Snitzer et al v. The Board of Trustees of the American Federation of Musicians and Employers' Pension Fund et al
Filing
205
FINAL APPROVAL OF THE SETTLEMENT AGREEMENT; FINAL JUDGMENT; AWARD OF ATTORNEYS' FEES, EXPENSES, AND SERVICE AWARDS; AND ORDER OF DISMISSAL WITH PREJUDICE: ORDERED, ADJUDGED, DECREED, AND FOUND THAT: This case arises out of Plaintiffs' alleg ations, inter alia, that Defendants violated the Employee Retirement Income Security Act of 1974, as amended, and breached their fiduciary duties in connection with certain investment decisions they made and the processes used by them to make those d ecisions from 2010 to the OCIO Management Date in 2017. After extensive settlement negotiations, including a formal mediation, the Parties agreed to settle this case. This Final Approval Order and Judgment incorporates and makes a part hereof the Set tlement Agreement (ECF #139-1) The Settlement Agreement provides substantial and meaningful relief to the Settlement Class, including the payment of at least $17 million to the Plan and the Plan Trustees' agreement to implement the Governan ce Provisions specified in Section 8 of the Settlement Agreement. The Court also concludes that, because the Action is being settled rather than litigated, the Court need not consider manageability issues that might otherwise be presented by trial of a class action involving the issues in the Action. For the purposes of Settlement only, Plaintiffs Andy Snitzer and Paul Livant are confirmed as the Class Representatives of the Settlement Class, and Steven A. Schwartz and Robert J. Kriner of Chimic les Schwartz Kriner & Donaldson-Smith LLP and their firm are confirmed as Class Counsel. The Action is hereby dismissed, with prejudice, on the merits, as against the Defendants, on the terms and conditions set forth in the Settlement Agreement, and without costs to any party except as provided herein and in the Settlement Agreement. The Court has reviewed the objections to Class Counsel's request for attorneys' fees and reimbursement of expenses. Having considered all of those objecti ons, Class Counsel are hereby awarded (i) attorneys' fees in the amount of $7,786,500 (29%) of the Gross Settlement Amount) plus (ii) reimbursement of their reasonable expenses in the amount of $713,204.45, to be deducted from the Gross Settlement Amount. Attorneys' fees in this amount are fair and reasonable in light of the positive results achieved by Class Counsel, the monetary benefits obtained in this Action, the substantial risks associated with this Action, Class Counsel's skill and experience in class action litigation of this type, and the fee awards in comparable cases. Service Awards are awarded to the Class Representatives in the amount of $10,000 each, to be deducted from Class Counsel's Attorneys' Fees and Costs and not from the Gross Settlement Amount. By reason of the Settlement, and approval hereof, there is no just reason for delay and this Final Approval Order and Judgment shall be deemed a final judgment pursuant to the F ederal Rules of Civil Procedure. Effectuating and enforcing the Settlement and the terms of the Settlement Agreement including payment of the $26.85 million Gross Settlement Amount, implementation of the Governance Provisions, and the payment of Plaintiffs' counsel's attorneys' fees and reimbursement of expenses and Service Awards as ordered by the Court; The above-captioned Action is hereby dismissed in its entirety with prejudice. The Clerk of Court is respectfully directed to terminate all pending motions and deadlines and close the case. And as set forth herein. IT IS SO ORDERED. (Signed by Judge Valerie E. Caproni on 8/28/2020) (ama)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
ANDREW SNITZER and PAUL LIVANT,
Plaintiffs,
v.
THE BOARD OF TRUSTEES OF THE AMERICAN
FEDERATION OF MUSICIANS AND EMPLOYERS’
PENSION FUND, ET AL.,
USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #:
DATE FILED: 08/28/2020
Case 1:17-cv-05361-VEC
Defendants.
FINAL APPROVAL OF THE SETTLEMENT AGREEMENT; FINAL
JUDGMENT; AWARD OF ATTORNEYS’ FEES, EXPENSES, AND
SERVICE AWARDS; AND ORDER OF DISMISSAL WITH PREJUDICE
WHEREAS, Plaintiffs Andy Snitzer and Paul Livant, individually and on behalf of Class
Members and the American Federation of Musicians and Employers’ Pension Plan (the “Plan”),
and Defendants The Board of Trustees of the American Federation of Musicians And Employers’
Pension Fund (the “Board of Trustees”), The Investment Committee of The Board of Trustees of
the American Federation of Musicians and Employers’ Pension Fund (the “Investment
Committee”), as well as Raymond M. Hair, Jr., Augustino Gagliardi, Gary Matts, William
Moriarity, Brian F. Rood, Laura Ross, Vince Trombetta, Phillip E. Yao, Christopher J.G.
Brockmeyer, Michael DeMartini, Elliot H. Greene, Robert W. Johnson, Alan H. Raphael, Jeffrey
Ruthizer, Bill Thomas, Marion Preston, and JoAnn Kessler (collectively, the “Defendants”) (with
Plaintiffs collectively referred to herein as the “Parties”), have agreed to settle the above-captioned
matter (the “Action”) on the terms and conditions set forth in the Settlement Agreement dated March
25, 2020 and all exhibits thereto;
WHEREAS, on May 18, 2020 (ECF #163), this Court entered a Preliminary Approval
Order that conditionally certified pursuant to Federal Rule of Civil Procedure 23(b)(1)A) and
23(b)(1)(B), a non-opt out class consisting of:
All participants and beneficiaries of the American Federation of Musicians and
Employers’ Pension Plan during the Class Period, excluding Defendants and their
beneficiaries (the “Settlement Class”).
WHEREAS, in the Preliminary Approval Order, the Court appointed, for the purposes of
the Settlement only, Plaintiffs Andy Snitzer and Paul Livant as Class Representatives of the
Settlement Class and Steven A. Schwartz and Robert J. Kriner of Chimicles Schwartz Kriner &
Donaldson-Smith LLP, and their firm Chimicles Schwartz Kriner & Donaldson-Smith LLP as
Class Counsel.
WHEREAS, in the Preliminary Approval Order, the Court approved the form and content
of the Notice of Proposed Class Action Settlement and Fairness Hearing (“Notice”) directed to
members of the Class;
WHEREAS, on June 9, 2020, the Plan caused the Notice to be emailed or mailed to
members of the Class for whom Plan records included an email or mailing address, which
informed members of the Class of the Settlement terms and that the Court would consider the
following issues at the Fairness Hearing: (i) whether the Court should grant final approval to the
Settlement; (ii) the amount of attorneys’ fees, costs, and expenses to be awarded to Class Counsel;
(iii) whether to approve the payment of the Service Awards to the Class Representatives and the
amount of the Service Awards; and (iv) any objections by members of the Class to any of the
above that were timely and properly served in accordance with the Preliminary Approval Order;
WHEREAS, in recognition that Plan records did not include either an email or mailing
address for some Class Members, the Plan caused the Notice to be published at www.afmepfsettlement.com (the “Settlement Website”) on June 9, 2020 and also included a link to the
Settlement Website on a scrolling banner on the Plan’s website at www.afm-epf.org.
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Additionally, Defendants’ counsel arranged for a call-out box with a link to the Settlement
Website to be published in the monthly magazine of the American Federation of Musicians for
two consecutive months beginning in June 2020, when the Notice was sent to Class Members;
WHEREAS, Defendants provided notice to the appropriate state and federal officials
under the Class Action Fairness Act of 2005, 28 U.S.C. § 1715;
WHEREAS, on June 25, 2020, Class Counsel filed an application for Attorneys’ Fees and
Expenses, Service Awards to Class Representatives (the “Fee Application”), in which Class
Counsel also applied to the Court for a release by Class Members of the Class Representatives
and responded to some of the objections of Class Member Martin Stoner;
WHEREAS, on July 27, 2020, Defendants responded to the Fee Application, as well as
to some of the objections filed as of that date;
WHEREAS, on or about July 29, 2020, an Ad Hoc Coalition consisting of nearly 70
individuals opposed to the Settlement (the “Ad Hoc Objectors”), filed with the Court an Objection
of Ad Hoc Coalition Opposed to the Class Action Settlement Agreement, ECF #186, opposing
various aspects of the Settlement, including that the release provided in Section 2.22.1 of the
Settlement Agreement is not narrowly tailored and could be construed to release investmentrelated claims arising after the OCIO Management Date (as defined in the Settlement
Agreement);
WHEREAS, on August 10, 2020, Defendants filed a Response to the Objection of Ad
Hoc Coalition Opposed to the Class Action Settlement Agreement, in which Defendants
explained that claims targeting the types of investment-related decisions that were the focus of
the lawsuit and that post-date the OCIO Management Date would not be released because these
claims – no matter how they are characterized – would necessarily be directed at new decisions,
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based on new factual allegations, rather than a continuity of claims previously challenged
(ECF#189);
WHEREAS, on August 11, 2020, Fiduciary Counselors, Inc., acting as the Independent
Settlement Evaluation Fiduciary, approved and authorized the Settlement on behalf of the Plan
in accordance with Prohibited Transaction Exemption 2003-39 (“PTE 2003-39”), but conditioned
its determination on the Court making clear that the limits explained by Defendants in ECF#189
apply with respect to the release and the injunction against future claims;
WHEREAS, on August 12, 2020, Plaintiffs moved unopposed for final approval of the
Settlement and responded to the various objections to the Settlement filed by class members and
responded to the objections related to Class Counsel’s request for attorneys’ fees and
reimbursement of expenses filed by class member Martin Stoner and by Defendants (“Plaintiffs’
Motion for Final Approval”);
WHEREAS, the Court conducted a hearing on August 26, 2020 (the “Fairness
Hearing”) to consider, among other things, (1) whether the proposed Settlement on the terms and
conditions provided for in the Agreement is fair, reasonable, adequate, and in the best interests
of the Class and should be finally approved by the Court; (2) whether Class Counsel’s Attorneys’
Fee and Cost application is reasonable and should be approved; (3) whether Plaintiffs’ request
for Service Awards is reasonable and should be approved; and (4) whether this Final Approval
Order should be entered dismissing with prejudice all claims asserted in the Action against
Defendants; and
WHEREAS, this Court finds that the papers are detailed and sufficient to rule on Plaintiffs’
Motion for Final Approval and the Fee Application on the papers; and
WHEREAS, this Court, having heard from Class Counsel on behalf of the Settlement
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Class, and from Defendants’ Counsel, and having reviewed all other arguments and submissions
presented by all interested persons and entities with respect to the Settlement and the Fee
Application; and
WHEREAS, all capitalized terms used herein have the meanings set forth and defined in
the Settlement Agreement, it is hereby
ORDERED, ADJUDGED, DECREED, AND FOUND THAT:
1.
This case arises out of Plaintiffs’ allegations, inter alia, that Defendants violated
the Employee Retirement Income Security Act of 1974, as amended, and breached their fiduciary
duties in connection with certain investment decisions they made and the processes used by them
to make those decisions from 2010 to the OCIO Management Date in 2017.
2.
After extensive settlement negotiations, including a formal mediation, the Parties
agreed to settle this case. This Final Approval Order and Judgment incorporates and makes a part
hereof the Settlement Agreement (ECF #139-1)
3.
The Settlement Agreement provides substantial and meaningful relief to the
Settlement Class, including the payment of at least $17 million to the Plan and the Plan Trustees’
agreement to implement the Governance Provisions specified in Section 8 of the Settlement
Agreement.
4.
The Settlement Class as provided in the Preliminary Approval Order is
unconditionally certified as a non-opt out class pursuant to Federal Rule of Civil Procedure
23(b)(1)(A) and 23(b)(1)(B). The Court finds, in the specific context of this Settlement, that the
following requirements are met: (a) the number of Class Members is in the thousands and is so
numerous that joinder of all Class Members is impracticable; (b) there are questions of law and
fact common to the Class Members; (c) Plaintiffs’ claims are typical of the claims of the Class
5
Members they seek to represent for purposes of this Settlement; (d) Plaintiffs and Class
Counsel have fairly and adequately represented the interests of the Settlement Class and will
continue to do so; (e) prosecuting separate actions would create a risk of inconsistent or varying
adjudications with respect to individual Class Members that would establish incompatible
standards of conduct for Defendants; (f) Defendants have acted on grounds that apply generally
to the Settlement Class, so that the benefits provided in the Settlement Agreement are appropriate
for the Settlement Class as a whole; (g) questions of law and fact common to the Class Members
predominate over any questions affecting any individual Class Member; and (h) a class action
provides a fair and efficient method for settling the controversy under the criteria set forth in Rule
23.
5.
The Court also concludes that, because the Action is being settled rather than
litigated, the Court need not consider manageability issues that might otherwise be presented by
trial of a class action involving the issues in the Action.
6.
For the purposes of Settlement only, Plaintiffs Andy Snitzer and Paul Livant are
confirmed as the Class Representatives of the Settlement Class, and Steven A. Schwartz and
Robert J. Kriner of Chimicles Schwartz Kriner & Donaldson-Smith LLP and their firm are
confirmed as Class Counsel.
7.
Notice to the members of the Settlement Class required by Federal Rule of Civil
Procedure 23 has been provided as directed by this Court in the Preliminary Approval Order, and
such notice having constituted the best notice practicable, including, but not limited to, the forms
of notice and methods of identifying and providing notice to the members of the Settlement Class,
has satisfied the requirements of the Federal Rules of Civil Procedure, the Class Action Fairness
Act of 2005, and all other applicable laws.
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8.
Defendants have complied with the Class Action Fairness Act of 2005, 28 U.S.C.
§1715, et seq. by timely mailing notice of the Settlement pursuant to 28 U.S.C. §1715(b), including
notices to appropriate state and federal officials under the Class Action Fairness Act. The notice
contains the documents and information required by 28 U.S.C. §1715(b)(1)-(8). The Court finds
that Defendants have complied in all respects with the requirements of 28 U.S.C. § 1715.
9.
Various class members in addition to the Ad Hoc Coalition and Martin Stoner
have filed objections to the Settlement. The Court has carefully reviewed all objections to the
Settlement and the Parties’ responses thereto and overrules all of the objections to the Settlement
for the reason set forth on the record at the Fairness Hearing.
10.
Pursuant to, and in accordance with, Rule 23 of the Federal Rules of Civil
Procedure, the Court hereby fully and finally approves the Settlement set forth in the Settlement
Agreement in all respects, and finds that the Settlement is, in all respects, fair, reasonable,
adequate, and in the best interests of the Settlement Class. Plaintiffs and Defendants are directed
to promptly consummate the Settlement in accordance with the Settlement Agreement and to
comply with all of its terms.
11.
The Settlement shall not be deemed to constitute an admission or finding of
liability or wrongdoing on the part of Defendants, Plaintiffs, the Class Members, or Released
Parties.
12.
The Action is hereby dismissed, with prejudice, on the merits, as against the
Defendants, on the terms and conditions set forth in the Settlement Agreement, and without costs
to any party except as provided herein and in the Settlement Agreement. For those defendants
who were dismissed without prejudice during the pendency of the litigation, namely Maureen
Kilkelly, Andrea Finkelstein, Harold Bradley, Lovie Smith-Wright, Melinda Wagner, Thomas
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Lee, and William Foster (see ECF Nos. 39, 71), the Action is dismissed with prejudice as to them
as well.
13.
Plaintiffs, each Class Member, and the Plan shall be deemed to have, and by
operation of this Final Approval Order, shall have, fully, finally, and forever settled, released,
relinquished, waived, and discharged all Released Claims against the Released Parties in the
manner(s) set forth in the Settlement Agreement. For the avoidance of doubt about the scope of
the release, the Court hereby finds that the release is limited to the period before the OCIO
Management Date with respect to decisions regarding (i) the Plan’s asset allocation, investment
return and risk objectives, and the selection (including of the Plan’s OCIO), retention, monitoring,
oversight, compensation, fees, or performance of the Plan’s investments or its investment
managers; (ii) investment-related fees, costs, or expenses charged to, paid, or reimbursed by the
Plan; (iii) disclosures or failures to disclose information regarding the Plan’s investments and/or
funding; or (iv) any alleged breach of the duty of loyalty, care, prudence, diversification, or any
other fiduciary duties or prohibited transactions in connection with (i) through (iii) above.
14.
Plaintiffs, each Class Member, and the Plan are permanently barred and enjoined
from asserting, commencing, prosecuting, or continuing any of the Released Claims in the
manner(s) set forth in the Settlement Agreement consistent with paragraph 13 above.
15.
Defendants and each Class Member shall be deemed to have fully, finally, and
forever settled, released, relinquished, waived, and discharged any claims against the Class
Representatives that arise out of the institution, prosecution, settlement or dismissal of the Action.
16.
The Court has reviewed the objections to Class Counsel’s request for attorneys’
fees and reimbursement of expenses. Having considered all of those objections, Class Counsel
are hereby awarded (i) attorneys’ fees in the amount of $7,786,500 (29%) of the Gross Settlement
8
Amount) plus (ii) reimbursement of their reasonable expenses in the amount of $713,204.45, to
be deducted from the Gross Settlement Amount. Attorneys’ fees in this amount are fair and
reasonable in light of the positive results achieved by Class Counsel, the monetary benefits
obtained in this Action, the substantial risks associated with this Action, Class Counsel’s skill and
experience in class action litigation of this type, and the fee awards in comparable cases.
17.
The award of attorneys’ fees to Class Counsel shall be allocated among Class
Counsel in a fashion that, in the opinion of Steven A. Schwartz and Robert J. Kriner of Chimicles
Schwartz Kriner & Donaldson-Smith LLP fairly compensates them for their respective
contributions in the prosecution of the Action. The fee requested by Daniel Walfish, counsel for
the Ad Hoc Coalition, is denied for the reasons stated at the fairness hearing, including for failure
to provide any support for the hours requested.
18.
Service Awards are awarded to the Class Representatives in the amount of
$10,000 each, to be deducted from Class Counsel’s Attorneys’ Fees and Costs and not from the
Gross Settlement Amount.
19.
Section 9.1 of the Settlement provides that Class Members and Defendants shall
also be deemed to have fully, finally and forever settled, released, relinquished, waived, and
discharged any claims against the Class Representatives and Class Counsel, that arise out of the
institution, prosecution, settlement or dismissal of the Action. After the Court raised questions
about this provision in connection with preliminary approval, Class Counsel agreed to withdraw
their request for a release as to them. The Notice approved by the Court provided Class Members
with notice of the proposed release as to the Class Representatives. No Class Member filed any
objection as to that proposed release. Nor did the Independent Settlement Evaluation Fiduciary.
Defendants take no position on this issue. The Court approves the release as to the Class
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Representatives.
20.
Defendants and the Released Parties shall not be liable for any additional fees or
expenses for Class Counsel or counsel of any Plaintiffs or Class Members in connection with the
Action.
21.
Any appeal or challenge affecting this Court’s approval regarding any attorneys’
fees, expenses, or Service Awards, shall in no way disturb or affect the finality of the other
provisions of this Judgment nor the Settlement Effective Date.
22.
By reason of the Settlement, and approval hereof, there is no just reason for delay
and this Final Approval Order and Judgment shall be deemed a final judgment pursuant to the
Federal Rules of Civil Procedure.
23.
Jurisdiction is reserved, without affecting the finality of this Final Approval
Order and Judgment, over:
a.
Effectuating and enforcing the Settlement and the terms of the Settlement
Agreement including payment of the $26.85 million Gross Settlement Amount, implementation
of the Governance Provisions, and the payment of Plaintiffs’ counsel’s attorneys’ fees and
reimbursement of expenses and Service Awards as ordered by the Court;
b.
Determining whether, in the event an appeal is taken from any aspect of this
Final Approval Order and Judgment, notice should be given at the appellants’ expense to some
or all Class Members apprising them of the pendency of the appeal and such other matters as the
Court may order;
c.
Adjudicating any disputes that arise under the Settlement Agreement; and
d.
Any other matters related or ancillary to the foregoing.
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24.
The above-captioned Action is hereby dismissed in its entirety with prejudice. The
Clerk of Court is respectfully directed to terminate all pending motions and deadlines and close
the case.
IT IS SO ORDERED.
August 28, 2020
Dated:___________________
________________________________
Honorable Valerie Caproni, U.S.D.J.
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