Tuten v. United Airlines Inc.
Filing
71
ORDER The Settlement Agreement ECF No. 33 is fully and finally APPROVED; Class Counsels Unopposed Motion for an Award of Attorneys Fees and Reimbursement of Expenses ECF No. 61 is GRANTED ; Plaintiffs Motion for Order to Approve a Service Award for the Class Representative ECF No. 60 is GRANTED; Under Rule 54(a) and (b) of the Federal Rules of Civil Procedure, this Order and constitutes final adjudication on the merits. Accordingly, the Clerk of the Court is directed to enter this Judgment forthwith, by Judge William J. Martinez on 5/19/2014. (evana, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 12-cv-1561-WJM-MEH
JAMES DANIEL TUTEN, on behalf of himself and all others similarly situated,
Plaintiff,
v.
UNITED AIRLINES, INC.,
Defendant.
ORDER GRANTING MOTION FOR FINAL APPROVAL OF SETTLEMENT
AGREEMENT, MOTION FOR ATTORNEY FEES AND REIMBURSEMENT OF
EXPENSES, AND MOTION FOR ORDER APPROVING A SERVICE AWARD FOR
CLASS REPRESENTATIVE
On October 31, 2013, the Court entered an Order certifying the Class in this
case, appointing Class Counsel and a Settlement Administrator, approving the form of
the Notice to the Class, preliminarily approving the proposed Settlement, and setting a
final fairness hearing on the Settlement. (ECF No. 52.) The Court held a fairness
hearing on May 15, 2014. (ECF No. 70.) Having considered the arguments raised in
the briefs and at the hearing, and for the reasons set forth below, the Court grants the
parties’ Motion for Final Approval of Settlement Agreement (ECF No. 67), Motion for
Attorney Fees and Reimbursement of Expenses (ECF No. 61), and Motion for Order to
Approve a Service Award for the Class Representative (ECF No. 60).
I. FACTUAL AND PROCEDURAL BACKGROUND
This action was originally filed on June 15, 2012 by James Tuten on behalf of
himself and all other pilots that took military leave while working for Defendant United
Airlines (“United”) between 2000 and 2010 (the “Class” or “Class Members”). (ECF No.
1.) The Complaint alleged that United calculated and made pension contributions for
pilots on military leave based on the minimum flight hours guaranteed under the pilots’
collective bargaining agreement. (Id.) Plaintiff alleged that this violates the Uniformed
Services Employment and Reemployment Rights Act (“USERRA”), which requires that
pension contributions be calculated based on the average rate of compensation or flight
hours during the 12-month period immediately preceding the military leave. (Id.)
Plaintiff sought a declaration that United’s policy violated USERRA, and an order
requiring United to compensate the Class in the amount of the full pension contributions
required by USERRA. (Id.)
Before United filed an answer, the parties sought a stay of this case to pursue
settlement negotiations. (ECF No. 12.) United volunteered to provide discovery about
Class Members, as well as other documents that could facilitate settlement. (Id.) The
Court stayed the case and later administratively closed the action to allow the parties to
pursue a joint resolution. (ECF Nos. 13 & 26.) The case was reopened on August 9,
2013. (ECF No. 26.)
On August 14, 2013, the parties filed a Settlement Agreement (“Settlement”)
(ECF No. 33) and an unopposed Motion for certification of the Class, preliminary
approval of the Settlement, and authorization to send notice of the Settlement to the
Class (ECF No. 34). On October 31, 2013, the Court granted the Motion, certifying the
Class, appointing Plaintiff’s counsel as class counsel (“Class Counsel”), appointing
Plaintiff as class representative (“Class Representative”), approving notice to the Class,
appointing a Class administrator, and setting a final fairness hearing for May 16, 2014.
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(ECF No. 52.) The hearing was later changed to May 15, 2014, and an amended
notice was mailed to the Class. (ECF No. 62.)
The Settlement is exhaustive, both retrospectively and prospectively, and the
Court need not parse all of the details in this Order. Briefly, the Settlement requires
United to create a settlement fund of $6.15 million dollars (the “Settlement Fund”),
which will be allocated amongst the Class Members pursuant to an agreed upon
damages methodology which relies on the employment data provided by United as to
each Class Member. (ECF No. 33 §§ II.II, VII, VIII.C.) The Settlement creates a
dispute process, whereby a Class Member can challenge this employment data to
dispute the amount owed. (Id. § VIII.C.3.) After each Class Member’s eligibility is
determined, payments will be made, to the extent possible, into the Class Members’
pension accounts in order to preserve favorable tax treatment. (Id. § VIII.F.2.) Class
Counsel estimates that each Class Member will ultimately receive a payment equal or
greater than the amount of the underpayment into each Class Member’s pension
account. (ECF No. 35 ¶ 18.)
The Settlement also provides non-monetary relief to the Class and future United
pilots. United agrees to change its method for calculating a pilot’s defined pension
contribution during periods of long-term military leave. (ECF No. 33 § X.A.) United also
agrees to, for the first time, maintain a written policy setting forth its method of
calculation. (Id. § X.B.) Finally, the Settlement improves communication between
United and its pilots, both in advance of military leave and after the pilot returns from
military leave. (Id. § X.C-D.)
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United agrees to pay the cost of administering the Settlement, and such payment
shall not come from the Settlement Fund. (Id. § VI.A.2.) The Settlement allows Class
Counsel to seek attorneys’ fees, expenses, and costs, as well as a service award for
James Tuten, the Class Representative, in an amount to be approved by the Court. (Id.
§ XI.) Finally, the Settlement contains a series of procedures that preserves the rights
of pilots that are currently on military leave. (Id. § VIII.D.)
Notice of the Settlement was mailed to all Class Members in December 2013.
(ECF No. 58.) The deadline for any Class Member to object to the Settlement was
February 14, 2014; no objections were filed. (ECF No. 55.) The only communication
that the Court has received from Class Members were notices from Vincent Alcazar and
James Blaisdell that they wish to participate in the Class. (ECF Nos. 59 & 63.)
On January 3, 2014, Plaintiff filed unopposed Motions for approval of a service
award for the Class Representative (ECF No. 60) and for the attorneys’ fees award
contemplated by the Settlement (ECF No. 61). On April 15, 2014, Plaintiff filed an
unopposed Motion for Final Approval of Settlement Agreement. (ECF No. 67.) The
Court held a fairness hearing on May 15, 2014 during which the parties argued the
relative merits of these Motions. (ECF No. 70.) No Class Members appeared at the
hearing to object to the fairness of the Settlement, or any of other issues raised in the
Motions.
II. MOTION FOR FINAL APPROVAL OF SETTLEMENT
The settlement of a class action may be approved where the Court finds that the
settlement is fair, reasonable, and adequate. Rutter & Wilbanks Corp. v. Shell Oil, 314
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F.3d 1180, 1186 (10th Cir. 2002). The Court reviews a proposed class action
settlement by considering four factors:
(1) whether the proposed settlement was fairly and honestly
negotiated;
(2) whether serious questions of law and fact exist, placing
the ultimate outcome of the litigation in doubt;
(3) whether the value of an immediate recovery outweighs
the mere possibility of future relief after protracted and
expensive litigation; and
(4) the judgment of the parties that the settlement is fair and
reasonable.
Gottlieb v. Wiles, 11 F.3d 1004, 1014 (10th Cir. 1993). The proponent of the settlement
has the burden of showing that the settlement is fair. Id. at 1015. Approval of a
proposed settlement is committed to the sound discretion of the trial court. Jones v.
Nuclear Pharm., Inc., 741 F.2d 322, 324 (10th Cir. 1984).
With regard to the four factors, the Court finds that the Settlement in this case is
the product of arms-length negotiations between experienced counsel. Before the
Settlement was reached, Class Counsel undertook voluntary discovery, negotiated over
a methodology for estimating damages, and retained an expert to calculate the
damages. This shows that the Settlement was fairly and honestly negotiated.
The parties have shown that serious questions of law and fact exist, particularly
with regard to the applicable statute of limitations. The Settlement assures that all
Class Members will receive a full recovery of the amount of the underpayments made
by United, despite the uncertainty of whether Class Members with older claims—those
accruing prior to 2008—would have been able to recover at all if the case had
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proceeded. There was also an issue with regard to the certainty of a pilots’
compensation that could have resulted in the entire Class not being entitled to any
relief. These significant factual and legal issues weigh heavily in favor of approving the
Settlement.
The Court further finds that the value of the Settlement greatly outweighs the
possibility of recovery after protracted litigation. On this point, courts have held that the
presumption in favor of voluntary settlement agreements
is especially strong in class actions and other complex cases
where substantial judicial resources can be conserved by
avoiding formal litigation. The strong judicial policy in favor
of class action settlement contemplates a circumscribed role
for the district courts in settlement review and approval
proceedings. This policy also ties into the strong policy
favoring the finality of judgments and the termination of
litigation. Settlement agreements are to be encouraged
because they promote the amicable resolution of disputes
and lighten the increasing load of litigation faced by the
federal courts. In addition to the conservation of judicial
resources, the parties may also gain significantly from
avoiding the costs and risks of a lengthy and complex trial.
Ehrheart v. Verizon Wireless, 609 F.3d 590, 594 (3d Cir. 2010). Notably, in this case,
Class Counsel estimates that most of the Class will receive 100% of the pension
contributions allegedly owed by United. Given this significant financial benefit to the
Class, the Court has little difficulty concluding that the presumption in favor of voluntary
settlements has been satisfied here.
Finally, both parties have represented their opinions that the Settlement is fair
and reasonable. The Court may also consider the fact that no objections were filed by
any Class Members. In re Dun & Bradstreet Credit Servs. Customer Litig., 130 F.R.D.
366, 372 (S.D. Ohio 1990) (“No timely objection was raised by any Class Member to the
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proposed settlement, and less than 5% of all Class Members have chosen to opt out.
One untimely objection, improper in other regards, was filed and subsequently
withdrawn prior to the fairness hearing. No objection was raised at the fairness hearing.
The Court gives these factors substantial weight in approving the proposed
settlement.”). Class Counsel represented to the Court that the feedback they have
received was overwhelmingly positive. Thus, this factor weighs heavily in favor of
approving the settlement.
As set forth above, the Court finds that each of the four factors weighs in favor of
finding that the Settlement is fair, reasonable, and adequate. Even more, the Court is
of the view that the results achieved for the Plaintiff class in this case were outstanding,
worthy of being emulated by class representatives and counsel in other comparable
litigation. Accordingly, the Court fully and finally approves the Settlement for purposes
of Rule 23(e).
III. MOTION FOR ATTORNEYS’ FEES AND REIMBURSEMENT OF EXPENSES
The Notice mailed to the Class in this case authorized Class Counsel to seek an
attorneys’ fees award of up to 25% of the Settlement Fund. (ECF No. 33 § XI.A.) In
the Motion, Class Counsel requests an attorneys’ fees award of 24.7% of the
Settlement Fund. (ECF No. 61.)
When considering the appropriateness of an attorneys’ fees award, the Court is
to consider: (1) the time and labor required by counsel; (2) the novelty and difficulty of
the legal question presented; (3) the skill required to represent the Class appropriately;
(4) the preclusion of other employment by the Class Counsel due to the acceptance of
this case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) any time
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limitations imposed by the client or the circumstances; (8) the amount involved and the
results obtained; (9) the experience, reputation and ability of Class Counsel, (10) the
“undesireability” of the case; (11) the nature and length of the professional relationship
with the client; and (12) awards in similar cases. See Johnson v. Ga. Highway Express,
Inc., 488 F.2d 714, 717-19 (5th Cir. 1979) (adopted by the Tenth Circuit in Gottlieb v.
Barry, 43 F.3d 474, 483 (10th Cir. 1994)).
The Court finds that the amount of fees requested is reasonable considering the
effort expended on this case by Class Counsel, including pre-suit investigation, informal
class and merits discovery, retention of an expert to estimate damages, negotiation of
the Settlement, and implementation of the Settlement. Counsel estimates that they
have already spent in excess of 2,000 hours on the case and, given the provisions in
the Settlement applicable to pilots currently on military leave, they will continue to work
on this case for years to come. (See ECF No. 61-1 ¶¶ 40-45.)
Additionally, Class Counsel has specialized knowledge and experience in
USERRA, which facilitated and promoted the settlement of this action. This knowledge
and experience supports a large request for attorneys’ fees. See Anderson v. Merit
Energy Co., 2009 WL 3378526, at *3 (D. Colo. Oct. 20, 2009) (a large attorneys’ fee
award is reasonable where “Class Counsel’s knowledge and experience . . .
significantly contributed to a fair and reasonable settlement”). Even without this
specialized experience, the Court finds that the rates charged by Class Counsel are
reasonable when compared to attorneys in the relevant markets. (Id. ¶ 38.)
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Class Counsel took the case on a contingent basis, which permits a higher
recovery to compensate for the risk of recovering nothing for their work. See Norman v.
Hous. Auth. of Montgomery, 836 F.2d 1292, 1302 (11th Cir. 1988) (noting that an
enhanced fee may be appropriate where counsel took a risk of non-recovery of a fee).
This is notable, particularly because this case involved novel legal issues for which
recovery was uncertain. Moreover, the time expended by Class Counsel on this case
prevented them from working on other matters. (ECF No. 61-1 ¶ 40.)
Though the monetary amount of fees is significant, the percentage of fees
requested (24.7% of the Settlement Fund) falls within the norm for these types of
cases. See Stuart J. Logan et al., Attorney Fee Awards in Common Fund Class
Actions, 24 Class Action Rep. 167, 167 (2003) (reporting that the median award of
attorney fees was 31.6% based on a survey of 1,200 class action settlements); Nilson
v. York Cty., 400 F. Supp. 2d 266, 281 (D. Me. 2005) (collecting cases and finding that
the median for attorneys’ fees awards in class action settlements was around 27%). In
another class action brought under USERRA, the court approved an attorneys’ fee of
one-third of the overall Settlement Fund, which is significantly higher than that sought
here. See Becher v. Long Island Lighting Co., 64 F. Supp. 2d 174, 182 (E.D.N.Y.
1999). Finally, Class Counsel estimates that the number of hours ultimately expended
by counsel will result in a lodestar multiplier at or below 2, which is reasonable
compared with other cases of similar size and result. See Miniscribe Corp. v. Harris
Trust Co. of Cal., 309 F.3d 1234, 1245 (10th Cir. 2002) (affirming fee award based on a
lodestar multiplier of 2.57 in class action).
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Significantly, counsel estimates that most Class Members will receive all or
nearly all of the pension contributions to which they are entitled, despite the payment of
attorneys’ fees from the Settlement Fund. (See ECF No. 61-1 ¶ 31.) This is an
outstanding result for the Class, and weighs very heavily in favor of approving the
amount of fees requested. See In re King Res. Co. Sec. Litig., 420 F. Supp. 610, 630
(D. Colo. 1976) (noting that “the amount of recovery, and end result achieved are of
primary importance” when considering what constitutes a reasonable attorney fee).
Having considered the applicable Johnson factors, the Court finds that the
amount of fees requested by Class Counsel is reasonable. The Court similarly finds
that Class Counsel’s incurred expenses are reasonable, and that Class Counsel is
entitled to recover its expenditures. See Vaszlavik v. Storage Tech. Corp., 2000 WL
1268824, at *4 (D. Colo. Mar. 9, 2000) (“[A]n attorney who creates or preserves a
common fund for the benefit of the class is entitled to receive reimbursement of all
reasonable costs incurred.”). Accordingly, the Motion for Attorneys’ Fees and
Reimbursement of Expenses is granted.
IV. MOTION FOR ORDER APPROVING AWARD FOR CLASS REPRESENTATIVE
Class Counsel seeks a service award of $15,000 for Class Representative
James Tuten. (ECF No. 60.)
A class representative may be entitled to an award for personal risk incurred or
additional effort and expertise provided for the benefit of the class. UFCW Local 880Retail Food Emp’rs Joint Pension Fund v. Newmont Mining Corp., 352 F. App’x 232,
235-36 (10th Cir. 2009). When considering the appropriateness of an award for class
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representation, the Court should consider: (1) the actions the class representative took
to protect the interests of the class; (2) the degree to which the class has benefitted
from those actions; and (3) the amount of time and effort the class representative
expended in pursuing the litigation. See Cook v. Niedert, 142 F.3d 1004, 1016 (7th Cir.
1998). “Incentive awards . . . are within the discretion of the court .” Frank v. Eastman
Kodak Co., 228 F.R.D. 174, 187 (W.D.N.Y. 2005).
Class Representative James Tuten seeks a service award of $15,000 in this
case. (ECF No. 60 at 5.) The Court finds this amount is reasonable, given Mr. Tuten’s
participation in the case, the hours he expended working with counsel and participating
in discovery, and his consultation with other Class Members throughout these
proceedings. (See ECF No. 60-1 ¶¶ 7-12.) The amount requested falls in line with
service awards in similar cases. See Torres v. Gristede’s Operating Corp., 2010 WL
5507892, at *7 (S.D.N.Y. Dec. 21, 2010) (approving service of $15,000 for each of
fifteen named plaintiffs).
Notably, Mr. Tuten brought this suit against his long-time employer, who he was
working for when this action was initiated, and for whom he still works. (Id. ¶ 13.) This
shows Mr. Tuten’s commitment to the case and the risk he took pursuing this litigation,
which warrants a significant award in this case. See Frank v. Eastman Kodak Co., 228
F.R.D. 174, 187 (W.D.N.Y. 2005) (noting that service awards are especially
appropriate in employment litigation where “the plaintiff is often a former or current
employee of the defendant, and thus, by lending his name to the litigation, he has, for
the benefit of the class as a whole, undertaken the risk of adverse actions by the
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employer or co-workers.”); Silberblatt v. Morgan Stanley, 524 F. Supp. 2d 425, 435
(S.D.N.Y. 2007) (“A class representative who has been exposed to a demonstrable risk
of employer retaliation or whose future employability has been impaired may be worthy
of receiving an additional payment, lest others be dissuaded.”).
Thus, the Court finds that the requested service award of $15,000 is reasonable
and grants the Motion for Order to Approve Service Award for Class Representative.
V. CONCLUSION
For the reasons set forth above, the Court FINDS as follows:
1.
The Court has jurisdiction over the subject matter of the Action, Plaintiff, all
Class Members, and the Defendant.
2.
The prerequisites for a class action under Fed. R. Civ. P. 23(a) and (b)(1) have
been satisfied in that: (a) the number of Class Members is so numerous that
joinder of all members thereof is impracticable; (b) there are questions of law
and fact common to the Class; (c) the claim of the Class Representative is
typical of the claims of the Class he seeks to represent; (d) the Class
Representative has and will fairly and adequately represent the interests of the
Class; and (e) prosecuting separate actions by or against individual Class
Members would create a risk of inconsistent or varying adjudications with respect
to individual Class Members that would establish incompatible standards of
conduct for the party opposing the class.
3.
Pursuant to Rule 23 of the Federal Rules of Civil Procedure, this Court hereby
finally CERTIFIES Plaintiff James Daniel Tuten as Class Representative and
finally certifies this Action as a class action on behalf of:
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(1)
all former or current pilots employed by United who were participants in
the Pilots Directed Account Plan (“PDAP”) between January 1, 2000 and
October 31, 2010; and
(2)
who were on a Long Term Military Leave that began and ended between
January 1, 2000 and October 31, 2010; and
(3)
on whose behalf United made defined contribution retirement plan
contributions based on the monthly minimum flight hours guaranteed
under the pilots’ collective bargaining agreement (“CBA”); and
(4)
whose average flight hours during the 12-month period that immediately
preceded a period of Long Term Military Leave (or, if shorter than 12
months, the period of employment immediately preceding such period of
military leave) exceeded the monthly minimum flight hours guaranteed
under the pilots’ CBA.
Excluded from the Settlement Class are all former or current pilots who
previously reached settlements with or judgments against United in their
individual USERRA claims or actions concerning inadequate retirement plan
contributions for periods of military leave.
4.
The Settlement was attained following an extensive investigation of the facts and
the law. The Settlement resulted from vigorous arms-length negotiations, which
were undertaken in good faith by counsel with significant experience litigating
civil rights and employee benefits class actions. Serious questions of law and
fact exist, placing the ultimate outcome of the litigation in doubt. The value of the
recovery outweighs the mere possibility of future relief after protracted and
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expensive litigation. The parties have judged the Settlement to be fair and
reasonable. Not a single Class Member has objected to the Settlement
Agreement or expressed any concern about the Settlement Agreement.
5.
Notice of the Settlement was given to all Class Members who could be identified
with reasonable effort. The form and method of notifying the Class of the
pendency of the action as a class action and of the terms and conditions of the
proposed Settlement met the requirements of Rule 23 of the Federal Rules of
Civil Procedure, due process, and any other applicable law, constituted the best
notice practicable under the circumstances.
6.
The Settlement Agreement, including the proposed Plan of Allocation, is fair,
reasonable, and adequate within the meaning of Rule 23(e) of the Federal Rules
of Civil Procedure.
Based on these findings, and in accordance with the analysis set forth above,
the Court ORDERS as follows:
1.
The Motion for Final Approval of Settlement (ECF No. 67) is GRANTED;
2.
The Settlement Agreement (ECF No. 33) is fully and finally APPROVED;
3.
Class Counsel’s Unopposed Motion for an Award of Attorneys’ Fees and
Reimbursement of Expenses (ECF No. 61) is GRANTED;
4.
The Court awards Class Counsel attorneys’ fees in the amount of 24.7% of the
Settlement Fund as of the date of this Order;
5.
Class Counsel is AWARDED $249,230.60 as reimbursement for expenses
incurred in prosecuting this action;
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6.
Plaintiff’s Motion for Order to Approve a Service Award for the Class
Representative (ECF No. 60) is GRANTED;
7.
Plaintiff James Tuten is AWARDED $15,000 as the service award for being class
representative;
8.
Without affecting the finality of this Judgment and Final Order in any way, this
Court hereby retains continuing jurisdiction for a period of six years from the
Final Approval Date, or until one year after all Non-Responding Class Members
have completed their last period of “military service” (as defined by the Service
Members Civil Relief Act) any portion of which occurred between the Notice
Mailing Date and the Final Approval Date, whichever is earlier, for the limited
purposes set forth in Section XIII of the Settlement Agreement;
9.
Continuing jurisdiction is hereby retained over the parties and the Class
Members for all matters relating to the terms of the Settlement Agreement,
including the administration, interpretation, effectuation or enforcement of the
Settlement embodied in the Settlement Agreement and this Order and Final
Judgment; and
10.
Under Rule 54(a) and (b) of the Federal Rules of Civil Procedure, this Order and
constitutes final adjudication on the merits. Accordingly, the Clerk of the Court is
directed to enter this Judgment forthwith.
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Dated this 19th day of May, 2014.
BY THE COURT:
William J. Martínez
United States District Judge
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