Arandell Corporation v. Xcel Energy Inc.

Filing 242

ORDER after settlement approval hearing. Signed by District Judge William M. Conley on 08/07/2020. Associated Cases: 3:07-cv-00076-wmc, 3:09-cv-00240-wmc (mfh)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN

ARANDELL CORPORATION et al.,

ORDER

Plaintiffs,
07-cv-76-wmc
v.
XCEL ENERGY, INC., et al.,
Defendants.

NEWPAGE WISCONSIN SYSTEM, INC.,
Plaintiff,

ORDER

v.
09-cv-240-wmc
CMS ENERGY RESOURCE MANAGEMENT
COMPANY, et al.,
Defendants.

These two consolidated class actions -- alleging price fixing in natural gas sold to
industrial and commercial users between 2000 and 2002 -- were part of an MDL action
for years and remanded in late 2019. While in the MDL court, six of the 11 defendant
groups settled.

Before this court is another defendant group -- the so-called “CMS

defendants” -- who have now also reached a settlement with plaintiffs. On April 16, 2020,
the court certified a class for settlement purposes and preliminarily approved the
settlement. (’076 dkt. #228.) Plaintiffs’ motion for final approval and for an award of

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fees and incentive awards for the named plaintiffs (dkt. ##231, 232) was heard on August
6, 2020, by telephone.
Key terms of the settlement include:
•

A $15 million settlement, which is represented by plaintiffs’ counsel to be
the largest such settlement at least in gross dollars to date, with
approximately $10 million to be disbursed to class members.

•

Notice was sent to 1,250 class members -- all of whom are corporations and
relatively sophisticated parties as industrial or commercial purchasers of
natural gas in Wisconsin between January 1, 2000 and October 31, 2002.
Moreover, the class administrator received 156 calls, 87 email inquiries and
95,000 hits on the class action website, producing no opt-outs or objections.

•

The class members will need to complete claim forms to receive payments
pro rata on the amount or estimates of amounts of natural gas purchased
during the class period.

Plaintiffs suggest a 90-day claims submission

period, which seems fair and reasonable.
•

There will likely be no cy pres fund since the full amount of approximately
$10 million will be disbursed to responding class members. If all 1,250 class
members complete claims, the average payment will be $8,000.

The

number of class members who complete claims may be significantly less than
that, but given the interest shown, likely there will be a number of claims
submitted. Regardless, all of the settlement proceeds will be distributed.

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Any funds from uncashed checks will go to a cy pres fund, which is to be held
for possible distribution to now-settling plaintiffs.
•

Class counsel seeks a total award of fees and costs of 35% of the settlement
fund, which equates to $5.2 million in attorney fees and $124,129 in
expenses. After accounting for expenses, the attorney fee percentage would
be 33.5%, which is represented to be consistent with what they’ve received
in the other settlements by plaintiffs’ counsel, as well as that earned in similar
cases. Accounting for fee awards from the other settlements, this will bring
plaintiffs’ counsel up to approximately 58% of their lodestar. Regardless,
the percentage seems reasonable in light of the long history of this case,
uncertainty of antitrust claims, both as to liability and damages, and the
tremendous amount of work class counsel has completed to date (estimated
to be about 55,000 hours on these cases to date).

•

Finally, plaintiffs request $75,000 incentive awards for each of the 7 named
plaintiffs,1 which seems high in light of the average award of $8,000 if all
class members complete claims, but justified given the significant investment
of time, judgment and responsibility taken on by the class representatives.

One of the named plaintiffs recently filed for Ch. 11 bankruptcy. (Dkt. #238.) Briggs &
Stratton has sought approval from the bankruptcy court of its continued participation in the
settlement. The bankruptcy court granted that motion on Wednesday, August 5th.
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Accordingly, the court will sign the proposed orders yesterday:

one for final

approval of the settlement (dkt. #231-1); and the other for the fee award and incentive
awards (dkt. #231-2).

However, Briggs & Stratton has sought approval from the

bankruptcy court of its continued participation in the settlement. Because that order
approving compromise and settlement of claims against Cantera Gas Company, LLC, CMS
Energy Corporation and SMC Energy Resource Management Company was only entered
yesterday, August 5, 2020, triggering a 14-day appeal period, this court’s signed orders are
not to be docketed nor take effect until August 20, 2020.
As for the remaining defendants, trial remains set for June 14, 2021, as do all related
deadlines.
Entered this 7th day of August, 2020.
BY THE COURT:
/s/
WILLIAM M. CONLEY
District Judge

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