Hester v. Vision Airlines, Inc.

Filing 401

ORDER granting 400 Motion for Approval of Pro Rata Distribution of Unclaimed Funds. Signed by Chief Judge Gloria M. Navarro on 9/22/2017. (Copies have been distributed pursuant to the NEF - JM)

Case 2:09-cv-00117-RLH-NJK Document 400 Filed 07/21/17 Page 1 of 6

UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

GERALD HESTER, on behalf of himself
And all others similarly situated,
Case No. 2:09-CV-00117-RLH
Plaintiff,
v.
VISION AIRLINES, INC.,
Defendant.

THE CLASS’ MOTION FOR APPROVAL OF
PRO RATA DISTRIBUTION OF UNCLAIMED FUNDS
The Class in this case consists of pilots and flight attendants that operated flights for the
United States government through a government subcontractor, Vision Airlines, Inc. (“Vision”),
into and out of the war zones in Baghdad, Iraq and Kabul, Afghanistan. The claims in this case
addressed Vision’s failure to pay the Class the hazard pay that the United States government
earmarked for them for flying into and out of those war zones. The case was litigated for many
years with the Class obtaining a jury verdict of $4,509,268, defending that verdict on appeal,
collecting on the bond that was posted to secure the judgment, and obtaining an additional $1.7
million settlement to settle the Class’ punitive damages claim against Vision Airlines. The funds
that Class Counsel collected were distributed to the Class members pursuant to the Court approved
allocation plans. The Claims Administrator has informed Class Counsel that after distributing the
money there remains $111,985.09 in unclaimed funds. The Class now seeks approval to initiate a
second distribution of the funds pro rata to the Class members that previously cashed their checks.

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BACKGROUND
On November 9, 2010, the Class obtained a jury verdict in its favor in the amount of
$4,509,268. [D.E. 222]. A final judgment of $5,270,230.06 was entered by the Court against
Vision on February 22, 2011. [D.E. 264]. The Ninth Circuit Court of Appeals affirmed the jury
verdict and remanded the case for a trial on punitive damages. [D.E. 297]. On December 19,
2012, the Court approved the distribution plan and shortly thereafter the funds obtained based on
the jury verdict and final judgment were distributed to the Class members. [D.E. 306]. While Class
Counsel was distributing those funds to the Class members, it was also actively litigating the
punitive damages claim against Vision. Due to Vision’s financial difficulties, the Class ultimately
settled those claims with Vision for $1.7 million.
On March 20, 2014, this Court issued an order preliminarily approving the Class Action
Settlement Agreement (“Settlement Agreement”) reached between the Class and Vision, and
directed the mailing of notice of the Settlement reached by the parties to the Class members. [D.E.
388]. On June 30, 2014, this Court held a fairness hearing for final approval of the settlement, and
on July 7, 2014, the Court issued an order finally approving the terms of the Settlement Agreement,
with distribution of the settlement proceeds to the Class pursuant to the court-approved plan of
allocation. Accordingly, the settlement of $1.7 million was also distributed pro rata to the
members of the Class.
The Claims Administrator has informed Class Counsel that $111,985.09 of the funds
disbursed to the Class members remains unclaimed and that a second distribution to the Class
would cost $5,000.1 The Class’ damages expert believes that he could calculate the amount owed

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The Claims Administrator has retained the addresses of the individual class members and upon this Court’s
approval of a second distribution, will send checks via U.S. mail to the class members who cashed the
checks sent to them in the previous distributions.

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to each Class member for a second distribution for an amount of $5,000. These proceeds, having
been generated by the value of the Class member’s claims, belong solely to the Class and should
remain in the hands of the Class members to the greatest degree possible. At the cost of $10,000,
Class Counsel can have the remaining funds distributed pro rata to those Class members that
previously cashed checks. Therefore, because redistribution of the remaining funds is logistically
and economically feasible, Class Counsel respectfully requests that the Court approve a second
distribution of the remainder of the Settlement Fund pro rata to the Class members that previously
cashed checks.
ARGUMENT
“Federal courts have broad discretionary powers in shaping equitable decrees for
distributing unclaimed class action funds.” Six (6) Mexican Workers v. Arizona Citrus Growers,
904 F.2d 1301, 1307 (9th Cir. 1990). Routinely, federal courts hold that redistribution of
unclaimed class action funds to existing class members is proper and preferred “[b]ecause the
settlement funds are the property of the class . . . .” Klier v. Elf Atochem N. Amer., Inc., 658 F.3d
468, 475 (5th Cir. 2011) (holding that additional pro rata distributions to class members should be
made as until it was no longer feasible to do so). “Each class member has a constitutionally
recognized property right in the claim or cause of action that the class action resolves. The
settlement-fund proceeds, having been generated by the value of the class members’ claims, belong
solely to the class members.” Id. at 474. Thus, “[w]here it is still logistically feasible and
economically viable to make additional pro rata distributions to class members, the district court
should do so . . . .” Id. at 475.
If the settlement involves individual distributions to class members and funds
remain after distributions (because some class members could not be identified or
chose not to participate), the settlement should presumptively provide for further
distributions to participating class members unless the amounts involved are too
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small to make individual distributions economically viable or other specific reasons
exist that would make such further distributions impossible or unfair.
Am. Law. Inst., PRINCIPLES OF THE LAW OF AGGREGATE LITIG. § 3.07, cmt. b (2010).
Pro rata distributions are particularly appropriate because it “ensures that 100% of the
[settlement] funds remain in the hands of class members” and, since class settlements rarely “pay
individual class members the full value of their claims, . . . redistribution is more likely to bring
the class members closer to that value rather than to be a windfall.” William B. Rubenstein, 4
NEWBERG ON CLASS ACTIONS § 12:30 (5th ed.). Indeed, “[a]s a general matter, few settlements
award 100 percent of a class member’s losses, and thus it is unlikely in most cases that further
distributions to class members would result in more than 100 percent recovery for those class
members.” Klier, 658 F.3d at 479 (internal quotations omitted) (holding that district court abused
its discretion by ordering cy pres distribution of settlement residue instead of redistributing residue
to class members).

Accordingly, the majority of federal courts have determined pro rata

redistributions to be the most appropriate method for addressing unclaimed settlement funds. See
Rubenstein, supra, at n.13 (listing a number of federal courts that have followed the ALI’s
recommendation to redistribute pro rata unclaimed settlement funds). “Money not claimed by
class members should be used for the class's benefit to the extent that is feasible.” Ira Holtzman,
C.P.A. v. Turza, 728 F. 3d 682, 689 (7th Cir. 2013).
Redistribution of the residual settlement proceeds to the Class is appropriate in this case.
As set forth above, the proceeds “belong solely to the class members” and a second pro rata
distribution to the Class properly “ensures that 100% of the settlement funds remain in the hands
of class members.” Klier, 658 F.3d at 474; Rubenstein, supra. An additional distribution will
“bring the class members closer to [the full] value” of their claims. Rubenstein, supra. In addition,
the comparatively low cost of $10,000 to administer the redistribution of the unclaimed proceeds
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to the Class makes a second distribution “logistically feasible and economically viable” and,
“[w]here it is still logistically feasible and economically viable to make additional pro rata
distributions to class members, the district court should do so.”

Klier, 658 F.3d at 475.

Accordingly, Class Counsel respectfully requests that the Court grant the Class’ Motion and enter
an Order approving a second distribution of the remainder pro rata to the Class, along with
expenses for that in an amount not to exceed $10,000.
CONCLUSION
WHEREFORE, the Class respectfully requests that this Court grant the Motion and enter
an Order approving a second distribution of the remainder pro rata to the Class members who
previously cashed checks, with expenses of administration and distribution not to exceed $10,000,
and award the Class any further relief the Court deems just and proper.
Dated July 21, 2017.
Respectfully submitted,

Buckner + Miles
3350 Mary Street
Miami, Florida 33133
Telephone: [phone]
s/David M. Buckner
David M. Buckner
Florida Bar No. 060550
[e-mail]
Brett E. von Borke
Florida Bar No. 0044802
[e-mail]

IT IS SO ORDERED.
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DATED this ___ day of September, 2017.
__________________________________
Gloria M. Navarro, Chief Judge
United States District Court

Counsel for Plaintiff and The Class

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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true copy of the forgoing has been served via the Court’s
CM/ECF system on July 21, 2017.

By: s/David M. Buckner
David M. Buckner

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