Chery v. Conduent Education Services, LLC et al

Filing 106

ORDER GRANTING PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT granting #105 Motion. A Settlement Fairness Hearing is SCHEDULED to be held before this Court on Thursday, December 1st, 2022, at 1:00 p.m. at the United States District Court, Northern District of New York, Alexander Pirnie Federal Building and U.S. Courthouse, 10 Broad Street, Utica, New York, 13501. Signed by Judge David N. Hurd on 7/26/2022. (khr)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
-------------------------------JEFFREY CHERY, on behalf of
himself and all others similarly
situated,
Plaintiff,
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1:18-CV-75

CONDUENT EDUCATION
SERVICES, LLC, formerly
known as ACS, ACCESS
GROUP, INC., and ACCESS
FUNDING 2015-1, LLC,
Defendants.
-------------------------------DAVID N. HURD
United States District Judge
ORDER GRANTING PRELIMINARY APPROVAL OF CLASS ACTION
SETTLEMENT
On January 18, 2018, named plaintiff Jeffrey Chery (“Chery” or “plaintiff”)
filed this class action against defendants Conduent Education Services, LLC
(“Conduent”), Access Group, Inc. (“Access Group”), and Access Funding
2015-1, LLC (“Access Funding”) (collectively “Conduent”), three entities that
held or serviced Federal Family Education Loan Program (“FFELP”)
loans. According to the complaint, Conduent interfered with borrowers’

rights to prepay or consolidate their FFELP loans in accordance with
guarantees set out in the written loan agreements and federal law.
On April 24, 2018, Conduent moved to dismiss Chery’s complaint. Dkt.
No. 20. That motion was denied. Chery v. Conduent Educ. Servs., LLC
(“Chery I”), 2019 WL 1427140 (N.D.N.Y. Mar. 29, 2019). Thereafter, the
parties engaged in some contested discovery before U.S. Magistrate Judge
Christian F. Hummel. Dkt. No. 60; Chery v. Conduent Educ. Servs., LLC
(“Chery II”), 2020 WL 4783167 (N.D.N.Y. Aug. 18, 2020).
On January 15, 2021, Chery moved under Federal Rule of Civil Procedure
(“Rule”) 23 to certify a class of student loan borrowers whose right to prepay
their FFELP loans was thwarted because Conduent failed to provide them
with a timely Loan Verification Certificate (“LVC”). Dkt. No. 79.
On May 5, 2021, Chery’s motion for class certification was granted over
Conduent’s opposition. Chery v. Conduent Educ. Servs., LLC (“Chery III”),
2021 WL 1791756 (N.D.N.Y.). The Court appointed Chery as representative
and certified the following Class:
All student loan borrowers who submitted an
application to consolidate one or more FFELP Loans
into a Direct Consolidated Loan between January 18,
2012, and the date of the Order certifying the Class,
for which Defendants failed to provide an LVC within
ten days of receiving the request therefor.
Chery III, 2021 WL 1791756, at *3.
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On August 13, 2021, the parties cross-moved under Rule 56 for summary
judgment. Dkt. No. 91, 92. Chery’s motion sought judgment in favor of the
Class on the General Business Law § 349 (“Section 349”) claim. Dkt. No. 91.
Conduent, on the other hand, sought a judgment dismissing the class action
in its entirety. Dkt. No. 92. Conduent also moved to preclude Chery’s expert
on damages. Dkt. No. 93.
On January 20, 2022, Chery’s motion was granted and defendants’
motions were denied. Chery v. Conduent Educ. Servs., LLC (“Chery IV”), –F.
Supp. 3d–, 2022 WL 179876 (N.D.N.Y.). Thereafter, the parties informed the
Court that they had reached a settlement in principle. Dkt. No. 103. They
sought to stay this matter while they hashed out a settlement agreement and
prepared a motion for approval. Id. That request was “so ordered” on March
21, 2022. Dkt. No. 104.
On July 22, 2022, Chery filed an “unopposed” motion under Rule 23 for
preliminary approval of the settlement. Dkt. No. 105. As plaintiff explains,
the parties have agreed to settle the matter in exchange for a $3,250,000 cash
payment made for the benefit of the Class, which consists of approximately
2,995 borrowers. Id. Class Members with claims for less than $750 will
automatically receive a cash award; Class Members with claims greater than
$750 will receive a cash award after submitting appropriate verification. Id.

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Upon review of Chery’s memorandum of law and the supporting
documentation in light of the governing law, it is
ORDERED that
1. The motion for preliminary approval of the class action settlement is
GRANTED;
2. The Court FINDS on a preliminary basis that the proposed Settlement 1
resulted from informed, good faith, and extensive arms’ length negotiations,
including mediation under the direction of an experienced mediator;
3. The Court FINDS that the proposed Settlement meets the
requirements for preliminary approval, and in particular falls within the
range of reasonableness and potential for final approval, appears to be
reasonable in light of the risk inherent in continuing with this litigation, and
was arrived at after an arms’ length negotiation involving experienced
counsel;
4. The Court APPROVES the form, substance, and requirements of the
Notices of the Proposed Settlement of Class Action (the “Notices”) annexed to
the Stipulation and Settlement Agreement as Exhibits A-1 and A-2;
5. The Court APPROVES the appointment of Rust Consulting, Inc. as the
Claims Administrator;
1 The Stipulation and Settlement Agreement is attached as Exhibit 1 to the Kuehn

Declaration. Dkt. No. 105-2. All capitalized terms used in this Order have the meanings defined in
the parties’ Stipulation. Id.
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6. The Claims Administrator shall cause the Notices, substantially in the
form annexed to the Stipulation and Settlement Agreement, to be mailed by
first class mail, postage prepaid, within thirty calendar days of this Order to
all Class Members identified in the Notice Database;
7. This Order, as well as the Notices and Stipulation, shall be posted on
the Settlement Website established by the Claims Administrator;
8. Plaintiff’s Counsel shall, no later than twenty days before the
Settlement Fairness Hearing, file with the Court proof of mailing of the
Notices and establishment of the Settlement Website;
9. The form and content of the Notices, and the method of notifying the
Class of the Settlement and of its terms and conditions meet the
requirements of the Federal Rules of Civil Procedure and due process, are the
best notice practicable under the circumstances, and shall constitute due and
sufficient notice to all persons entitled thereto;
10. Class Members with potential claims of $750 or more will be required
to file a Verification in order to be entitled to participate in the distribution of
the Net Settlement Amount as follows:
(a) A properly executed Verification, substantially in the form attached
to the Stipulation and Settlement Agreement as part of Exhibit A-2, must be
submitted to the Claims Administrator at the address indicated in the

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Notices, or online through the Settlement Website, no later than thirty days
before the Settlement Fairness Hearing;
(b) Any Class Member with a potential claim of $750 or more who does
not do so within the time period provided shall be barred from sharing in the
distribution of the proceeds of the Net Settlement Amount, unless otherwise
ordered by the Court, but shall nevertheless be bound by any Judgment
entered by the Court;
(c) Each Verification shall be deemed to have been submitted on the
date submitted online, or when postmarked (if properly address and mailed
by first class mail, postage prepaid);
(d) The Verification submitted by each Class Member must satisfy the
following conditions:
(i) it must be properly completed signed, and submitted in a timely
manner in accordance with the provisions of the preceding paragraphs;
(ii) if the person executing the Verification is acting in a
representative capacity, a certification of his or her current authority to act
on behalf of the Class Member must be included in the Verification; and
(iii) the Verification must be signed under penalty of perjury;
11. In the event that the Claims Administrator cannot determine
Taxpayer Identification Numbers for certain Eligible Class Members based
on CES’s business records, the Claims Administrator may require Eligible
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Class Members who have claims of $600 or more to submit a W-9 as a
condition precedent to payment;
12. Each Class Member who did not timely exclude themselves from the
Class shall be deemed to have submitted to the jurisdiction of this Court with
respect to the Settlement, and shall (subject to the effectuation of the
Settlement) release all Released Claims as provided in the Stipulation
against the Released Parties;
13. Class Members shall be bound by the Stipulation and all
determinations and judgments in this Action concerning the Settlement,
including, but not limited to, the Releases and covenants not to sue provided
for therein, unless they request exclusion from the Class in a timely and
proper manner as follows:
(a) A Class Member wishing to exclude himself or herself from the
Class shall, no later than thirty calendar days prior to the date scheduled for
the Settlement Fairness Hearing, mail a request for exclusion in written form
by first class mail to the Claims Administrator at the address designated in
the Notices;
(b) Such a request for exclusion shall:
(i) clearly indicate the name, address, and telephone number of the
person seeking exclusion;

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(ii) state that the person requests to be excluded from the Class and
settlement in Chery v. Conduent Education Services, LLC et al., Case No.
1:18-CV-75 (DNH/CFH) (N.D.N.Y.), and;
(iii) must be signed by such person;
(c) The request for exclusion shall not be effective unless it provides the
required information and is made within the time stated above, or the
exclusion is otherwise accepted by the Court;
14. Class Members requesting exclusion from the Class shall not be
entitled to receive any payment out of the Net Settlement Amount as
described in the Stipulation and Notices, shall not be entitled to object to the
Settlement, and shall not be bound by the Final Judgment and Release;
15. Plaintiff’s Counsel shall file the list of exclusions—if any—with the
Court before the Settlement Fairness Hearing;
16. The Court will consider objections to the Settlement, the Plan of
Allocation, the Plaintiff’s request for an award of attorneys’ fees and
reimbursement of expenses, and Plaintiff’s request for a service award only if
such objections and any supporting papers are filed in writing with the Clerk
of the Court, United States District Court, Northern District of New York,
Alexander Pirnie Federal Building and U.S. Courthouse, 10 Broad Street,
Utica, New York, 13501, no later than thirty calendar days prior to the date

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scheduled infra for the Settlement Fairness Hearing and served upon
Plaintiff’s Counsel and Defendants’ Counsel;
17. Any objection must include the Class Member’s name, address,
telephone number, signature, the specific reasons for the objection, and
whether the objection applies only to the objector, to a specific subset of the
Class, or to the entire Class;
18. Attendance at the Settlement Fairness Hearing is not necessary, but
any person wishing to be heard at the hearing in opposition to approval of the
Settlement, the Plan of Allocation, Plaintiff’s Fee and Expense Application, or
Plaintiff’s service award are required to indicate in their written objection
that they intend to appear at the hearing;
19. Persons who intend to present evidence at the Settlement Fairness
Hearing must include in their written objection copies of any exhibits they
intend to introduce into evidence at the Settlement Fairness Hearing;
20. If an objector hires an attorney to represent him or her for the purpose
of making an objection, the attorney must serve a notice of appearance on
counsel for the parties and file it with the Court no later than thirty calendar
days before the Settlement Fairness Hearing;
21. Any Class Member who does not timely file and serve a written
objection in compliance with aforementioned requirements shall be deemed to
have waived their right to do so, and shall be foreclosed from raising (in this
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proceeding or in any appeal), any objection to the Settlement, and any
untimely objection shall be barred;
22. Class Members do not need to appear at the hearing or take any other
action to indicate their approval of the Settlement;
23. Defendants’ Counsel and Plaintiff’s Counsel shall promptly furnish
each other with copies of any and all objections that come into their
possession;
24. All motions and papers in support of the final approval of the
Settlement, the Plan of Allocation, the application by Plaintiff’s Counsel for
an award of attorneys’ fees and expenses, and the request by Plaintiff for a
service award shall be filed and served no later than twenty calendar days
prior to the Settlement Fairness Hearing;
25. All proceedings in this Action are stayed until further Order of this
Court, except as may be necessary to implement the Settlement or to comply
with the terms of the Stipulation;
26. Pending final determination of whether the Settlement should be
approved, Plaintiff, all Class members, and each of them, and anyone who
acts or purports to act on their behalf, shall not institute, commence,
maintain, or prosecute, and are hereby barred and enjoined from instituting,
commencing, maintaining, or prosecuting, any action in any court or tribunal
that asserts Released Claims against any Released Defendant;
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27. If any specified condition to the Settlement set forth in the Stipulation
is not satisfied and Plaintiff’s Counsel or Defendants exercise their right
under the Stipulation to terminate the Settlement, or if the Settlement is not
finally approved or otherwise fails to become effective for any reason, then, in
any such event, the Stipulation, including any amendment(s) thereto, and
this Order Preliminarily Approving Settlement and Providing for Notice,
shall be null and void, of no further force and effect, and without prejudice to
any party, and may not be introduced as evidence or referred to in any Action
or proceeding by any person or entity for any purpose, and each party shall be
restored to their respective positions as they existed on February 27, 2022;
28. The Court retains exclusive jurisdiction over the Action to consider all
further matters arising out of, or connected to, the Settlement;
29. A Settlement Fairness Hearing is SCHEDULED to be held before this
Court on Thursday, December 1st, 2022, at 1:00 p.m. at the United States
District Court, Northern District of New York, Alexander Pirnie Federal
Building and U.S. Courthouse, 10 Broad Street, Utica, New York, 13501, for
the following purposes:
(a) to determine whether the proposed Settlement is fair,
reasonable, and adequate, and should be finally approved by the Court;
(b) to determine whether the Final Judgment as provided under the
Stipulation should be entered, dismissing the Amended Class Action
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Complaint filed in the Action on the merits and with prejudice and approving
the Releases and covenants not to sue set forth in the Settlement;
(c) to determine whether the proposed Plan of Allocation for the Net
Settlement Amount is fair and reasonable, and should be approved by the
Court;
(d) to consider Plaintiff’s Counsel’s application for an award of
attorneys’ fees and expenses;
(e) to consider Plaintiff’s request for a service award for the time and
effort he expended in prosecuting the Action on behalf of the Class; and
(f) to rule upon such other matters as the Court may deem appropriate.
30. The Court may adjourn or continue the Settlement Fairness Hearing
without further written notice to the Class.
IT IS SO ORDERED.

Dated: July 26, 2022
Utica, New York.

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