The opinion of the court was delivered by: Honorable Christina A. Snyder United States District Court Judge
[Related to: Vind v. The Prudential Insurance Co., et al., CV073564 CAS (FMOx)] and Salgado v. Reliastar Life Ins. Co., CV 08-05624 CAS (FMOx)]
AMENDED FINAL APPROVAL ORDER AND JUDGMENT
Date: July 27, 2009 Time: 10:00 a.m. Dept.: Courtroom 5
Following a hearing on May 11, 2009, this Court entered its Order of Preliminary Approval of Class Action Settlement and Related Orders (Doc. No. 138), ("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. 134-2), 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, Dallas Alloway, on behalf of himself, the certified class in this action, 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, Dallas Alloway, on behalf of himself, the certified class in this action, 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. 132-136); (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 action was extensively and vigorously litigated prior to settlement, up to the eve of trial. All pretrial proceedings were completed prior to settlement. 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 operative Second Amended Complaint in the action, and the entire class previously certified by this Court (Doc. No. 91, and see below), for the period from the outset of the class period (four years prior to the filing of the action -- July 28, 2002) through the date of ReliaStar's suspension of the subject permanent disability offsets (August 23, 2008). Only two potential putative class members (identified in Appendix B to the Agreement), for whom class membership could not be confirmed despite the good faith efforts of the Parties, have been excluded from the Settlement Class.
C. Before reaching the Settlement, the Parties fully and vigorously litigated their claims and defenses, 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. Settlement was reached at mediation only four days before the December 9, 2008 trial date. 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 action, the Parties were fully informed of the legal bases for the claims and defenses herein, 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 settling parties also conducted extensive discovery. In addition to the production and analysis of the class representative's personal files, ReliaStar's claims file for the class representative, and the files of the class representative's employer, ReliaStar produced extensive documentation including all of the plan documents for the Settlement Class members and the pertinent claims data regarding workers' compensation offsets applied against the Settlement Class members. In total, the documentary record exceeded 4,000 pages. The Settlement Class claims data was updated throughout the litigation so that the Parties' negotiation of settlement was based on the most up to date offset information available. In addition, Rule 30(b)(6) deposition testimony regarding ReliaStar's claims handling practices and guidelines was completed prior to negotiation of the settlement. Post-settlement, claims data was again updated to ensure to the greatest extent possible the accuracy of settlement payments under the settlement should it become final. ReliaStar provided a detailed declaration authenticating and verifying the accuracy of the claims data, and the process for ascertaining the members of the class and the pertinent claims and offset data. Based upon this extensive discovery, 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 proposed 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. Plaintiff and Class Counsel have obtained, through settlement, not only "future" claims process reformation relief, but also monetary relief on behalf of every Settlement Class member, which under ERISA and the Court's rulings in a related action, (Knapp v. UNUM Life Insurance Company of America, Case No. 2:07-CV-03565 CAS (FMOx)), would have required individual class members to engage in further administrative proceedings (and potentially further litigation). Further, 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 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 92 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 exclusion, no objections, and no requests for appearance have been received by the Court, Settlement Administrator, or the Settling Parties.
4. Certification of the Settlement Class: For purposes of the Settlement, the Court hereby certifies the Settlement Class, as defined in the Settlement and set forth herein, pursuant to Rule 23(b)(3), and appoints Plaintiff, Dallas Alloway, as class representative and the law firms of Gianelli & Morris and Ernst and Mattison as class counsel for the Settlement Class.
In its order dated July 14, 2008 (Doc No. 91) and as further defined in the Court's order approving the form of notice to the class of certification (Doc. Nos. 95, 97), the Court certified a class, pursuant to Rule 23(b)(2), defined as:
"All California residents who have been or are participants under ERISA plans funded by group disability income policies issued by ReliaStar to plans established by California employers who have had their benefits under those plans reduced by amounts received for ...