C.C. v. Baylor Scott & White Health
| Decision Date | 26 September 2022 |
| Docket Number | CIVIL 4:18-CV-828-SDJ |
| Parties | C.C. & L.C., individually and as next friends to L.L.C., ET AL. v. BAYLOR SCOTT & WHITE HEALTH, ET AL. |
| Court | U.S. District Court — Eastern District of Texas |
Before the Court is Plaintiffs' Unopposed Motion for Final Approval of Settlement Agreement, Award of Attorney Fees and Litigation Costs, and Incentive Awards. (Dkt. #102). Also before the Court is Plaintiffs' Unopposed Motion for Approval of Attorney Fees, Litigation Costs and Case Contribution Awards. (Dkt. #97). The Court, having considered the motions, the record, and the applicable law GRANTS both motions.
On January 6, 2022, the Court preliminarily approved a proposed settlement agreement between Plaintiffs C.C. and L.C individually and as next friend to L.L.C.; D.C. and H.C., individually and as next friend to O.C.; C.S. (“Ca.S.”), individually and as next friend to J.A., Jr.; and S.M. and C.S. (“Ch.S.”), individually and as next friend to E.M., each on their own behalf and on behalf of the settlement class, and Defendants Baylor Scott & White Health; Baylor Scott & White Health and Welfare Benefits Plan (the “Plan”); Scott & White Health Plan; and Baylor Scott & White Holdings. (Dkt. #94). The settlement agreement provides prospective coverage of medically necessary Applied Behavior Analysis (“ABA”) services and speech, occupational, and physical therapies to treat Autism (“NDT”) and establishes a claims process for reimbursement of previously uncovered ABA and NDT services.
The settlement agreement establishes a Qualified Settlement Fund that is funded by Defendants and replenished when requested by the claims processor. Under the terms of the settlement agreement, this fund will be used to pay retrospective claims for unreimbursed ABA and NDT services during the class period, attorney's fees and litigation costs, case contribution awards, costs of claims administration, and taxes. After these payments are made, any residual funds will be returned to Defendants. The settlement agreement provides that an independent claims administrator will process claims; it also establishes an appeal process in the event of a dispute over whether a claim should be paid.
The Court directed Defendants to transmit the names and addresses of the class notice recipients located after a reasonable search to the claims processor within sixty days of the order preliminarily approving the settlement. (Dkt. #94 ¶ 4). In that order, the Court also directed the claims processor to mail the class notice and claim form materials, (Dkt. #87-3), to the class notice recipients within fourteen days of receiving the names and addresses of class notice recipients from Defendants. (Dkt. #94 ¶ 5). By February 3, 2022, the claims processor emailed and mailed all class notices and claim form materials in accordance with the class notice procedures. (Dkt. #102-2 ¶ 5). Within thirty days of the order preliminarily approving the settlement agreement, class counsel established a settlement web page that contained the class notice, the claim form materials, and key filings in the litigation, including Plaintiffs' Unopposed Motion for Approval of Attorney Fees, Litigation Costs and Case Contribution Awards. (Dkt. #102-5 ¶ 2); see also http://www.syshlaw.com/bswhsettlement.
Pursuant to the Court's order, (Dkt. #94), class members who wished to comment on or object to the proposed settlement agreement were required to do so by June 23, 2022. Class members were informed of their rights and of this deadline in the notices that were mailed to them and via links on class counsel's website. Defendants also mailed the required Class Action Fairness Act (“CAFA”) notice on June 24, 2022. (Dkt. #101); accord 28 U.S.C. § 1715(b).
The Court held a fairness hearing on July 14, 2022, to determine whether the proposed settlement agreement is fair, reasonable, adequate. (Dkt. #104). No class members submitted comments or objected to the settlement agreement. Nor did anyone object to the requested attorney's fees, litigation costs, or case contribution awards. (Dkt. #102-2 ¶ 12). And no objections were received from any governmental entity notified pursuant to the CAFA notice. (Dkt. #105) (Defendants' Notice Regarding Lack of Objection from Attorneys General), see 28 U.S.C. § 1715(d)).
Plaintiffs now move for final approval of the settlement agreement and for approval of the agreed upon attorney's fees, litigation costs, and incentive awards.
Class settlements must comply with Federal Rule of Civil Procedure 23(e). Under Rule 23(e), a class action “may be settled, voluntarily dismissed, or compromised only with the court's approval.” FED. R. CIV. P. 23(e). Rule 23(e) requires notice to the proposed class members before the court can finally approve a class settlement. To send notice, the parties must show “that the court will likely be able to . . . approve the proposal under Rule 23(e)(2)” and “certify the class for purposes of judgment on the proposal.” FED. R. CIV. P. 23(e)(1)(B).
Before 2018, the Fifth Circuit required district courts considering whether a class settlement was fair, reasonable, and adequate under Rule 23(e)(2) to apply the six Reed factors: (1) the existence of fraud or collusion; (2) the complexity, expense, and likely duration of the litigation; (3) the stage of the proceedings; (4) the plaintiffs' probability of success; (5) the range of possible recovery; and (6) the opinions of class counsel, class representatives, and absent class members. Reed v. General Motors Corp., 703 F.2d 170, 172 (5th Cir. 1983). But in 2018, Rule 23(e)(2) was amended to provide uniform guidance to courts evaluating class settlements. Amended Rule 23(e)(2) provides that a “court may approve [a settlement] only after a hearing and only on finding that it is fair, reasonable, and adequate after considering” whether:
The Advisory Committee notes to the 2018 amendments indicate that the changes to the rule are meant to “focus the court and the lawyers on the core concerns of procedure and substance that should guide the decision whether to approve the proposal” rather than “displace any factor” sanctioned by the circuit courts. FED. R. CIV. P. 23(e)(2) Advisory Committee's Note to 2018 Amendments. Because the Rule 23 and Reed factors overlap, “courts in this circuit often combine them in analyzing class settlements.” ODonnell v. Harris County, No. 16-CV-1414, 2019 WL 6219933, at *9 (S.D. Tex. Nov. 21, 2019); see also, e.g., In re Chinese-Manufactured Drywall Prods. Liab. Litig., 424 F.Supp.3d 456, 485 (E.D. La. 2020) ().
The factors enumerated in Rule 23(e) and those identified by the Fifth Circuit for determining the fairness, reasonableness, and adequacy of a proposed class action settlement support finally approving the settlement here.
The record shows that the class representatives and class counsel have ably and diligently represented the class, in a case filled with legal and factual complexities. Counsel was competent and zealously litigated on behalf of the class. And, based on the evidence presented, the named plaintiffs do not have conflicts of interest with the putative class members.
The Court may “presume that no fraud or collusion occurred between opposing counsel in the absence of any evidence to the contrary.” Welsh v. Navy Fed. Credit Union, No. 16-CV-1062, 2018 WL 7283639, at *12 (W.D. Tex. Aug. 20, 2018). Here, the class settlement was the product of hard-fought negotiations conducted at arm's length. (Dkt. #84-14 ¶ 12). The parties participated in two unsuccessful mediation sessions, after which they continued to negotiate and exchanged multiple drafts of the agreement before reaching an appropriate settlement. (Dkt. #84-14 ¶¶ 12, 14); see In re Oil Spill by Oil Rig Deepwater Horizon in Gulf of Mexico, on Apr. 20, 2010, 910 F.Supp.2d 891, 931 (E.D. La. 2012) (). The record demonstrates the zealous advocacy that all sides deployed, and there is no indication that the settlement is the product of fraud or collusion.
As the Fifth Circuit has explained, settling “avoids the risks and burdens of potentially protracted litigation.” Ayers v. Thompson, 358 F.3d 356, 369 (5th Cir. 2004). So when “the prospect of ongoing litigation threatens to impose high costs of time and money on the parties, the reasonableness of approving a mutually-agreeable settlement is strengthened.” In re Heartland Payment Sys., Inc. Customer Data Sec. Breach Litig., 851 F.Supp.2d 1040, 1064 (S.D. Tex. 2012) (quoting Klein v. O'Neal, Inc., 705 F.Supp.2d 632, 651 (N.D. Tex. 2010)).
Although the class here contends that it had a...
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