Parrish et al v. National Football League Players Incorporated

Filing 700

RESPONSE to re 699 Order -- Class Counsels' and Defendants' Response to July 12, 2010 Order by Herbert Anthony Adderley. (Attachments: # 1 Declaration of Lewis T. LeClair, # 2 Declaration of Jennifer M. Keough)(Katz, Ronald) (Filed on 7/19/2010)

Parrish et al v. National Football League Players Incorporated

Doc. 700

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MANATT, PHELPS & PHILLIPS, LLP RONALD S. KATZ (Bar No. CA 085713) E-mail: [e-mail] RYAN S. HILBERT (California Bar No. 210549) E-mail: [e-mail] NOEL S. COHEN (California Bar No. 219645) E-mail: [e-mail] 1001 Page Mill Road, Building 2 Palo Alto, CA 94304-1006 Telephone: [phone] Facsimile: [phone] McKOOL SMITH, P.C. LEWIS T. LECLAIR (Bar No. CA 077136) E-mail: lleclair@mckoolsmith 300 Crescent Court, Suite 1500 Dallas, TX 75201 Telephone: [phone] Facsimile: [phone] Attorneys for Plaintiffs [Counsel for Defendants Appear On Signature Page] UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION HERBERT ANTHONY ADDERLEY, on behalf of himself and all others similarly situated, Plaintiff vs. NATIONAL FOOTBALL LEAGUE PLAYERS ASSOCIATION, a Virginia corporation, and NATIONAL FOOTBALL LEAGUE PLAYERS INCORPORATED d/b/a PLAYERS INC, a Virginia corporation, Defendants. CIVIL ACTION NO. C07 0943 WHA CLASS COUNSELS' AND DEFENDANTS' RESPONSE TO JULY 12, 2010 ORDER

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Counsel for the GLA Class ("Class Counsel"), and defendants National Football League Players Association ("NFLPA") and National Football League Players Incorporated (collectively "Defendants") hereby jointly respond to the Court's July 12, 2010 Order Regarding Undeliverable Claim Forms and would show the Court as follows. I. INTRODUCTION Class Counsel's efforts to provide the Class with notice of the Settlement Agreement satisfy the requirements of due process and Rule 23 of the Federal Rules of Civil Procedure. With the help of its claims administrator--The Garden City Group (the "Claims Administrator")--Class Counsel has diligently attempted to notify each and every Class Member regarding the Settlement Agreement. Over the course of the last seven months, the Claims Administrator has conducted multiple mailings to the Class and has spent significant time and resources attempting to locate Class Members whose mailings were returned to the Claims Administrator as "undeliverable." In addition, the Claims Administrator created a website in which it posted all relevant notices and specifically set forth the deadlines by which Class Members needed to respond in order to receive their share of the Settlement Fund. As a result of these efforts, over 87% of the Class has already received its share of the first installment of the Settlement Fund. Furthermore, the Court's Order regarding distribution of settlement funds anticipated, as is usually the case with large classes, that all class members might not be contacted. The Order provided that the shares of those who failed to respond would be distributed to those who did respond. This Order assures that class members get the full benefit of the settlement. Despite the fact that the requirements of due process have been satisfied, Class Counsel has attempted to determine whether there are any other reasonable steps that could be taken in order to locate class members for whom there is no current address. After discussion with the Claims Administrator, Class Counsel believes that one additional step might be available, were the Court to prefer an additional attempt. Specifically, Class Counsel has contacted counsel for
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Defendants to request the social security numbers of those Class Members who have yet to receive their share of the Settlement Fund. Defendants have agreed to provide this information to the Claims Administrator. Class Counsel could provide the Claims Administrator each missing Class Member's social security number to run Lexis-based searches in an attempt to locate a more current address for each such Class Member. Given the efforts undertaken to

date, however, Class Counsel is not sure that delaying and potentially diminishing the recovery to other Class Members who have responded is in the overall best interest of the Class. II. FACTUAL BACKGROUND 1. On November 11, 2008, the Class Members received a jury verdict in the amount

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of $28.1 million. The verdict received a significant amount of media attention. See Declaration of Lewis T. LeClair ("LeClair Decl.") ¶ 1. 2. On June 5, 2009, the parties agreed, subject to court approval, to enter into a

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Settlement and Release Agreement with Defendants, and on November 23, 2009, the Court granted Class Counsel's Motion for Final Approval of the Settlement Agreement and Proposed Plan of Distribution. See Docket No. 670. 3. Shortly thereafter, on December 11, 2009, Class Counsel caused the Claims

Administrator to mail each Class Member for whom Class Counsel has a known address a Claim Form and Release ("Claim Form"). See Declaration of Jennifer M. Keough ("Keough Decl.") ¶ 3. The Claim Form stated that the recipient must return a completed Claim Form to the Claims Administrator on or before February 9, 2010, to share in the settlement amount. Id. 4. In addition to the mailing, the Claims Administrator published the Notice of Class

Action Settlement on a website that was created specifically for this case. See Keough Decl. ¶ 4. The website set forth the date by which each Class Member was required to return a completed

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Claim Form and the hotline number which Class Members could use to contact the Claims Administer. Id. 5. The Claims Administrator received 1,571 Claim Forms that were postmarked on

or before the February 9, 2010 deadline, and distributed funds to each of the Class Members who submitted a Claim Form by that deadline. Keough Decl. ¶ 5. Four hundred and eighty-eight Class Members did not submit a completed claim form by the deadline. Id. 6. Despite the fact that the deadline for submitting a completed Claim Form had

passed, Class Counsel authorized the Claims Administrator to send a second notice to each of those Class Members who did not timely submit a Claim Form and for whom Class Counsel had a known address. See Keough Decl. ¶ 6. This Claim Form extended the deadline to June 1, 2010. Id. The Claims Administrator updated its website to reflect the new deadline. Id. ¶ 6. 7. Prior to instructing the Claims Administrator to proceed with the second mailing,

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Class Counsel instructed the Claims Administrator to conduct "advanced address searches" in an attempt to identify the addresses of 261 Class Members whose Claim Forms were returned as "undeliverable" in connection with the initial mailing. See Keough Decl. ¶ 7. As part of the "advanced address searches", the Claims Administrator attempted to locate an updated address for the relevant Class Members by submitting the name, address, phone number and, if available, Social Security number to Choicepoint, a Lexis-based database that aggregates publicly available records, such as utilities and financial records. Id.. In addition to the "advanced address searches", the Claims Administrator also used available address information to look up class member phone numbers via reverse directory look-up on the internet and subsequently made attempts to contact these individuals by phone in order to get an updated address. Id. The Claims Administrator then conducted a calling campaign to locate updated address information for Class Members whose Claim Forms were returned as "undeliverable". Id.
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8.

The Claims Administrator mailed each Class Member for whom it had a known

address a second claim form in March 2010. Keough Decl. ¶ 8. According to the Claims Administrator, 203 of these Claim Forms were returned as "undeliverable" for a second time. Id. 9. On July 14, following the Court's most recent Order, Class Counsel met and

conferred with counsel for Defendants pursuant to the Court's July 12, 2010 Order. During the conversation, Class Counsel requested that Defendants provide Class Counsel with the social security number for each Class Member who has yet to receive his share of the Settlement Fund so that the Claims Administrator could run additional searches to locate each Class Member's current address. Defendants' counsel agreed to provide the Claims Administrator through Class Counsel with the information for such purpose. LeClair Decl. ¶ 2. III. ARGUMENT A. Class Counsel's Efforts to Distribute the Settlement Funds Satisfy the Requirements of Due Process.

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To ensure that class members receive notice of their rights in accordance with due process, the "best notice that is practicable under the circumstances" is required. FED. R. CIV. P. 23(c)(2)(B); Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 173 (1974). Best practicable notice requires individual notice "to all class members whose names and addresses may be ascertained through reasonable effort." Eisen, 417 U.S. at 173. "[D]ue process requires reasonable effort to inform affected class members through individual notice, not receipt of individual notice." Rannis v. Recchia, No. 09-55859, 2010 U.S. App. LEXIS 10858, at *8 (9th Cir. May 27, 2010) (emphasis added); see also Silber v. Mabon, 18 F.3d 1449, 1454 (9th Cir. 1994) (finding that "best practicable" notice is required, not "actually received" notice); Wright v. Linkus Enters., Inc., 259 F.R.D. 468, 475 (E.D. Cal. 2009) (noting that actual notice to all members of the class is not required). The Ninth Circuit has recognized that, in the majority of class actions, at least some unlocated class members will remain in the class. Six (6) Mexican Workers v. Arizona Citrus Growers, 904 F.2d 1301, 1306 (9th Cir. 1990); see also NEWBERG ON CLASS ACTIONS §
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10.14 ("In the majority of cases, not all affected class members can be individually identified or located."). In Sweet v. General Tire & Rubber Co., No. C75-181A, 1982 U.S. Dist. LEXIS 12371, at *18 (N.D. Ohio March 17, 1982), the settlement notice and proof of claim form was sent to the last known address of each class member. When returned notices were received, plaintiffs' counsel took additional steps to assure that the returned notices were forwarded to class members. Id. at *18-19. Notwithstanding these efforts, some class members still failed to receive notice. Id. at *19. The district court found that Rule 23(e) requires that notice be given in a form and manner that, while not guaranteeing receipt by every class member, does not systematically leave an identifiable group without notice. Id. Recognizing that "additional steps" had been taken to attempt to forward notices to class members whose notices had been returned, the district court found that the failure of the mailed notices to reach all class members did not mandate rejection of the settlement. Id. Several California district courts have reached similar decisions when a significant number of notices have been returned but "additional steps" have been taken to find the correct addresses of the class members. In Alberto v. GMRI, Inc., No. 07-1895 WBS DAD, 2008 U.S. Dist. LEXIS 91691, at *30-31 (E.D. Cal. Nov. 12, 2008), the district court entered final judgment approving a settlement of a class action in such a situation. Notice packets were initially sent to 18,286 class members, but 5,088 of the packets were returned as undeliverable. Id. The settlement administrator performed "skip traces" on the addresses on the returned packets utilizing an internet database and then mailed additional packets to those addresses. Id. Even though 1,231, or 7%, of the notice packets were ultimately undeliverable, the district court found that the notice given the class complied in all respects with due process. In Ybarrondo v. NCO Fin. Sys., Inc., No. 05-CV-2057-L(JMA), 2009 U.S. Dist. LEXIS 100502, at *10 (S.D. Cal. Oct. 28, 2009), 1,340 notices were sent out to the class. Of those, a total of 298 were returned as undeliverable. Id. at *11. A second round of notices were sent out after an address verification process was performed. Id. After the second mailing, 215 notices
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were returned as undeliverable. Id. A total of 104 completed claim forms were received. Id. Although 16% of the notices were returned as undeliverable, the district court found that the notice given was the best notice practicable under the circumstances, as it had provided individual notice to all members of the class who could be located through reasonable effort; and the court granted the motion for final approval. Id. In another case, Sandoval v. Tharaldson Employee Management, Inc., No. EDCV 08482-VAP (OPx), 2010 U.S. Dist. LEXIS 69799, *31 (C.D. Cal. June 15, 2010), a total of 190 of 988, or 19.23%, of the class notices were undeliverable even though a second notice was sent out after an address trace was performed. The settlement administrator received 244 claim forms. Id. Thus, 24% of the class members submitted claims. The district court found that the class members had received the best notice practicable under the circumstances. Id. at *32-33.

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Although 19% of the class notices were returned as undeliverable, the district court granted the motion for final approval of the class action settlement and determined that all class members, except those who had properly opted out, were bound by the dismissal with prejudice. Id. at *33. Because individual notices were sent to all class members' last known addresses in this case and because additional efforts were made to ascertain the correct present addresses and to mail a second notice to all class members whose notices were returned, due process has been met. Thus, the 202 class members whose claim forms were returned as undeliverable after two attempts to send notice may be bound by the settlement; their claims may be released under paragraph 32 of the Settlement and Release Agreement (Doc. No. 653-4); and the funds in the Net Settlement Fund allocated to their claims may be declared "unclaimed" and distributed pursuant to the terms of the Proposed Plan of Distribution (Doc. No. 653-2). See Sandoval, 2010 U.S. Dist. LEXIS 69799, at *33. B. Class Counsel Could Take One Additional Step to Find the Missing Class Members But It would Delay and Potentially Diminish the Recovery to the Class.

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While Class Counsel has satisfied the requirements of due process, Class Counsel has determined that it could take one additional step to contact those Class Members who have yet to
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submit a timely Claim Form. Specifically, Class Counsel could ask the Claims Administrator to conduct additional Lexis-based searches using social security information in order to identify the addresses of each Class Member whose Claim Form was returned as "undeliverable". Class Counsel has requested that Defendants provide Class Counsel with the social security number of each Class Member who has yet to submit a Claim Form, and Defendants have agreed to provide this information to the Claims Administrator if the Court directs Class Counsel to take additional steps to locate the Class Members whose Claim Forms were returned as "undeliverable". Because due process has been satisfied, Class Counsel is reluctant to take action that would result in further delay and potentially diminish the recovery amount to the Class Members who have responded, at a minimum because the Claims Administrator will incur additional fees and costs that will be paid from the remaining Settlement Fund. Should the Court deem the additional step appropriate, however, Class Counsel is in a position to proceed as directed. CONCLUSION For these reasons, Class Counsel respectfully requests that the Court find that the requirements of due process have been satisfied and that the settlement and the distribution of the Settlement Fund should be finalized as proposed. Alternatively, Class Counsel requests that the Court order Class Counsel to (i) perform additional searches for missing addresses using each Class Member's social security number that will be provided by the Defendants, and (ii) conduct a third mailing of the Claim Form using any additional address information that is obtained, before making the final distribution of the Settlement Fund.

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Respectfully submitted, Dated: July 19, 2010 MANATT, PHELPS & PHILLIPS, LLP By:_____/s/ Ronald S. Katz______________ Ronald S. Katz (SBN 085713) Ryan S. Hilbert (SBN 210549) Noel S. Cohen (SBN 219645) 1001 Page Mill Road, Building 2 Palo Alto, CA 94304-1006 Telephone: [phone] Facsimile: [phone] MCKOOL SMITH, P.C. Lewis T. LeClair (SBN 077136) Jill Adler Naylor (SBN 150783) 300 Crescent Court Dallas, TX 75201 Telephone: [phone] Facsimile: [phone] Attorneys for Plaintiffs LATHAM & WATKINS, LLP Dated: July 19, 2010 By: _/s/ Charles H. Samel______________ Charles H. Samel (SBN 182019) 355 South Grand Avenue Los Angeles, CA 90071-1560 Telephone: [phone] Facsimile: [phone] E-mail: [e-mail] LATHAM & WATKINS, LLP David A. Barrett 555 Eleventh Street, NW, Suite 1000 Washington, DC 20004-1304 Telephone: [phone] Facsimile: [phone] E-mail: [e-mail] Attorneys for Defendants National Football League Players Association and National Football League Players Incorporated Filer's Attestation: Pursuant to General Order No. 45, Section X(B) regarding signatures, Ronald S. Katz hereby attests that concurrence in the filing of this document has been obtained.

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