Harris v. U.S. Physical Therapy, Inc.

Filing 57

ORDER that the notices of settlement (#51-2 Exhibit A) must be distributed as outlined in this Order. FURTHER ORDERED that a Final Fairness Hearing is scheduled for 12/7/2012 at 01:30 PM in LV Courtroom 3A before Magistrate Judge Cam Ferenbach. Signed by Magistrate Judge Cam Ferenbach on 9/18/12. (Copies have been distributed pursuant to the NEF - MMM)

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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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***
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WELTONIA HARRIS
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Plaintiff,

2:10-cv-01508-JCM -VCF

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vs.

ORDER

U.S. PHYSICAL THERAPY, INC., et al.,

(Remand from District Judge: Final Fairness

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Defendants.

Hearing #54)

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Before the court is the matter of Harris v. U.S. Physical Therapy, Inc., et al (Case No.
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2:10-cv-01508-JCM -VCF).
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Background
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On May 31, 2012, plaintiff Weltonia Harris filed a motion for preliminary approval of class
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action settlement and related orders. (#47 and #48). In plaintiff’s motion, she asked this court to take
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the following steps in the settlement approval process: (1) grant preliminary approval of the settlement
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agreement, including the settlement relief to the class and the fees and costs payment to plaintiff’s
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counsel; (2) provisionally certify the proposed settlement class and appoint Weltonia Harris as
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settlement class representative; (3) appoint as class counsel the law firm of Caddell & Chapman; (4)
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approve the proposed notice plan and the forms of settlement notice and order provision of such notice;
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and (5) schedule the final fairness hearing and related dates as proposed by the parties. (#48). On June
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14, 2012, defendant U.S. Physical Therapy, Inc, filed a response to plaintiff’s motion, stating that it
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“agrees that the relief sought on [p]laintiff’s [motion] is appropriate” and joins in her request. (#52).

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On July 18, 2012, the undersigned Magistrate Judge issued a report and recommendation
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(hereinafter “R&R”) finding that the settlement is reasonable, fair, and adequate, and recommending
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granting the relief sought in plaintiff’s motion (#47 and #48). (#53). The R&R recommended that the
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District Judge grant preliminary approval of the proposed settlement and certify the class. Id. The R&R
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also recommended that the District Judge order notice of settlement be distributed in accordance with
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the terms of the settlement agreement (#51-1 Exhibit 1) and schedule a final fairness hearing “for a date
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that would provide class members enough advance notice to be able to attend if they desire.” Id. Any
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objection to the R&R was due by July 18, 2012. Id. No objection was filed.
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On August 9, 2012, the District Judge issued an order adopting the R&R and granting the motion
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for preliminary approval of class action settlement and related orders (#47 and #48), thereby (1)
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granting preliminary approval of the settlement agreement (#51-1 Exhibit 1), including settlement relief
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to the class members of $1,000, an incentive award to plaintiff Harris of $1,5000, and a fee payment to
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plaintiff’s counsel of $85,977.50, plus reasonable and necessary expenses and costs estimated to be no
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more than $8,608.421, (2) certifying the proposed class of 47 members and appointing plaintiff Harris as

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settlement class representative, (3) appointing the law firm of Caddell & Chapman as class counsel, and
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(4) approving the proposed notice plan (#51-1 Exhibit 1 Section (3)) and the proposed form of
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settlement notice (#51-2 Exhibit A). (#54). The District Judge also remanded the final fairness hearing
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and the scheduling therefor to the undersigned Magistrate Judge. Id.
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Remand for Distribution of Notice and Scheduling Final Fairness Hearing
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The Manual for Complex Litigation describes a three-step procedure for approval of class action
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settlements: (1) preliminary approval of the proposed settlement at an informal hearing; (2)
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dissemination of mailed and/or published notice of the settlement to all affected class members; and (3)
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a “formal fairness hearing” or final settlement approval hearing, at which class members may be heard
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Plaintiff’s counsel must submit an application for attorneys’ fees with the motion for final approval.
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regarding the settlement, and at which evidence and argument concerning the fairness, adequacy, and
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reasonableness of the settlement may be presented. MANUAL FOR COMPLEX LITIGATION
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(FOURTH) § 21.632 (2008) (hereinafter “MANUAL”).
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A.

Preliminary Approval

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As the District Judge adopted the R&R and granted the preliminary approval of the proposed
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settlement, the first step is satisfied. (#54); See MANUAL §13.14 (stating that a formal hearing is not
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required at the preliminary approval stage, and the court may grant the parties’ motion upon an informal
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request by the settling parties).
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B.

Dissemination of Mailed Notice

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In accordance with Rule 23(e)(1)(B), step two requires “the court to ‘direct notice in a reasonable
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manner to all class members who would be bound by a proposed settlement, voluntary dismissal, or
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compromise’ regardless of whether the class was certified under Rule 23(b)(1), (b)(2), or (b)(3).”
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MANUAL §§ 21.312 and 21.632. Rule 23(e)(1)(B) requires notice in a reasonable manner to “all class
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members who would be bound by a proposed settlement, voluntary dismissal, or compromise.” Id.
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“[I]ndividual notice is required, where practicable, in Rule 23(b)(3) actions.”

Id.

“In an order

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preliminarily approving the settlement under Rule 23(e), the judge sets the date for providing notice of
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the proposed settlement. This order, as well as the notice, should establish the time and place of a public
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hearing on the proposed settlement and specify the procedure and timetable for opting out, filing
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objections, and appearing at the settlement hearing.” Id.
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The “notice should announce the terms of a proposed settlement and state that, if approved, it will
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bind all class members. If the class has been certified only for settlement purposes, that fact should be
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disclosed. Even though a settlement is proposed, the notice should outline the original claims, relief
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sought, and defenses so class members can make an informed decision about whether to opt out.” Id.
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Plaintiff attached the proposed form of notice of the settlement to the settlement agreement, which

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complies with the requirements outlined above. (#51-2 Exhibit A). The proposed form of notice was
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approved by the District Judge.

(#54).

As the fairness hearing and the scheduling thereof was

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remanded to the undersigned Magistrate Judge, and § 21.312 requires the judge to set the date for
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providing notice and “the time and place of the public hearing on the proposed settlement and specify
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the procedure and timetable for opting out, filing objections, and appearing at the settlement hearing,"
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the undersigned orders that notice be distributed as follows:
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(1)

On or before September 21, 2012, defense counsel must provide the law firm of

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Caddell & Chapman with updated contact information from its personnel files for
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each of the 47 class members.
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(2)

On or before September 26, 2012, the law firm of Caddell & Chapman must send

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each class member, by First Class Certified Mail, the court approved notice of the
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settlement (#51-2 Exhibit A)2 providing the time and place of the final fairness

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hearing and providing for an objection date of October 15, 2012, and an opt-out
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and intention to appear date of November 7, 2012.
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(3)

On or before November 15, 2012, the law firm of Caddell & Chapman must

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respond to any class member objections or inquiries regarding the settlement, the
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terms thereof, and/or the final fairness hearing.
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C.

Scheduling Final Approval Hearing

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Step three requires that a “formal fairness hearing” or final settlement approval hearing, at which
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class members may be heard regarding the settlement, and at which evidence and argument concerning
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the fairness, adequacy, and reasonableness of the settlement may be presented,” be scheduled for a date
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that would provide class members enough advance notice to be able to attend if they desire. MANUAL
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§ 21.632. The final fairness hearing is scheduled for December 7, 2012, at 1:30 p.m. in Courtroom 3A.
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As the undersigned will be conducting the final fairness hearing, paragraphs 18 and 19 on page 8 of the notice of settlement
(#51-2 Exhibit A) must be amended to read “Judge Ferenbach” in place of “Judge Mahan.”
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The court finds that, in accordance with § 21.632, this date provides class members enough advance
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notice to be able to attend if they desire. Id.
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Accordingly, and for good cause shown,
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IT IS HEREBY ORDERED that the notices of settlement (#51-2 Exhibit A) must be distributed
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as outlined above.
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IT IS FURTHER ORDERED that a final fairness hearing is scheduled for December 7, 2012, at
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1:30 p.m. in Courtroom 3A.
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DATED this 18th day of September, 2012.
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_________________________
CAM FERENBACH
UNITED STATES MAGISTRATE JUDGE

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