Keith v. Back Yard Burgers of Nebraska, Inc. et al

Filing 116

ORDER adopting the 115 Findings and Recommendation in their entirety. granting 112 Motion to Certify Class; The Unopposed Motion for Conditional Class Certification, Appointment of Class Representative, Appointment of Class Counsel, Preliminary Approval of Class Settlement And Notice to Class And Setting Of Final Approval Hearing (Filing No. 112 ), is granted, as set forth within the order. Ordered by Chief Judge Laurie Smith Camp. (MKR)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
BRADY KEITH,
)
Individually and on behalf of a class, )
)
Plaintiff,
)
)
v.
)
)
BACK YARD BURGERS OF
)
NEBRASKA, INC.; BACKYARD
)
BURGERS, INC., and DOES 1-10,
)
)
Defendants.
)

Case No. 8:11-CV-00135

ORDER

ORDER ADOPTING FINDINGS AND RECOMMENDATION AND GRANTING
UNOPPOSED MOTION FOR (1) CONDITIONAL CLASS CERTIFICATION; (2)
APPOINTMENT OF CLASS REPRESENTATIVE; (3) APPOINTMENT OF
CLASS COUNSEL; (4) PRELIMINARY APPROVAL OF CLASS ACTION
SETTLEMENT AND NOTICE TO CLASS; AND (5) SETTING OF FINAL
APPROVAL HEARING
WHEREAS, Plaintiff Brady Keith, on behalf of the Class, as defined below
(“Plaintiff”), have entered into a settlement (the “Settlement”) of the claims
asserted in the above-captioned class action (the “Action”) with Defendant Back
Yard Burgers of Nebraska, Inc., including its affiliates (“Defendant”);
WHEREAS, the “Class,” as defined in Section 2.1, of the Agreement of
Settlement between Plaintiff and Defendant (the “Settlement Agreement”),
consists of all persons who used a Visa, MasterCard, or Discover debit or credit
card, and/or American Express credit card at any of Defendant’s restaurant
where Defendant provided an electronically printed receipt at the point of sale or
transaction that violated FACTA’s truncation requirements of that person’s credit
or debit card for a time period beginning November 3, 2010, until the date of the
filing of the Action, April 15, 2011; and
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WHEREAS, the Plaintiff has made an application, pursuant to Rule 23 of
the Federal Rules of Civil Procedure, for an Order appointing class counsel and
class representatives, and certifying for purposes of settlement a class of all
persons who used a Visa, MasterCard, or Discover debit or credit card, and/or
American Express credit card at Defendant’s restaurant where the person was
provided an electronically printed receipt at the point of sale or transaction that
displayed the expiration date of that person’s credit or debit card and/or more
than five digits of that person’s credit or debit card number during the period
beginning November 3, 2010, to the date the Class is certified; and
WHEREAS, the Parties have made an application, pursuant to Rule 23(e)
of the Federal Rules of Civil Procedure, for an Order preliminarily approving the
Settlement of this Action in accordance with the Settlement Agreement; and
WHEREAS, the Court, having read and considered the Settlement
Agreement and the papers filed in support of Plaintiff’s Unopposed Motion for (1)
Conditional Class Certification; (2) Appointment of Class Representative; (3)
Appointment of Class Counsel; (4) Preliminary Approval of Class Action
Settlement and Notice to Class; and (5) Setting of Final Approval Hearing and
finding that substantial and sufficient grounds exist for entering this Order;
IT IS ORDERED:
1.

The Findings and Recommendation (Filing No. 115) are adopted in their

entirety.
2.

The Unopposed Motion for Conditional Class Certification, Appointment of

Class Representative, Appointment of Class Counsel, Preliminary Approval of

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Class Settlement And Notice to Class And Setting Of Final Approval Hearing
(Filing No. 112), is granted, as follows:
DEFINITIONS
3.

The Court, for purposes of this Order, adopts all definitions of terms set

forth in the Settlement Agreement.
4.

The Unopposed Motion for Conditional Class Certification, Appointment of

Class Representative, Appointment of Class Counsel, Preliminary Approval of
Class Settlement and Notice to Class and Setting of Final Approval Hearing
(Filing No. 112), is granted.
APPOINTMENT OF CLASS REPRESENTATIVES
5.

The Court finds that Plaintiff Brady Keith will fairly and adequately protect

the interests of the class pursuant to Rule 23(a)(4) of the Federal Rules of Civil
Procedure and therefore appoints Plaintiff as Class Representative.
APPOINTMENT OF CLASS COUNSEL
6.

The Court finds that proposed class counsel are qualified to represent the

Class and therefore appoints as Class Counsel Joshua C. Dickinson and Bryant
T. Lamer of the law firm of Spencer Fane Britt & Browne LLP, pursuant to Rule
23(g) of the Federal Rules of Civil Procedure.
CERTIFICATION FOR SETTLEMENT PURPOSES ONLY
7.

The Court preliminarily concludes that, for the purposes of approving this

settlement only and for no other purpose and with no other effect on the Action,
should the proposed Settlement Agreement not ultimately be approved, the
proposed Settlement Class meets the requirements for certification under Rule

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23(a) and Rule 23(b)(3) of the Federal Rules of Civil Procedure and therefore
certifies the Class for settlement purposes only.
PRELIMINARY APPROVAL AND SETTLEMENT HEARING
8.

The Court finds that for purposes of preliminary approval, the terms of the

Settlement Agreement are within the range of reasonableness for a class
settlement. The terms of the Settlement Agreement are, therefore, preliminarily
approved, subject to further consideration at a hearing to be held consistent with
the requirements of Fed. R. Civ. P. 23(e) (the “Final Approval Hearing”), which
shall be held before this Court on Thursday, February 19, 2014, at 1:00 p.m. in
Courtroom 2 of the Hruska United States Courthouse, 111 S 18th Plaza, Omaha,
NE 68102.
9.

During the Final Approval Hearing, the Court will: (i) determine whether

the proposed Settlement is fair, reasonable and adequate; (ii) determine whether
any objections to the Settlement should be overruled; (iii) determine whether a
Final Order approving the Settlement and dismissing any of the actions should
be entered; and (iv) consider the request by Class Counsel for payment of a
reasonable Fee and Expense Award to include attorneys’ fees, costs and
expenses, and a class representative incentive fee.
NOTICE TO CLASS MEMBERS
10.

Class Counsel and counsel for Defendant shall cause notice of the

pendency of the Action, the proposed Settlement, the Final Approval Hearing,
and the request by Class Counsel for payment of a reasonable Fee and Expense
Award, as follows:

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(a)

Settlement Payment. The Settlement Payment shall be as

follows:
BYBN will enter into a Consent Judgment against it and in
favor of the Class in the amount of $2,792,400 (“the Consent
Judgment”). In addition, BYBN will distribute and honor coupons
and post notice of the Claims Process as outlined in paragraphs b
and c below, and BYBN will comply with all requirements of FACTA
going forward. Class Counsel will seek an award from this common
fund judgment of up to 40% of the amount of the Consent
Judgment, or $1,116,960 and BYBN will not contest such request.
BYBN fully and unconditionally quitclaim assigns to Plaintiff
any claim it may have against Data Cash Register (“DCR”) based
on or arising out of Plaintiff’s and the Class members’ claims
against BYBN, including but not limited to any claims it may have
for contribution, indemnity, fraud, negligence, breach of contract,
any statutory claims under federal, state or local law, and any other
claims related in any way to BYBN’s violations of FACTA as alleged
by Plaintiff in this matter (the “DCR Claims”).

Plaintiff has

acknowledged that the DCR Claims are being assigned as is/where
is without any representations or warranties express or implied
being made by BYBN about the DCR Claims.
In consideration for this assignment, Plaintiff will never
attempt to enforce the Consent Judgment against any officer,

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director, shareholder etc. of BYBN, collect from any of its officers,
directors, shareholders etc., garnish any bank accounts of any
officer, director shareholder etc. of BYBN or execute on any
property of any officer, director shareholder etc. of BYBN. As a
precondition to any efforts to collect any monies from BYBN,
Plaintiff will first exhaust any and all reasonable efforts to collect the
Consent Judgment against DCR; and once all reasonable collection
efforts against DCR have been exhausted, Plaintiff must, within
thirty (30) days from the date of final exhaustion of remedies
against DCR, time being of the essence, notify BYBN through
counsel of its intention to pursue collection against BYBN and
request a statement, to be issued within twenty (20) days, from
BYBN’s accountants certifying BYBN’s book value net worth and
liquid cash on hand.

Plaintiff is forever barred from pursuing

collection against BYBN unless Plaintiff’s accountant certifies that
BYBN has a book value net worth exceeding $1,000,000 and
liquidated cash on hand exceeding $250,000 or if Plaintiff fails to
notify BYBN through counsel of its intention to pursue collection
against BYBN within thirty (30) days from the date of final
exhaustion of remedies against DCR. In the event that Plaintiff
becomes forever barred from pursuing collection against BYBN as
a result of any of the foregoing reasons, Plaintiff shall file a
satisfaction of judgment for the Consent Judgment within twenty

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(20) days of becoming forever barred from pursuing collection
against BYBN.
Until it is released from this obligation by Plaintiff, BYBN will
preserve any information in its possession that may relate to any
claim against DCR described in section (ii) above, or that may
otherwise assist Plaintiff or Class Counsel in collecting the Consent
Judgment against DCR.

BYBN will cooperate with Plaintiff and

Class Counsel in pursuing collection of the Consent Judgment
against DCR by providing testimony, documents and other
information that may be relevant to any claims against DCR upon
request by Plaintiff or Class Counsel.
For a period of 60 days beginning no later than 21 days after
entry of the Consent Judgment described in section (i) above,
BYBN shall make available in its restaurant coupons for a free soft
drink with the purchase of an entrée to anyone who submits a valid
claim as defined in paragraph 6(b) below. These coupons shall
only be redeemable on a subsequent visit to the restaurant, shall
be transferable, stackable with any other discounts or coupons, and
shall be valid for 6 months from the beginning of the distribution
period. Class members may also obtain a coupon via the thirdparty administrator through the website referenced in section 6
below.

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(b)

Publication Notice and Website Notice. Publication Notice

of the Settlement Agreement will be provided substantially in the form
attached as Exhibit “A” attached hereto. For a period of 60 days, which
will coincide with the coupon distribution period, BYBN shall cause notice
of the Consent Judgment to be posted in its restaurant and published
once a week during the first two weeks of the 60-day period in The Daily
Reporter.
For the same 60-day period referenced in the preceding paragraph,
claim forms shall be available at the restaurant and through a website
referenced in the posted notice and publication notice (the “Website
Notice”). Claim forms shall require the class member to attest that he or
she did in fact engage in the number of transactions for which he or she is
making a claim at BYBN’s restaurant during the Relevant Period. Claim
forms must be completed and returned via e-mail or regular mail to a thirdparty administrator.
(c)

Website Notice. Within fourteen (14) days following entry of

this Order, but no later than the earlier of the date the Publication Notice is
first published, the Administrator shall create, maintain and establish a
dedicated and operational website where potential class members can
obtain a more detailed settlement notice (the “Website Notice”), attached
hereto as Exhibit “B”, and also submit a claim form, as further discussed
below.

The website’s address shall be referenced in the Publication

Notice. The website shall include information about the Action and the

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Settlement, including a copy of the Complaint in the Action; a copy of the
Settlement Agreement; a downloadable claim form; and the name,
address and telephone number of the Administrator. The Administrator
shall maintain the website until 30 days following entry of the Final Order
in this Action.
(d)

Seven (7) days prior to the Final Approval Hearing, the

Defendant will file with the Court and serve upon Class Counsel proof, by
affidavit or declaration, of such Publication Notice and Website Notice.
(e)

Defendant designates Analytics to assist in the Notice and

Settlement claims administration process (the “Administrator”).
11.

The Court approves the form of Notice.

The Court finds that the

procedures established for Notice and the posting and publication of such Notice
as set forth in this Order meet the requirements of Rule 23 of the Federal Rules
of Civil Procedure, and due process.

The Court further finds that these

procedures are the best notice practicable under the circumstances and shall
constitute due and sufficient notice to all persons and entities entitled thereto.
12.

The Settlement Administrator shall be responsible for the receipt of all

written communications from the Class and shall preserve same, and all other
written communications from members of the Class, or any other person in
response to the Notices.
OPT-OUT/EXCLUSION FROM THE SETTLEMENT
10.

Opt-Out/Exclusion. Any Class Member, except Plaintiff, may seek to be

excluded from this Settlement Agreement and from the Settlement Class as
detailed in the Class Notice and within the time and in the manner provided by
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the Court.

To be timely, a request for exclusion must be appropriately

postmarked and mailed within 90 days after entry of the Preliminary Approval
Order and pursuant to its terms. A copy of the opt-out must be mailed to Class
Counsel, Joshua C. Dickinson, Spencer Fane Britt & Browne LLP, 12925 West
Dodge Road Omaha, NE 68154, and to Defendant’s Counsel, J. Daniel Weidner,
Koley Jessen P.C., L.L.O., 1125 S. 103rd Street, Suite 800, Omaha, NE 68124.
Any Class Member so excluded shall not be bound by the terms of this
Settlement Agreement nor be entitled to any of its benefits.
OBJECTIONS BY CLASS MEMBERS
11.

Objection.

Any Class Member, except Plaintiff, may object to the terms

of this Settlement Agreement in writing, as detailed in the Class Notice and within
the time and in the manner provided by Court order. Written notice of objection,
together with a statement of reasons for the objection, must be postmarked and
mailed to the Clerk of Court within 90 days after entry of the Preliminary Approval
Order and pursuant to its terms. An objector’s attorney shall file an appearance
with the Clerk of the Court, with copies to counsel. Any Class Member who
exercises his or her right to object to this Settlement Agreement will be
responsible for his or her own attorney’s fees and costs. A copy of the objection
must also be served upon Class Counsel, Joshua C. Dickinson, Spencer Fane
Britt & Browne LLP, 12925 West Dodge Road, Omaha, NE 68154 and to
Defendant’s Counsel, J. Daniel Weidner, Koley Jessen P.C., L.L.O., 1125 S.
103rd Street, Suite 800, Omaha, NE 68124. To preserve timeliness, the objection
must be postmarked and mailed to counsel for Plaintiff and Defendant within 90
days after entry of the Preliminary Approval Order. The Class Notice shall advise
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Class Members of this option.

Any objections must be in writing and timely

submitted or else they are waived. All objectors shall identify all other cases in
which they filed an objection, as to the caption of the case, case number, and the
venue where the case was filed.
Any Class Member who does not make an objection in the manner
provided shall be deemed to have waived such objection and shall forever be
foreclosed

from

making

any

objection

to

the

fairness,

adequacy

or

reasonableness of the proposed Settlement, the Order and Final Judgment to be
entered approving the Settlement, the plan for distribution of economic relief and
equitable relief pursuant to the Settlement Agreement or the request for
attorneys’ fees, reimbursement of expenses and Class Representative incentive
fees.
CLAIMS (CLAIMS PROCESS)
12.

The Claims Period shall begin on November 1, 2014. Class Members

may submit claims during the Claims Period for determination whether their
claims constitute Valid Claims. To constitute a “Valid Claim,” a claim must meet
the following conditions:
For a claim to be valid, the claim form must be accompanied by either (a) a
copy of a printed credit or debit card receipt from BYBN’s restaurant
during the class period for each transaction for which the class member is
making a claim, or (b) a copy of the class member’s bank statement or
credit card statement(s) indicating that the class member engaged in the
number of transactions for which he or she is making a claim at BYBN’s
restaurant during the Relevant Period.
Completed claim forms and supporting materials must be e-mailed or
postmarked no later than 90 days after the claim forms first become
available (30 days after the conclusion of the 60-day period referenced
above).

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13.

Within forty-five (45) days after the Effective Date, the Administrator shall

provide Class Counsel and Settling Defendant’s counsel a report indicating,
among other things, the number of claims submitted, the number and total dollar
value of vouchers sent to Class Members, the number of claims submitted that
were rejected and the reason(s) for each such rejection. Upon receipt of the
report, Class Counsel may request further information and/or documentation
from the Administrator concerning any rejected claims and may challenge the
basis for rejection with the Administrator within thirty (30) days.
14.

Any Class Member who does not submit a Valid Claim and has not

requested exclusion shall not be entitled to a coupon for a free soft drink with the
purchase of an entrée or the potential for a future cash payment. These coupons
shall only be redeemable on a subsequent visit to the restaurant, shall be
transferable, stackable with any other discounts or coupons, and shall be valid
for 6 months from the beginning of the distribution period. Class members may
also obtain a coupon via the third-party administrator through the website
established by Defendant.
PRESERVATION OF PRE-SETTLEMENT RIGHTS
15.

If the Settlement and the Settlement Agreement, as a whole, are not

approved by the Court or do not receive final approval after review by any court
of competent jurisdiction for any reason, or is terminated in accordance with its
terms for any other reason, the Parties will be returned to their status
immediately prior to execution of the Settlement Agreement as if the Settlement
Agreement had never been made. Accordingly, upon any such termination for
any reason (i) the Parties will be deemed to have preserved all their substantive
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or procedural rights or defenses with respect to the Action as of the date of
execution of this Agreement, and (ii) the Parties shall not be deemed to have
waived any substantive or procedural rights or defenses of any kind that they
may have.
ADDITIONAL OBLIGATIONS OF THE PARTIES
16.

The Administrator shall be responsible for administering the initial receipt

of responses to the Notice, responding to inquiries from Class Members, and
preserving all correspondence in response to the Notice.
17.

The Settling Defendant shall cause to be filed with the Court affidavit(s) or

declaration(s) of the person or persons under whose general direction Notice
shall have been provided, showing that such Notice has been provided in
accordance with this Order by December 30, 2014.
18.

Class Counsel shall submit to the Court any papers in support of its

application for attorneys’ fees, reimbursement of expenses and class
representative inventive fee by February 10, 2014.
19.

Class Counsel and counsel for Settling Defendant, if they choose, shall file

with the Court and serve on opposing counsel any papers in reply to any
objection received, no later than three (3) days prior to the Final Approval
Hearing.
POWERS AND JURISDICTION OF THE COURT
20.

The Court expressly reserves its right to adjourn the Final Approval

Hearing or any further adjournment thereof, and to approve the Settlement
Agreement, including any modifications thereto that are acceptable to the
Parties, without any further notice to Class Members.
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21.

The Court will have continuing jurisdiction over the Action for the purpose

of implementing the Settlement, all related matters, and issuance of a Final
Order.
22.

The Parties to the Settlement Agreement are directed to carry out their

obligations under the terms thereof.

Dated this 15th day of September, 2014.
BY THE COURT:
s/Laurie Smith Camp
Chief United States District Judge

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