Peck v. Air Evac EMS, Inc.
| Decision Date | 21 January 2020 |
| Docket Number | Civil Action No. 5: 18-615-DCR |
| Parties | JASON PECK, et al., Plaintiffs, v. AIR EVAC EMS, INC., d/b/a AIR EVAC LIFETEAM, Defendant. |
| Court | U.S. District Court — Eastern District of Kentucky |
Plaintiff Jason Peck has filed an unopposed motion for approval of the settlement agreement and to certify the class. [Record No. 28] The Court has reviewed the motion, the settlement agreement, conducted a final fairness hearing, and considered all of the objections to the proposed settlement. For the reasons set forth below, the Court concludes that the notice provided to potential class members was reasonable, the objections lacked merit, and the settlement is fair, reasonable, and adequate. Additionally, the requested attorney's fees are reasonable. Finally, the schedule for disbursement of the settlement is reasonable.
Peck is a former flight nurse employed by Defendant Air Evac EMS, Inc. ("Air Evac"). He filed a class action on behalf of former flight nurses, flight paramedics, and pilots employed by Air Evac for overtime compensation dating from October 25, 2013, to July 17, 2019. Before March 2014, Air Evac required that an individual work one hundred twenty hours per pay period before receiving overtime pay. Air Evac modified the policy in March 2015 to lower the threshold to eighty-four hours per pay period before being eligible for overtime compensation. Air Evac then changed its policy in July 2018 to pay all flight nurses, paramedics, and pilots overtime for all hours worked in excess of forty hours per week. Peck filed this lawsuit alleging that the previous overtime policy violates the Kentucky Wage and Hour Act ("KWHA").
The parties previously agreed to a gross settlement fund of $3,000,000.00, including up to $800,000.000 in attorney's fees and costs and a $15,000.00 incentive for Peck. The parties later filed a motion to amend the settlement seeking $750,000.00 in attorney's fees and a gross settlement fund of $2,950,000.00. [Record No. 33] The Court granted the motion to amend the settlement to reduce the amount of attorney's fees. The proposed class includes 428 "current and former flight nurses, flight paramedics, and pilots employed by [Air Evac] in the Commonwealth of Kentucky at any time from October 25, 2013 through July 17, 2019." [Record No. 28-2, p. 7] The parties explained that individual settlement payments were calculated by reviewing Air Evac's payroll and timecard records to establish the amount of unpaid overtime for each class member assuming that the claims were true.
The Court preliminarily approved the proposed settlement; conditionally certified the class; appointed class counsel, a class representative, and a settlement administrator; approved the schedule outlined in the settlement agreement; and approved the notice packet and opt-out form. [Record No. 24] Peck then submitted an unopposed motion for final class certification and approval of the class action settlement. [Record No. 28] A final fairness hearing was originally scheduled for October 2019.
After preliminary approval, Rust Consulting, the administrator of the settlement fund, obtained an address, website, and toll-free telephone number to receive questions, opt-out statements, objections, and provide information on the settlement. Air Evac provided Rustwith a list of the last known addresses, social security numbers, and award amounts for all the potential class members. Notice packets were mailed to 427 class members through first class mail and the class members were advised they had a month to file an opt-out statement, dispute, or objection. Rust traced addresses for 18 notice packets that had been returned as undeliverable. Five notice packets remain undeliverable. Additionally, five class members disputed their individual settlement payment; counsel reviewed the disputes and discussed them with Rust Consulting. [Record No. 28-1, p. 11] Further, one individual, Caleb Michael Ensley, submitted an opt-out statement. [Record No. 28-1, p. 11]
Two individuals submitted letters to the Court to object to the settlement offer. First, Caroline Caine submitted an objection stating that she was "cheated" out of money owed and a strong message should be sent by penalizing the defendant more harshly. [Record No. 25] She sought interest, as well as civil and statutory penalties. Caine originally planned to appear at the final fairness hearing but did not attend. [Id.] Next, Robert Steven Haney filed an objection to the settlement offer, explaining that the paperwork sent to him regarding the lawsuit does not include 32 hours of overtime he worked every other week. [Record No. 26] He noted that his settlement is only for $1,837.63 for 62 hours of overtime, but he worked 64 hours of overtime every month. [Id.] He attached all of his paystubs to his objection, his offer letter, and requests to AirEvac for his pay stubs and clock in/clock out sheets. [Record Nos. 26-1, 26-2, 26-3] Haney attended the final fairness hearing and discussed his individual settlement payment with the Court and counsel for the parties.
In the motion for final approval and the motion to amend the settlement, the plaintiff requests final approval of the settlement agreement, approval of attorney's fees of $750,000.00, and to accept the remaining schedule for the settlement process. The partiesrequest that the deadline for the defendant to provide the gross settlement fund to the administrator be within seven days of the effective date of the settlement and that the administrator disburse the gross settlement fund within seven days of receiving the fund. [Record No. 28-1, p. 12]
In October 2019, the Court directed the plaintiff to notify the Court regarding whether it had provided the proper notice under 28 U.S.C. § 1715(b) to the appropriate government officials. The parties then notified the Court that notice had not originally been filed but was mailed on October 10, 2019. Accordingly, the final fairness hearing originally scheduled for October 16, 2019, was continued until January 17, 2020.
At the final fairness hearing, held on January 17, 2020, the Court discussed the settlement with counsel and invited anyone present to comment on the settlement if they wished. The parties discussed the terms of the settlement agreement, the objections, and the reasonableness of attorney's fees. Additionally, Class Member Robert Haney appeared and discussed his objection to the individual settlement agreement. The parties also addressed a procedure for resolving Haney claim. No other individuals attended the hearing.
Rule 23(e)(2) of the Federal Rules of Civil Procedure requires that notice is directed in a reasonable manner to all class members that would be bound by the settlement. Additionally, notice must comport with due process by being "reasonably calculated to reach interested parties." Karkoukli's, Inc. v. Dohany, 409 F.3d 279, 283 (6th Cir. 2005). Further, Rule 23(c) necessitates that notice is provided to the class regarding "the nature of the action; the definition of the class certified; the class claims, issues, or defenses; information on how aclass member can enter an appearance with their lawyer; information on how class members can opt into or out of the settlement; and the binding effect of the settlement agreement."
Rust Consulting mailed the notice of settlement through first class mail after receiving a mailing list from the defendant. It also established a mailing address, toll-free telephone number, and website that included information about the settlement and a way to reach out with questions. Rust utilized the National Change of Address Database before mailing notice packets to 427 class members and explained the potential class members' options. Rust then performed address traces on the notice packets returned as undeliverable. Five notice packets remain undeliverable.
The steps taken to provide notice to potential class members were reasonable, the notice packet could be understood by the average prospective class member, and it adequately explained the terms of the settlement and proposed class members' options about opting out or joining the class. See Thacker v. Chesapeake Appalachia, L.L.C., 695 F. Supp. 2d 521, 526 (E.D. Ky. 2010) (). Accordingly, the Court finds that the notice provided was reasonable under the circumstances presented.
The Class Action Fairness Act requires that notice be served on the appropriate federal and state officials within "10 days after a proposed settlement of a class action is filed in court[.]" 28 U.S.C. § 1715(b). Further, "[a]n order giving final approval of a proposed settlement may not be issued earlier than 90 days after the later of the dates on which the appropriate Federal official and the appropriate State official are served with the notice required under subsection (b)." 28 U.S.C. § 1715(d). Notice was filed after the Court issuedan Order requesting information about whether appropriate notice had been given. [Record No. 31] Notice was sent to the appropriate officials on October 10, 2019. [Id.] The appropriate officials did not respond to the notice or attend the final fairness hearing. The Court concludes that the defendant complied with the Class Action Fairness Act notice requirements.
When the motion was originally filed, five individuals disputed their individual settlement payment, one individual submitted an opt-out statement, and two objections were filed with the Court. "Once preliminary approval has been granted, a class action settlement is presumptively reasonable, and an objecting class member must overcome a heavy burden to prove that the settlement is unreasonable." Levell v. Monsanto Research Corp., ...
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