 4:01-CV-071 from the

Northern District of Ohio to the addition of one of the named plaintiffs from that action as a class representative in this action. That








inmate will be from the Ohio State Penitentiary and will be formally added as a class representative in this action as soon as he is

identified and not later than December 9, 2005.



Date v. Sony Electronics, Inc., Slip Copy (2013)




Southern Division.

David DATE, Jr., Individually and On Behalfof All Others Similarly Situated, Plaintiff,

v.SONY ELECTRONICS, INC. and ABC Appliance,

Inc., d/b/a ABC Warehouse, Defendants.

No. 07–15474. | July 31, 2013.


Alan M. Mansfield, Robbins Umeda and Fink, LLP, HallenD. Rosner, Rosner & Mansfield, San Diego, CA, LanceA. Raphael, Chicago, IL, Dani K. Liblang, Liblang Assoc.,Birmingham, MI, Darren T. Kaplan, Chitwood, Harley,Atlanta, GA, for Plaintiff.

Clarence L. Pozza, Jr., Michael P. Coakley, Miller, Canfield,Detroit, MI, Kimberly K. Kefalas, Robert J. Wierenga, SchiffHardin LLP, Ann Arbor, MI, Thomas W. Cranmer, Miller,Canfield, Troy, MI, for Defendants.

Opinion

OPINION AND ORDER (1) GRANTING FINALAPPROVAL OF PROPOSED SETTLEMENT;(2) GRANTING PLAINTIFF'S COUNSEL'S

REQUEST FOR ATTORNEYS' FEES OF $435,000;AND (3) APPROVING PLAINTIFF'S REQUESTFOR A $7,000 INCENTIVE AWARD FOR HISSERVICES AS A CLASS REPRESENTATIVE


*1 This matter is before the Court on the parties' jointapplication for final approval of class action settlement,for approval of Plaintiff's counsels request for an awardof attorneys' fees and for approval of a $7,000 incentive/service award for named Plaintiff, David Date. Both Plaintiffsand Defendants have filed memoranda and supportingdeclarations and affidavits in support of their joint requestfor final approval. (ECF Nos. 279–284.) The Court held aFinal Fairness Hearing on July 24, 2013. Having consideredthe written submissions and the oral presentations to the

Court at the Final Fairness Hearing, the Court GRANTS finalapproval of the proposed Settlement Agreement, GRANTSPlaintiff's counsel's request for a fee award of $435,000 andGRANTS Class Representative David Date's request for a$7,000 incentive/service award for his efforts and service asthe named class representative in this multi-year litigation.

I. BACKGROUNDPlaintiff David Date, Jr. (“Date”) originally filed this classaction against Sony Electronics, Inc. (“Sony”) and ABCAppliance, Inc. d/b/a ABC Warehouse (“ABC”) in theSouthern District of California on April 2, 2007, allegingmisrepresentations in the marketing of Sony's Grand WegaTelevisions, Models KDS–R50XBR1 and KDS–R60XBR1(“XBR1 s” or “Televisions”). (ECF No. 1, Record Receivedfrom the Southern District of California, 2–4.) On December18, 2007, the District Court for the Southern District ofCalifornia, the Honorable Roger T. Benitez, granted Date'smotion to transfer venue to this District, finding that thetransfer would serve the convenience of witnesses and partiesand would best serve the interests of justice. (Id. at 11–17, Order Granting Plaintiff's Motion to Transfer Venue.)On December 27, 2007, this Court received the record fromthe Southern District of California and received Date's FirstAmended Class Action Complaint. (ECF Nos. 1, 2.)

On March 12, 2008, the parties stipulated to the filingof the Second Amended Complaint. (ECF Nos. 29, 30.)Also on March 12, 2008, the parties filed a joint requestfor preliminary approval of a settlement agreement. (ECFNo. 20.) On July 25, 2008, this Court entered an Orderpreliminarily approving the proposed settlement agreementand scheduling a final fairness hearing for November 3, 2008.(ECF No. 45.)

On November 3, 2008, this Court held a final fairness hearingon the proposed settlement, considered the objections filedin response to the proposed settlement agreement, and onJanuary 16, 2009, issued an Opinion and Order RejectingClass Action Settlement, concluding that the objectors hadmet their significant burden in opposing the proposed classaction settlement. (ECF No. 76.) On February 20, 2009, thisCourt filed an Amended Opinion and Order Rejecting ClassAction Settlement. (ECF No. 86.)

On April 30, 2010, Date, joined by Elliott Handler(“Handler”), who had been a principal objector to theproposed class action settlement, filed a Third AmendedClass Action Complaint, seeking certification of several


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different classes and seeking declaratory relief and monetarydamages. (“The TAC”) (ECF No. 123.) The TAC containedthe following Counts: Count I (Against Sony on Behalf of theProposed Nationwide Class Under the California ConsumersLegal Remedies Act, Cal. Civ.Code § 1750, et seq.); CountII (Against Sony on Behalf of the Proposed NationwideClass Under the California Unlawful, Unfair and FraudulentBusiness Acts and Practices Act, Cal. Bus. Prof.Code §17200); Count III (Against Sony and ABC on Behalf of theProposed Nationwide Class for Breach of Express WarrantyPursuant to U.C.C. § 2–313); Count IV (Against Sony onBehalf of the Proposed Nationwide Class for Breach ofWritten Warranty Under Magnuson–Moss Warranty Act, 15U.S.C. § 2301, et seq.); Count V (Against ABC on Behalf ofDate and a Proposed Subclass of ABC Purchasers for Breachof Written Warranty Under Magnuson–Moss Warranty Act,15 U.S.C. § 2301, et seq.); Count VI (Against Sony onBehalf of the Proposed Nationwide Class for Breach ofImplied Warranty of Merchantability under 15 U.S.C. §2308); Count VII (Against ABC on Behalf of Date and aProposed Subclass of ABC Purchasers for Breach of ImpliedWarranty of Merchantability under 15 U.S.C. § 2308); CountVIII (Against Sony and ABC on Behalf of the ProposedNationwide Class and on Behalf of Date and the ProposedSubclass of ABC Purchasers for Unjust Enrichment); CountIX (Against Sony and ABC on Behalf of the ProposedNationwide Class for Declaratory Relief); Count X (AgainstSony and ABC on Behalf of Date and a Proposed Subclassof Michigan Purchasers Under the Michigan ConsumerProtection Act, Mich. Comp. Laws § 445.901 et seq.); CountXI (Against Sony on Behalf of Handler and a ProposedSubclass of New York Purchasers Under New York GeneralBusiness Law § 349 et seq.).

*2 Following the filing of the TAC, the Court deniedmotions to dismiss (ECF No. 142) and the parties beganthe process of extensive discovery. According to the parties,Sony produced over 27,000 documents and eight witnessesfor depositions. (ECF No. 281, Defs.' Memo In Support 9.)

On January 3, 2011, Date and Handler filed motions forclass certification. (ECF Nos. 165 and 167.) On July 18,2011, pursuant to the parties' stipulation, this Court enteredan Order dismissing Handler from the case and dismissingeach and every claim pled by him against Sony and ABC withprejudice. (ECF No. 207.) The Handler dismissal promptedthe Court to seek from the parties supplemental briefing onthe class certification motions, setting forth their positions asto how, if at all, the Handler dismissal affected the pending

motions for class certification. On August 11, 2011, Sony andABC (ECF Nos. 211, 212) and Date (ECF No. 213) filedsupplemental briefs. In his supplemental brief, Date soughtto withdraw from the TAC all allegations pertaining to theQualia model of television set purchased by Handler (not anXBR1) and also sought to modify his class definitions againstSony and ABC. The Court thereafter required Date to file afurther supplemental brief in support of the motion for classcertification. (ECF No. 220, August 18, 2011 Order RequiringSupplemental Briefing.)

On September 2, 2011, Date filed his second supplementalbrief. (ECF No. 223.) As permitted by the Court's August 18,2011 Order, Sony and ABC filed a joint response to Date'ssecond supplemental brief. (ECF No. 241.) On November9, 2011, the Court held a hearing on the motions for classcertification. On November 21, 2011, the Court requested theparties to submit supplemental briefing on the issue of classcertification in light of a then-recent Sixth Circuit decision,Pilgrim v. Universal Health Card, LLC, 660 F.3d 943 (6thCir.2011). (ECF No. 243, Order Requiring SupplementalBriefing.) The parties completed their supplemental briefingin midDecember, 2011.

In January, 2012, before the Court issued its Opinionand Order on Date's motion for class certification, theparties informed the Court that they had resumed settlementnegotiations. On December 21, 2012, the parties filed a JointApplication for Preliminary Approval of Class Settlement.(ECF No. 252.) On January 25, 2013 the Court held a hearingon the parties' joint motion for preliminary approval ofsettlement of class action and on March 25, 2013, after severalfollow up discussions with the parties regarding changes tothe proposed Notices and other matters, the Court issuedan Order Preliminarily Approving the Parties' Class ActionSettlement. (ECF No. 262.) On June 24, 2013, the parties filedtheir respective memoranda in support of final approval ofthe proposed settlement agreement, with supporting affidavitsand declarations. (ECF Nos. 279–284.) On July 24, 2013,as set forth in the Preliminary Approval Order and in theapproved Class Notices, the Court held a Final FairnessHearing. No objectors asked to be heard or appeared atthe Final Fairness Hearing. For the reasons that follow, theCourt GRANTS final approval of the proposed settlementagreement, GRANTS Plaintiff's counsel's request for a feeaward of $435,000 and GRANTS the request for a $7,000incentive/service award for named Plaintiff, David Date.

II. CERTIFICATION OF THE SETTLEMENT CLASS


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*3 For purposes of settlement only, the settlement class isdefined as:

All United States end user consumerswho purchased, or received as a giftfrom the original retail purchaser,a KDS–R50XBR1 or KDS–R60XBR1 television (individually and

collectively, the “Television(s)”). 1

The settlement class does not include any person/entitywho purchased or acquired a TELEVISION for resale orcommercial use. (ECF No. 254, Settlement Agreement ¶1.16.)

Certification of a class must satisfy the requirements ofFederal Rule of Civil Procedure 23(a) and one of the threesubsections of Federal Rule of Civil Procedure 23(b). Int'l

Union v. Ford Motor, No. 05–74730, 06–10331, 2006 WL1984363, at *18 (E.D.Mich. July 13, 2006) (citing Spraguev. General Motors Corp., 133 F.3d 388, 397 (6th Cir.1998)).The Court finds that the Settlement Class satisfies the Rule23 requirements.

A. The Settlement Class Satisfies the Requirements ofRule 23(a).Federal Rule of Civil Procedure 23(a) provides that classmembers may represent a class if the following prerequisitesare satisfied:






1. Rule 23(a)(1): Sony represents that approximately 175,000Televisions were sold. A class of this size satisfies thenumerosity requirement. See Ford Motor, 2006 WL 1984363,at *19 (holding that class of over 170,000 satisfied thenumerosity requirement). The Settlement Class is too largefor joinder to be practicable.

2. Rule 23(a)(2): “The requirement of commonality requiresonly a common question of law or fact.” Ford Motor, 2006WL 1984363, at *19 (citing Bittinger v. Tecumseh Prods.Co., 123 F.3d 877, 884 (6th Cir.1997)). There exist commonquestions of law and fact to satisfy Rule 23(a)(2), i.e. whetherSony deceptively marketed the Televisions as having 1080pinput capabilities that the Televisions did not actually possess.

3. Rule 23(a)(3): The claims of the Class Representativesare typical of the Settlement Class in satisfaction of Rule23(a) (3). “If there is a strong similarity of legal theories,the requirement [of typicality] is met, even if there arefactual distinctions among named and absent class members.”Ford Motor, 2006 WL 1984363, at *19. Because all ClassMembers' claims arise from the same course of conduct, i.e.whether Sony misrepresented the 1080p capabilities of theTelevisions, their claims are based on the same legal theoryand the typicality requirement, which is not onerous, is met.

4. Rule 23(a)(4): The named Plaintiff will fairly andadequately represent the interests of the Settlement ClassMembers in satisfaction of Rule 23(a)(4). “The two criteriafor determining whether class representatives are adequateare ‘(1) the representatives must have common interests withunnamed members of the class, and (2) it must appear thatthe representatives will vigorously prosecute the interests ofthe class through qualified counsel.’ ” Ford Motor, 2006 WL1984363, at *19 (quoting Senter v. General Motors Corp.,532 F.2d 511, 525 (6th Cir.1976)). Plaintiff's interests arealigned with the Class Members because they all possess thesame interests and have suffered the same alleged injury,i.e. they have each purchased a 1080p television that theyclaim cannot natively accept and display a 1080p signal,and the class is represented by competent and experiencedClass Counsel. There is no indication that the namedPlaintiff's interests are unjustifiably advanced at the expenseof unnamed Class Members or that the named Plaintiff'sinterests conflict in any way with those of the Class Members.Lessard v. City of Allen Park, 372 F.Supp.2d 1007, 1009(E.D.Mich.2005) (“In determining fairness, a court shouldconsider whether the interests of counsel and the namedplaintiffs are ‘unjustifiably advanced at the expense ofunnamed class members.’ ”) (quoting Williams v. Vukovich,720 F.2d 909, 921–923 (6th Cir.1983)).

B. The Settlement Class Satisfies the Requirements ofRule 23(b)(3).*4 Finally, the Court concludes that the Settlement Class

satisfies the requirements of Fed.R.Civ.P. 23(b)(3) because


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for purposes of this Settlement Agreement “questions of lawor fact common to the members of the class predominate overany questions affecting only individual members, and ... aclass action is superior to other available methods for the fairand efficient adjudication of the controversy.” Fed.R.Civ.P.23(b)(3). Because of the small size of any potential individualclaim in this case, i.e. the full value of an individual classmember's claim has been calculated to be approximately$200, no class member's interest in “individually controlling”prosecution of a separate action is significantly greater thanthe benefit to the class of aggregating the claims.

For the foregoing reasons, the Court concludes that theproposed class meets the requirements of Rule 23 and certifiesthe Settlement Class for settlement purposes only.

III. NOTICEThe Notice provided to the class members, both by direct mailand by publication, satisfied the requirements of Rule 23(e).In addition to running a one-quarter page advertisement inUSA Today on April 18, 2013, containing a summary versionof the Notice, on April 19, 2013, Helgeson Enterprises,Inc. (“Helgeson”) mailed 2,278 D1 Notices (sent to thoseconsumers who previously had submitted a claim form toSony in connection with the previous proposed settlement)and 42,074 D2 Notices (all other consumers for whom Sonyhad postal addresses) via United States mail. (ECF No. 282,Amended Declaration of Charles Schroeder ¶¶ 3–6; ECFNo. 276, Declaration of Danielle Hayman ¶ 3.) For thoseconsumers for whom Sony did not have addresses, but had anemail address, Helgeson sent two (2) D1 Notices and 8,496D2 Notices by electronic mail. (ECF No. 274, Declarationof Charles Schroeder ¶¶ 3–5.) These Notices containeddetailed information explaining clearly to consumers how toparticipate, file a claim, object or opt out of the proposedsettlement and informed consumers of the date of FinalFairness Hearing and of steps to take in order to be heard at theHearing. The Notices also contained a link to a website thatwent live on April 18, 2013, that was dedicated to providinginformation about the settlement, which itself contained linksto claim forms and the underlying settlement documents.(ECF No. 275, Declaration of Jennifer DiCarlo ¶¶ 1–5.)Although the link on the website that enabled a consumerto print a copy of the claim form was inactive for a periodof approximately three weeks, Sony corrected any deficiencycaused by this malfunction by extending the date for thesubmission of claim forms to July 24, 2013 and running anadditional advertisement in USA Today on July 3, 2013,explaining that the claim form submission date had been

extended. (ECF No. 283, Second Declaration of DanielleHayman.)

Additionally, Sony satisfied the requirements of the ClassAction Fairness Act, 28 U.S.C. § 1715(b) by serving noticeof the proposed settlement on the State Attorneys General forall 50 states, together with the Attorney General of the UnitedStates, the Attorney General of the District of Columbia andthe Attorneys General for American territories. (ECF No.280, Declaration of Clarence Pozza ¶ 3.) Notice also wasprovided to each of the above-named Attorneys General ofthe date of the Preliminary Approval Hearing that took placeon January 25, 2013. (ECF No. 280, Declaration of ClarencePozza ¶ 4.) None of the state or federal officials who receivednotice of the proposed settlement has filed any objection.

*5 To date, the claims administrator has received 6,594claims. This response rate far exceeds the number of claimsfiled in response to the 2008 settlement that this Courtrejected and speaks favorably to the sufficiency of the Noticeprocedures, as well as to the attractiveness of the settlementterms to consumers.

IV. THE ADEQUACY AND REASONABLENESS OFTHE SETTLEMENTSettlement of class action litigation is strongly favored in thelaw and as a matter of federal policy. UAW v. General MotorsCorp. ., 497 F.3d 615, 632 (6th Cir.2007); IUE–CWA v.General Motors Corp., 238 F.R.D. 583, 593 (E.D.Mich.2006)(noting federal policy favoring settlement of class actions);Ford Motor, 2006 WL 1984363, at *21 (“The law favorsthe voluntary settlement of class action litigation.”). Toensure the fairness of such settlements to all class members,however, this Court must determine whether the settlement is“fair, reasonable, and adequate.” Id.

A. The Terms of the Settlement AgreementUnder the terms of the Settlement Agreement, all SettlementClass members who (a) previously submitted valid claimforms in connection with the earlier rejected settlementor (b) now provide a valid claim form with evidence oftheir purchase of a Television and a 1080p HDMI sourcecomponent prior to the Settlement Date (defined in thesettlement agreement as the last date on which a partyexecutes the agreement which was David Date on December21, 2012), will receive a $60.00 gift card that does notexpire and is redeemable for the purchase of any itemavailable online at the Sony store or at a Sony retail store






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(including music or movies). Plaintiff has estimated that thevalue of an individual class member's actual claim would beapproximately $200. This figure is derived from a measureof the difference in value between a television with 1080pdisplay capabilities and a television with 1080p native inputcapabilities, i.e. the diminished value of an upconvertedpicture. The parties arrived at the $60 settlement figure asa reasonable discount from the $200 value, factoring in therisk of loss, the risks of class certification being denied andthe costs of continued litigation and appeals. The gift cardsnever expire and will be redeemable for the purchase of anyitem available from thestore.sony.com website or at any Sonyretail store.

As to class members who submitted valid claim forms inconnection with the previous proposed but rejected settlement(those identified in sealed Exhibit B to the SettlementAgreement), they received Notice D 1 by mail informingthem they do not have to do anything to receive the$60 benefit but explaining that they may opt out. As toclass members who previously demonstrated ownership ofa Television, or as to whom Sony agrees a record ofownership exits, but who did not previously submit a validclaim form (those identified in sealed Exhibit C to theSettlement Agreement), they received Notice D2 by mail andwere informed that they must submit proof of ownership ofany brand 1080p HDMI source component. All remainingclass members, who received Notice by publication, wereinformed that they must provide both proof of ownership ofa Television (satisfied by providing the unique serial numberaffixed to the Television, subject to Sony's validation of theserial number) and proof of purchase of a qualifying 1080psource component by the Settlement Date.

*6 Regarding the required proof of ownership of a 1080psource component, the parties have agreed that all devices,of any brand, capable of sending a 1080p video signal overan HDMI output shall be deemed to satisfy the definitionof “1080p HDMI source component.” The settlement claimsadministrator, Hegelson, will be responsible, with the helpof the parties, for determining whether a particular devicequalifies. A list of example products was available on thesettlement website and on the class notice itself.

Settlement class members not identified on Exhibit B areable to demonstrate ownership of a 1080p HDMI sourcecomponent by providing: (a) a legible and dated copy of areceipt; (b) a legible copy of an invoice for a 1080p HDMIsource component marked “paid;” (c) a legible copy of a

canceled check that identifies the payment as being for a1080p HDMI source component; (d) a legible copy of acredit card bill that identifies the purchase of a 1080p HDMIsource component; (e) a legible, dated shipping invoicethat identifies a 1080l HDMI source component; or (f)photographic evidence sufficient to establish ownership of a1080p HDMI source component on or before the SettlementDate.

Regarding option (f), if a class member uses photographicproof, there is a further limitation—if the 1080p devicedepicted in the photograph is not readily available for retailpurchase on the Settlement Date, no further proof is required.If the 1080p device depicted in the photograph is readilyavailable for retail purchase on or after the Settlement Date,then the class member will be required to submit additionalevidence (receipt, credit card statement or other paymentrecord) to substantiate that the device was purchased beforethe Settlement Date. The claims administrator shall contacteach claimant who must submit this additional informationand they shall have 20 days from the date of the request foradditional information to submit further proof.

Sony and/or its claims administrator will promptly notifyPlaintiff's counsel of all rejected claims. Plaintiff's counselhas the right but not the obligation to dispute rejections if thereis a good faith belief that the rejection does not comport withthe spirit of the agreement. Objections to the claims processmay be raised with the Court.

In addition to the benefits to the Settlement Class, under theterms of the Settlement Agreement, named Plaintiff Date,subject to approval by this Court, may receive a $7,000incentive/service award, paid to compensate him for his timeand service acting as class representative. Also in additionto the benefits to the Settlement Class, Defendants agree toand did bear the entire cost of providing Notice to the classmembers, including running an additional advertisement inUSA Today following the three-week glitch that temporarilydisabled the ability to print the claim form on the dedicatedwebsite. Defendants also agree to pay Class Counsel'sattorneys' fees and costs, subject to Court approval, in anamount not to exceed $435,000.00. Also in addition to thebenefits to the Settlement Class, Defendants agree to bearall of the costs associated with the claims process andadministration of the settlement benefits.

B. Fairness, Reasonableness and Adequacy


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*7 The Sixth Circuit has identified a number of factorsthat are relevant in determining whether a settlement is fair,reasonable and adequate: “(1) the likelihood of success on themerits weighed against the amount and form of relief in thesettlement; (2) the complexity, expense and likely durationof the litigation; (3) the opinions of class counsel and classrepresentatives; (4) the amount of discovery engaged in by theparties; (5) the reaction of absent class members; (6) the riskof fraud or collusion; and (7) the public interest.” UAW, 497F.3d at 631. In determining the fairness of a settlement, theCourt must recognize that settlement “embodies a bargainedgive and take between the litigants that is presumptively valid,about which the Court should not substitute its judgmentfor that of the parties.” Id. at *21 (internal quotation marksand citations omitted). Determining that a settlement is fair,reasonable and adequate does not require a finding that “itis the most favorable possible result in the litigation.” Id.(internal quotation marks and citation omitted). In fact, giventhe very nature of the act of compromise, this will nearlynever be so.

In conducting the fairness analysis, “[t]he Court may chooseto consider only those factors that are relevant to thesettlement at hand and may weigh particular factors accordingto the demands of the case.” Ford Motor, 2006 WL 1984363,at *22. Consideration of the factors most relevant in this caseleads the Court to conclude that, given the potential legalhurdles that remain in this case, particularly in certifyinga litigation class, and given the overall favorable responseof class members, the Settlement Agreement falls withinthe range of reasonableness, fairness and adequacy requiredunder Fed.R.Civ.P. 23. The Court notes that the release ofclaims by which all class members will be bound, regardlessof whether or not they are qualified to obtain the benefit bydemonstrating their purchase of a 1080p device, is limitedto claims that relate to the 1080p input functionality of theTelevisions. Thus, although the settlement targets and onlyprovides a benefit to those class members who purchased a1080p device, this is fair in view of the fact that these arethe purchasers who could most successfully assert the onlyclaim being waived, i.e. a claim that they have been damagedby the lack of 1080p input capability. While there may beconsumers who decided not to purchase a 1080p device afterlearning of the input capability issue and who will be boundby the settlement but ineligible to receive the $60 gift card,they are likely to be few in number and have been given theoption to be excluded from the settlement and continue withan individual claim against Sony.

Finally, the Court notes that, unlike a “coupon” settlement,this is not a percentage off arrangement. Here, the gift cardcan be used to pay the full price for any item costing $60or less, of which there are many available through the Sonywebsite and at its retail outlets. Additionally, to the extentthat Sony carries third party products at its retail outlets, oroffers them online, these third party products are available forpurchase with the gift card.

1. The likelihood of Plaintiff's success on the meritsweighed against the amount and form of relief offered inthe settlement supports approval.*8 In determining whether the relief offered in a settlement

outweighs the Plaintiff's chances of ultimate success on themerits, the Court “recognizes the uncertainties of law andfact in any particular case and the concomitant risks andcosts inherent in taking any litigation to completion.” IUE–CWA, 238 F.R.D. at 594. The Court “is not to decide whetherone side is right or even whether one side has a better ofthese arguments.... The question rather is whether the partiesare using settlement to resolve a legitimate legal and factualdispute.” UAW, 497 F.3d at 632.

The Court concludes that the Settlement Agreement seeks toresolve a genuine legal and factual dispute. After extensivediscovery and full briefing and argument on the Plaintiff'smotion for class certification, there are several legal hurdlesthat Plaintiff faces in taking this case further. First, Plaintifffaces the task of obtaining certification of litigation class. AsPlaintiff recognizes, “[n]ational consumer fraud cases, whilepossible, are difficult to obtain.” (Pls.' Mem. in Support 6.)Plaintiff acknowledges that “[s]ince the inception of this suit,class certification has become an even rarer occurrence.” Id.at 7. Additionally, in a case such as this where discoveryhas disclosed that Sony's and its retailer's advertising of“1080p” was not perhaps entirely uniform, it may be difficultand costly to establish that all consumers in fact were evenexposed to or viewed the allegedly deceptive advertising. Inthis respect, Plaintiff's chance of successfully establishingtheir claims on a class-wide basis is further weakened.

Weighing against these potential weaknesses is the immediateavailability of a $60 gift card that can be used on any itemavailable on the Sony website or at a Sony store. Unlike a“coupon,” the $60 gift card can be used to fund the entirepurchase of small items or can be applied to the purchaseof a more valuable item, at the consumer's option. Theparties submit, and the Court has received no evidence to thecontrary, that the actual value of an individual class member's












claim would be approximately $200, the difference betweena Television with a 1080p native input capability and onewithout that capability. In addition, Plaintiff has figured intothe analysis the additional costs that would be associatedwith what would certainly be a long appellate process even ifthey were to succeed at the trial level. Balanced against thetentative probabilities of a successful outcome for the Plaintiffin the absence of a settlement, the $60 gift card provides realvalue compared to what otherwise could amount to an adversejudgment which could yield class members $0.

2. The complexity, expense and likely duration of thelitigation favor approval.“[T]he prospect of a trial necessarily involves the risk thatPlaintiffs would obtain little or no recovery.” In Re CardizemCD Antitrust Litig., 218 F.R.D. 508, 523 (E.D.Mich.2003).“Experience proves that, no matter how confident trialcounsel may be, they cannot predict with 100% accuracya jury's favorable verdict....” Id. As discussed above, thePlaintiff has conceded that significant obstacles remain inobtaining certification of a litigation class and of establishingthe claim of deceptive advertising on a class wide basis.Sony and ABC, on the other hand, have contested thiscase for years, and continue to maintain that they did notmisleadingly market the Televisions and assert that theynever represented to consumers that the Televisions hadHDMI inputs that could accept 1080p inputs. As one of the“objectors” noted, the input capabilities of the Televisionswere readily apparent from a review of the specificationsheets. While some consumers may not have appreciatedthat the Televisions lacked the 1080p input capability, Sonymaintains that this fact was disclosed and several reviewsof the Televisions in the media discussed this shortcomingcontemporaneous with their release. There is no reason tobelieve that Defendants would not continue the fight were afavorable judgment rendered in this Court. They likely willrely on the fact that the Ninth Circuit rejected this exact 1080pclaim in Johnson v. Mitsubishi Digital Electronics America,Inc., 365 F. App'x 830 (9th Cir.2010) (finding that the phrase“1080p” was not false and misleading given that the TV hasa 1080p display, although it lacks a 1080p input).

*9 The Court concludes that this factor weighs in favorof final approval, given the real possibility that Plaintiffand Class Members could ultimately recover $0 if thiscase continues through the class certification phase andbeyond. As discussed infra, while some of the 11 objectorscomplain that $60 is not sufficient to compensate themfor the inconvenience and disappointment of the lack of a

1080p input, very few actually make this objection and theyfail to appreciate that every settlement inherently involvescompromise. Sheick v. Automotive Component Carrier LLC,No. 09–14429, 2010 WL 4136958, at *18 (E.D.Mich. Oct. 18,2010) (finding that the potential that a full blown trial mightleave plaintiffs with “absolutely nothing” was a significantfactor favoring final approval).

3. The opinions of class counsel and classrepresentatives.The Court appointed class counsel after thorough review ofhis credentials and abilities. Class Counsel's judgment thatsettlement is in the best interests of the class “is entitledto significant weight, and supports the fairness of the classsettlement.” Sheick, 2010 WL 4136958, at *18 (citationomitted). Class counsel has devoted extensive time and effortto pursuing this litigation and after extensive discovery, bothparties have a very good idea of the relative strength oftheir legal positions. In the absence of evidence of collusion(there is none here) this Court “should defer to the judgmentof experienced counsel who has competently evaluated thestrength of his proofs.” Williams v. Vukovich, 720 F.2d909, 922–23 (6th Cir.1983). The Court concludes that thisfactor weighs in favor of final approval of the SettlementAgreement.

4. The amount of discovery conducted to date weighsheavily in favor of approval.As discussed above, this proposed settlement agreementcomes after years of protracted litigation, one failedsettlement, production of over 27,000 documents, depositionsof eight Sony witnesses, and full briefing and oral argumenton the issue of class certification. The discovery to dateis assuredly sufficient “to permit the plaintiffs to make aninformed evaluation of the merits of a possible settlement,”and to permit this Court “to intelligently approve ordisapprove the settlement.” UAW v. Ford Motor, No. 07–14845, 2008 WL 4104329, at *26, 27 (E.D.Mich. Aug.29,2008).

5. The reaction of absent Class Members.The number of claims filed (6,594) represents approximately4% of the total number of Televisions sold (175,000). Thisratio is even higher (approximately 13%) when the numberof claims filed is compared to the number of direct mailand email Notices sent, 45,000. See Touhey v. United States,No. EDCV 08–01418, 2011 WL 3179036, at *7–8 (C.D.Cal.



















July 25, 2011) (finding a 2% response rate acceptable—38responses out of 1,875 notices mailed—where there were noobjections and the overall recovery was fair and reasonable);In re Cardizem, 218 F.R.D. at 526 (finding favorable classreactions in a 6.9% response rate (1,800 proofs of claim outof 26,000 notices sent) and a 9% response rate (37,000 proofsof claim out of 400,000+ notices sent).

*10 As the court recognized in In re Serzone Pdcts. LiabilityAction, 231 F.R.D. 221 (S.D.W.Va.2005), many factors affectresponse rates and this ratio should not be given greatsignificance:

Objectors also assert that because the settlement class couldhave potentially included millions of Class Members,and only 6,524 have “shown their hands” to be includedin the class by filing an inventory form, the notice isinadequate. However, many factors contribute to the claimsresponse rate. See, e. g., Zimmer Paper Prod., Inc. v. Berger& Montague, P.C., 758 F.2d 86, 92–93 (3d Cir.1985)(holding that where defendant engaged in customary andcourt approved notice procedure, the response rate wasnot determinative of the adequacy of the class notice.);3 Alba Conte & Herbert Newberg, Newberg on ClassActions § 8.45 (4th ed. 2002) (“Claims response levelswill tend to vary with the circumstances, types of classnotices employed, and size of individual claims involvedin each case.”).... [T]he adequacy of notice is measured bywhether notice reached Class Members and gave them anopportunity to participate, not by actual participation.

231 F.R.D. at 235–36.

There have been only 11 objections filed, and only 6actually complain about the 1080p input capability. To brieflysummarize the objections:

(1) ECF No. 263, Letter from Kirkland, WA, complainingthat the settlement agreement is not fair to the class because“in no way, shape or form does a $60 dollar Sony gift card(which can only be used to purchase Sony products) is anequal or fair substitute for all estimated expenses” to repair thedefective TVs. This objector claims the settlement agreementis a “contract of adhesion” and asks that Sony be requiredto (a) pay for all costs related to the repair of the defectiveTVs; and (b) that Sony be required to replace all defective setswith an equivalent brand new model, at no cost to Plaintiffs.This objector appears to be complaining about a “green andyellow tint” on his television screen, apparently due to afaulty “optical block,” and attaches communications that he

had with Sony regarding resolving his picture quality issues.This optical block defect is not an issue in this case andthis objector does not appear to complain about the 1080pcapabilities of his TV.

(2) ECF No. 264, Letter from Cypress, TX, objecting to yetanother case where the injured party gets a useless gift cardwhile the lawyers get hundreds of thousands of dollars incash. He requests that the lawyers get paid in Sony gift cardsor the class members get cash, like the attorneys.

(3) ECF No. 265, Letter from Sauk Village, Ill, objecting thatthe $60 gift card (for the loss of a feature that has been valuedat $200) does not adequately compensate the buyers whobought gaming units. He asks that the amount be increased orhave a non-Sony gift card issued because these buyers don'tnecessarily want to do business with Sony.

*11 (4) ECF No. 266, Letter from Idaho Falls, ID, objectingbecause this is a frivolous case and the plaintiffs should getnothing. He states that the user specifications (copies of whichhe attaches to his letter) disclose the 1080p signal limitationsand the case should be dismissed. This “objector” actuallyobjects to the filing of this case, and to the fact that Defendantsare having to pay anything to settle this matter.

(5) ECF No. 267, Letter from Wilmington, DEL, objectingthat the $60 pay out is too small compared to the $200 valueof the 1080p feature. Also states that at the time, the 1080pTVs were selling at a huge premium over the non–1080p TVs.Asks the Court to increase the award amount.

(6) ECF No. 268, Letter from Trumbull, CT, objecting that$60 does not come close to covering the heartbreak he hassuffered of not being able to play games in 1080p from thenumerous devices he purchased, Playstation 3, X–Box andWii–V.

(7) ECF No. 269, Letter from Middleton, MA, objecting andasking to opt-out because his TV has not worked properlysince he spent about $5,000 on it—it takes 5 minutes to turnon and get a signal. This objector does not complain aboutthe lack of full 1080p. This objector has been considered anopt-out.

(8) ECF No. 270, Letter from Cadiz, KY, objecting thatconsumers will be forced to accept a $60 gift card to a storethat “has already soured him.” He states that Sony sold a TVthat deceptively stated it would support other devices. Now













he can use a gift card to buy a 1080p device that his TVwon't support. Thinks the attorneys should receive gift cardsthat they can redeem at the Sony store instead of a sizableaward. If the court decides he has been damaged, he asks, whyshould he be forced to spend the money at Sony instead of acompetitor.

(9) ECF No. 271, Letter from Clermont, FL, objecting thatconsumer's optical block is defective and does not appear tocomplain about the 1080p feature. It will cost $1,000 to get itfixed and she thinks the $60 gift card is “absurd.”

(10) ECF No. 272, Letter from Moiches, NY, consumersbought the TV because they wanted to be sure they boughta 1080p because they knew the Playstation 3 and Blu–RayDVD player would have a 1080p signal. They were awarethat a 1080p signal is better than 1080i because 1080p isprogressive scan and 1080i is split into two interfaced fieldsof 540 lines. They realized that the 1080p was not supportedand they have been watching a 1080i signal for 7 years whenthey should have been watching a 1080p resolution and don'tfeel the $60 gift card seems right. This objector did file acomplaint with Sony about the inability to accept 1080p andin that communication said he was happy with the TV anywayand it was “one of the best HDTV on earth!”

(11) ECF No. 273, Letter from Tequesta, FL, objecting to thepicture quality of his TV and having to pay $600 to fix theunit. He feels that he should be paid at least $600.

*12 (12) On June 10, 2013, the Court received a letter froma consumer in Burbank, Alaska, who wanted a copy of theoriginal complaint. The Court responded by giving him ClassCounsel's contact information. No further communicationshave been received from him.

The number of objections compared to the number of filedclaims indicates that the response overall to the terms of theSettlement Agreement was quite favorable. One “objection”actually opines that the lawsuit lacks merit as the 1080pinput capabilities were directly disclosed in the specificationsaccompanying the Televisions. Those who do complainabout the 1080p capabilities only complain that $60 isnot a sufficient amount to compensate them. Moreover,although admittedly there is “distortion” that results from theupconverting of the 1080p signal, the Televisions are notincapable of being used with a 1080p device, as one objectornotes when stating that his Television still is the best HDTVon earth. As Plaintiffs concede, “even if someone purchased

the television for the sole purpose of using a 1080p devicewith it, that device will play ... [and] the [visual] distinctioncomplained of by Mr. Date may be difficult for the averageperson to see.” (Pls.' Mem. in Support 15.) In this case, only23 class members have elected to be excluded, and only 6objections have been filed that actually complain about the1080p capabilities that are at issue in this case (See ExhibitA to Final Order of Class Action Settlement and Judgment,filed separately by the Court this day.). These facts speakstrongly to the positive reaction of affected class members.Consideration of this factor weighs in favor of approval of theSettlement Agreement.

6. The risk of fraud or collusion.“Courts respect the integrity of counsel and presume theabsence of fraud or collusion in negotiating the settlement,unless evidence to the contrary is offered.” Ford Motor, 2006WL 1984363, at *26. There is no evidence in this case ofany collusion and counsel on both sides are presumed tohave acted in good faith. This factor weighs in favor of finalapproval.

7. The Settlement Agreement is consistent with thepublic interest.“[T]here is a strong public interest in encouraging settlementof complex litigation and class action suits because theyare ‘notoriously difficult and unpredictable’ and settlementconserves judicial resources.”In re Cardizem, 218 F.R.D. at530. There do not appear to the Court to be any countervailingpublic interests that would suggest that the Court shoulddisapprove the Settlement Agreement and, significantly, noone has come forward to suggest one to the Court. This factorweighs in favor of final approval.

8. Overall the Settlement Agreement is Fair, Reasonableand AdequateThe Sixth Circuit and courts in this district have recognizedthat the law favors the settlement of class action lawsuits.“The evaluation and approval of a class settlement iscommitted to the sound discretion of the district court”and the district court “should approve a class settlement if,following a hearing, the court determines that the settlement‘is fair, reasonable, and adequate.’ ” IUE–CWA, 238 F.R.D.at 593, 594. “In exercising that discretion, the Court maylimit the fairness hearing to whatever is necessary to aid itin reaching an informed, just and reasoned decision” and“the settlement or fairness hearing is not to be turned into










a trial or rehearsal for trial on the merits.” Ford Motor Co.,2006 WL 1984363 at *21 (internal quotation marks andcitations omitted). “Given that class settlements are favored,the role of the district court is limited to the extent necessaryto reach a reasoned judgment that the agreement is not theproduct of fraud or overreaching by, or collusion between,the negotiating parties, and that the settlement taken as awhole, is fair, reasonable and adequate to all concerned.”IUE–CWA, 238 F.R.D. at 594 (internal quotation marks andcitations omitted); Sheick, 2010 WL 4136958 at *14 (“Inassessing a proposed settlement, the district court judge ‘maynot substitute his or her judgment for that of the litigantsand their counsel’ and ‘should approve a class settlement if,following a hearing, the court determines that the settlement‘is fair, reasonable, and adequate.’ ”) (quoting IUE–CWA, 238F.R.D. at 593). “Settlement embodies a bargained give andtake between the litigants that is presumptively valid aboutwhich the Court should not substitute its judgment for that ofthe parties.” Ford Motor, 2006 WL 1984363, at *21 (internalquotation marks and citation omitted).

*13 Bearing in mind the Court's function in approving classaction settlements, and considering all of the relevant factors,each of which weighs in favor of final approval, the Courtconcludes that the Settlement Agreement is fair, reasonableand adequate and merits Final Approval.

V. ATTORNEYS' FEE REQUESTDefendants have agreed to pay, in addition to (1) thebenefits to the settlement class, and (2) the costs of noticeand claims processing, $435,000.00 in attorneys' fees, tobe shared among all Plaintiff's counsel. Plaintiff's counselseek an award calculating fees under the lodestar method,which is determined by multiplying the number of hoursreasonably expended on the litigation times a reasonablehourly rate. (ECF No. 278, Declaration of Plaintiff'sCounsel Lance A. Raphael; ECF No. 284, Certification ofPlaintiff's Counsel Dani Liblang.) In this case, the actuallodestar for class counsel is in excess of $1,075,000, basedupon a blended rate (including hourly rates of supportstaff) of $375 per hour. (Raphael Decl. ¶¶ 2–4.) Counselrequests a significant reduction from the actual lodestar. The$435,000.00 represents over a 50% reduction from Plaintiff'scounsel's actual fees, costs and expenses. (See ECF No. 255,Lance Raphael's Certification, ¶ 2 explaining that counsels'combined lodestar is $1,075,016.27.) Costs and expensesshall first be deducted from the $435,000 payment and theremaining amount will be divided among Plaintiff's counselon a pro rata basis for work performed from November

3, 2008 (the date of the prior final approval hearing inthis action) through final approval of this action. Plaintiff'scounsel shall be solely responsible for allocating such fees,costs and expenses and Defendants shall be held harmlessfrom any liability arising from any dispute regarding theallocation. Plaintiff's counsel seeks approval of the $435,000payment and agrees not to request attorneys' fees, expensesor costs in excess of this amount. The Court finds thatPlaintiff's counsel's request for a fee award of $435,000, a50% reduction from his actual lodestar, is fair and reasonableand approves the award of fees.

VI. INCENTIVE PAYMENT FOR CLASSREPRESENTATIVEIn In re Cardizem, supra, the court considered and awardedincentive payments to class representatives that the courtfound were “well deserved” given the class representativesdevotion of time and effort in producing documents andattending depositions, all to the general benefit of the class.218 F.R.D. at 535. The Sixth Circuit has “never explicitlypassed judgment on the appropriateness of incentive awards.”Hadix v. Johnson, 322 F.3d 895, 897 (6th Cir.2003). Suchawards have been approved, however, largely in commonfund cases. “[I]ncentive awards are usually viewed asextensions of the common-fund doctrine, a doctrine thatholds that a litigant who recovers a common fund forthe benefit of persons other than himself is entitled torecover some of his litigation expenses from the fund asa whole.” Id. at 899. While this is not a common fundcase, the amount of and possibility for an incentive awardwas agreed to in the Settlement Agreement as a separateitem for which Sony agreed to be responsible and theincentive award was disclosed in all of the class notices.None of the objections mentioned or objected to the incentiveaward. Class Representative Plaintiff David Date has spentextensive time and effort in this litigation acting as a classrepresentative, appearing at hearings, responding to discoveryand sitting for his deposition. Thus, the Court approves the$7,000 incentive award to Mr. Date.

IV. CONCLUSION*14 For the foregoing reasons, the Court:

(1) GRANTS the joint application for final approval ofclass settlement and enters final judgment as set forthin the attached Final Order of Approval of Class ActionSettlement and Judgment filed contemporaneously withthis Opinion and Order;














(2) GRANTS Plaintiff's counsel's request for a fee awardof $435,000.00 to be paid directly by Defendants as per theSettlement Agreement;

(3) GRANTS an incentive/service award to named PlaintiffDavid Date of $7,000.00 to be paid directly to him as perthe Settlement Agreement.

IT IS SO ORDERED.

Footnotes

1 The settlement class does not include purchasers of Qualia televisions, the model that was purchased by former Plaintiff Handler,

who has settled his claim against the Defendants and has been dismissed from the case. (ECF No. 253, Jt. Mot. 5.)



Axelrod v. Saks & Co., Not Reported in F.Supp. (1981)

1980-81 Trade Cases P 63,861


1981 WL 2031United States District Court; E.D. Pennsylvania.

Jeanette Axelrod, et al.v.

Saks & Co., et al.Mitzi Adis, et al.

v.Saks & Co., et al.

Lois Squiresv.

Bergdorf Goodman, Inc., et al.

Civil Action No. 76-3805 | CivilAction No. 76-4011 | Civil Action

No. 77-172 | Filed February 23, 1981

Opinion

LUONGO, J.

Memorandum

*1 On January 26, 1981, after hearing, I approved as fair andreasonable, settlement of the above class action DepartmentStores women's clothing litigation for partial refunds totalling$1,160,000. The notice of the settlement hearing informedclass members that plaintiffs' counsel would file applicationsfor fees, costs and expenses, and that the attorneys' feessought would not exceed 25% of the settlement fund. Noclass member appeared at the hearing to oppose the proposedsettlement or the applications for attorneys' fees, costs andexpenses. Before me now for disposition are petitions seeking

counsel fees totalling $292,361.09, 1 representing 25.2% ofthe settlement amount.

These suits and several others in various parts of the country 2

were instituted following defendants' plea of nolo contenderein the Southern District of New York in 1975 to charges ofconspiracy to fix the price of women's clothing. The suitsin this district were consolidated for all purposes early inthe proceedings and have been vigorously contested everystep of the way. The settlement achieved by class counsel,following difficult and complicated negotiations with highlyskilled defense counsel, constitutes an excellent result. Theterms of settlement in the instant actions are more favorableto the class members than the settlements achieved in the

suits in other parts of the country in two respects: (a) theoverall average of the settlement is approximately 3.7% ofsales compared to less than 3% in the other suits and (b) thesettlement fund of $1,160,000 in the instant suit has beenbearing interest from and after July 1, 1980, at the prevailingUnited States Treasury Bill rates.

Under Lindy I and II (Lindy Bros. Builders, Inc. ofPhiladelphia v. American Radiator & Standard SanitaryCorporation [1973-2 TRADE CASES P 74,761], 487 F. 2d161 (3d) Cir. 1973); [1976-2 TRADE CASES P 61,039],540 F. 2d 102 (3d Cir. 1976)), the fees to be awarded ascompensation to class counsel out of the settlement fundare to be based upon the hours spent by each attorney,the manner in which those hours are spent, and the normalreasonable hourly billing rate of each attorney (the so-called“lodestar”), adjusted upward or downward after consideringthe contingent nature of the undertaking and the quality of theattorney's work.

[Contingency and Quality]

In the instant case, the factors of contingency and qualityof the work warrant a higher upward adjustment than I willaward. I am limiting the upward adjustment because it is aconsumer class action and the amounts payable to individualclass members are relatively modest. Indeed, lead counseland their co-petitioners have, in their joint applications,specifically referred to these considerations in requesting avery restrained (and unnecessarily complicated) multiple of1.196 as a quality factor. I have chosen to round out theupward adjustment for contingency and quality to a mutipleof 1.2 and award it only to those firms and attorneys whohave been active in bringing about, and whose efforts havecontributed substantially to, the successful settlement. Inaddition, I will make some minor adjustments in the lodestaramounts requested.

TABULAR OR GRAPHIC MATERIAL SET AT THISPOINT IS NOT DISPLAYABLE

A. Joint Petition of Berger and Montague;Greenfield & Schoen; and Barrack,

Rodos & McMahon and Myron Harris

*2 The firm of Berger and Montague, P.C., was designatedas lead counsel at the outset of these proceedings. That










1980-81 Trade Cases P 63,861


firm has been actively assisted throughout by Greenfield& Schoen, P.C., Barrack, Rodos & McMahon and MyronHarris. I am satisfied that it was the joint efforts of theseattorneys which produced the excellent result and they willbe awarded a multiple of 1.2 as a quality adjustment to theirrespective lodestar amounts, as hereinafter modified.

(a) Berger and Montague

The hourly rates requested for the attorneys in this firmincluded $260 for David Berger, $175 for H. L. Montague,and $125 for M. G. Davidoff. The hourly rates that Iawarded to these attorneys in 1979 in Magic MarkerSecurities Litigation (Civil Action 77-3155) were: Berger$250; Montague $150; and Davidoff $100. Although I amfully aware and appreciative of the continuing inflationarytrend, I am not prepared to accept an increase in the alreadygenerous rate of $250 per hour for David Berger. As toMessrs Montague and Davidoff, I consider an increase of $15per hour in their hourly rate as a more reasonable reflectionof realistic billing rates. The breakdown of the Berger andMontague hours and rates allowed for lodestar calculations is:


(b) Greenfield & Schoen

All the time devoted by this firm was by Richard D.Greenfield. He has requested an hourly rate of $150 forlodestar purposes. Based on a review of the servicesperformed by Mr. Greenfield, I conclude that an hourlyrate of $140 more nearly reflects a realistic lodestar billingrate. Accordingly, the lodestar calculation for Greenfield &Schoen is:


(c) Barrack, Rodos & McMahon and Myron Harris

The firm of Barrack, Rodos & McMahon and Myron Harriswas also involved in the Magic Marker Securities Litigation.The hourly rates which I approved at that time were: Barrack$125; Rodos $100; and McMahon $90. The lodestar rateswhich they have requested in the instant case reflect an

increase of $10 in the hourly rate for each. This strikes me asreasonable and will be allowed.

The lodestar calculations for the Barrack firm and for MyronHarris are:

TABULAR OR GRAPHIC MATERIAL SET AT THISPOINT IS NOT DISPLAYABLEThe total lodestar amount for the Joint Petition is $209,165.Applying the 1.2 multiple for contingency and quality resultsin an award of $250,998 as counsel fee on the Joint Petition.This represents 21.64% of the settlement fund without takinginto account the interest earned since July 1, 1980.

B. C. and D. George Weissblum;Steven Sher; Emmanuel Weiss

George Weissblum's petition requests compensation for120.85 hours at $100 per hour. Originally he requesteda multiple of 2 for contingency and quality, but afterlearning of the request of counsel on the Joint Petitionfor a multiple of 1.196, he abandoned the request foran increase over the lodestar amount. In addition, myexamination of M. Weissblum's detailing of the way his timewas spent convinces me that an excessive amount of histime was devoted to conferences and review of documents.Accordingly, I have reduced the number of hours for which heis to be compensated to 100 and no multiple will be awarded.

*3 Mr. Sher requested compensation for 54.1 hours at $50per hour. His request for a multiple of 2 was abandoned at thefee hearing. In addition, I have disallowed ¾ hour expendedin the preparation of his fee petition.

Mr. Weiss represented one of the class plaintiffs. Early inthe proceedings he was compelled to withdraw because of apotential conflict of interest. He requested compensation for21.75 hours at an hourly rate of $65.

Accordingly, counsel fees will be awarded as follows:

TABULAR OR GRAPHIC MATERIAL SET AT THISPOINT IS NOT DISPLAYABLEThe total attorneys' fees awarded amount to 22.85% of thesettlement fund, well within the limit set forth in the noticeto class members.



1980-81 Trade Cases P 63,861


Costs

In addition to counsel fees, the following amounts will beawarded as reimbursement of reasonable costs:


Parallel Citations

1980-81 Trade Cases P 63,861

Footnotes

1 Not included in the total is the petition of Ira Jay Sands, Esquire, of New York. Mr. Sands' petition was not timely filed and was

withdrawn in its entirety a short while after the hearing.

2 New York, N. Y.; Chicago, Ill.; Boston, Mass.; and San Francisco, Cal.



Documents

Motion for Final Approval - In re: Refrigerant Compressors ... · PDF fileFor the reasons set forth in the attached Brief in Support of this Motion, ... Appointment of Class Counsel