JOINT MOTION TO MODIFY SETTLEMENT CLASS DEFINITION EXPEDITED RELIEF REQUESTED
VIRGINIA M. KENDALL, District Judge.
Through their respective counsel, Plaintiffs Elizabeth A. Craft, Jane Doe, Bryan L. Pautsch and Mary Doe ("Plaintiffs"), on behalf of themselves and the putative Settlement Class,1 and Defendant Health Care Service Corporation, a Mutual Legal Reserve Company ("HCSC") (collectively, the "Parties"), respectfully submit this joint motion to modify the Settlement Class definition contained in the attached Final Order and Judgment Approving Settlement and Dismissing Action with Prejudice.
In support of their joint request, the Parties state as follows:
1. On September 20, 2017, the Court entered an Order (ECF No. 153) preliminarily certifying the Settlement Class and approving the Settlement Agreement (ECF No. 148-01).
2. The Settlement Agreement contains a procedure for one or more individuals to be added to the Settlement Class if, at any time before entry of the Final Approval Order, the Parties confirm that such individuals otherwise met the Settlement Class definition but were not included in the Request Data produced by HCSC.2 See ECF No. 148-01, at 17-18 ¶ 19.
3. Shortly before the Fairness Hearing on January 22, 2018, Class Counsel was contacted by an individual who did not appear in the Request Data, who believed that he and his daughter met the Settlement Class definition. After reviewing documentation submitted by that individual and researching the issue, the Parties' respective counsel verified that the individual and his daughter meet the Settlement Class definition, see ECF No. 153 ¶ 5, and added them to the Settlement Class pursuant to the approved procedure in ¶ 19 of the Settlement Agreement.
4. At the Fairness Hearing on January 22, 2018, counsel advised the Court of this development based on then-available information, and undertook to research the issue further in order to determine whether to recommend additional actions to the Court. Based upon these representations, the Court continued Plaintiffs' Motion for Final Order and Judgment Approving Settlement and Dismissing Action with Prejudice until February 26, 2018. ECF No. 166.
5. The Parties, having now completed their review, jointly propose a modification to the Settlement Class definition. In particular, the Parties recommend modifying the Settlement Class definition to encompass only those individuals identified in the updated Request Data. Due to the sensitive nature of that data, the Parties propose submitting a final list of Settlement Class members, excluding opt outs, to the Court under seal promptly following entry of the modified Final Approval Order, attached at Exhibit A1.
6. The proposed modification to the Settlement Class definition ensures that persons who were not identified as potential Settlement Class Members in the updated Request Data will not be deemed to have released any claims through this Settlement.
7. The proposed modification does not affect the rights of any existing Settlement Class Members, who stand in the same position as when they received the Notice. Therefore, the Court may modify the class definition under its authority in Fed. R. Civ. P. 23(c) without affecting class members' rights, implicating due process considerations, and/or requiring a supplemental notice. See generally Fed. R. Civ. P. 23(c)(1)(C) ("An order that grants or denies class certification may be altered or amended before final judgment."); Fed. R. Civ. P. 23(c) 2003 Advisory Committee Notes (discussing the court's ability to alter or amend the class definition); Carpenter v. Boeing Co., 456 F.3d 1183, 1187 (10th Cir. 2006)("The district court can modify or amend its class-certification determination at any time before final judgment in response to changing circumstances in the case.") (citing Fed. R. Civ. P. 23(c)(1)(C)); In re Initial Public Offering Sec. Litig., No. 21 MC 92 (SAS), 2011 WL 2732563 at *3 (S.D.N.Y. July 8, 2011) (holding that "the revised class definition satisfied Rule 23 certification requirements" for purposes of a class settlement).
8. On January 5, 2018, Plaintiffs filed a Proposed Final Order together with their final approval papers. ECF No. 163-3. A revision to the Proposed Final Order is attached in redline and clean versions that incorporate the recommended modification to the Settlement Class definition. See Exhibit A1 (clean) & A2 (redline) at ¶ 10.
9. The Parties jointly request that this Court enter the Final Order and Judgment in the form attached as Exhibit A1. The Parties will be prepared to file under seal a list of all Settlement Class Members promptly after entry of the Final Order and Judgment.
10. If the Court is inclined to enter the Final Order and Judgment in Exhibit A1 without further submissions from counsel, then Plaintiffs' pending Motion for Final Order and Judgment Approving Settlement and Dismissing Action with Prejudice may be removed from the calendar for February 26ent Class
Exhibit A1
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
ELIZABETH A. CRAFT; JANE DOE, by her next )
friend and parent, ELIZABETH A. CRAFT; )
BRYAN L. PAUTSCH; MARY DOE, by her next )
friend and parent, BRYAN L. PAUTSCH; on their ) Case No. 14-cv-5853
own behalf and on behalf of all others similarly )
situated, ) Hon. Virginia M. Kendall
)
Plaintiffs, )
)
v. )
)
HEALTH CARE SERVICE CORPORATION, )
)
Defendant. )
________________________________________________ )
[PROPOSED] FINAL ORDER AND JUDGMENT APPROVING SETTLEMENT AND DISMISSING ACTION WITH PREJUDICE
This matter is before the Court on Plaintiffs' motion for final approval of the proposed class action settlement and entry of final judgment. Plaintiffs, individually and on behalf of the proposed Settlement Class, and Defendant Health Care Service Corporation, a Mutual Legal Reserve Company ("HCSC"), have entered into a Settlement Agreement ("Settlement Agreement") that settles the above-captioned litigation. The Court, having considered the Motion for Final Approval, the Settlement Agreement together with all exhibits and attachments thereto, the record, and all other matters submitted to it at the Fairness Hearing on January 22, 2018, and finding no just reason for delay in entry of this Final Order and Judgment Approving Settlement and Dismissing Action with Prejudice ("Final Approval Order and Judgment") and good cause appearing therefore,
It is hereby ORDERED, ADJUDGED, AND DECREED as follows:
1. The Court has jurisdiction over the subject matter and personal jurisdiction over the Parties to the Action, including the Settlement Class Members.
2. The Settlement Agreement and all of its exhibits (Dkt. No. 148-01) are incorporated in this Final Approval Order and Judgment, including the definitions and terms set forth therein.
FINAL SETTLEMENT AGREEMENT APPROVAL
3. Federal Rule of Civil Procedure 23(e)(2) requires the Court to find that the Settlement Agreement is "fair, adequate, and reasonable, and not a product of collusion." Mirfashi v. Fleet Mortg. Corp., 450 F.3d 745, 748 (7th Cir. 2006) (internal citation omitted).
4. The Court finds that the Settlement Agreement was not a product of fraud or collusion, and satisfies Rule 23(e) after considering (i) the complexity, expense, and likely duration of the Action; (ii) the stage of the proceedings and amount of discovery completed; (iii) the factual and legal obstacles to prevailing on the merits; (iv) the possible range of recovery; (v) the respective opinions of the Parties, including Plaintiffs, Class Counsel, Defendant, and Defendant's Counsel; and (vi) any objections submitted by Settlement Class Members.
5. The Court, therefore, finds that the Settlement Agreement is in the best interests of Settlement Class Members, is fair, reasonable, and adequate within the meaning of Federal Rule of Civil Procedure 23, and GRANTS final approval of the Settlement Agreement and all of the terms and conditions contained therein.
APPROPRIATE NOTICE
6. Federal Rule of Civil Procedure 23(c)(2)(B) requires that Settlement Class Members be provided "the best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort."
7. The Court finds that the Notice Plan (Dkt. 148-05) and claims submission procedures (Dkt. 148-06) set forth in the Settlement Agreement, which it previously approved, complied in all respects with the requirements of the Federal Rules of Civil Procedure, the United States Constitution (including the Due Process Clause), the rules of this Court, and applicable law. The Notice (Dkt. 160-2), which the Court approved (Dkt. 153 at ¶ 11), has been given in an adequate and sufficient manner to all Settlement Class Members who could be identified through reasonable effort. The Notice given constitutes the best notice practicable under the circumstances, and was reasonably calculated to apprise interested parties of the pendency of the Action, the nature of the claims, the definition of the Settlement Class, the scope and binding effect of the release, and their opportunity to exclude themselves from the Settlement Class or present objections to the Settlement.
8. The Notice Plan permitted Settlement Class Members to access information and documents about the case to inform their decision about whether to opt out of or object to the Settlement.
9. Settlement Class Members were given the opportunity to exclude themselves from the Settlement Class through submission of an Opt-Out Notice. None of the Settlement Class Members who received the Notice opted out of the Settlement.
FINAL CERTIFICATION OF SETTLEMENT CLASS
10. Pursuant to Federal Rule of Civil Procedure 23, the Court finally certifies, for settlement purposes only, the Settlement Class1 defined as follows:
All individuals who, on or after July 30, 2011, have been participants in and beneficiaries of an ERISA-governed employee welfare benefit plan administered and/or insured by HCSC that provided coverage for both medical/surgical conditions and mental health conditions and who had made on their behalf or on behalf of their beneficiary pre-service and/or post-service claims for benefits for treatment of mental illness in a residential treatment center, and for which HCSC issued an adverse benefit determination denying the claims in whole or in part based on plan exclusions of coverage, as identified in the Request Data; provided, however, that the following are excluded from the Settlement Class: (i) HCSC, any entity in which HCSC has a controlling interest, and HCSC's officers, directors, attorneys, successors, subsidiaries, and assigns; (ii) any judge, justice, or judicial officer presiding over this matter and the members of their immediate families and judicial staff; and (iii) any other person who has previously released claims against HCSC that would otherwise be released pursuant to this Settlement Agreement.
THE REQUEST FOR ATTORNEYS' FEES IS REASONABLE
11. The Court has appointed Zuckerman Spaeder LLP, Psych-Appeal, Inc., and Miner, Barnhill & Galland, P.C. as Class Counsel. Dkt. 153 at 9.
12. The Court has reviewed the application for an award of fees and expenses submitted by Class Counsel and the exhibits, memoranda of law, and other materials submitted regarding that application (Dkt. 158). On the basis of its review of the foregoing, the Court hereby awards $1.575 million in attorneys' fees, to be distributed to Class Counsel by the Settlement Administrator from the Settlement Fund as set forth in the Settlement Agreement (Dkt. 148-01 at ¶ 17).
THE REQUEST FOR SERVICE AWARDS IS REASONABLE
13. The Court has appointed Elizabeth Craft and Bryan Pautsch to serve as Settlement Class Representatives of the Settlement Class. Dkt. 153 at ¶ 8.
14. The Court has reviewed the application for service awards to the Settlement Class Representatives submitted by Class Counsel and the exhibits, memoranda of law, and other materials submitted regarding that application (Dkt. 158). On the basis of its review of the foregoing, the Court hereby approves of service awards in the amount of $15,000 to Elizabeth Craft and $15,000 to Bryan Pautsch to be paid by the Settlement Administrator from the Settlement Fund as set forth in the Settlement Agreement (Dkt. 148-01 at ¶ 16).
NO ADMISSION OF LIABILITY
15. This Order shall not be offered or received against HCSC, or any other Released Parties, as evidence of or construed as or deemed to be evidence of any presumption, concession or admission by any person or entity with respect to the truth of any fact alleged by Plaintiffs or the validity of any claim that has been or could have been asserted in the Action or in any litigation, or the deficiency of any defense that has been or could have been asserted in the Action or any litigation, or of any liability, negligence, fault, breach of duty or wrongdoing of any Released Party.
16. This Order shall not be used for any purpose in this or any other matter or proceeding other than as may be necessary to enforce the terms of the Settlement Agreement or this Final Approval Order and Judgment.
DISMISSAL AND RELEASE
17. The Action is dismissed with prejudice, with each Party to bear its own costs and attorneys' fees except as provided by the terms of the Settlement Agreement and this Order.
18. Every Settlement Class Member who did not timely and validly opt-out and exclude himself or herself from the Settlement Class fully, finally, and forever releases any and all Released Claims in accordance with the terms of the Settlement Agreement.
19. The terms of the Settlement Agreement, including all exhibits thereto and to this Final Approval Order and Judgment, shall be forever binding on the Settlement Class.
TERMINATION
20. In the event that the Settlement Agreement is terminated pursuant to the terms of the Settlement Agreement, (a) the Settlement Agreement and this Order shall become void, shall have no further force or effect, and shall not be used in any Action or any other proceedings for any purpose other than as may be necessary to enforce the terms of the Settlement Agreement that survive termination; (b) this matter will revert to the status that existed before execution of the Settlement Agreement; and (c) no term or draft of the Settlement Agreement or any part of the Parties' settlement discussions, negotiations or documentation (including any briefs filed in support of preliminary or final approval of the Settlement) shall (i) be admissible into evidence for any purpose in any Action or other proceeding other than as may be necessary to enforce the terms of the Settlement Agreement that survive termination, (ii) be deemed an admission or concession by any Party regarding the validity of any Released Claim or the propriety of certifying any class against HCSC, or (iii) be deemed an admission or concession by any Party regarding the truth or falsity of any facts alleged in the Action or the availability or lack of availability of any defense to the Released Claims.
JURISDICTION
21. Without affecting the finality of this Final Approval Order and Judgment in any way, this Court will retain exclusive continuing jurisdiction over all Parties, the Settlement Administrator and Settlement Class Members with regard to implementation of the Settlement Agreement, disposition of the Settlement Fund, and enforcement and administration of this Order and the Settlement Agreement, including the release provisions thereof. The Court may order any appropriate legal or equitable remedy necessary to enforce the terms of this Final Approval Order and Judgment and/or the Settlement.
ENTRY OF FINAL JUDGMENT
22. The Court finds there is no just reason for delay and DIRECTS the Clerk to enter judgment pursuant to Federal Rule of Civil Procedure 54 immediately.
SO ORDERED.
Dated: _________________, 2018
__________________________________
Honorable Virginia M. Kendall
United States District Judge
for the Northern District of Illinois
Exhibit A2
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
ELIZABETH A. CRAFT; JANE DOE, by her next )
friend and parent, ELIZABETH A. CRAFT; )
BRYAN L. PAUTSCH; MARY DOE, by her next )
friend and parent, BRYAN L. PAUTSCH; on their ) Case No. 14-cv-5853
own behalf and on behalf of all others similarly )
situated, ) Hon. Virginia M. Kendall
)
)
Plaintiffs, )
)
)
v. )
)
HEALTH CARE SERVICE CORPORATION, )
)
)
Defendant. )
________________________________________________ )
[PROPOSED] FINAL ORDER AND JUDGMENT APPROVING SETTLEMENT AND DISMISSING ACTION WITH PREJUDICE
This matter is before the Court on Plaintiffs' motion for final approval of the proposed class action settlement and entry of final judgment. Plaintiffs, individually and on behalf of the proposed Settlement Class, and Defendant Health Care Service Corporation, a Mutual Legal Reserve Company ("HCSC"), have entered into a Settlement Agreement ("Settlement Agreement") that settles the above-captioned litigation. The Court, having considered the Motion for Final Approval, the Settlement Agreement together with all exhibits and attachments thereto, the record, and all other matters submitted to it at the Fairness Hearing on January 22, 2018, and finding no just reason for delay in entry of this Final Order and Judgment Approving Settlement and Dismissing Action with Prejudice ("Final Approval Order and Judgment") and good cause appearing therefore,
It is hereby ORDERED, ADJUDGED, AND DECREED as follows:
1. The Court has jurisdiction over the subject matter and personal jurisdiction over the Parties to the Action, including the Settlement Class Members.
2. The Settlement Agreement and all of its exhibits (Dkt. No. 148-01) are incorporated in this Final Approval Order and Judgment, including the definitions and terms set forth therein.
FINAL SETTLEMENT AGREEMENT APPROVAL
3. Federal Rule of Civil Procedure 23(e)(2) requires the Court to find that the Settlement Agreement is "fair, adequate, and reasonable, and not a product of collusion." Mirfashi v. Fleet Mortg. Corp., 450 F.3d 745, 748 (7th Cir. 2006) (internal citation omitted).
4. The Court finds that the Settlement Agreement was not a product of fraud or collusion, and satisfies Rule 23(e) after considering (i) the complexity, expense, and likely duration of the Action; (ii) the stage of the proceedings and amount of discovery completed; (iii) the factual and legal obstacles to prevailing on the merits; (iv) the possible range of recovery; (v) the respective opinions of the Parties, including Plaintiffs, Class Counsel, Defendant, and Defendant's Counsel; and (vi) any objections submitted by Settlement Class Members.
5. The Court, therefore, finds that the Settlement Agreement is in the best interests of Settlement Class Members, is fair, reasonable, and adequate within the meaning of Federal Rule of Civil Procedure 23, and GRANTS final approval of the Settlement Agreement and all of the terms and conditions contained therein.
APPROPRIATE NOTICE
6. Federal Rule of Civil Procedure 23(c)(2)(B) requires that Settlement Class Members be provided "the best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort."
7. The Court finds that the Notice Plan (Dkt. 148-05) and claims submission procedures (Dkt. 148-06) set forth in the Settlement Agreement, which it previously approved, complied in all respects with the requirements of the Federal Rules of Civil Procedure, the United States Constitution (including the Due Process Clause), the rules of this Court, and applicable law. The Notice (Dkt. 160-2), which the Court approved (Dkt. 153 at ¶ 11), has been given in an adequate and sufficient manner to all Settlement Class Members who could be identified through reasonable effort. The Notice given constitutes the best notice practicable under the circumstances, and was reasonably calculated to apprise interested parties of the pendency of the Action, the nature of the claims, the definition of the Settlement Class, the scope and binding effect of the release, and their opportunity to exclude themselves from the Settlement Class or present objections to the Settlement.
8. The Notice Plan permitted Settlement Class Members to access information and documents about the case to inform their decision about whether to opt out of or object to the Settlement.
9. Settlement Class Members were given the opportunity to exclude themselves from the Settlement Class through submission of an Opt-Out Notice. None of the Settlement Class Members who received the Notice opted out of the Settlement.
FINAL CERTIFICATION OF SETTLEMENT CLASS
10. Pursuant to Federal Rule of Civil Procedure 23, the Court finally certifies, for settlement purposes only, the Settlement Class1 defined as follows:
All individuals who, on or after July 30, 2011, have been participants in and beneficiaries of an ERISA-governed employee welfare benefit plan administered and/or insured by HCSC that provided coverage for both medical/surgical conditions and mental health conditions and who had made on their behalf or on behalf of their beneficiary pre-service and/or post-service claims for benefits for treatment of mental illness in a residential treatment center, and for which HCSC issued an adverse benefit determination denying the claims in whole or in part based on plan exclusions of coverage, for residential treatment of mental illness as identified in the Request Data; provided, however, that the following are excluded from the Settlement Class: (i) HCSC, any entity in which HCSC has a controlling interest, and HCSC's officers, directors, attorneys, successors, subsidiaries, and assigns; (ii) any judge, justice, or judicial officer presiding over this matter and the members of their immediate families and judicial staff; and (iii) and any other person who has previously released claims against HCSC that would otherwise be released pursuant to this Settlement Agreement.
THE REQUEST FOR ATTORNEYS' FEES IS REASONABLE
11. The Court has appointed Zuckerman Spaeder LLP, Psych-Appeal, Inc., and Miner, Barnhill & Galland, P.C. as Class Counsel. Dkt. 153 at 9.
12. The Court has reviewed the application for an award of fees and expenses submitted by Class Counsel and the exhibits, memoranda of law, and other materials submitted regarding that application (Dkt. 158). On the basis of its review of the foregoing, the Court hereby awards $1.575 million in attorneys' fees, to be distributed to Class Counsel by the Settlement Administrator from the Settlement Fund as set forth in the Settlement Agreement (Dkt. 148-01 at ¶ 17).
THE REQUEST FOR SERVICE AWARDS IS REASONABLE
13. The Court has appointed Elizabeth Craft and Bryan Pautsch to serve as Settlement Class Representatives of the Settlement Class. Dkt. 153 at ¶ 8.
14. The Court has reviewed the application for service awards to the Settlement Class Representatives submitted by Class Counsel and the exhibits, memoranda of law, and other materials submitted regarding that application (Dkt. 158). On the basis of its review of the foregoing, the Court hereby approves of service awards in the amount of $15,000 to Elizabeth Craft and $15,000 to Bryan Pautsch to be paid by the Settlement Administrator from the Settlement Fund as set forth in the Settlement Agreement (Dkt. 148-01 at ¶ 16).
NO ADMISSION OF LIABILITY
15. This Order shall not be offered or received against HCSC, or any other Released Parties, as evidence of or construed as or deemed to be evidence of any presumption, concession or admission by any person or entity with respect to the truth of any fact alleged by Plaintiffs or the validity of any claim that has been or could have been asserted in the Action or in any litigation, or the deficiency of any defense that has been or could have been asserted in the Action or any litigation, or of any liability, negligence, fault, breach of duty or wrongdoing of any Released Party.
16. This Order shall not be used for any purpose in this or any other matter or proceeding other than as may be necessary to enforce the terms of the Settlement Agreement or this Final Approval Order and Judgment.
DISMISSAL AND RELEASE
17. The Action is dismissed with prejudice, with each Party to bear its own costs and attorneys' fees except as provided by the terms of the Settlement Agreement and this Order.
18. Every Settlement Class Member who did not timely and validly opt-out and exclude himself or herself from the Settlement Class fully, finally, and forever releases any and all Released Claims in accordance with the terms of the Settlement Agreement.
19. The terms of the Settlement Agreement, including all exhibits thereto and to this Final Approval Order and Judgment, shall be forever binding on the Settlement Class.
TERMINATION
20. In the event that the Settlement Agreement is terminated pursuant to the terms of the Settlement Agreement, (a) the Settlement Agreement and this Order shall become void, shall have no further force or effect, and shall not be used in any Action or any other proceedings for any purpose other than as may be necessary to enforce the terms of the Settlement Agreement that survive termination; (b) this matter will revert to the status that existed before execution of the Settlement Agreement; and (c) no term or draft of the Settlement Agreement or any part of the Parties' settlement discussions, negotiations or documentation (including any briefs filed in support of preliminary or final approval of the Settlement) shall (i) be admissible into evidence for any purpose in any Action or other proceeding other than as may be necessary to enforce the terms of the Settlement Agreement that survive termination, (ii) be deemed an admission or concession by any Party regarding the validity of any Released Claim or the propriety of certifying any class against HCSC, or (iii) be deemed an admission or concession by any Party regarding the truth or falsity of any facts alleged in the Action or the availability or lack of availability of any defense to the Released Claims.
JURISDICTION
21. Without affecting the finality of this Final Approval Order and Judgment in any way, this Court will retain exclusive continuing jurisdiction over all Parties, the Settlement Administrator and Settlement Class Members with regard to implementation of the Settlement Agreement, disposition of the Settlement Fund, and enforcement and administration of this Order and the Settlement Agreement, including the release provisions thereof. The Court may order any appropriate legal or equitable remedy necessary to enforce the terms of this Final Approval Order and Judgment and/or the Settlement.
ENTRY OF FINAL JUDGMENT
22. The Court finds there is no just reason for delay and DIRECTS the Clerk to enter judgment pursuant to Federal Rule of Civil Procedure 54 immediately.
SO ORDERED.
Dated: _________________, 2018
___________________________________
Honorable Virginia M. Kendall
United States District Judge
for the Northern District of Illinois
