Speaks et al v. U.S. Tobacco Cooperative, Inc.
ORDER PRELIMINARILY APPROVING SETTLEMENT - A hearing on the Final Approval of the Settlement shall be held before this Court on January 19, 2018 at 10:00 am, in Courtroom 1. Signed by Chief Judge James C. Dever III on 9/13/2017. Counsel should read the order in its entirety for critical deadlines and information. (Briggeman, N.)
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
Civil Action No.: 5:12-CV-00729-D
TERESA M. SPEAKS, TOBY SPEAKS,
STANLEY SMITH, EDDIE BROWN, ROBERT
POINDEXTER, MIKE MITCHELL, ROY L.
COOK, ALEX SHUGART, H. RANDLE WOOD,
ROBIN ROGERS and DANIEL LEE NELSON,
U.S. TOBACCO COOPERATIVE, INC. f/k/a
FLUE-CURED TOBACCO COOPERATIVE
ORDER PRELIMINARILY APPROVING SETTLEMENT
WHEREAS, Plaintiffs and Defendant ("U.S. Tobacco" or "Defendant") have entered
into a "Stipulation and Agreement of Class Action Compromise, Settlement and Release" (herein
the "Settlement Agreement") intended to resolve, on a global basis, this litigation in the Court
against the Defendant arising out of claims inter alia, that the fundamental purposes for which
U.S. Tobacco was created had ceased to exist, and that the actions of U.S. Tobacco were unfair
and would have the effect of divesting or eliminating the value of Plaintiffs' alleged equity
interests in U.S. Tobacco. The Plaintiffs asserted a claim for distribution of U.S. Tobacco's
assets, a claim for declaratory judgment, or, alternatively, a claim for judicial dissolution of U.S.
Tobacco. U.S. Tobacco denies Plaintiffs' allegations; and
WHEREAS, this Court has jurisdiction over the subject matter and all Parties to this
proceeding and venue is proper in this district; and
WHEREAS, the proposed Settlement is the result of arm's-length negotiations between
the Parties and not the result of collusion, bears a probable reasonable relationship to the claims
alleged by the Plaintiffs and the litigation risks of Plaintiffs and Defendant, and the proposed
settlement is within the range of possible judicial approval; and
WHEREAS, the Court has reviewed the papers filed in connection with the Motion and
considered all supporting evidence in the record and as presented by counsel; and
WHEREAS, the Court is satisfied that the terms and conditions set forth in the
Settlement Agreement are fair and satisfy the requirements of Fed. R. Civ. P. 23, and the Court is
exercising its discretion in preliminarily certifying the Class for settlement purposes only and has
not determined whether the Action could be properly maintained on behalf of a Class for
purposes oftrial; and
WHEREAS, the Court recognizes that the Released Parties have preserved all of their
defenses and objections against and rights to oppose certification of the Class if the proposed
Settlement is not finally approved by the Court following the Final Approval Hearing or any
IT IS HEREBY ORDERED AS FOLLOWS:
All capitalized terms used in this Order shall have the same meanings assigned to
them in the Settlement Agreement.
The terms of the Parties' Settlement Agreement are hereby preliminarily
approved, subject to further consideration thereof at the Final Approval Hearing provided for·
The Court finds the Settlement is sufficiently fair, reasonable and adequate to
justify notice to those affected, along with an opportunity to be heard, pursuant to Fed. R. Civ. P.
With respect to the Settlement Class, the Court finds that the requirements of Fed.
R. Civ. P. 23(a) have been satisfied for settlement purposes in that: (i) the Class Members are
sufficiently numerous so as to make joinder of all Class Members impracticable; (ii) there are
questions of fact and law that are common to all members of the Class; (iii) the claims of the
Named Plaintiffs are typical of the claims of the Class; and (iv) the Named Plaintiffs will fairly
and adequately protect the interests of the Class.
With respect to the Settlement Class, the Court further finds that the requirements
of Fed. R. Civ. P. 23(b)(3) have been satisfied for settlement purposes in that: (i) questions of
law and fact common to the Class Members predominate over any questions affecting only
individual members; and (ii) a class action is superior to other available methods for the fair and
efficient adjudication of this controversy.
The Court therefore grants preliminary approval to the Settlement.
Settlement shall be submitted to Class Members for their consideration and for a Final Approval
Hearing pursuant to Fed. R. Civ. P. 23(e), as provided below.
The Court preliminarily certifies, for settlement purposes only, the following
All individuals, proprietorships, partnerships, corporations and other entities that
are or were shareholders and/or members of U.S. Tobacco at any time during the
Class Period, without any exclusion, including any heirs, representatives,
executors, powers-of-attorney, successors, assigns or others purporting to act for
or on their behalf with respect to U.S. Tobacco and/or the Settled Claims.
The Court preliminary finds that Named Plaintiffs have claims typical of Class
Members and are adequate class representatives for the Settlement Class.
The Court preliminarily finds that Class Counsel, named below, are adequate to
serve as Settlement Class Counsel and preliminarily appoints the following as counsel for the
Gary K. Shipman
SHIPMAN & WRIGHT, LLP
575 Military CutoffRoad, Suite 106
Wilmington, North Carolina 28405
N. Leo Daughtry
DAUGHTRY, WOODARD, LAWRENCE & STARLING, LLP
403 E. Market Street
Smithfield, North Carolina 27577
For the purpose of the settlement of the Action (and only for such purpose, and
without an adjudication on the merits), after conducting a rigorous analysis of the requirements
set forth in Fed. R. Civ. P. 23(a) and (b)(3) and taking into consideration factors including, but
not limited to: (i) the opinions of the participants, including Settlement Class Counsel; (ii) the
complexity, expense, and likely duration of the litigation; (iii) the extent of discovery completed
and the state of the proceedings; and (iv) the absence of any evidence that the proposed
Settlement is the product of fraud or collusion, the Court preliminarily finds that the
requirements of the Federal Rules of Civil Procedure, the United States Constitution, and any
other applicable law have been met, in that:
The Settlement Class is sufficiently ascertainable and the Class Members
are so numerous that their joinder before the Court would be impracticable.
The predominance and superiority requirements of Fed. R. Civ. P.
23(b)(3) generally are satisfied when members of the proposed Class share at least one
common factual or legal issue. Here, Plaintiffs allege numerous questions of fact and law
common to the Settlement Class. The Court preliminarily finds that these common
questions of fact and law predominate over questions of fact and law affecting only
individual Class Members.
The Court preliminarily finds that the claims of the Named Plaintiffs are
typical of the claims of Class Members and the Named Plaintiffs and Class Counsel will
adequately protect the interests of the Class, in that: (i) the interests of the Named
Plaintiffs and the nature of their alleged claims are consistent with those of Class
Members; (ii) there appear to be no conflicts between or among the Named Plaintiffs and
the Class Members; (iii) the Named Plaintiffs have been and appear to be capable of
continuing to be active participants in both the prosecution and settlement of the Action;
and (iv) the Named Plaintiffs and the Class Members are represented by qualified,
reputable counsel who are experienced in preparing and prosecuting large, complicated
The Court preliminarily finds that a resolution of the Action in the manner
proposed by the Settlement Agreement is superior or equal to other available methods for
fair and efficient adjudication of the Action.
In niaking these preliminary findings, the Court has considered, among other
factors: (i) the interest of Class Members in individually controlling the prosecution or defense
of separate actions; (ii) the impracticability or inefficiency of prosecuting or defending separate
actions; (iii) the extent and nature of any litigation concerning these claims already commenced;
and (iv) the desirability of concentrating the litigation of the claims in a particular forum.
The Court will make a final determination on class certification concurrently with
its final determination whether to approve the Settlement.
Notice ofSettlement and Appointment ofSettlement Administrator
The Courtapproves, as to form and content, the Long Form Notice (attached to
the Declaration of Shannon R. Wheatman, Ph.D on Adequacy of the Class Action Notice
Program) and approves it for online publication on the Settlement Website. The Court approves,
as to form and content, the Postcard and Publication Notices (attached to the Wheatman
Declaration), and approves them for publication and/or mailing as set forth in the Notice Plan.
The Court finds that these forms of Notice provide Class Members with all of the information
necessary to make an informed decision regarding the fairness of the Settlement.
The Court finds that the first-class mailing and distribution of notice substantially
in the manner and form set forth in the Notice Plan (attached to the Wheatman Declaration)
meets the requirements of Fed. R. Civ. P. 23 and due process, and shall constitute due and
sufficient notice to all persons entitled thereto. Such notice is the best practicable notice under
the circumstances of this case, complies with due process, and provides sufficient notice to bind
all Class Members, regardless of whether a particular Class Member receives actual notice. The
Parties shall supervise and administer the notice procedures as set forth in the Notice Plan,
including the following:
Within thirty (30) days after the Settlement is Preliminarily Approved by
the Court, the Notice Administrator shall cause a copy of the Postcard Notice to be
mailed to all Class Members known to the Parties with viable mailing addresses after
having first updated the addresses using the National Change of Address database.
Within fifteen (15) days after the Settlement is Preliminarily Approved by
the Court, the Notice Administrator shall post the Long Form Notice, Settlement
Agreement, "FA Q' s" pertaining to the Settlement, along with other documents as agreed
Within forty-five (45) days after the Settlement is Preliminarily Approved
by the Court, the Notice Administrator shall commence Publication Notice in accordance
with the Notice Plan.
Prior to the Final Approval Hearing, the Notice Administrator shall serve and file
a sworn statement attesting to the mailing of the Notice and compliance with the Notice Plan,
along with the Opt-Out List and Defendant shall file with the Court a declaration of compliance
with CAFA notice requirements.
The parties and their respective counsel are authorized to retain Rust Consulting,
Inc. to serve as the Claims Administrator and Kinsella Media, LLC to serve as the Notice
Administrator, in accordance with terms of the Settlement Agreement, Notice Plan and this
Requests for Exclusion from the Settlement Class
Any member of the Settlement Class· who desires to request exclusion ("opt-out")
from the Settlement Class shall submit to the Claims Administrator an appropriate and timely
request for exclusion to the address stated in the Notice on or before fJO\Jt2f.l~
order to be effective, the Request for Exclusion must include:
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(a) the Person's full name,
address, telephone number and email address (if available); (b) the title "Request for Exclusion";
(c) a specific statement of the person's intention to exclude himself, herself or itself from the
Settlement in Speaks v. US. Tobacco Cooperative, Inc., No. 5:12-CV-729-D; and (d) the
Exclusions shall be exercised individually by a Settlement Class Member, not as
or on behalf of a group, class, or subclass, not by any appointees, assignees, claims brokers,
claims filing services, claims consultants or third-party claims organizations; except that an
exclusion request may be submitted by a Settlement Class Member's attorney on an individual
Any Settlement Class Member who does not submit a timely, written request for
exclusion from the Settlement Class will be bound by all proceedings, orders and judgments in
Objections to the Settlement
Any Settlement Class Member who has not submitted a timely request for
exclusion from the Settlement Class and who wishes to object to the fairness, reasonableness, or
adequacy of the Settlement may, but need not, submit comments or objections regarding the
proposed Settlement and/or Class Counsel's application for fees and expenses by submitting a
A person making an objection (an "Objector") must sign the objection personally
(an attorney's signature is not sufficient). To object, the Objector must provide to the Claims
Administrator (who shall forward it to Class Counsel and Counsel for Defendant), and file with
the Clerk of the Court not later than thirty (30) days before the date set for the Final Approval
Hearing, a statement of the objection including any support the Settlement Class Member wishes
to bring to the Court's attention and all evidence the Settlement Class Member wishes to
introduce in support of his, her, or its objection or motion, or forever be barred from objecting.
Such statement must: (a) be made in writing, including a heading that refers to the Action by
name and docket number (Speaks v. US. Tobacco Cooperative, Inc. No. 5-12-CV-729-D); (b)
contain the Objector's full name, address, telephone number, and email address (if applicable);
(c) declare that the Objector is a Class Member; (d) provide a statement of the Objector's
objections to any matter before the Court and the grounds and arguments for the objection; (e)
include all documents and other writings the Objector wishes the Court to consider and describe
any and all evidence the objecting Settlement Class Member may offer at the Final Approval
Hearing, including, but not limited to, the names and expected testimony of any witnesses; (f)
state whether the Objector is represented by an attorney (and if so, provide the attorney's name,
address, telephone number, and email address); and (g) state whether the Objector or his, her, or
its attorney plans to appear at the Final Approval Hearing. Any papers not filed and served in
the prescribed manner and time will not be considered at the Final Approval Hearing, and all
objections not made in the manner set forth herein, or not containing all of the required
information described herein, shall be deemed waived.
Any objections by a Settlement Class Member must be exercised individually by
a Settlement Class Member, not as or on behalf of a group, class, or subclass, not by any
appointees, assignees, claims brokers, claims filing services, claims consultants or third-party
claims organizations; except that such objections may be submitted by a Settlement Class
Member's attorney on an individual basis.
If a Settlement Class Member retains an attorney to represent him, the attorney
must (a) file a notice of appearance with the Clerk of Court no later than fourteen (14) days prior
to the Final Approval Hearing or as the Court may otherwise direct; and (b) serve a copy of such
notice of appearance on Gary K. Shipman, Esq., Shipman & Wright, LLP, 575 Military Cutoff
Road, Suite 106, Wilmington, NC 28405 and Derek L. Shaffer, Esq., Quinn Emanuel Urquhart
& Sullivan, LLP, 777 6th Street NW 11th floor, Washington, D.C. 20001-3706 within the same
Any responses to objections must be filed with the Court and served upon Class
Counsel and counsel for Defendant on or before a date set by the Court that is no later than thirty
(30) days from receipt of the objection or five (5) days before the hearing, whichever is earlier.
Claims Submission Dates
All Claim Forms must be either received by the Claims Administrator or
postmarked on or before the end of the relevant Claims Period set forth in the Settlement
"Claims Period" means the period commencing with the final publication of the
Class Notice and ending one-hundred eighty (180) days thereafter. All Class Members who do
not submit a timely Claim Form within the Claims Period shall be barred from recovering under
The Final Approval Hearing
A hearing on the Final Approval ofthe Settlement (the "Final Approval Hearing")
shall be held before this Court on JCU)uar,y
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