UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA NOTICE OF PROPOSED CLASS ACTION SETTLEMENT

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1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA NOTICE OF PROPOSED CLASS ACTION SETTLEMENT If you paid a practice assessment to the American Psychological Association Practice Organization, you are entitled to a cash payment from a settlement. A federal court authorized this notice. This is not a solicitation from a lawyer. If you wish to receive a cash payment under the proposed Settlement, you must submit a Claim Form by October 12, 2015 There is a proposed settlement of the class action lawsuits known as In re APA Assessment Fee Litigation, Nos. 1:10-cv JDB (D.D.C.) and 1:10-cv JDB (D.D.C.), and Grossman v. American Psychological Association, et al., No. 1:13-cv JDB (D.D.C.), pending in the United States District Court for the District of Columbia (the Case or Lawsuit ). 1 The proposed Settlement is with the American Psychological Association ( APA ), and the American Psychological Association Practice Organization ( APAPO ) (collectively, Defendants ) concerning payments of a practice assessment (or special assessment ) by certain members of APA to APAPO beginning in dues year You are included in this proposed Settlement if you paid the practice assessment between dues year 2001 and February 12, The Court in charge of this case still has to decide whether to give final approval of the proposed Settlement. Valid claims for a pro rata portion of the cash settlement, as described in this Notice, will be paid if the proposed Settlement is finally approved by the Court. SUMMARY OF YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT Submit a Claims Form Do Nothing Exclude Yourself Object Attend the Hearing If eligible, you will receive a cash payment of your pro rata share of a Settlement Fund. If you choose to do nothing, you will receive no payment under the Settlement but will still be bound by its terms. You can pursue your own action against APA and APAPO relating to the legal claims in this case, at your own expense. You can write to the Court if you don t like the Settlement and want to object to its approval. You can ask to speak to the Court about the fairness of the Settlement at the Final Approval Hearing. These rights and options are explained in more detail in this Notice. 1 Capitalized terms have the meanings set forth in the Settlement Agreement. If there is a conflict between the terms of this Notice and the Settlement Agreement, the Settlement Agreement controls.

2 WHAT THIS NOTICE CONTAINS BACKGROUND INFORMATION... PAGE 3 1. Why was this Notice posted online? 2. What is the Lawsuit about? 3. Why is this a class action? 4. Why is there a Settlement? 5. Why do the Plaintiffs and their lawyers think the settlement is a good thing? WHO IS IN THE SETTLEMENT?... PAGE 4 6. How do I know if I m part of the Settlement? WHAT BENEFITS DOES THE SETTLEMENT PROVIDE?... PAGE 4 7. What does the Settlement provide? HOW DO I GET THE BENEFITS DESCRIBED IN THE SETTLEMENT?... PAGE 5 8. How can I get a cash payment under the proposed Settlement? 9. When will I receive payment? WHAT AM I GIVING UP IF I STAY IN THE CASE?... PAGE What am I giving up to stay in the case? WHAT IF I DON T WANT TO BE A PART OF THE SETTLEMENT?... PAGE How do I opt out or exclude myself from the Settlement? 12. If I don t exclude myself, can I bring a lawsuit for the same thing later? CAN I OBJECT TO THE SETTLEMENT?... PAGE How do I tell the Court that I object to this Settlement? 14. What is the difference between objecting and excluding? 15. What will happen if there are objections to the Settlement? THE COURT S FAIRNESS HEARING... PAGE When and where will the Court decide whether to approve the Settlement? 17. Do I have to come to the hearing? 18. May I speak at the hearing if I want to? WHAT IF I DO NOTHING?... PAGE What will happen if I do nothing at all? HOW CAN I GET MORE INFORMATION?... PAGE Do I have a lawyer in this case? 21. How will the lawyers be paid? HOW CAN I GET MORE INFORMATION?... PAGE What if I have additional questions? 23. What if my address or other contact information changes? 2

3 1. Why was this Notice posted online? BACKGROUND INFORMATION This Notice has been posted to inform you that a Settlement has been reached in class action lawsuits against Defendants APA and APAPO. These lawsuits alleged that Defendants engaged in unfair and deceptive practices in connection with representations to APA members regarding the payment of an annual practice assessment (or special assessment ) to APAPO. This Notice explains the nature of the lawsuits against APA and APAPO, the general terms of the proposed Settlement, and your legal rights and obligations. To obtain more information about the Settlement, including information about how you can review or obtain a copy of the Settlement Agreement, visit 2. What is this Lawsuit about? Three lawsuits were filed against the APA and APAPO and are pending in the United States District Court for the District of Columbia. The Plaintiffs in each lawsuit alleged that APA and APAPO engaged in unfair and deceptive practices by representing on annual dues statements and their website that payment of an annual practice assessment (or special assessment ) was required for membership in APA, even though payment of the practice assessment was only required for membership in APAPO (the APAPO Practice Assessment ). Each case was pleaded as a class action and sought monetary damages, restitution, attorneys fees, punitive damages, and injunctive relief. APA and APAPO deny Plaintiffs allegations, including Plaintiffs assertions that they engaged in unfair or deceptive practices or any wrongful, unlawful, or improper conduct. 3. Why is this a class action? In a class action, one or more people called class representatives sue on behalf of other people who have similar claims. The people with the similar claims make up the class and are known as class members. When a class action case is settled or goes to trial, it resolves the case for all of the class members, except those who choose to exclude themselves from the class. A class action is more efficient than having hundreds or thousands of separate lawsuits, especially where, as here, the individual damages were less than the cost of bringing a lawsuit. The Plaintiffs who brought the cases are asking to be class representatives for a nation-wide Settlement Class of APA members who paid the APAPO Practice Assessment, as explained in more detail below. The Plaintiffs are also asking the Court to approve this Settlement. 4. Why is there a Settlement? A settlement is a compromise. The Court did not decide in favor of the Plaintiffs or the Defendants. Although the Plaintiffs think they may have won if the case went to trial, the Defendants disagree and do not believe they did anything wrong. 3

4 The parties negotiated this proposed Settlement after lengthy briefing and argument on Defendants motion to dismiss. The Court granted Defendants motion to dismiss, but the Plaintiffs appealed, and the appellate court affirmed in part and reversed in part the trial court s decision. Thereafter, Plaintiffs filed a consolidated amended complaint. If a settlement were not reached, it would have taken a long time to get to trial, as the parties would still have to brief and argue Plaintiffs motion to certify the case to proceed as a class action on behalf of a nation-wide class of APA members, motions for summary judgment, and other legal issues. Further, it is uncertain whether Plaintiffs would ultimately be successful on those motions, or at trial. For their part, Defendants deny the claims but decided that it was in their best interest to resolve the Litigation so as to avoid the expense, inconvenience, and interference with business operations that continuing the Litigation would entail. Instead of going to trial, both sides agreed to settle. 5. Why do the Plaintiffs and their lawyers think the Settlement is a good thing? Plaintiffs and their lawyers investigated this action before filing this case, and the Plaintiffs attorneys have been researching legal and factual issues concerning this case over the course of several years. Plaintiffs attorneys have reviewed documents from the Defendants related to their collection of the APAPO Practice Assessment, reviewed discovery informally produced by the Defendants for purposes of settlement analysis, and conducted their own investigation involving publicly available records and documentation produced by Class Members. Plaintiffs lawyers fully support the settlement because they believe it will be the best outcome for all Class Members. WHO IS IN THE SETTLEMENT? 6. How do I know if I m part of the Settlement? In order to receive money from the Settlement, you must be a Class Member. The attorneys in this case are able to determine who are Settlement Class Members based upon a review of APA s records, which shows which APA members fall into the description below. The Settlement Class. All persons in the United States who are current or former members of APA and paid the APAPO Practice Assessment for APA dues years 2001 through February 12, Excluded from this class are Defendants, their subsidiaries, affiliates, parents, any entity in which Defendants have a controlling interest, governmental entities, and all judges assigned to hear any aspect of this case, as well as their immediate families. Also excluded is any person who, during the Class Period, released Defendants from liability concerning the claims in the Litigation. WHAT BENEFITS DOES THE SETTLEMENT PROVIDE? 7. What does the Settlement provide? 4

5 The Defendants have agreed to pay $9.02 million into a Settlement Fund. The amount of your cash payment and pro rata share of the Settlement Fund will depend on the total amount of the APAPO Practice Assessment you paid, as determined by the Settlement Administrator. The Settlement Fund will be used to pay claims made by Settlement Class Members, costs, attorneys fees not to exceed 30% of the Settlement Fund, and a $5,000 service award for each of the four named Plaintiffs for the time spent on and risks associated with their participation in this Lawsuit. The Defendants have also indicated that they intend to implement and maintain the following practices regarding their representation and collection of the APAPO Practice Assessment. APA s annual membership dues statements and any electronic equivalent will make clear that (i) APA members who are licensed by a board of psychology are eligible to join APAPO by paying the APAPO Membership Dues, but doing so is optional; and (ii) the APAPO Membership Dues are not required for membership in APA. The Practice Assessment will also be renamed APAPO Membership Dues. In order to receive a cash payment from the Settlement Fund, you must submit a Claim Form by October 12, HOW DO I GET THE BENEFITS DESCRIBED IN THE SETTLEMENT? 8. How can I get a cash payment under the proposed Settlement? In order to receive a cash payment under the Settlement, you must fill out and submit a valid Claim Form either by mail or online, which Claim Form is available at or attached to the short form Notice. If you submit a Claim Form online, it must be completed by 11:59 p.m. Eastern Time on October 12, If you submit a Claim Form via U.S. Mail, the Claim Form must be post marked by October 12, 2015 and mailed to the address below. 9. When will I receive the payment? In re APA Assessment Fee Litigation PO Box 4178 Portland, OR If you submit a Claim Form by October 12, 2015, and your claim is approved, the Settlement Administrator will distribute cash payments by check from the Settlement Fund within 60 days of the Effective Date. That means that payments will be made after the Court enters the final Judgment and the time for filing appeals or other similar documents has expired. After the checks are issued, they will be valid for 180 days. The Settlement Administrator will make reasonable efforts to locate the proper address for any Claimant whose check is returned by the postal service as undeliverable, and will r checks once to the updated address. Uncashed checks and checks returned to the Settlement Administrator will remain in the Settlement Fund for one year from the date that the first distribution check is mailed by the 5

6 Settlement Administrator and may be claimed by the Class Member during this one year period with proof that the uncashed check belonged to them. Within 395 days after the Settlement Administrator mails the first Settlement Payment, any unallocated or unclaimed funds remaining in the Settlement Fund will be distributed either on a pro rata basis to Claimants to the extent feasible and practical in light of the costs of administering such subsequent payments, or through a residual cy pres program to Mental Health America, which is a nonprofit organization dedicated to promoting mental health, preventing mental and substance use conditions and achieving victory over mental illnesses and addictions through advocacy, education, research and service. WHAT AM I GIVING UP IF I STAY IN THIS CASE? 10. What am I giving up to stay in the case? If the Settlement is approved, the Court will enter a Final Order and Judgment dismissing the action with prejudice, meaning that it cannot be filed again. The Settlement Class and each Settlement Class Member, except for Class Members who submit a valid request for exclusion from the Settlement, will fully and unconditionally release and discharge the Released Parties from any and all types or nature of claims or causes of action, whether arising at law or in equity, or in tort, contract, quasi-contract, redhibition, or under any state or federal law, in any way relating to any or all of the facts that are alleged or could have been alleged in the Litigation, including without limitation those arising out of or relating to the APAPO Practice Assessment through the Effective Date, regardless of whether the claim or cause of action is known or unknown, filed or unfiled, asserted or not asserted, existing or contingent, and regardless of the legal theory involved. The Released Claims expressly include, without limitation, (i) any and all such actual or potential claims against Defendants arising from the facts alleged in the Litigation, and (ii) any and all claims, demands, damages or causes of action in any way seeking, alleging or including claims for negligence, negligent misrepresentation, intentional misrepresentation, fraud, fraudulent inducement, deceptive advertising, breach of contract, breach of fiduciary duty, consumer fraud, violation of public policy, breach of any state or federal consumer law, breach of any state or federal tax law, punitive damages, exemplary damages, attorneys fees, absolute liability, strict liability, liability for any wanton or reckless conduct, intentional or deliberate acts, and declaratory or injunctive relief arising from the facts alleged in the Litigation. This release will discharge the claims of all those who claim through any Settlement Class Member or who assert claims on behalf of Settlement Class Members (including the federal government or any state government in its capacity as parens patriae). The Settlement Class, except for Settlement Class Members who submit a valid request for exclusion from the Settlement, will specifically waive any and all rights or benefits that any of them may have with respect to the Litigation, arising now or in the future under Section 1542 of the California Civil Code, which section provides: A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. The Settlement Class acknowledges that some or all of them may hereafter discover facts different from or in addition to those that the Settlement Class now knows, 6

7 believes, or suspects to be true with respect to the Litigation. Nevertheless, it is the intention of the Settlement Class fully, finally, and forever to settle and release all of the claims released in this Settlement Agreement. The Settlement Class assumes the risk of the possible discovery of such additional or different facts and agrees that the Release given herein shall be and remain effective in all respects as to the released matters, regardless of the discovery of such additional or different facts. WHAT IF I DON T WANT TO BE PART OF THE SETTLEMENT? 11. How do I opt out of exclude myself from the Settlement? If you do not want to be part of the Settlement and opt out or exclude yourself per this paragraph, you will not be bound by the terms of the Settlement or the releases in paragraph 10, above, but you will relinquish your right to any payment under the Settlement. In order to exclude yourself from the Settlement, you must mail a notice of intention to opt out or exclude yourself from the Settlement, which includes words that clearly indicate you do not want to participate in the Settlement. You must include your name, address, and telephone number in this exclusion request, and send it to the Settlement Administrator at the address below, post marked on or before May 13, In re APA Assessment Fee Litigation PO Box 4178 Portland, OR Settlement Class Members who fail to submit a valid and timely opt-out request will be bound by all the terms of the Settlement Agreement, any Court order approving the Settlement, and Judgment. Any Settlement Class Member who submits a timely opt-out request may not file an objection to the Settlement and will be deemed to have waived any rights or benefits under the Settlement Agreement. 12. If I don t exclude myself, can I bring a lawsuit for the same thing later? No. If you do not exclude yourself, you cannot bring a lawsuit related to the same allegations raised in this Lawsuit later on. If you exclude yourself from the Settlement, you would retain the right to bring your own claims against the Defendants, but you would not have representation provided for you through this Lawsuit, and would be responsible for hiring your own attorney at your own expense. CAN I OBJECT TO THE SETTLEMENT? 13. How do I tell the Court that I object to this Settlement? If you are a member of the Settlement Class and did not opt-out pursuant to paragraph 11 above, you can object to the Settlement if you don t like a part of it, and give your reasons why you think the Court should not approve it. The Court will consider your views. 7

8 Objections to the Settlement or to the application for fees, costs, expenses, and Settlement Class Representative Service Awards must be mailed to the Clerk of the Court, Settlement Class Counsel, and Defendants counsel at the addresses below. The Court Clerk of the Court United States District Court for the District of Columbia 333 Constitution Ave., NW Washington, DC Settlement Class Counsel Hassan Zavareei, Esq. Lorenzo Cellini, Esq. TYCKO & ZAVAREEI LLP 2000 L Street NW, Suite 808 Washington, DC Defendants Counsel David W. Ogden, Esq. Jonathan E. Paikin, Esq. WILMER CUTLER PICKERING HALE AND DORR LLP 1875 Pennsylvania Ave., NW Washington, DC For an objection to be considered by the Court, the objection must be received by the Court, Settlement Class Counsel, and Defendants counsel no later than May 13, Any person that fails to object in the manner set forth in this paragraph 13 shall forever be barred from making any such objections in the Litigation or any other action or proceeding, unless the Court in its discretion shall thereafter otherwise direct upon application of such person and for good cause shown. For an objection to be considered by the Court, the objection must also set forth: (1) the name of the litigation (In re APA Assessment Fee Litigation, Case No. 1:10-cv [D.D.C.]); (2) the objector s full name, address, and telephone number; (3) an explanation of the basis upon which the objector claims to be a Settlement Class Member or otherwise asserts standing to object; (4) all grounds for the objection, accompanied by any legal support for the objection known to the objector or his counsel; (5) the number of times in which the objector has objected to a class action settlement within the five years preceding the date that the objector files the objection, and the caption of each case in which the objector has made such objection; (6) the identity of all counsel who represent the objector, including any former or current counsel who may be entitled to compensation for any reason related to the objection to the Settlement or fee application; (7) the number of times in which the objector s counsel and/or counsel s law firm have objected to a class action settlement within the five years preceding the date that the objector files the objection, and the caption of each case in which the counsel or the firm has made such objection; (8) any and all agreements that relate to the objection or the process of objecting whether written or verbal between objector or objector s counsel and any other person or entity; (9) the identity of all counsel representing the objector who will appear at the Final Approval Hearing; (10) a list of all persons, including if applicable the objector himself, who will be called to testify at the Final Approval Hearing in support of the objection; and (11) the objector and the objector s attorney s signature. 14. What is the difference between objecting and excluding? Objecting tells the Court that you don t like something about the Settlement. You can only object if you stay in the Lawsuit. Excluding yourself or opting out is telling the Court that you don t want to be part of the Settlement and would rather hire your own lawyer and start your own lawsuit. If you exclude yourself, you have no basis to object because the Settlement no longer affects you. 8

9 15. What will happen if there are objections to the Settlement? The Court will listen to any objections and take them into consideration when it decides whether or not to approve the Settlement. If there are no objections or appeals, the Court could approve the Settlement sooner, and money could be distributed sooner. If there are objections and appeals, distribution of payments could be delayed. THE COURT S FAIRNESS HEARING 16. When and where will the Court decide whether to approve the Settlement? The Court will hold a Final Approval Hearing at 10 a.m. on August 13, 2015, at the United States District Court for the District of Columbia, 333 Constitution Avenue, NW, Washington, DC At this hearing, the Court will consider whether the Settlement is fair, reasonable, and adequate. The Court will consider all objections and the Judge will listen to people who have asked to speak at the hearing. After the hearing, the Court will decide whether to approve the Settlement. We do not know how long his decision will take. 17. Do I have to come to the hearing? No. Settlement Class Counsel will answer any questions the Court may have. But you are welcome to come at your own expense. If you send an objection, you don t have to come to court to talk about your objection if you don t want to. As long as you mailed your written objection on time, the Court will consider it. You may also pay your own lawyer to attend, but it is not required. 18. May I speak at the hearing if I want to? You may ask the Court for permission to speak at the Final Approval Hearing. To do so, you must send a letter in advance providing the Court with notice of your intention to appear at the Final Approval Hearing in In re APA Assessment Fee Litigation, Case No. 1:10-cv (D.D.C.) (hereinafter, Notice of Intent to Appear ). Be sure to include your name, address, telephone number, and signature. You must mail a copy of your Notice of Intent to Appear to each of the three places listed below, postmarked no later than May 13,

10 The Court Clerk of the Court United States District Court for the District of Columbia 333 Constitution Ave., NW Washington, DC Settlement Class Counsel Hassan Zavareei, Esq. Lorenzo Cellini, Esq. TYCKO & ZAVAREEI LLP 2000 L Street NW, Suite 808 Washington, DC Defendants Counsel David W. Ogden, Esq. Jonathan E. Paikin, Esq. WILMER CUTLER PICKERING HALE AND DORR LLP 1875 Pennsylvania Ave., NW Washington, DC What will happen if I do nothing at all? WHAT IF I DO NOTHING? If you do nothing, you will not receive a payment, even if the Court orders payment to those who completed valid Claim Forms. You will also be giving up your right to bring your own action against the Defendants related to the claims in the Lawsuit. If you wish to receive a cash payment under this Settlement, you must submit a timely, complete, and signed Claim Form. 20. Do I have a lawyer in this case? ARE THERE LAWYERS REPRESENTING ME? Attorneys at the law firms of Tycko & Zavareei LLP, Wexler Wallace LLP, Whitfield Bryson & Mason LLP, The Miller Law Firm, and Greg Coleman Law PC have been appointed by the Court to represent the Class. These law firms are called Settlement Class Counsel and have worked together to bring this Lawsuit and obtain a settlement. You will not be personally charged for the services of these law firms. If you want to be represented by your own lawyer in this case, you may hire one at your own expense. 21. How will the layers be paid? Settlement Class Counsel will ask the Court to award them attorneys fees in an amount not to exceed 30% of the Settlement Fund and reimbursement of their expenses. The Court has not yet expressed an opinion about what amount would be appropriate compensation for Settlement Class Counsel and may award less than this amount. HOW CAN I GET MORE INFORMATION? 22. What if I have additional questions? To review or obtain a copy of the Settlement Agreement, the Court s preliminary approval order, and the operative complaint filed in this Litigation, please visit the Settlement Website at You may also contact the Settlement Administrator at 10

11 or In re APA Assessment Fee Litigation, PO Box 4178, Portland, OR In order to see the complete file for this Action, you may visit the website to access publicly filed documents in the United States District Court for the District of Columbia at What if my address or other information changes? If, after you submit a Claim Form, you change your postal or address, it is your responsibility to inform the Settlement Administrator of your updated information. You may do so either by mail or at the addresses below: In re APA Assessment Fee Litigation PO Box 4178 Portland, OR DO NOT ADDRESS ANY QUESTIONS ABOUT THE SETTLEMENT OR THE LITIGATION TO THE CLERK OF THE COURT OR THE JUDGE. 11

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