Dakota Med., Inc. v. Rehabcare Grp., Inc.
| Decision Date | 20 September 2017 |
| Docket Number | No. 1:14-cv-02081-DAD-BAM,1:14-cv-02081-DAD-BAM |
| Court | U.S. District Court — Eastern District of California |
| Parties | DAKOTA MEDICAL, INC., a California corporation doing business as Glenoaks Convalescent Hospital, Plaintiff, v. REHABCARE GROUP, INC., a Delaware corporation, and CANNON & ASSOCIATES, LLC, a Delaware limited liability corporation doing business as Polaris Group, Defendants. |
ORDER GRANTING FINAL APPROVAL OF CLASS ACTION SETTLEMENT, AWARDING ATTORNEYS' FEES AND INCENTIVE PAYMENTS, AND DIRECTING DISTRIBUTION OF SETTLEMENT
This matter is before the court on three motions filed by plaintiff on August 1, 2017: a motion for final approval of settlement and certification of the settlement class (Doc. No. 179); a motion for attorneys' fees and expenses (Doc. No. 180); and a motion for an incentive payment to be made to class representative Dakota Medical (Doc. No. 181). The motions were heard collectively on September 7, 2017, with attorneys C. Darryl Cordero and Donald Fischbach appearing on behalf of Dakota Medical, Inc. and the class, and attorneys Oliver Wanger, Jon Wilson, and David Jordan appearing on behalf of defendants. Following the hearing, plaintiff submitted supplemental briefing and a final report of the settlement administrator on
///// September 11, 2017. (Doc. Nos. 187, 188.) Each of the motions will be granted for the reasons discussed below.
The court granted preliminary certification of a class action settlement in this matter on April 19, 2017. (Doc. No. 177.) As the pertinent factual background is set forth in that order, it will not be repeated here. Following the granting of preliminary approval, the class administrator sent class settlement notices to almost 13,000 class members starting on May 10, 2017. (Doc. No. 179-13 at ¶ 3.) Of those, 10,898 were successfully transmitted, and through subsequent research and location of mailing addresses, notices were delivered to 12,489 of the 12,867 class members. (Id. at ¶¶ 3-6.) Therefore, over 97 percent of the class received notification of the settlement. No class members have objected, and only one has opted out of the settlement. (Id. at ¶¶ 9-10.) The settlement administrator declares that, as of the final report, there were 12,302 class members eligible to receive a distribution, to be credited with a total of 2,328,003 shares under the settlement. (Doc. No. 187 at ¶ 3.)
The court has already evaluated the standards for class certification in its prior order granting preliminary approval of the class action settlement here. (Doc. No. 177 at 13-18.) Nothing has been raised subsequently to the court that might affect its prior analysis of whether class certification is appropriate here, and the court has no cause to revisit that analysis. The court finds final certification of the following class is appropriate:
All persons that were subscribers of facsimile telephone numbers to which there was a successful transmission of one or more facsimiles by defendants (or either of them) between July 17, 2010 and February 4, 2014, in broadcasts by WestFax Inc. Excluded from the class are officers, directors, and employees, accountants, and/or agents of defendants; any affiliated company; legal representatives, attorneys, heirs, successors, or assigns of defendants, defendants' officers and directors, or of any affiliated company; any entity in which any foregoing persons have or have had a controlling interest; any members of the immediate families of the foregoing persons; any federal, state and/or local governments, governmental agencies (including the Federal Communications Commission), government entities, government body and any attorneys of record in this action; and any person orentity that has released defendants from all claims based on the transmission of faxes during the entire class period.
C. Darryl Cordero of Payne & Fears LLP is confirmed as lead settlement class counsel, and Donald R. Fischbach of Dowling Aaron and Joel S. Magolnick of Marko & Magolnick P.A. are further confirmed as settlement class counsel. Dakota Medical, Inc. is the representative for this settlement class, and KCC LLC is the settlement administrator in this matter.
Class actions require the approval of the district court prior to settlement. Fed. R. Civ. P. 23(e) (). This requires that: (1) notice be sent to all class members; (2) the court hold a hearing and make a finding that the settlement is fair, reasonable, and adequate; (3) the parties seeking approval file a statement identifying the settlement agreement; and (4) class members be given an opportunity to object. Fed. R. Civ. P. 23(e)(1)-(5). The settlement agreement was previously filed on the court docket (Doc. No. 171) and class members have been given an opportunity to object. The court now turns to the adequacy of notice and its review of the settlement following the final fairness hearing.
"Adequate notice is critical to court approval of a class settlement under Rule 23(e)." Hanlon v. Chrysler Corp., 150 F.3d 1011, 1025 (9th Cir. 1998). "Notice is satisfactory if it 'generally describes the terms of the settlement in sufficient detail to alert those with adverse viewpoints to investigate and to come forward and be heard.'" Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004) (quoting Mendoza v. Tucson Sch. Dist. No. 1, 623 F.2d 1338, 1352 (9th Cir. 1980)). Any notice of the settlement sent to the class should alert class members of "the opportunity to opt-out and individually pursue any state law remedies that might provide a better opportunity for recovery." Hanlon, 150 F.3d at 1025. It is important for class notice to include information concerning the attorneys' fees to be awarded from the settlement, because it serves as "adequate notice of class counsel's interest in the settlement." Staton v. Boeing Co., 327 F.3d 938, 963 n.15 (9th Cir. 2003) (quoting Torrisi v. Tucson Elec. Power Co., 8F.3d 1370, 1375 (9th Cir. 1993)) ( that where notice references attorneys' fees only indirectly, "the courts must be all the more vigilant in protecting the interests of class members with regard to the fee award").
The court previously reviewed the notice of class certification at the preliminary approval stage, and found it satisfactory. (Doc. No. 177 at 18-19.) Notice has been sent to the class, first by facsimile transmission at the numbers forming the basis for the class, and then at mailing addresses for those class members where facsimile transmission failed. (Doc. No. 179-13 at ¶¶ 3-4.) Of the 12,867 potential class members, 10,898 faxed class notices were successfully transmitted. (Id. at ¶ 3.) The settlement administrator obtained address information for 1,855 class members out of the 1,969 not contacted by fax, and mailed notice through the U.S. Postal Service. (Id. at ¶ 4.) Of the mailed notices, only 276 were returned as undeliverable, and further address reviews allowed an additional twelve of these class members to receive notice of the settlement. (Id. at ¶ 5.) Therefore, 12,489 of the 12,867 total class members—or approximately 97 percent—received the class notice the court previously found sufficient.
Of the class members receiving notice, none have objected to the settlement to date. (Doc. No. 184-1 at ¶ 4.) One class member—Robinson Health Care of North Little Rock, Arkansas, representing 286 shares of the ultimate settlement fund—has opted out of the class. (Doc. No. 179-13 at ¶ 9.) No objections were heard at the final fairness hearing held before the court.
The settlement administrator advised the court that it lacks sufficient information to provide settlement proceeds to 564 class members, representing 19,312 shares of the settlement, because information is missing concerning their names and addresses. (Doc. No. 187 at ¶ 4.) Thus, the eligible settlement class consists of 12,303 class members, reflecting the initial class size of 12,867, minus 564 class members for whom there is insufficient identifying information and one class member who opted out. (Id.)
Given the above, the court concludes adequate notice was provided to the vast majority of the class here. Silber v. Mabon, 18 F.3d 1449, 1453-54 (9th Cir. 1994) (); Winans v.Emeritus Corp., No. 13-cv-03962-HSG, 2016 WL 107574, at *3 (N.D. Cal. Jan. 11, 2016) (). The court accepts the reports of the settlement administrator, and finds sufficient notice has been provided so as to satisfy Federal Rule of Civil Procedure 23(e)(1).
On September 7, 2017, the court held a final fairness hearing, at which class counsel and defense counsel appeared. No class members, objectors, or counsel representing the same appeared at the hearing. The court now determines that the settlement is fair, adequate, and reasonable. See Fed. R. Civ. P. 23(e)(2).
In assessing whether a district court's determination of the fairness of a class action settlement was within its discretion, the Ninth Circuit Court of Appeals balances the following factors:
(1) the strength of the plaintiffs' case; (2) the risk, expense, complexity, and likely duration of further litigation; (3) the risk of maintaining class action status throughout the trial; (4) the amount offered in settlement; (5) the extent of discovery completed and the stage of the proceedings; (6) the experience and views of counsel; (7) the presence of a governmental participant; and (8) the reaction of the class members to the proposed settlement.
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