Casey v. Coventry Healthcare of Kansas, Inc.

Filing 152

JUDGMENT AND ORDER Granting Final Approval of Amended Class Action Settlement. Signed on 3/13/12 by District Judge Greg Kays. (Francis, Alexandra)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
MARY CASEY, on behalf of herself and
all others similarly situated,
Plaintiff,
v.
COVENTRY HEALTHCARE
OF KANSAS, INC.,
Defendant.

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Case No. 08-00201-CV-W-DGK

JUDGMENT AND ORDER GRANTING FINAL APPROVAL OF
AMENDED CLASS ACTION SETTLEMENT
Before the Court is Plaintiff and Defendant’s joint “Motion for and Memorandum in
Support of Motion for Final Approval of Amended Class Action Settlement” (Doc. 150). In this
motion, the parties seek the Court’s final approval of their “Amended Stipulation of Settlement”
(Doc. 147-1). Also before the Court is Plaintiff’s unopposed “Application for Attorney Fees”
(Doc. 149). Having carefully considered the parties’ arguments, including comments made
during the March 13, 2012 Fairness Hearing, the motions are GRANTED.
Background
This case was originally filed on March 18, 2008, when Mary Casey filed a Complaint
against Coventry claiming that Coventry violated Missouri Code of State Regulation 20 C.S.R.
4007.100 by imposing both copayment and coinsurance charges on certain Missouri HMO
members for the same health care service. After negotiations between the parties, an initial
settlement agreement was entered into in April 2011. Although the Court granted preliminary
approval of that initial settlement agreement, the Court ultimately issued an order denying final

approval of the settlement finding that it was not fair, adequate, and reasonable to the class
(Docs. 129, 142). In that order, the Court noted:
The Court is concerned that providing reimbursement to only 6% of class
members is inadequate, particularly where other methods exist for ensuring
that a larger portion of the settlement proceeds are actually paid to class
members. While the Court understands Coventry’s interest in limiting its
liability, a settlement whereby 94% of class members receive no monetary
compensation while three-fourths of the fund set aside for class members
reverts back to Defendants is not fair, adequate, and reasonable.
In response to the Court’s denial of final approval of the initial settlement, the parties
resumed settlement negotiations, and, on November 21, 2011, filed a joint motion for
preliminary approval of an amended settlement agreement (Doc. 147). On December 6, 2011,
the Court issued an Order which: (1) preliminarily approved the amended settlement agreement;
(2) certified a settlement class; (3) approved the proposed notice plan; and (4) appointed
plaintiff’s counsel as Class Counsel. Doc. 148. The parties now seek final approval of the
amended class action settlement and an award of attorneys’ fees in the amount of $470,894.07.
Standard
Rule 23(e) mandates judicial review of any “settlement, voluntary dismissal, or
compromise” of the “claims, issues, or defenses of a certified class.” Fed. R. Civ. P. 23(e). The
court is responsible for determining that the settlement terms are fair, adequate, and reasonable
and must act as a fiduciary, “serving as a guardian of the rights of absent class members.” In re
Wireless Telephone Federal Cost Recovery Fees Litig., 396 F.3d 922, 932 (8th Cir. 2005). In
determining whether a settlement is fair, adequate, and reasonable, a district court is required to
consider four factors: (1) the merits of the plaintiff’s case, weighed against the terms of the
settlement; (2) the defendant’s financial condition; (3) the complexity and expense of further
litigation; and (4) the amount of opposition to the settlement.

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Id.

“The most important

consideration in deciding whether a settlement is fair, reasonable, and adequate is ‘the strength of
the case for plaintiffs on the merits, balanced against the amount offered in settlement.’” Id. at
933 (quoting Petrovic v. Amoco Oil Co., 200 F.3d 1140, 1150 (8th Cir. 1999)). Ultimately, the
court must examine whether the interests of the class are better served by settlement than by
further litigation. In re Wireless, 396 F.3d at 932.
Discussion
The amended settlement agreement addresses the Court’s two primary concerns, that
under the original settlement agreement only 6% of the class recovers and that approximately
three fourths of the settlement fund reverts back to Defendant. First, the amended settlement
agreement provides recovery to 87% of class members as opposed to 6% under the initial
settlement agreement.

In addition, the amended settlement provides no reversion to the

Defendant. Rather, the entire $1,470,894.07 will be paid to the class and Class Counsel. Finally,
the amended settlement, like the original settlement, includes the provision that within sixty days
from entry of this judgment, Coventry “agrees to amend its Missouri HMO plans to eliminate
any requirement that plan members are to be charged, obligated to pay or made to incur both a
co-payment and coinsurance payment for the same healthcare service” (Doc. 147-1). Thus,
under the circumstances, the Court finds the amended settlement agreement is fair, reasonable,
adequate and in the best interests of the class. Accordingly, the parties’ joint motion for final
approval of amended class action settlement (Doc. 150) and Plaintiff’s motion for attorney fees
(Doc. 149) are granted.
IT IS SO ORDERED.
Date: March 13, 2012
/s/ Greg Kays
GREG KAYS, JUDGE
UNITED STATES DISTRICT COURT

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