Doral Mortgage Corporation/Doral Financial Corporation v. Segarra-Miranda

Filing 30

***FILED IN ERROR, WRONG CASE***ORDER (nunc pro tunc) on Motion for Final Approval of Class Action Settlement. Signed by Judge Gustavo A. Gelpi on 9/10/09. (CSL) Modified on 9/10/2009 (er).

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CRŽ. 3. 2.

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO

ALMA SIMONET, et al., Plaintiffs, Civil No. 06-1230 (GAG/CVR) v. GLAXOSMITHKLINE, et al., Defendants.

SECOND ORDER (NUNC PRO TUNC) ON MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND NOW, this 4th day of September, 2009, upon consideration of the Joint Motion f o r Final Approval of Class Action Settlement, the evidence and arguments submitted at the h e a rin g on July 27, 2009, and all matters of record, it hereby is Ordered and Decreed that the M o tio n is GRANTED. The Court makes the following findings of fact and conclusions of law: 1. This Settlement between Alma Simonet, Julie Goldenberg, Universal Care, Inc.,

in d iv id u a lly and in their capacities as class representatives ("Plaintiffs"), and their counsel, a n d GSK will have the effect of resolving all the class actions asserting these claims against D e f e n d a n ts , including a case in another jurisdiction. The cases are: ˇ ˇ T h is case, Simonet v. SmithKline Beecham Corporation, U.S.D.C., Dist. O f Puerto Rico, Case No. 06-1230; and G o ld e n b e r g , et al. v. SmithKline Beecham Corporation, California S u p e rio r Court, Orange County, Case No. 04-CC-00653 ("Goldenberg a c tio n " ). Defendants are the manufacturer and marketer of the prescription drug Paxil

In this action, originally filed on March 6, 2006 in the District of Puerto Rico,

th e named plaintiff sought certification of a nationwide class of all persons who purchased

Civil No. 99-1435 (GAG) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 P a x il CRŽ. The Goldenberg action was filed on September 21, 2004. Both actions involved a lle g a tio n s of defective manufacturing processes at GSK's Puerto Rico plant, such that the P a x il CRŽ produced during the class period was not manufactured by proper manufacturing p r o c e s s e s and suffered from certain defects, including, for example, that the pills would " s p lit apart." 4. GSK, through demurrers, motions to dismiss and/or responsive pleadings, denied a ll allegations of unlawful conduct, and raised numerous affirmative defenses. T h ro u g h extensive negotiations between counsel for the Plaintiffs in both this case and th e Goldenberg action and counsel for GSK, the parties have reached a settlement, which P la in tif f s and their counsel consider be fair, reasonable, adequate and in the best interests of th e putative class. 5. Under this settlement, GSK will pay up to Twenty Eight Million Dollars ($28

m illio n ) to settle class member claims ("Settlement Amount"). The Settlement Amount will b e allocated between two subclasses: a Third-Party Payor Class and a Consumer Class. A to ta l of Eleven Million Two Hundred Thousand Dollars ($11.2 million), which is 40% of $ 2 8 million, will be allocated to settle the Third-Party Payor Class Claims (the "TPP Class S e ttle m e n t Amount"). A maximum of Sixteen Million Eight Hundred Thousand Dollars ($ 1 6 .8 million), which is 60% of $28 million, will be allocated to settle the Consumer Class C la im s (the "Consumer Class Settlement Amount"). The settlement monies will be

d is trib u te d by a Claims Administrator to each class member who submits a valid claim. 6 . In summary, the Settlement provides a two-tier claims process for the Consumer C la s s that allows members of the Class to recover costs for defective Paxil CRŽ. A claims p ro c e s s for the Third-Party Payor Class will allow members of the TPP Class to recover costs f o r Paxil CRŽ based on the number of TPP claims made and the number of covered lives f o r each covered TPP. 7. The claims period is open until August 10, 2009, after which the claims

Civil No. 99-1435 (GAG) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 a d m in is tra to r will perform a final accounting and all validated Consumer Class Claims and v a lid a te d TPP Class claims will be paid. 8. On March 2, 2009, Plaintiffs and GSK jointly presented the proposed

s e ttle m e n t for preliminary approval to this Court. 9. Following the hearing, the Court granted the joint motion and certified the

C o n su m e r Class and the TPP Class. The Court also appointed class counsel. 10. The Court preliminarily found that the proposed settlement was fair,

re a s o n a b le and adequate, found that the notice plan satisfied Due Process, and ordered notice to be commenced April 1, 2009. In addition, the Court allowed class members to opt out of th e settlement by May 15, 2009 or to object to the settlement by July 1, 2009. The Court a llo w e d class members until August 10, 2009 to file a claim. 11. In accordance with the Order, the parties carried out an extensive notice plan

to educate and inform the class of their rights under the settlement, which was commenced A p ril 1, 2009.. That plan included (a) direct notice by first class mail to potential TPP Class M e m b e r s ; (b) broad notice through the use of paid media including national newspaper s u p p le m e n ts , national consumer magazines, television spot advertising, newspaper a d v e rtis in g in the United States Territories and trade publications; (c) notice through a n a tio n a l earned media campaign utilizing a press release; and (d) electronic notice through a dedicated informational Internet website and keyword/term sponsorship on major search e n g in e s . The Court finds this notice was the best notice practicable and did meet the re q u ire m e n ts of Due Process. 12. The Court further finds that the notice of the proposed settlement was

s u f f ic ie n t and furnished Class members with the information they needed to evaluate whether to participate in or opt-out of the proposed settlement. The Court therefore concludes that th e notice of the proposed settlement met all requirements required by law, including all c o n stitu tio n a l requirements. Specifically, the notice stated in plain language: (1) a

Civil No. 99-1435 (GAG) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 d e s c rip tio n of the class; (2) a description of the claims asserted in the lawsuit; (3) a d e s c rip tio n of the settlement; (4) the deadline for filing a claim form; (5) the names of class c o u n s e l; (6) a description of the fairness hearing; (7) a statement of the maximum amount o f attorneys' fees that may be sought by class counsel; (8) the deadline for filing objections to the settlement; (9) a description of how to receive further information about the settlement; a n d (10) a description of how to opt-out of the settlement. 13. Even though Plaintiffs enjoyed significant success during this litigation,

G S K ' s defenses were strong and a successful outcome for the plaintiffs was by no means a s s u re d . The Court therefore finds that the possible risks to the Plaintiffs' claims, if the c la im s were not settled, strongly favors final approval of the proposed settlement. 14. This litigation has been complex, lengthy and expensive. GSK has raised a

n u m b e r of complex legal issues and the case has been on file for more than four years. Given the scope of the pretrial activity in the case, further litigation through certification, m e rits discovery, and trial would have been a significant burden on all parties. This factor th e re f o re weighs in favor of final approval. 15. The Court finds that the amount of opposition to the settlement is de minimis

a n d that the overall Class' reaction is overwhelmingly favorable. Further, the court notes th a t the TPP Class consists of entities that are sophisticated and thus, to the extent TPP Class m e m b e rs have not made objections, it can be presumed that they support the settlement. These factors weigh heavily in favor of final approval. 16. The settlement is fair, reasonable and adequate in the opinion of Counsel in

th is matter as well as others. This factor weighs in favor of final approval. 17. The parties engaged in extensive and thorough discovery in the matter and

w e re thus well informed as to the strengths and weaknesses of their positions. This factor w e ig h s in favor of final approval. 18. The Court finds that the settlement will benefit participating class members;

Civil No. 99-1435 (GAG) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 1. a c c o rd in g ly, class members who have not opted out of the settlement, based on the initial n o tic e , shall remain as class members and are bound by the terms of the settlement. 19. There were minimal objections to the terms of the settlement, all filed by The Court has considered these

c o n s u m e rs or alleged representatives of consumers.

o b je c tio n s and finds they are unfounded, result from misunderstanding of the terms of the s e ttle m e n t, and lack merit to overcome the presumption of reasonableness that was the result o f arms-length negotiations between the parties, coupled with the overwhelming, nearly u n a n im o u s support for the settlement demonstrated by the absence of any other objections, a n d the small number of exclusion requests. 20. The Court having reviewed and considered the Settlement and all documents,

e v id e n c e and arguments of all counsel; the Court being fully advised in the premises and g o o d cause appearing therefore, the Court finds that the Settlement reached is the result of a rm 's length negotiations, the Settlement is fair, reasonable, adequate and in the best interests o f the Class, and the Motion for Final Approval should be GRANTED. I T IS HEREBY ORDERED, ADJUDGED AND DECREED: The Court has personal jurisdiction over the parties and has subject matter

ju ris d ic tio n over the Action. 2. All Class members who timely exercised their right to opt out as provided in

th e Court-approved notice are identified in Exhibit A hereto. 3. The Court hereby determines that the Settlement is fair, reasonable and adequate

a n d in the best interests of the Class members, that there are no valid objections to the S e ttle m e n t, and that, accordingly, the Settlement is finally approved. 4. GSK shall allocate $28,000,000.00 (the "Settlement Amount") in full, complete

a n d final settlement of the case, all Released Claims and any obligations GSK might o th e r w is e have to pay for notice to Class members, the claims of Class members (" S e ttle m e n t Benefit"), interest, the costs of administration of the Settlement, and the cost

Civil No. 99-1435 (GAG) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 o f suit, including attorneys' fees. 5. Class members who submit a claim form by December 12, 2008, with the

s u p p o rtin g data as required in the form, will be entitled to payment for their claim according to the percentage formula and criteria set forth therein. 6. The Claims Administrator shall determine which Class members have submitted th e requisite proof and shall distribute the Settlement Benefit to those Class members. Each C la s s member will receive their full Settlement Benefit in one payment. 7. All settlement expenses of whatever kind relating to administration and notice,

a n d all attorneys' fees and costs and incentive awards to be borne by GSK shall be paid out o f the Settlement Amount and not additionally by GSK. If the aggregate amount of claimed b e n e f its , exceeds the balance of the Settlement Amount after payment of fees, expenses and c o s ts , the benefits shall be reduced on a pro rata basis, so that in no event is the Settlement A m o u n t exceeded. 8. In accordance with the terms of the Settlement (and with the exception of those

p e rs o n s who opted-out, identified in Exhibit A hereto): a . T h e case is dismissed with prejudice. b . U p o n this Settlement receiving Final Approval, the Class Plaintiffs, on b e h a lf of themselves and all Class Members, and their successors, heirs and assigns, a n d anyone acting on their behalf, including in a representative or derivative capacity (c o lle c t i v e l y "Class Releasors") shall (i) release Defendants and their present and f o rm e r parents, subsidiaries, divisions, affiliates, stockholders, benefit plans, officers, d ire c to rs , employees, agents and any of their legal representatives, and the p re d e c e s so rs , heirs, executors, administrators, successors and assigns of each of the f o re g o in g (collectively the "Releasees") from all claims, demands, actions, suits, c a u s e s of action, liabilities of any nature whatsoever (including claims for damages, c o s ts , expenses and attorneys' fees), known or unknown, suspected or unsuspected,

Civil No. 99-1435 (GAG) 1 2 3 4 5 6 7 8 9 10 11 12 d. M e m b e rs of the class are permanently enjoined from filing, commencing, 13 p ro s e c u tin g , intervening in, or participating as plaintiff, claimant, or class member in 14 a n y other lawsuit or administrative, regulatory, or other proceeding based on, relating 15 to , or arising out of the Released Claims in this case. 16 9. 17 s e ttle m e n ts to the named Plaintiffs and individual consumers who were named plaintiffs in 18 th e pending settled cases, for their special efforts that benefited the absent Class members, 19 s u c h amounts to be paid from the award of attorneys' fees: 20 e. A lm a Simonet 21 f . J u lie Goldenberg 22 g . U n iv e rs a l Care, Inc. 23 10. 24 d e e m e d or construed to be an admission or evidence of any violation of any statute or law 25 o r of any liability or wrongdoing by GSK or of the truth of any of the claims or allegations 26 in the case. The Court has made, and herein makes, no determination as to the merits of the 27 28 7 Nothing in this Final Order and Judgment or the Settlement is or shall be $ 2 0 ,0 0 0 $ 1 0 ,0 0 0 $ 1 0 ,0 0 0 The Court approves the payment of the following incentive awards and in law or equity, relating to defective and/or adulterated Paxil CRŽ manufactured at th e Cidra facility, that were or could have been alleged in the Simonet Case or the G o ld e n b e r g Case ("Released Claims"). c. T h e foregoing release does not cover, and GSK will not assert this Release o r the Settlement of claims pursuant to the Settlement Agreement as a defense to any c la im for personal injury by any person which might or could have been sustained by th e ingestion of Paxil CRŽ. A Settlement Class member may not claim or recover e c o n o m ic damages released by this Settlement Agreement for itself or on behalf of a n y of its members or insureds, either through subrogation or any other theory that w o u ld allow the Settlement Class Member to recover such damages on behalf of its m e m b e rs or insureds.

Civil No. 99-1435 (GAG) 1 2 3 4 5 6 7 8 9 10 11 12 S/Gustavo A. Gelpí 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 GUSTAVO A. GELPI United States District Judge c la im s . 11. Without affecting the finality of this Final Order and Judgment, the Court

re ta in s continuing jurisdiction over this case and the parties, including all members of the C la s s, concerning the administration and enforcement of the Settlement, and the benefits to th e Class thereunder. 12. The Settlement Agreement between the parties and all negotiations,

p ro c e e d in g s , documents prepared and statements made in connection herewith shall not be a d m is s ib le in any proceeding for any purpose, except to enforce or interpret the terms herein in any dispute between the parties. SO ORDERED. In San Juan, Puerto Rico this 10th day of September, 2009