In Re: Kentucky Grilled Chicken Coupon Marketing & Sales Practices Litigation

Filing 108

MOTION by In Re In Re: Kentucky Grilled Chicken Coupon Marketing & Sales Practices Litigation for judgment Final Approval of Class Action Settlement and Approval of Attorney Fees, Expenses and Incentive Award (Attachments: # 1 Exhibit A - Se ttlement Agreement, # 2 Declaration, # 3 Exhibit 1 to McMorrow Declaration, # 4 Exhibit 2 (Group) to McMorrow Declaration, # 5 Exhibit 3 (Group) to McMorrow Declaration, # 6 Exhibit 4 (Group) to McMorrow Declaration, # 7 Exhibit 5 to McMo rrow Declaration, # 8 Exhibit 6 to McMorrow Declaration, # 9 Exhibit 7 to McMorrow Declaration, # 10 Exhibit 8 to McMorrow Declaration, # 11 Exhibit 9 to McMorrow Declaration, # 12 Exhibit 10 to McMorrow Declaration, # 13 Declaration Of Jay Edelson)(McMorrow, Michael)

Case: 1:09-cv-07670 Document #: 99-1 Filed: 08/12/11 Page 1 of 85 PageID #:729

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS,
EASTERN DIVISION
In re Kentucky Grilled Chicken Coupon
Marketing & Sales Practices Litigation

MDL 2103
Case No. 1:09-cv-7670

THIS DOCUMENT RELATES TO
ALL CLASS ACTIONS

Hon. James F. Holderman

STIPULATION OF CLASS ACTION SETTLEMENT, AS AMENDED
This Stipulation of Class Action Settlement (“Settlement Agreement” or “Agreement” or
“Settlement”) is entered into between Plaintiffs James Asanuma, Daleen Brown, Christine
Doering, Veronica Mora, and Kay Ready (collectively, the “Plaintiffs”), on the one hand, and
Defendants, KFC Corporation (“KFC”) and YUM! Brands, Inc. (“YUM!”) (together,
“Defendants”), on the other (collectively, the “Parties”). This Agreement is intended by the
Parties to fully, finally, and forever resolve, discharge and release all liability associated with the
Released Claims (as defined in Paragraph 8 herein) upon and subject to the terms and conditions
set forth in this Agreement, and subject to the approval of the Court.
RECITALS
A.

On May 5, 2009, Oprah Winfrey announced on her eponymous television show

that KFC had agreed to give away a free, two-piece Kentucky Grilled Chicken® meal with two
individual sides and a biscuit (the “KGC Free Meal”). Interested customers could go to
Oprah.com or unthinkfc.com from May 5 at 9 a.m. central time to May 6 at 11:59 p.m. central
time, and download a coupon, containing a unique bar code, to receive the KGC Free Meal (the
“Original Coupon”). The Original Coupon was redeemable from May 5, 2009 to May 19, 2009

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(except on May 10, 2009, which was Mother’s Day). The KGC Free Meal announced on The
Oprah Winfrey Show shall be referred to herein as the “Oprah Promotion.”
B.

Sometime in the afternoon of May 5, the servers handling the requests for the

Original Coupon were subjected to an electronic attack, making it difficult for consumers to
download the Original Coupon. After discussions with Harpo Productions, Inc., KFC agreed to
make a coupon temporarily available in a .pdf format (containing a generic bar code ending in
“1234”) that a consumer could download directly from Oprah.com (“PDF Coupon”) until such
time as the Original Coupon was available again.
C.

The response to the Oprah Promotion was overwhelming. Between May 5 and

10, 2009, Defendants represent that KFC gave away approximately 4,500,000 KGC Free Meals.
D.

According to Defendants, the overwhelming response to the Oprah Promotion

quickly created supply shortages and caused disruptions at KFC restaurants by customers who
tired of waiting in long lines.
E.

Additionally, according to Defendants, the PDF Coupon was fraudulently copied

and posted on a number of websites.
F.

On May 7, 2009, KFC announced that it would make available a raincheck

coupon (the "Raincheck Coupon") that would permit customers to redeem the KGC Free Meal
during one of several staggered two-week periods during the summer of 2009. The Raincheck
Coupon offered the same KGC Free Meal plus a free drink (which was not available with the
Original Coupon). Defendants represent that KFC gave away an additional approximately
2,700,000 KGC Free Meals in connection with the Raincheck Coupon. The Original Coupon,

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the PDF Coupon, and the Raincheck Coupon shall be referred to collectively as the “KGC
Coupons.”
G.

In total, Defendants represent that KFC gave away approximately 7,200,000 free

meals in connection with the Oprah Promotion between May and August 2009. (Defendants
represent that KFC also gave away approximately 20,000 “Chicken Checks” to customers who
called to report problems concerning the Oprah Promotion. The Chicken Checks could be
redeemed at any KFC restaurant for any KFC product).
H.

In the summer of 2009, four putative class actions were filed that challenged,

among other things, KFC’s handling of the Promotion. Christine Doering v. KFC Corporation,
No. 1:09-cv-04166 (N.D. Ill.); Kay Ready v. KFC Corporation, No. 2:09-cv-12827-GCS-DAS
(E.D. Mich.); Daleen Brown v. KFC Corporation, No. 3:09-cv-03269-EMC (N.D. Cal.); and
James Asanuma and Veronica Mora v. KFC Corporation and Yum! Brands, Inc., No. 2:09-5246
(C.D. Cal.) (As used herein, the foregoing cases shall be referred to as the “Underlying
Actions.”) The Underlying Actions allege, inter alia, that Defendants breached the terms of the
Original Coupon and defrauded consumers by refusing to honor all Original Coupons between
May 5 and May 19, 2009 (excluding Mother’s Day). The Ready action also alleged that KFC
failed to disclose that the topical seasoning used on Kentucky Grilled Chicken® contains “beef
products.”
I.

Defendants subsequently petitioned the Judicial Panel on Multidistrict Litigation

(“JPML”) to have all of the Underlying Actions centralized before a single court for pre-trial
proceedings. The JPML granted the petition and centralized the Underlying Actions before the
Honorable James F. Holderman in the Northern District of Illinois. The Underlying Actions are

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now pending before Judge Holderman as In Re: Kentucky Grilled Chicken Coupon Marketing &
Sales Practices Litigation, No. 1:09-cv-7670 (MDL 2103) (the “Litigation”).
J.

Plaintiffs subsequently filed a consolidated amended complaint in the Litigation

asserting against KFC and YUM! claims for breach of contract, common law fraud, and violation
of state consumer protection statutes.
K.

Defendants moved to dismiss the amended complaint. The Court denied that

motion on July 9, 2010.
L.

Defendants answered the amended complaint, denying the material allegations

raised in the Litigation, and denying any wrongdoing and any liability in connection with the
claims asserted in the Litigation. Defendants continue to deny all of the Plaintiffs’ claims raised
in this Litigation.
M.

Plaintiffs and their counsel have conducted an extensive examination and

investigation of the facts and law relating to the matters set forth in this Litigation regarding the
claims and potential defenses of Defendants. KFC produced over 15,000 pages of documents;
the Parties have exchanged responses to scores of written discovery requests; and KFC’s Chief
Operations Officer has been deposed.
N.

The Parties have engaged in intensive arm’s-length negotiations. At the request

of the Court, the parties agreed to mediation before the Hon. Maria Valdez. Judge Valdez held
mediation sessions on September 3, 2010 and October 18, 2010, during which the parties made
progress toward resolving the Litigation. Nevertheless, they were unable to reach an agreement
and discovery resumed.

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O.

After another three months of discovery, the parties resumed settlement

discussions in January 2011. After a week of additional arm’s-length negotiations, the parties
reached an understanding on January 18, 2011.
P.

The Litigation, if it were to continue, would likely result in expensive and

protracted litigation, appeals, and continued uncertainty as to outcome.
Q.

Based upon extensive analysis of the facts and the law applicable to the claims in

the Litigation, and taking into account the burdens and expense of such Litigation, including the
risks and uncertainties associated with protracted trials and appeals, as well as the fair,
cost-effective and assured method of resolving the claims of the Settlement Class (as defined
below), Plaintiffs and Class Counsel have concluded that this Agreement provides substantial
benefits to Plaintiffs and to members of the Settlement Class, is fair, reasonable, adequate and in
the best interests of the Settlement Class, and resolves all issues that were or could have been
raised in the Litigation without prolonged litigation and the risks and uncertainties inherent in
litigation.
R.

Defendants have similarly concluded that this Agreement is desirable in order to

avoid the time, expense and inherent risk of defending multiple and protracted litigations, as well
as the concomitant disruption of their business operations, and to resolve finally, completely and
globally the pending and potential claims of Plaintiffs and the Settlement Class, and thus to
resolve all of the litigation regarding the allegations of the Settlement Class in this Litigation.
S.

Nothing in this Settlement Agreement shall be construed as an admission or

concession by Defendants of the truth of any allegations raised in the Litigation, or of any fault,
wrongdoing, or liability of any kind.

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NOW, THEREFORE, in consideration of the foregoing, and the mutual covenants,
promises, and general releases set forth below, the Parties hereby agree as follows:
PROPOSED CLASS FOR SETTLEMENT PURPOSES
1.

Settlement Class. Pursuant to Fed. R. Civ. P. 23, the Parties hereto agree to

certification, for settlement purposes only, of a settlement class of all persons who
(a) downloaded an Original or PDF Coupon between May 5, 2009 at 9 a.m. central time and May
6, 2009 at 11:59 p.m. central time from Oprah.com or unthinkfc.com, and (b) did not receive (i)
the KGC Free Meal pursuant to the Original Coupon, the PDF Coupon, or the Raincheck
Coupon, (ii) a “Chicken Check” or other compensation from KFC in response to a complaint
concerning the Oprah Promotion, or (iii) a free meal or other consideration at a restaurant
unaffiliated with Defendants that agreed to accept the KGC Coupons. The foregoing will be
referred to hereinafter as the “Settlement Class.”
2.

Class Counsel and Plaintiffs’ Steering Committee. Subject to approval by the

Court, class counsel (“Class Counsel”) are as follows: Jay Edelson and Michael J. McMorrow of
Edelson McGuire LLC, 350 North LaSalle, Suite 1300, Chicago, IL 60654. In addition, and also
subject to approval by the Court, the committee of attorneys comprising Plaintiffs’ steering
committee (“Plaintiffs’ Steering Committee”) is as follows: Seth Safier and Adam Gutride of
Gutride Safier, LLP, 835 Douglass Street, San Francisco, CA 94114, David C. Parisi of Parisi &
Havens LLP, 15233 Valleyheart Drive, Sherman Oaks, CA 91403, and Mark H. Freedman of the
Law Offices of Freedman & Freedman, PLC, 24725 West Twelve Mile Road, Suite 220,
Southfield, MI 48034.

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3.

Settlement Purposes Only; Vacating Settlement Certification. Defendants

agree to certification of the Settlement Class solely for purposes of effectuating the Settlement
Agreement. The certification of the Settlement Class shall be binding only with respect to the
settlement of the Litigation. In the event that the Settlement Agreement is terminated pursuant to
its terms or is not approved in all material respects by the Court, or such approval is reversed,
vacated, or modified in any material respect by this or any other court, the certification of the
Settlement Class shall be deemed vacated, the Litigation shall proceed as if the Settlement Class
had never been certified, and no reference to the Settlement Class, this Settlement Agreement, or
any documents, communications, or negotiations related in any way thereto shall be made for
any purpose in this Litigation or any other action or proceeding.
BENEFITS TO THE CLASS
4.

Payment by Defendants. Defendants agree to pay up to $1.575 million

($1,575,000) (the “Available Amount”) for (i) Valid Claims (as defined below) submitted by
Settlement Class members pursuant to Paragraph 5 of this Agreement, (ii) notice to the
Settlement Class, (iii) administrative costs of the settlement, (iv) Class Counsel’s attorneys’ fees
and costs; and (v) incentive awards to Plaintiffs. If, after deducting the amounts paid pursuant to
Paragraph 4(ii), (iii), (iv) and (v), the Available Amount is less than the total amount of Valid
Claims submitted, then the amount paid to each Settlement Class member who submitted a Valid
Claim shall be reduced pursuant to subparagraph 5(f) so that the total payments made under this
Paragraph 4 shall not exceed $1.575 million ($1,575,000).
5.

Payment of Claims and the Claims Process. A Settlement Class member shall

be entitled to submit a claim to recover cash under the following terms.

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(a)

To be eligible for a payment pursuant to this Agreement, a Settlement

Class member must submit a claim that (i) is postmarked no later than 60 days after the
Fairness Hearing (as defined below), (ii) contains the required information and
documentation set forth in the claim form, (iii) attaches, if applicable, a valid Original or
PDF Coupon, and (iv) is signed under penalty of perjury. A claim that satisfies all of the
terms of this Paragraph 5(a) shall be a “Valid Claim” and shall be paid according to
Paragraphs 5(b)-(f).
(b)

Settlement Class members who attach the Original Coupon and complete

and sign the claim form attached as Exhibit D hereto shall be entitled to receive $3.99 for
each Original Coupon submitted, up to a total of $15.96 per household. Settlement Class
members who submit Valid Claims pursuant to this subparagraph 5(b) shall be
considered “Group 1” Settlement Class members.
(c)

Settlement Class members who attach the PDF Coupon and complete and

sign the claim form attached as Exhibit D hereto shall be entitled to receive $2.00 for
each PDF Coupon submitted, up to a total of $8.00 per household. Settlement Class
Members who submit a Valid Claim pursuant to this subparagraph 5(c) shall be
considered “Group 2” Settlement Class members.
(d)

Settlement Class members who no longer have an Original or PDF

Coupon but complete and sign the claim form attached as Exhibit D hereto shall be
entitled to receive $1.00 for each Original Coupon or PDF Coupon downloaded, up to a
total of $4.00 per household. Settlement Class members who submit a Valid Claim

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pursuant to this subparagraph 5(d) shall be considered “Group 3” Settlement Class
members.
(e)

Settlement Class members may submit a claim under only one group. If a

claimant submits a claim under multiple groups, only the claim under the lowestnumbered group (Group 1 > Group 2 > Group 3) will be paid and the remaining claims
will be denied.
(f)

If, after deducting the amounts paid or to be paid pursuant to Paragraph

4(ii), (iii), (iv), and (v), the Available Amount is less than the total amount of all Valid
Claims (the “Available Settlement Funds”), then payment of Valid Claims shall be
allocated as follows:
(i)

Fifty percent (50%) of the Available Settlement Funds will be

available for payment to Group 1 Settlement Class members (“Group 1 Funds”).
If the amount of Valid Claims submitted by Group 1 Settlement Class members
exceeds the Group 1 Funds, then the amounts paid to Group 1 Settlement Class
members will be reduced proportionally. If the amount of Valid Claims
submitted by Group 1 Settlement Class members is less than the Group 1 Funds,
the amount remaining (“Surplus Group 1 Funds”) will be made available for
payments to Group 2 Settlement Class members.
(ii)

Twenty-five percent (25%) of the Available Settlement Funds, plus

any Surplus Group 1 Funds, will be available for payment to Group 2 Settlement
Class members (“Group 2 Funds”). If the amount of Valid Claims submitted by
Group 2 Settlement Class members exceeds the Group 2 Funds, then the

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payments to Group 2 Settlement Class members will be reduced proportionally.
If the amount of Valid Claims submitted by Group 2 Settlement Class members is
less than the Group 2 Funds, the amount remaining (“Surplus Group 2 Funds”)
will be made available for payments to Group 3 Settlement Class members.
(iii)

Twenty-five percent (25%) of the Available Settlement Funds, plus

any Surplus Group 2 Funds, will be available for payment to Group 3 Settlement
Class members (“Group 3 Funds”). If the total amount of Valid Claims submitted
by Group 3 Settlement Class members exceeds the Group 3 Funds, the cash
consideration paid to each claimant in Group 3 Settlement Class members will be
reduced proportionally.
(iv)

If the amount of Valid Claims submitted by Group 3 Settlement

Class members is less than the Group 3 Funds, the amount remaining will be used
to recalculate the amount of Group 1 Funds and Group 2 Funds in the following
order of priority: First, Valid Claims of Group 1 Settlement Class members shall
be paid up to a maximum of $12.00 per claimant; then, Valid Claims of Group 2
Settlement Class members shall be paid up to a maximum of $6.00 per claimant.
(g)

If any Available Settlement Funds remain after all payments have been

made pursuant to Paragraphs 5(b)-(f), KFC shall make a cash donation in a total amount
equal to the remaining Available Funds, to the following organizations in the percentages
listed: Feeding America (50%), the nation's leading domestic hunger-relief charity, the
Illinois Bar Foundation (25%), and the Chicago Bar Association (25%).

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(h)

If a Settlement Class member elects to challenge a rejected claim, he or

she must present the dispute to the Settlement Administrator, which will present it to the
Parties. If the Parties cannot resolve it to the satisfaction of the claimant, the disputed
claim may be submitted to the Court for final resolution at the option of the Settlement
Class member.
6.

Application for Attorneys’ Fees and Expenses, and Incentive Awards. Class

Counsel will apply to the Court for an aggregate award of attorneys’ fees and actual expenses
(including their court costs) in a total amount not to exceed $515,000.00, and for an incentive
award to the Plaintiffs in an aggregate amount not to exceed $25,000.00. The Court’s ruling on
the fees, awards, and expenses requested pursuant to this paragraph shall not affect the
enforceability of the Settlement, including but not limited to the claims released pursuant to
Paragraphs 8 and 9, nor shall its timing or substance affect the finality of any judgment in the
action. Defendants shall not take any position on Class Counsel’s request for attorneys’ fees and
expenses.
7.

Total Financial Commitment. Defendants’ total financial commitment under

this Settlement Agreement, including but not limited to payment of amounts described in
Paragraphs 4, 5 and 6 shall not exceed a total of $1.575 million ($1,575,000) under any
circumstance.
RELEASES
8.

Release by Plaintiffs and the Settlement Class.

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(a)

As used in this Agreement, the “Releasing Parties” shall mean Plaintiffs

and each Settlement Class member (except a person who has obtained proper and timely
exclusion from the Settlement Class pursuant to Paragraph 13), on her/his own behalf and
on behalf of her/his spouse.
(b)

As used in this Agreement, the “Released Parties” shall mean (i) KFC and

YUM!; (ii) any KFC franchisee or the National Council and Advertising Cooperative,
Inc. (“NCAC”); (iii) any person or entity in the chain of distribution of any goods or
services for YUM!, KFC, or KFC franchisees, including but not limited to the Unified
FoodService Purchasing Co-Op, LLC (“UFPC”), suppliers, and distributors; and (iv) any
person or entity connected in any way, directly or indirectly, with the Oprah Promotion,
the KGC Free Meal, the KGC Coupons, or the sales, marketing, or advertising of
Kentucky Grilled Chicken®, including but not limited to Ms. Oprah Winfrey, Harpo
Productions, Inc., The Oprah Winfrey Show, Draft FCB, Coupons, Inc., Gomez,
Rackspace, and Fulfillment Concepts, Inc.
(c)

As used in this Agreement, the “Affiliated Parties” shall mean
(i)

In the case of a natural person, her/his current or former spouse,

children, or any relative who may claim an interest in the Released Claims, as
well as the present, former, and future respective administrators, agents, assigns,
attorneys, executors, heirs, partners, predecessors-in-interest, and successors of
any of the foregoing.
(ii)

In the case of an entity such as a partnership, corporation, or

limited liability company, its present, former, and future direct and indirect parent
companies, affiliates, agents, divisions, predecessors-in-interest, subsidiaries, and
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successors and all of the aforementioneds’ respective present, former, and future
officers, directors, partners, employees, shareholders, members, agents, assigns,
and attorneys.
(d)

As used in this Agreement, the “Released Claims” shall mean any and all

rights, duties, obligations, claims, actions, causes of action, or liabilities, whether arising
under local, state, or federal law, whether by statute, contract, common law, or equity,
whether known or unknown, suspected or unsuspected, asserted or unasserted, foreseen
or unforeseen, actual or contingent, liquidated or unliquidated that arise out of or relate in
any way to: (i) claims that were or could have been asserted in the Litigation; (ii) the
Oprah Promotion, the KGC Free Meal, or the KGC Coupons, or any representation,
misrepresentation, promise, communication, act, or omission regarding the same; (iii) any
matters alleged, argued, raised, or asserted in any pleading or court filing in the
Underlying Actions or the Litigation; or (iv) any representation, misrepresentation,
promises, communication, act, or omission regarding the topical seasonings for Kentucky
Grilled Chicken®.
(e)

The Releasing Parties and their Affiliated Parties hereby release and

forever discharge the Released Parties and their Affiliated Parties from the Released
Claims as of the date the Final Judgment Order (as defined below) is entered.
9.

Release of Unknown Claims. The Releasing Parties acknowledge that they may

have claims that are currently unknown and that the release in this Agreement is intended to and
will fully, finally, and forever discharge all Released Claims, whether now asserted or
unasserted, known or unknown, suspected or unsuspected, which now exist, or heretofore existed

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or may hereafter exist, which if known, might have affected their decision to enter into this
release. Each Releasing Party shall be deemed to waive any and all provisions, rights, and
benefits conferred by any law of the United States, any state or territory of the United States, or
any state or territory of any other country, or principle of common law or equity, which governs
or limits a person’s release of unknown claims. In making this waiver, the Releasing Parties
understand and acknowledge that they may hereafter discover facts in addition to or different
from those that are currently known or believed to be true with respect to the subject matter of
this release, but agree that they have taken that possibility into account in reaching this
Settlement Agreement and that, notwithstanding the discovery or existence of any such
additional or different facts, as to which the Releasing Parties expressly assume the risk, they
fully, finally, and forever settle and release any and all Released Claims, known or unknown,
suspected or unsuspected, which now exist, or heretofore existed, or may hereafter exist, and
without regard to the subsequent discovery or existence of such additional or different facts. The
foregoing waiver includes, without limitation, an express waiver, to the fullest extent not
prohibited by law, by Plaintiffs, the Settlement Class members, and all Releasing Parties, of any
and all rights under California Civil Code Section 1542, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR.
In addition, Plaintiffs, Settlement Class members, and all Releasing Parties also expressly waive
any and all provisions, rights, and benefits conferred by any law or principle of common law or
equity, that are similar, comparable, or equivalent, in whole or in part, to California Civil Code
Section 1542.
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SETTLEMENT ADMINISTRATION
10.

Settlement Administrator.
(a)

The Parties agree that a third-party shall serve as the settlement

administrator to administer the settlement and advise the Parties on a notice plan (the
“Settlement Administrator”). The Settlement Administrator will work under the direction
of Class Counsel. Subject to Court approval, Rust Consulting, Inc. (or such other
company as mutually agreed by the Parties) will serve as Settlement Administrator. The
Settlement Administrator shall be compensated from the Available Amounts up to a
maximum of $357,000 for all notice and administration costs. Defendants shall have no
obligation to pay the Settlement Administrator more than $ 357,000.
(b)

The Settlement Administrator shall be responsible for the Settlement Class

notice and the administration of the Settlement, including, inter alia, designing a plan for
Notice, publishing the Notice, establishing a settlement website and a toll-free number
with a voice-response unit (“VRU”), making claim forms available to members of the
Settlement Class, adjudicating claims, calculating the amounts paid to each claimant
pursuant to Paragraphs 5(b)-(f), sending payments to claimants with Valid Claims,
maintaining proper records of claims and payments, and providing weekly or other
periodic reports to Class Counsel and counsel for Defendants regarding the number and
status of claims.
11.

Class Notice. As soon as practicable after receiving preliminary Court approval

of this Settlement Agreement and a form of notice (“Notice”), the Settlement Administrator shall
cause to be published a summary notice of the settlement, and post on the settlement website a

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full notice, according to the notice plan approved by the Court. A copy of the proposed forms of
notice and the notice plan are attached as Exhibits A, B, and C hereto.
SETTLEMENT APPROVAL PROCESS
12.

Preliminary Approval Order. The Parties agree to petition the Court promptly

after execution of this Settlement Agreement for an order preliminarily approving the Settlement
Agreement (the “Preliminary Approval Order”). A copy of the form of the proposed Preliminary
Approval Order agreed to by the Parties is attached as Exhibit E hereto. The Preliminary
Approval Order shall provide, inter alia, that:
(a)

The settlement proposed in the Agreement has been negotiated at arm’s-

length and is preliminarily determined to be fair, reasonable, adequate, and in the best
interests of the Settlement Class for settlement purposes;
(b)

The Notice and the proposed plan for giving notice fully complies with the

requirements of Fed. R. Civ. P. 23 and due process, constitutes the best notice practicable
under the circumstances, and is due and sufficient notice to all persons entitled to notice
of this Settlement;
(c)

The Settlement Class is certified for settlement purposes only, with

Plaintiffs serving as class representatives, and the attorneys and law firm listed in
Paragraph 2 serving as Class Counsel and Plaintiffs’ Steering Committee, on the
condition that the certification and designations shall be automatically vacated if the
Settlement is terminated or is disapproved in whole or in part by the Court, any appellate
court, or any of the Parties;

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(d)

A final hearing on the settlement proposed in this Agreement shall be held

before the Court to determine whether the proposed settlement is fair, reasonable, and
adequate, and whether it should be approved by the Court (“Fairness Hearing”);
(e)

In further aid of the Court’s jurisdiction to implement and enforce the

proposed settlement, all Plaintiffs and Settlement Class members shall be preliminarily
enjoined and barred from commencing or prosecuting any action asserting any of the
Released Claims, either directly, representatively, derivatively, or in any other capacity,
whether by a complaint, counterclaim, defense, or otherwise, in any local, state, or
federal court, or in any agency or other authority or forum wherever located. Any person
or entity who knowingly violates such injunction shall pay the attorneys’ fees and costs
incurred by Defendants or any other Released Party as a result of the violation.
13.

Rights of Exclusion. All Settlement Class members who properly deliver to the

Settlement Administrator a timely written request to opt-out of the Settlement shall be excluded
from the Settlement Class, shall have no rights as members of the Settlement Class pursuant to
this Settlement Agreement, and shall receive no payments as provided herein. Unless otherwise
specified, a settlement class member’s opt-out request will also opt-out that settlement class
member’s spouse. A request for exclusion from the Settlement Class must be in writing, identify
the case name In re Kentucky Grilled Chicken Coupon Marketing & Sales Practices Litigation,
and state the name, address, and phone number of the Settlement Class member(s) seeking
exclusion. Exclusions can be submitted by U.S. Mail or online. To ensure accurate
identification, members of the Class who submit exclusion requests online shall provide the last
four digits of their social security number. Each request must also contain a typed or signed
statement, submitted under penalty of perjury, that: “I/We hereby request to be excluded from
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the proposed Settlement Class in In re Kentucky Grilled Chicken Coupon Marketing & Sales
Practices Litigation.” The request must be submitted online or mailed to the Settlement
Administrator at the address provided in the Notice and postmarked no later than forty-five (45)
days after the Notice is first published. A request for exclusion that does not include all of the
foregoing information, that is sent to an address other than the one designated in the Notice, or
that is not submitted online or postmarked within the time specified, shall be invalid and the
person(s) serving such a request shall be deemed member(s) of the Settlement Class, and shall be
bound as class member(s) by the Settlement. The Settlement Administrator shall promptly
forward copies of all requests for exclusion to Class Counsel and counsel for Defendants.
14.

Right to Object or Comment. Any member of the Settlement Class may

comment in support of or in opposition to the Settlement and may do so in writing, in person, or
through counsel, at his or her own expense, at the Fairness Hearing. Except as the Court may
order otherwise, no Settlement Class member objecting to the Settlement shall be heard and no
papers, briefs, pleadings, or other documents submitted by any such class member shall be
received and considered by the Court unless such class member shall mail to Class Counsel and
counsel for Defendants a written objection with the caption In re Kentucky Grilled Chicken
Coupon Marketing & Sales Practices Litigation, No. 1:09-cv-7670, that includes:
(a) the Settlement Class member’s full name and current address;
(b) a signed declaration that he or she is a member of the Settlement Class;
(c) the specific grounds for the objection;

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(d) all documents or writings that such Settlement Class member desires the Court to
consider; and
(e) notice of the Class Member’s intention to appear (if any). All written objections shall
submitted online or postmarked no later than forty-five (45) days after the first Notice is
published. Any member of the Settlement Class who fails to object in the manner
prescribed herein shall be deemed to have waived his or her objections and forever be
barred from making any such objections in this action or in any other action or
proceeding. While the statement described in subparagraph (b) is prima facie evidence
that the objector is a member of the Settlement Class, Plaintiffs or Defendants both may
take discovery regarding the matter, subject to Court approval.
15.

Final Judgment and Order. If this Settlement Agreement is preliminarily

approved by the Court, the Plaintiffs shall jointly request at the Fairness Hearing that the Court
enter final judgment (the “Final Judgment and Order”). The Fairness Hearing shall be held no
earlier than twenty-one (21) days after the deadline for all Settlement Class members to opt-out
or object under Paragraphs 13 and 14 of this Agreement. A copy of the form of the proposed
Final Judgment and Order agreed to by the Parties is attached hereto as Exhibit F. The Final
Judgment and Order shall provide, inter alia, that:
(a)

The Settlement Agreement is fair, reasonable, adequate, and in the best

interests of the Settlement Class;
(b)

The Notice fully complied with the requirements of Fed. R. Civ. P. 23 and

due process, constituted the best notice practicable under the circumstances, and was due
and sufficient notice to all persons entitled to notice of this Settlement;

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(c)

The Released Claims are dismissed without prejudice as to all Released

Parties and their Affiliated Parties, without fees or costs except as provided in this
Settlement Agreement. This dismissal without prejudice shall not allow the Parties or
any members of the Class to litigate or otherwise reopen issues resolved by this
judgment, or included within the Released Claims, but is “without prejudice” so as to
allow the Court to supervise the implementation and administration of the Settlement;
(d)

All Plaintiffs and Settlement Class members are permanently enjoined and

barred from commencing or prosecuting any action asserting any of the Released Claims,
either directly, representatively, derivatively, or in any other capacity, whether by a
complaint, counterclaim, defense, or otherwise, in any local, state, or federal court, or in
any agency, or other authority or forum wherever located. Any person or entity who
knowingly violates such injunction shall pay the attorneys’ fees and costs incurred by
Defendants or any other Released Party or their Affiliated Parties as a result of the
violation; and
(e)

The Court shall retain exclusive jurisdiction over this action, the Parties,

and all Settlement Class members to determine all matters relating in any way to the
Final Judgment and Order, the Preliminary Approval Order, or the Settlement
Agreement, including but not limited to the administration, implementation,
interpretation, or enforcement of such orders or Agreement;
(f)

Based upon the Court’s finding that there is no just reason for delay of

enforcement or appeal, notwithstanding the Court’s retention of jurisdiction to oversee

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implementation and enforcement of the Settlement Agreement, the Court directs the
Clerk to enter final judgment pursuant to Rule 54(b).
16.

Finality of Judgment. The Final Judgment and Order shall be deemed final on

the later of: (i) the expiration of the time to appeal the Final Judgment and Order with no appeal
having been filed; or (ii) if any such appeal is filed, the termination of such appeal on terms
which affirm the Final Judgment and Order or dismiss the appeal with no material modification
of the Final Judgment and Order; and (iii) the expiration of the time to obtain any further
appellate review of the Final Judgment and Order (“Effective Final Judgment Date”).
17.

Dates of Payment Obligations. Defendants shall have no obligation to make any

payments under this Settlement Agreement until the Court enters a Preliminary Approval Order.
Once the Preliminary Approval Order is entered and before the Effective Final Judgment Date,
Defendants shall pay reasonable notice costs and any administrative costs arising under
Paragraph 4 that must be incurred prior to the Effective Final Judgment Date. All Valid Claims
shall be paid as expeditiously as possible but in no event any later than 120 days after the
Effective Final Judgment Date. Defendants shall pay any incentive awards, attorneys’ fees and
costs awarded by the Court within 30 days after the Effective Final Judgment Date. Defendants
shall make any cy pres donations within 180 days after the Effective Final Judgment Date.
18.

Option to Withdraw. Defendants shall have the option to withdraw from the

Settlement Agreement, and thereby render this Settlement null and void, if (i) the Plaintiffs
breach any material provision of the Settlement Agreement or the Preliminary Approval Order,
or fail to fulfill any material obligation hereunder or thereunder; (ii) the Court fails to give final
approval to any portion of the Settlement Agreement or any aspect of the Settlement by June 1,

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2012; (iii) the attorney general or other authorized officer of the United States or any state, or
any representative of any local, state, or federal agency or branch of government, shall have
intervened in the Litigation or advised the Court in writing of opposition to the terms of the
Settlement Agreement, and the withdrawing Party reasonably believes such intervention or
opposition will materially delay or render impracticable or unlikely the final approval of the
Settlement; (iv) the number of persons submitting valid and timely written requests to opt-out of
the Settlement equals or exceeds the number set forth in Exhibit G; or (v) upon such other
grounds as may be agreed to by the Parties or permitted by the Court. Any election made by a
Party to terminate this Agreement pursuant to this Paragraph shall be made no later than seven
(7) days prior to the Fairness Hearing.
19.

Effect of Withdrawal/Rejection. In the event that (i) Defendants withdraw from

the Settlement Agreement pursuant to Paragraph 18; (ii) the Settlement Agreement, Preliminary
Approval Order, and Final Judgment and Order are not approved in all material respects by the
Court; or (iii) the Settlement Agreement, Preliminary Approval Order, or Final Judgment and
Order are reversed, vacated, or modified in any material respect by the judge assigned to the
Litigation (currently, the Hon. James F. Holderman), or by any other court; then (a) the
Settlement Agreement shall become null and void; (b) Defendants shall cease to have any
obligation to pay any of the amounts set forth in Paragraph 4, except for all notice and
administrative costs incurred as of the date the Settlement Administrator is notified that the
Settlement Agreement has become null and void; (c) the Litigation may continue; and (d) any
and all orders entered pursuant to the Settlement Agreement shall be deemed vacated, including,
without limitation, any order certifying or approving certification of the Settlement Class;
provided, however, that if the Parties hereto agree jointly to appeal such ruling and the

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Settlement Agreement and Final Judgment and Order are upheld on appeal, then the Settlement
Agreement and Final Judgment and Order shall be given full force and effect according to their
terms.
20.

Escheatment. If any payment check is not cashed within six months of mailing,

Defendant may stop payment or decline to honor the check and shall be released from any
payment obligation to such individual; in such event, any such funds shall, within a reasonable
period of time, be contributed, as a cy pres award on behalf of such class member, to the
organizations identified in Paragraph 5(g).
MISCELLANEOUS PROVISIONS
21.

Interpretation. This Settlement Agreement contains the entire agreement among

the Parties hereto and supersedes any prior discussions, agreements or understandings among
them. All terms are contractual. In the event of an alleged ambiguity, there will be no
presumption or construction against either side as the drafter.
22.

Authority. Each signatory represents and warrants (i) that he, she, or it has

obtained all requisite approval and has all requisite power and authority to bind the party for
which he, she or it is executing and delivering this Settlement Agreement and to consummate the
transactions contemplated hereby; (ii) that the execution, delivery and performance of this
Settlement Agreement and the consummation by it of the actions contemplated herein have been
duly authorized by all necessary corporate action on the part of each party; and (iii) that this
Settlement Agreement has been duly and validly executed and delivered by each signatory and
constitutes each party’s legal, valid and binding obligation.

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23.

Headings. The headings contained in this Settlement Agreement are for

reference purposes only and shall not affect in any way the meaning or interpretation of this
Settlement Agreement.
24.

No Rescission on Grounds of Mistake. The Parties acknowledge that they have

made their own investigations of the matters covered by this Settlement Agreement to the extent
they have deemed it necessary to do so. Therefore, the Parties agree that they will not seek to set
aside any part of the Settlement Agreement on the grounds of mistake. Moreover, the Parties
understand, agree, and expressly assume the risk that any fact not recited, contained, or
embodied in the Settlement Agreement may turn out hereinafter to be other than, different from,
or contrary to the facts now known to them or believed by them to be true, and further agree that
the Settlement Agreement shall be effective in all respects notwithstanding and shall not be
subject to termination, modification, or rescission by reason of any such difference in facts.
25.

Amendment. This Settlement Agreement may be amended or modified only by a

written instrument signed by the Parties or their counsel. Amendments and modifications may
be made without notice to the Settlement Class unless notice is required by law or by the Court.
26.

Construction. For the purpose of construing or interpreting this Settlement

Agreement, the Parties agree that it is to be deemed to have been drafted equally by all Parties
hereto and shall not be construed strictly for or against any Party.
27.

Integration of Exhibits. The exhibits to this Settlement Agreement are an

integral and material part of the Settlement and are hereby incorporated and made a part of the
Settlement Agreement.

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28.

Jurisdiction. The United States District Court for the Northern District of Illinois

has jurisdiction over the Parties to this Settlement Agreement and the Settlement Class.
29.

No Admission. Neither this Settlement Agreement, nor any of its provisions, nor

any of the documents (including but not limited to drafts of the Settlement Agreement, the
Preliminary Approval Order, or the Final Judgment and Order), negotiations, or proceedings
relating in any way to the Settlement, shall be construed as or deemed to be evidence of an
admission or concession by any person, including Defendants, and shall not be offered or
received in evidence, or subject to discovery, in this or any other action or proceeding except in
an action brought to enforce its terms or except as may be required by law or Court order. The
provisions of this Paragraph shall become effective when this Settlement Agreement has been
signed by the Parties and shall be binding on the Parties and their counsel regardless of whether
the Settlement Agreement is approved by this Court or any other court and regardless of whether
the Settlement Agreement is otherwise rendered null and void pursuant to Paragraphs 18 and 19.
30.

Governing Law. This Settlement Agreement shall be governed by and construed

in accordance with the internal laws (as opposed to the conflicts of law provisions) of the State
of Illinois.
31.

Counterparts. This Settlement Agreement may be executed in counterparts, and

may be executed by facsimile, and as so executed shall constitute one agreement.
32.

No Media Statements. Neither the parties nor their counsel shall issue any press

release, or make any statement to any media or press of any sort, regarding this Settlement,
including any references on web sites maintained by Plaintiffs or their counsel, other than to state

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