Peace Officers' Annuity and Benefit Fund of Georgia v. DaVita Inc. et al

Filing 104

Order Granting Lead Plaintiffs' 103 Unopposed Motion for Preliminary Approval of Class Action Settlement. A hearing (the "Settlement Fairness Hearing") shall be held before this Court on March 30, 2021 at 10:00 a.m., in person, in Courtroom A801 at the Alfred A. Arraj United States Courthouse, 901 19th Street, Denver, Colorado 80294- 3289. Lead Plaintiffs Motion for Class Certification, Appointment of Class Representatives, and Appointment of Class and Liaison Counsel (ECF No. 84 ) and Defendants Amended Motion for Partial Reconsideration of the Court's Order Denying Motion to Dismiss (ECF No. 91 ) are DENIED without prejudice to refiling if the Settlement Agreement does not receive final Court approval. ORDERED by Judge William J. Martinez on 10/27/2020. (angar, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 17-cv-0304-WJM-NRN
PEACE OFFICERS’ ANNUITY AND BENEFIT FUND OF GEORGIA, Individually and
on Behalf of All Others Similarly Situated, and
JACKSONVILLE POLICE AND FIRE PENSION FUND, Individually and on Behalf of All
Others Similarly Situated,
Plaintiffs,
v.
DAVITA INC.,
KENT J. THIRY,
JAMES K. HILGER, and
JAVIER J. RODRIGUEZ,
Defendants.

ORDER GRANTING LEAD PLAINTIFFS’ UNOPPOSED MOTION FOR
PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT

Plaintiffs Peace Officers’ Annuity and Benefit Fund of Georgia and the
Jacksonville Police and Fire Pension Fund (jointly, “Lead Plaintiffs”) bring this lawsuit
against Defendants DaVita Inc., Kent J. Thiry, James K. Hilger, and Javier J. Rodriguez
(collectively, “Defendants”) for alleged violations of federal securities laws by making
materially false and misleading statements and omissions regarding Defendants’
alleged scheme to “steer” all patients eligible for and/or enrolled in Medicare and/or
Medicaid away from government plans and into high-cost commercial insurance so
DaVita could obtain higher dialysis reimbursement rates. (ECF No. 36.)
Before the Court is Lead Plaintiffs’ Unopposed Motion for Preliminary Approval
of Class Action Settlement (the “Motion”). (ECF No. 103.) Having reviewed the

Stipulation and Agreement of Settlement (the “Settlement Agreement”) dated
September 18, 2020 (ECF No. 103-1), and the other exhibits attached to the Motion
(ECF Nos. 103-2–103-6), and being fully advised by the parties of all pertinent facts
and law, IT IS HEREBY ORDERED THAT:1
1.

Lead Plaintiffs’ Unopposed Motion for Preliminary Approval of Class Action
Settlement (ECF No. 103) is GRANTED.

2.

For settlement purposes only, the Court preliminarily CERTIFIES a class with the
following definition: “All persons and entities who purchased or otherwise
acquired DaVita common stock during the period between February 26, 2015
and October 6, 2017, inclusive, and were damaged thereby.” (the “Settlement
Class”). The Court also finds that the Lead Plaintiffs have satisfied all of the
requirements of Federal Rule of Civil Procedure 23(a) and at least one provision
of Rule 23(b).

3.

The Stipulation and Agreement of Settlement (ECF No. 103-1) is
PRELIMINARILY APPROVED as fair and reasonable.

4.

A hearing (the “Settlement Fairness Hearing”) shall be held before this Court on
March 30, 2021 at 10:00 a.m., in person, in Courtroom A801 at the Alfred A.
Arraj United States Courthouse, 901 19 th Street, Denver, Colorado 802943289, to: (a) determine whether the proposed Settlement on the terms and
conditions provided for in the Settlement Agreement is fair, reasonable, and
adequate to the Settlement Class, and should be finally approved by the Court;
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Unless otherwise defined herein, all capitalized terms have the same meaning as they
have in the Settlement Agreement.

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(b) determine whether a Judgment, attached as Exhibit B to the Settlement
Agreement, should be entered dismissing the Action with prejudice against the
Defendant Releasees; (c) determine whether the proposed Plan of Allocation for
the proceeds of the Settlement Agreement is fair and reasonable and should be
approved; (d) determine whether the motion by lead Plaintiffs for an award of
attorneys’ fees and reimbursement of Litigation Expenses should be approved;
(e) hear and determine any objections to the Settlement Agreement; and (f) rule
on such other matters as the Court may deem appropriate.
5.

The Court approves, as to form and content, the Notice of (I) Proposed
Settlement and Plan of Allocation; (II) Settlement Fairness Hearing; and (III)
Motion for an Award of Attorneys’ Fees and Reimbursement of Litigation
Expenses form (the “Notice”) (ECF No. 103-3); the Claim Form (ECF No. 103-4);
and the Summary Notice of (I) Proposed Settlement and Plan of Allocation; (II)
Settlement Fairness Hearing; and (III) Motion for an Award of Attorneys’ Fees
and Reimbursement of Litigation Expenses form (the “Summary Notice”) (ECF
No. 103-5), and finds that the mailing and posting of the Notice and Summary
Notice, substantially in the manner and form set forth in the Settlement
Agreement, meets the requirements of Federal Rule of Civil Procedure 23 and
due process, are the best notice practicable under the circum stances, and shall
constitute due and sufficient notice to the Settlement Class Members.

6.

The Notice contains a cy pres provision stating that following the initial
distribution and any re-distributions of funds in the Net Settlement Fund, at such
time as it is determined that the re-distribution of funds remaining in the Net
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Settlement Fund is not cost-effective, the remaining balance will be contributed
to a non-sectarian, not-for-profit, 501(c)(3) organization(s) to be recommended
by Lead Counsel and approved by the Court, should the Court grant final
approval. (ECF No. 103-3 at 18.) For purposes of preliminarily approving the
Settlement Agreement, the Court is satisfied that the proposed cy pres award is
the “next best use for indirect class benefit” for unclaimed settlement funds. See
Bailes v. Lineage Logistics, LLC, 2016 WL 4415356, at *7 (D. Kan. Aug. 19,
2016).
7.

By November 11, 2020, DaVita shall provide or cause to be provided to the
Claims Administrator records reasonably available to DaVita or its transfer agent
concerning the identity and last known address of all Settlement Class Members.

8.

By November 27, 2020, the Claims Administrator shall cause a copy of the
Notice and Claim Form, substantially in the forms attached as Exhibits A-1 and
A-2 (ECF Nos. 103-3, 103-4), respectively, to be mailed by first-class mail to
potential Settlement Class Members at the addresses set forth in the records
which DaVita caused to be provided, or who otherwise may be identified through
further reasonable effort.

9.

By November 27, 2020, the Claims Administrator shall cause copies of the
Notice and Claim Form to be posted on a website to be developed for the
Settlement, from which copies of the Notice and Claim Form can be
downloaded.

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10.

By December 14, 2020, the Claims Administrator shall cause the Summary
Notice, substantially in the form attached as Exhibit A-3 (ECF No. 103-5), to be
published once in Investor’s Business Daily and to be transmitted once over PR
Newswire.

11.

By December 21, 2020, Lead Counsel shall file with the Court proof, by
appropriate declaration, of such mailing and posting described in Paragraphs
7–9.

12.

Notice Packets that are returned by the United States Postal Service (“USPS”)
as undeliverable will be reviewed for updated addresses and, where available,
new addresses will be entered into the Claims Administrator’s database and
Notice Packets will be mailed to the updated addresses. The Claims
Administrator shall immediately re-mail any returned undelivered mail for which
the USPS has provided a forwarding address. The Claims Administrator shall
attempt to locate anyone whose Notice Packet has been returned by USPS as
undeliverable (and an updated address was not provided) by conducting a
National Change of Address (“NCOA”) search, given that the NCOA database
contains records of all permanent change of address submissions received by
the USPS for the last four years. Addresses found through NCOA searches will
also be certified via the Coding Accuracy Support System (“CASS”) to ensure
the quality of the zip code, and verified through Delivery Point Validation (“DPV”)
to verify the accuracy of the addresses. Where an updated address was not
available through a NCOA search, the Claims Administrator shall conduct

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internet searches or engage a third-party search firm or lookup service, such as
LexisNexis® Public Records, to conduct more rigorous searches for persons
whose Notice Packet is returned as undeliverable. The search efforts set forth in
this Paragraph 11 shall be undertaken as soon as practicable, and all such
efforts must by concluded by no later than January 5, 2021.
13.

Settlement Class Members who wish to participate in the Settlement and to be
potentially eligible to receive a distribution from the Net Settlement Fund must
complete and submit a Claim Form in accordance with the instructions contained
therein. All Claim Forms must be postmarked by March 20, 2021.

14.

Any Settlement Class Member who wishes to exclude himself, herself, or itself
from the Settlement Class must request exclusion in writing within the time and
in the manner set forth in the Notice. A request for exclusion must be mailed or
delivered such that it is received as set forth in the Notice by February 16, 2021.

15.

The parties’ motion for final approval of the Settlement Agreement, and Lead
Counsel’s motion for attorneys’ fees and costs, shall be filed with the Court and
served on any timely objectors by February 23, 2021. Any response, in
opposition or otherwise, to either of these motions must be filed with the Court
no later than March 16, 2021. Any reply in support of either of these motions
shall be filed with the Court by March 23, 2021.

16.

Any Settlement Class Member may appear and show cause, if he, she, or it has
any reason why the Settlement should not be approved as fair, reasonable, and
adequate, or why a judgment should not be entered thereon, or why attorneys’

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fees and expenses should not be awarded to Lead Counsel, or why a service
award should not be awarded to each of the Class Representatives; provided;
however, that no Settlement Class Member shall be heard or entitled to contest
the approval of the terms and conditions of the settlement unless that person
has, by February 16, 2021, filed a detailed objection in writing (described further
below) with the Clerk of Court:
Clerk of Court
ATTN: Peace Officers’ Annuity and Benefit Fund of Georgia v. DaVita Inc.,
Civil Action No. 17-cv-0304-WJM-NRN
Alfred A. Arraj United States Courthouse
901 19th Street
Denver, CO 80294
An objection shall also be served on the following counsel postmarked no later
than February 16, 2021:
Lead Counsel
Saxena White P.A.
Lester R. Hooker, Esq.
777 Glades Road, Suite 300
Boca Raton, FL 33434

Defendants’ Counsel
Morgan, Lewis & Bockius LLP
Michael D. Blanchard, Esq.
One State Street
Hartford, CT 06103-3178

Such objections must contain the following information: (a) the Settlement Class
Member’s name, legal address, and telephone number; (b) proof of being a
Settlement Class Member as of the Settlement Class Period; for example, proof
of the date(s) the Settlement Class Member purchased the DaVita securities;
(c) a statement of the Settlement Class Member’s position with respect to the
matters to be heard at the Settlement Fairness Hearing; and (d) the grounds for
the objection or the reasons for the Settlement Class Member desiring to appear
and to be heard.
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Any Settlement Class Member who fails to object or otherwise request to be
heard in the manner prescribed above will be deemed to have waived the right to
object to any aspect of the Settlement or to otherwise request to be heard
(including the right to appeal) and will be forever barred from raising such
objection or request to be heard in this or any other action or proceeding, and
shall be bound by the Settlement, the judgment, and the releases given.
17.

To the extent the parties believe there to be other deadlines necessary to
implement the terms of the Settlement Agreement, the parties may agree on
such deadlines among themselves, provided none of these additional
deadlines are inconsistent with any provision of this Order.

18.

Lead Plaintiffs’ Motion for Class Certification, Appointment of Class
Representatives, and Appointment of Class and Liaison Counsel (ECF No. 84)
and Defendants’ Amended Motion for Partial Reconsideration of the Court’s
Order Denying Motion to Dismiss (ECF No. 91) are DENIED without prejudice to
refiling if the Settlement Agreement does not receive final Court approval.
Dated this 27th day of October, 2020.
BY THE COURT:

William J. Martínez
United States District Judge

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