United States District Court, W.D. Arkansas, Harrison Division
VINCENT EASTWOOD, individually and on behalf of all others similarly situated, Plaintiff,
SOUTHERN FARM BUREAU CASUALTY INSURANCE COMPANY, Defendant.
OPINION AND ORDER
P.K. HOLMES, III, Chief District Judge.
Currently before the Court are Plaintiff's motion for final approval of class action settlement (Doc. 108) and brief in support (Doc. 109) and Plaintiff's motion for attorney fees (Doc. 110) and supporting documents (Docs. 111, 112). For the reasons described herein, the motion for final approval of class action settlement (Doc. 108) is GRANTED, and the motion for attorney fees (Doc. 110) is GRANTED IN PART AND DENIED IN PART.
The Court certified a class in this case on June 5, 2013 (Doc. 75), finding that each of the requirements of Federal Rule of Civil Procedure 23(a) and (b)(3) had been satisfied. Several months later, on January 22, 2014, Plaintiff filed an unopposed motion for preliminary approval of class action settlement. (Doc. 91). The Court then reviewed the terms of the proposed settlement and held a hearing on the motion for preliminary approval on February 12, 2014. On February 13, 2014, the motion for preliminary approval was granted (Doc. 99), and the Court found that the terms of the proposed settlement agreement as set forth in the parties' stipulation (Doc. 93) were fair, adequate, and reasonable, while the notice procedures proposed by the parties (Docs. 93-2, 93-4) were determined to be appropriate.
The Court made only one modification to the parties' proposed notice procedure: the Court required the claims administrator to attempt a second mailing of the notice documents when a class member failed to respond to the first mailing. The Court reasoned that by adding this procedure, the likelihood of providing notice to as many class members as possible would be achieved. Other notice procedures agreed to by the parties included placing the notice in a newspaper of general circulation in Arkansas and establishing both a toll-free telephone number and dedicated website to provide information about the settlement.
Plaintiff now reports that the notice process is complete, and the parties ask the Court for final approval of the settlement. According to the declaration of Patrick M. Passarella (Doc. 109-1), a representative of Kurtzman Carson Consultants, LLC, the company that administered the notice and claim procedure for the class, the notice documents were initially mailed to 1, 889 class members. Of the initial notices that were mailed, several were returned due to incorrect addresses. Those claims forms that were returned were re-sent after correct addresses were located. In total, 1, 837 claims forms were successfully mailed. Then, a second mailing was made to any class member who failed to respond to the first mailing. The notice was also published in the Arkansas Democrat-Gazette, and both a toll-free telephone number and settlement website were activated during the claims period.
Of the 1, 837 class members who received claims forms, only 304 were completed correctly and returned to the class administrator. This means that roughly 16% of the class members made claims on the settlement fund. The parties agree that the average value of a class member's claim is $3, 000; however, it bears mentioning that at all times the precise value of each class member's individual claim was known by counsel and was presented to the Court in the form of a spreadsheet prior to the preliminary approval hearing. The class administrator now informs the Court that the aggregate dollar value of the 304 eligible claims is $855, 956.32. This figure represents approximately 23% of the total settlement fund of $3, 600, 000.00.
Only two class members requested to be excluded from the settlement, and no class members mailed in objections to the settlement or appeared in person to object at the final approval hearing.
In seeking final approval of the settlement, the parties acknowledge that their agreement provides that attorney's fees for class counsel are to be paid from the $3, 600, 000.00 common fund. Defendant has agreed not to object to a fee award of up to $1, 200, 000.00, which is approximately one-third of the common fund. Also, according to the settlement agreement, all money in the common fund that is not paid to the class members, class administrator, or class counsel will revert to Defendant.
A. Approval of the Settlement
It appears that many of the concerns the Court expressed at the preliminary approval hearing regarding the potential for low class participation were well-founded. At the hearing, the Court pointed out to the parties that the proposed notice documents were relatively lengthy and failed to state the precise amount of money each class member would receive, even though that information was known to the parties in advance. The seven-page Long-Form Notice stated only that class members would receive "ten to thousands of dollars, " a detail the Court questioned during the preliminary approval hearing. See Doc. 107, p. 17 (Court: "If someone got that notice and saw that they may have a claim for one to $5, 000, they would be less likely to throw it away and not do anything with it. Should the notice contain that information as well?"). Moreover, the agreed claim form that the class members were required to complete did not solicit information that Defendant did not already have in its possession, with the possible exception of class members' social security numbers.
The Court also suggested during the preliminary approval hearing that, rather than engage in the mailed notice procedure agreed to by the parties, perhaps it would be more efficient to write a settlement check to each class member who was a current insured and had a confirmed address. See id. at p. 32 (Court: "[Y]ou know, it, it would be real easy just to say, just send them a check...."). The parties did not agree to this suggestion.
Finally, the Court questioned whether publishing the Summary Notice in the newspaper was "still considered the best method of publishing legal notice" in light of "today's media environment." Id. at p. 38. The Court had its reservations regarding whether the toll-free telephone number and dedicated website would be effective, as well. Despite the Court's concerns, however, these notice procedures were, on their face, sufficient to satisfy due process, as they have commonly been used in class actions for decades. The Court preliminarily approved the proposed notice procedures in part because the parties assured the Court that they expected the ...