Wehlage v. EmpRes Healthcare Inc et al

Filing 128

ORDER by Judge Claudia Wilken Granting 123 Motion for Settlement (ndr, COURT STAFF) (Filed on 10/4/2012)

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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA

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OAKLAND DIVISION
Phyllis Wehlage, et al., on behalf of
themselves and all others similarly situated,

[PROPOSED] FINAL APPROVAL ORDER
Plaintiffs,

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v.

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Case No. 4:10-cv-05839-CW

Evergreen at Arvin LLC; Evergreen at
Bakersfield LLC; Evergreen at Lakeport
LLC; Evergreen at Heartwood LLC;
Evergreen at Springs Road LLC; Evergreen
at Tracy LLC; Evergreen at Oroville LLC;
Evergreen at Petaluma LLC; Evergreen at
Gridley (SNF) LLC; Evergreen at Chico
LLC; Evergreen at Salinas LLC; Evergreen
at Fullerton LLC,
Defendants.

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This case was filed as a proposed class action in California state court on

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November 15, 2010, removed by Defendants to this Court on December 22, 2010, and resolved

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pursuant to the terms of the Class Action Settlement Agreement executed between April 30 and

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May 16, 2012 (“Settlement Agreement”). (Dkt. No. 107, Exhibits 1–4.) Where not otherwise

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defined, all capitalized terms in this Order shall have the same meaning as set forth in the

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Settlement Agreement. The proposed Settlement Agreement has proceeded through the required

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process for Court approval and is now formally and finally approved by this Court.
[PROPOSED] FINAL APPROVAL ORDER
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Due and adequate notice having been given of the proposed Settlement as required

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by the Preliminary Approval Order (Dkt. No. 113), and the Court having considered all papers

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filed and proceedings had herein, the Court now enters Order granting final approval to the

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Settlement.

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It is hereby ORDERED and DECREED as follows:

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1.

The Parties have agreed to settle this action upon the terms and conditions

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set forth in the Settlement. (Dkt. No. 107, Exhibits 1–4.) The definitions in the Settlement are

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incorporated as though fully set forth herein. This Court has jurisdiction over the subject matter

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and Parties in this action pursuant to 28 U.S.C. § 1332(d)(2) and 28 U.S.C. § 1453.

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2.

The Settlement, including all Exhibits thereto, is finally approved as fair,

reasonable, and adequate, based upon the findings below.

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3.

The Plaintiffs, by and through their counsel, investigated the facts and law

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related to the matters alleged in their Complaint, engaged in extensive motion practice, and

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evaluated the risks associated with continued litigation, trial, and/or appeal.1

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4.

The Settlement before the Court was reached in the absence of collusion, is

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the product of informed, good-faith, arms-length negotiations between the parties and their

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capable and experienced counsel, and was reached with the assistance of a well-qualified and

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experienced mediator, Catherine A. Yanni.

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5.

The Settlement confers substantial benefits upon the Settlement Class,

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particularly in light of the limited economic damages that Plaintiffs and Class Counsel believe

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would be recoverable at trial given Defendants’ financial condition, and the costs, uncertainty,

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delays, and other risks associated with continued litigation, trial, and/or appeal. Under the

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Settlement, Defendants have agreed to a stipulated Injunction that requires them to consistently

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utilize staffing practices at their skilled nursing facilities which will ensure that they comply with

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applicable California law. This Injunction carries a substantial value and obtains fair and

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adequate relief for the Class.

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The Court will address Class Counsel’s application for attorneys’ fees and costs (Dkt. Nos. 115–
116) in a separate Order.
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6.

Accordingly, pursuant to the terms of the Settlement Agreement,

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Defendants are hereby ENJOINED as provided for in the Stipulated Order for Injunction, which

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is attached as Exhibit 1 to the Settlement Agreement. (Dkt. No. 107–2.) This Order incorporates

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all provisions of the aforementioned Stipulated Order for Injunction as though fully set forth

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herein.

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7.

While the Settlement does not provide for cash payments to the unnamed

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Class members, the record demonstrates that such payments are not realistically possible because

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they would likely result in Defendants and/or their corporate affiliates entering bankruptcy or

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facing financial impairment at such a level that they would be in imminent threat of bankruptcy

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proceedings. See 4 Newberg on Class Actions § 11:50 (noting that “[c]ollectibility of a judgment

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. . . bear[s] on the reasonableness of a settlement in relation to the defendants’ ability to withstand

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a greater one.”). Given Defendants’ demonstrated financial condition, continued litigation is

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unlikely to yield a recovery greater than that provided for under the Settlement. Moreover, the

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Class members’ claims are expressly not being released by the Settlement. Thus, the Class

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members retain the ability to pursue separate claims for damages. Under these circumstances, the

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Court finds that the absence of cash compensation to the Class is reasonable.

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8.

The best notice practicable was provided to the Class, via direct mailing to

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each Class member as well as publication in USA Today. The Notice program fully complied

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with due process and with Federal Rule of Civil Procedure 23. Both the mailed and published

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Notices informed the Class Members of the material terms of the Settlement and their right to

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object to it. There were no objections.

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This Order incorporates the Court’s prior class certification decision, and

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its underlying findings, as though fully set forth herein. (Dkt. No. 113.) In granting preliminary

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approval, the Court certified an injunctive-relief Class for settlement purposes pursuant to Federal

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Rules of Civil Procedure 23(a) and 23(b)(2), consisting of all persons who resided at any of

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Evergreen’s skilled nursing facilities in California (the “Facilities”) from November 15, 2006,

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through the date of class certification. Each Settlement Subclass consists of all persons who

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currently reside or previously resided at a specific one of the Facilities during the Class Period.
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The Facilities include Evergreen Lakeport Healthcare, Evergreen Bakersfield Post Acute Care,

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Evergreen Arvin Healthcare, Springs Road Healthcare, Heartwood Avenue Healthcare, Petaluma

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Health and Rehabilitation, Katherine Healthcare Center, Olive Ridge Post Acute Care, Evergreen

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Gridley Healthcare, Fullerton Post Acute Care, Twin Oaks Post Acute Rehab, and New Hope

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Post Acute Care. Excluded from the Class and Subclasses are: (a) Defendants; any entity in

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which Defendants have a controlling interest; the officers, directors, and employees of any

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Defendant; and the legal representatives, heirs, successors, and assigns of Defendants; and (b) the

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Judge to whom this case is assigned and any member of the Judge’s immediate family.

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10.

This Court retains continuing and exclusive jurisdiction over the Class

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representatives, the Settlement Class, and Defendants with respect to the Settlement Agreement

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and this Order, including (a) implementation of the Settlement Agreement, (b) oversight of the

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Settlement Monitor and of Defendants’ compliance with the terms and conditions of the

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Stipulated Order for Injunction, and (c) jurisdiction over the Class representatives, members of

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the Settlement Class, and Defendants for purposes of construing, enforcing, and administering the

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Settlement Agreement and this Order, including the Stipulated Order for Injunction that is fully

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incorporated herein.

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Based on the foregoing, the Court grants final approval to the Settlement,

and stays this litigation for the period during which the Injunction remains in place.

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IT IS SO ORDERED.

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10/4/2012
Dated: _______________

The Honorable Claudia Wilken
Chief Judge, United States District Court

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[PROPOSED] FINAL APPROVAL ORDER
Case No. 4:10-cv-05839-CW
1056636.1