The opinion of the court was delivered by: Honorable Christina A. Snyder United States District Court Judge
AMENDED FINAL APPROVAL ORDER AND JUDGMENT
Hearing Date: July 27, 2009
Following a hearing on May 11, 2009, this Court entered its Order of Preliminary Approval of Class Action Settlement and Related Orders (Doc. No. 26), ("Preliminary Approval Order"), preliminarily approving the Settlement and Release Agreement entered into by and on behalf of the parties in the above-captioned action (Doc. No. 22-3), and scheduling a hearing to determine whether the settlement was fair, reasonable, adequate, in the best interests of the class, and free from collusion, and to consider a petition by Class Counsel for an award of attorneys' fees and litigation expenses and for an incentive award to be paid to the class representative. Thereafter, the parties reached a further settlement with respect to the claims in the action for an award of attorneys' fees and litigation expenses, as set forth in the Settlement Agreement Re: Attorneys' Fees and Litigation Expenses.
The Court has considered: (i) the proposed settlement, as set forth in the Settlement and Release Agreement and Settlement Agreement Re: Attorneys' Fees and Litigation Expenses, (hereafter collectively, "Settlement"); (ii) the Motion for Final Approval of Class Action Settlement and Related Orders and supporting papers filed by Plaintiff, Judy A. Salgado, on behalf of herself and the proposed Settlement Class; (iii) the Motion for Award of Attorneys' Fees, Litigation Expenses, and Class Representative Incentive and supporting papers filed by Plaintiff, Judy A. Salgado, on behalf of herself and the proposed Settlement Class; (iv) the joinder by Defendant, ReliaStar Life Insurance Company, ("ReliaStar"), whereby ReliaStar joins in seeking final approval of the Settlement and entry of judgment; (v) the stated non-opposition by ReliaStar to the motion for an award of attorneys' fees, litigation expenses, and a class representative incentive; (vi) the entire record in this action, including but not limited to the points and authorities, declarations, and exhibits submitted in support of preliminary approval of the Settlement, (Doc. Nos. 20-24); (vii) the absence of any objections by the Settlement Class members to the Settlement; (viii) the absence of any requests for exclusion from the Settlement Class members; (ix) the absence of any notices of intention to appear, or requests for appearance, from the Settlement Class members; (x) the representations and arguments of Class Counsel and Counsel for Defendant at the Final Approval Hearing; (xi) this Court's experiences and observations while presiding over this matter; and (xii) the relevant law.
On these bases, and based upon the findings of fact and law below and implicit in this Order, and in the Court's prior Preliminary Approval Order (Doc. No. 138), and good cause appearing, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED, as follows:
1. Definitions: The capitalized terms used in this Final Approval Order and Judgment shall have the meanings and/or definitions given to them in the settlement, or if defined herein, the meanings and/or definitions given to them herein.
2. Jurisdiction: Plaintiff, ReliaStar, and all members of the settlement class who have not timely and properly requested exclusion from the class in accordance with the provisions of settlement, (hereafter, the "Settlement Class"), have submitted to the jurisdiction of the Court for purposes of the settlement. The Court has personal jurisdiction over Plaintiff, ReliaStar, and the Settlement Class. The Court has subject matter jurisdiction to release all claims and causes of action as set forth in the Settlement and to dismiss the above entitled action, ("Action"), with prejudice, in its entirety. The Court has subject matter jurisdiction to approve the Settlement.
3. Findings in Support of Final Settlement Approval: The Court finds that the Settlement was not the product of collusion or any other indicia of unfairness, is fair, reasonable, and adequate to the Settlement Class in light of the complexity, expense, and likely duration of the litigation, and the risks involved in establishing liability, damages, and in maintaining the Action as a class action through trial and appeal. The Court finds that the Settlement represents a fair and complete resolution of all claims asserted in a representative capacity on behalf of the Settlement Class and should fully and finally resolve all such claims. In support of these findings, the Court further specifically finds that:
A. There is no evidence of collusion. The Settlement resulted from extensive arms-length negotiation. The related Alloway action was extensively and vigorously litigated prior to settlement, up to the eve of trial. The Parties engaged in intensive arms-length negotiation prior to reaching the Settlement.
B. The Settlement provides for substantial cash payments and additional "future" relief to every single member of the Settlement Class, without requiring any Settlement Class member to affirmatively participate in a claims process. No portion of the substantial class relief would be consumed by attorneys' fees, litigation expenses, notice expenses, settlement administration expenses, or the class representative's incentive award, since such amounts are all separately provided for.
The Settlement Class encompasses the entire putative class as alleged in the complaint in the action, for the period from the outset of the class period (four years prior to the filing of the action -- August 27, 2004) through the date of ReliaStar's suspension of the subject permanent disability offsets (August 23, 2008). Only a single potential putative class member (identified in Appendix B to the Agreement), for whom class membership could not be confirmed despite the good faith efforts of the Parties, has been excluded from the Settlement Class.
The Settlement provides for the dismissal, without prejudice, of the alleged subclass claims related to improper social security offsets. Notwithstanding, the Settlement is approved as fair in this regard, in that dismissal of such subclass claims is without prejudice, such claims are explicitly not released under the Settlement, and the Settlement Notice provided clear notice to the Settlement Class in this regard and an opportunity to object or opt out. As such, any potential claims of those Settlement Class members who are also members of this putative subclass have been adequately protected.
C. Before reaching the Settlement in this action, the related action also pending in this Court, Alloway v. ReliaStar Life Insurance Company, Case No. CV 06-4719 CAS (FMOx), ("Alloway action"), was fully and vigorously litigated against ReliaStar by Class Counsel, on behalf of the plaintiff therein, Dallas Alloway. Both the Alloway action and this action assert claims on behalf of individuals insured by ReliaStar against long-term disability, whose long-term disability benefits were reduced by offsets for the amount of California workers' compensation permanent disability benefits they received for the same disability. The Alloway action asserted claims on behalf of a class of such individuals whose coverage was subject to ERISA. This action asserts claims on behalf of such individuals whose coverage was not subject to ERISA. Although there are differences arising from the ERISA/nonERISA legal framework, there were overlapping legal and factual issues in the Alloway action and this action.
The settlement in the Alloway action was reached only four days prior to trial. Prior to said settlement, the parties in that action had fully litigated all pretrial proceedings, including two rounds of Rule 12(b)(6) motions to dismiss, a summary judgment motion, the class certification motion, and a Rule 23(f) petition to the Ninth Circuit challenging class certification. Prior to settlement, all pretrial proceedings had been completed in the action, including pretrial disclosures and trial briefs. Based upon this full pretrial litigation of the Alloway action, the Parties in this action were fully informed of the legal bases for the claims and defenses, and capable of balancing the risks of trial and post-trial appellate proceedings and the benefits of the proposed settlement.
D. Before reaching the Settlement, the Parties also conducted extensive discovery, both in this action and the Alloway action. In addition to the review and analysis of Ms. Salgado's extensive records, ReliaStar produced claims and offset data for the entire putative class. Post-settlement, as a condition thereof, this data for the putative class was re-reviewed, updated, and verified, to ensure to the greatest extent possible the accuracy of settlement payments under the Settlement. ReliaStar authenticated and verified the accuracy of the claims data, and the process for ascertaining the members of the class and the pertinent claims and offset data.
In the related Alloway action, in addition to the production and analysis of records related to the class representative, ReliaStar produced extensive documentation including all of the plan documents for the class members therein and the pertinent claims data regarding workers' compensation offsets applied against the Settlement Class members. In total, that documentary record exceeded 4,000 pages. In addition, Rule 30(b)(6) deposition testimony regarding ReliaStar's claims handling practices and guidelines was completed prior to negotiation of the settlement.
Based upon this extensive discovery in this action and the Alloway action, the Parties were fully informed of the evidentiary bases for their respective claims and defenses herein, and capable of balancing the risks of continued litigation and the benefits of the Settlement.
E. The Settlement Class is and was at all times adequately represented by Plaintiff and Class Counsel. Class Counsel have fully and competently prosecuted all causes of action, claims, theories of liability, and remedies reasonably available to the Settlement Class members. Both Class Counsel and Defendant's Counsel are highly experienced trial lawyers with specialized knowledge in complex insurance class action litigation. Class Counsel and Defendants' Counsel are capable of properly assessing the risks, expenses, and duration of continued litigation, including at trial and on appeal. Class Counsel and Defendants' Counsel agree that the proposed settlement represents a fair and reasonable resolution to this matter in light of the various risks and costs to the respective parties of continued litigation.
F. As further addressed below, through the mailing of the Settlement Notice in the form and manner ordered by this Court, the Settlement Class has received the best practicable notice of the certification of the Settlement Class, the Settlement, and of their rights and options as Settlement Class members. Said notice fully satisfied all notice requirements under the law, including all due process rights under the U.S. Constitution, and;
G. The response of the Settlement Class to this Action, and to the Settlement, including Class Counsel's application for an award of attorneys' fees, litigation expenses, and the class representative's incentive award, after full, fair, and effective notice thereof, strongly favors final approval of the Settlement. In response to the 45 Settlement Notices mailed to the Settlement Class, as of July 6, 2009, (fourteen days after the deadline for requesting exclusion or objecting to the Settlement), no requests for ...