Settlement Class M - A Case Paper Summary

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1 Case 1:09-md JLK Document 3804 Entered on FLSD Docket 03/07/2014 Page 1 of 8 UNITED STATES DISTRICT COURT SOUTHERNDISTRICT OF FLORIDA MIAMI DIVISION CASE No. 1:09-MD R K IN RE: CHECKING ACCOUNT OVERDRAFT LITIGATION MDL No THIS DOCUMENT RELATES TO: FOURTH TM NCHE ACTIONS Cas6bvuran, et al. v. PNC Bank, N A. D.N.J. Case N o. 2: S.D. Fla. Case N o. 10-cv JLK Cowen, et al. v. PNC Bank, N A. S.D. Fla. Case N o. 10-cv JLK Hèrnandez, et al. v. PNC Bank NA. S.D. Fla. Case No. 10-cv JLK ORDER GM NTING JOINT MOTION TO AUTHORIZE DISTRIBUTION OF SETTLEM ENT FUND PAYM ENTS THIS CAUSE cam e before the Court upon the Joint M otion to Authorize Distribution of Settlement Fund Payments Ctloint M otion') ûled by Settlement Class Counsel and Defendant 1 'NC Bnnk, N.A. pursuant to the February 10, 2014 Order (DE # 3581).1 The Court now enters this Order based on the Joint M otion and accompanying declarations submitted by Setlem ent Class Counsel and PNC. (DE # 3798). 1 Except as specificaly modified by the Final Approval Order and/or Final Judgment (DE # 3580, 358 1), a1 capitalized defined terms used herein have the meaning set forth in the Settlement Agreement and Release and Am endment to Settlem ent Agreem ent and Release (collectively, the Settlement' (DE # , ).

2 Case 1:09-md JLK Document 3804 Entered on FLSD Docket 03/07/2014 Page 2 of 8 Backzround This Action was commenced in October Plaintiffs sued on behalf of themselves and a1 others sim ilarly situated who incurred Overdraft Fees as a result of PN C'S practice of High-to-laow Posting of Debit Card Transactions. The Parties actively litigated this Action for nearly three years. On M ay 16, 2012 the Court entered an Order granting Plaintiffs' m otion for class certification. (DE # 2697). On June 26, 2012, Settlement Class Counsel and PNC fled a Joint Notice of Settlement (DE # 2792), which notified the Court that they had reached an agreement to resolve the pending litigation, and requesting suspension of al case deadlines pending the drafting and execution of a snal settlement agreem ent. The Court granted that request on June 27, (DE # 2793). In December 2012, the Parties executed the Agreement resolving all clisputes that tmderlie this Action. (DE # ). The Court granted Preliminary Approval to the Settlement on Janlngy 4, (DE # 3151). ln the Spring of 2013, the Notice Administrator provided Class Notice to approxim ately 960,000 Settlem ent Class M embers via: (1) published notice in twentpone (21) of the highest daily circulation newspapers and/or newspapers that were more likely to be read by Settlem ent Class M embers in the geographic markets where PNC maintained branches during the Class Period ('DE # ) Cdpublished Notice'); direct postcard mailings to the last known address of each identitiable Settlement Class Idember (DE # ) (dtmailed Notice'); and through publication of Long Form notice on the Setlement W ebsite (tlong Form Notice'). (DE # ). On A ugust 5, 2013, this Court entered the Final A pproval Order and Final Judgm ent. (DE # 3580, 358 1). No appeals were taken. Ptlrsuant to the terms of the Settlement and the 17ina1 Approval Order, Settlem ent Fund Paym ents were required to be distributed to al eligible 2

3 Case 1:09-md JLK Document 3804 Entered on FLSD Docket 03/07/2014 Page 3 of 8 Settlement Class Members by February 7, 2014 (within 150 days after the Effective Date). (DE # at! 108). Settlement Fund Payments to Settlement Class M embers who are Current Account Holders are to be m ade by PNC by issuing credits to Settlem ent Class M embers' PN C Accounts or by mailed check in those instnnces where it is not feasible or reasonable to make the payment by a credit, and Settlement Fund Payments to eligible Past Account Holders are to be made via checks mailed by the Settlement Administrator.(DE # at!! 114, 116). On February 3, 2014, Settlement Class Counsel and PNC jointly moved to temporarily suspend the deadline for distributing Settlem ent Fund Payments because of a recently-detected technical error. (DE # 3780). On February 10,2014, the Court temporarily suspended the deadline for distributing Settlement Fund Payments, and directed Settlem ent Class Cotmsel and PNC to submit a m otion describing the nature of the technical error that necessitated the tem porary suspension of paym ent deadlines and setting forth a plan for distributing the Settlement Fund Payments as soon as possible. (DE # 3782). Findinzs of Fact and C onclusions of L aw The Court has reviewed the Joint M otion and al declarations attached thereto. Based on the declaration of PNC Vice President Daniel Gaffney, the Court is satisfied that the technical error, whereby PNC included the m 'ong names and addresses for approximately 360,000 Settlem ent Class M em bers when compiling the m aster database for transm ittal to the Notice Administrator in January 2013, was tmintentional and occurred as a result of a coding m istake. Notwithstanding the foregoing error, based on the inform ation set forth in the declarations of R icky Borges of Epiq Class A ction & M ass Tort Solutions, Inc., the N otice Administrator and Settlement Adm inistrator, as wel as Gwendolyn Friedman, Senior M anager, Research Systems with Balard Spnhr, LLP, PNC'S cotmsel in this Action, and the opinions 3

4 Case 1:09-md JLK Document 3804 Entered on FLSD Docket 03/07/2014 Page 4 of 8 expressed in the supplemental declaration of Professor Brian Fitzpatrick of Vanderbilt Law School, a recognized expert on Rule 23 and class actionjurisprudence, the Court is satisfied that the Notice Program set forth under the Settlement, and performed by the Notice Adm inistrator, was comprehensive and provided sufficient notice to a1 persons entitled to receive Notice of the Settlement, as wel an adequate time to opt-out or object to the Settlement. As this Court noted in the Final Approval Order (DE # 3580), the Settlement was also widely publicized prior to the deadline for Settlement Class M em bers to timely subm it requests for exclusion or objections to the Settlement. Settlement Class M embers received notice of the Settlement through local and internet news sources. News reports of the Settlement appeared in 40 newspapers, in 93 published articles between June 26, 2012, when the Parties first filed the Joint Notice of Settlement (DE # 2792) and April 12, 2013, the deadline for timely submiting requests for exclusion and objections. The effectiveness of the Notice Progrnm is demonstrated by the fact that 25% of the objections to the Settlement were filed by Settlement Class Members who did not receive Postcard Notice. Federal courts that have addressed the adequacy of notice in sim ilar contexts have fbcused on whether the breadth of notice program provided a reasonable opportmity to the class as a whole for the ful range of relevant objections to be raised. The United States Court of Appeals for the Ninth Circuit held that settlement of a Rule 23(b)(3) class was proper and valid even though approxim ately one-third of the class m embers did not receive tim ely notice. See Ttvrgf v. Tucson Electric Power Co., 8 F.3d 1370 (9th Cir. 1993). In Torrisi, the Court r'easoned: tl-flhe question before us today is not whether some individual shareholders got adequate notice, but whether the class as a whole had notice adequate to flush out whatever objections might reasonably be raised to the setlement.' f#. at 1375; see also Fidel v. Farley, 4

5 Case 1:09-md JLK Document 3804 Entered on FLSD Docket 03/07/2014 Page 5 of F.3d 508, 514 (6th Cir. 2008) (affirming settlement where twenty percent of class did not receive timely notice). As in Torrisi and Fï#e/, the Notice Program under the Settlement here was legally s'ufficient because the Settlement Class as a whole was provided with adequate notice through the Notice Program. The wide distribution of Notice through the Publication Notice, and the Setlement W ebsite and tol-free number two months before the opt-out and objection period elapsed provided adequate opportunity to flush out whatever objectionsmight reasonably be raised to the Setlem ent, even though approximately one-third of the Settlement Class M em bers did not receive individual Postcard Notice of the Settlement as a result of PNC'S acknowledged eror in providing the data to the Notice Administrator. In addition to the Court-ordered Notice P'rogram, widespread coverage of the Setlem ent in local print m edia and contem poraneous internet coverage created further opportmity to flush out any objections that might have been reasonably raised to the Settlem ent. Indeed, the sufficiency of the Notice Progrnm is supported not simply by the breadth of the Notice Progrnm, but also by the fact that 25% of the objections were subm itted by individuals who did not receive Postcard N otice. ytccording to Professor F'itzpatrick, due process does not require that an additional period for opt-outs or objections be provided to those Settlem ent Class M embers who were not provided with Postcard Notice as a result of PN C'S error. Based on the foregoing, the Court finds and concludes that there is no legal imperative that requires nor warrants an additional period for opt-outs or objections to those Settlement Class M embers who were not provided with Postcard Notice as a result of PNC'S eror. The N otice Progrnm satisfied al applicable requirements of law including, but not limited to, Federal Rule of Civil Procedure 23 and the constitutional requirem ent of due process. 5

6 Case 1:09-md JLK Document 3804 Entered on FLSD Docket 03/07/2014 Page 6 of 8 Notwithstanding the foregoing findings and conclusions, in an abtmdance of caution, the Court wil afford the approximately 360,000 Settlement Class M embers who were not m ailed Postcard Notice as a result of PNC'S error with a brief additional opportunity to exclude them selves from the Settlement, should they choose to do so. The process for afording those Setlement Class M embers the additional opportunity to opt-out shall be undertaken and canied out as set forth in the Joint M otion, including use of the special language on the check stub of the checks to be distributed to those Settlem ent Class M embers notifying them of their additional opportunity to opt-out within the additional 30-day period. Should any Setlement Class M embers who receive Settlem ent Fund Paym ent checks with this m essage timely and properly submit requests for exclusion within the additional 30-day period, Setlement Class Counsel and F'NC shall file an Addendum Exhibit A-1 to the Final Judgm ent, updating the list of exclusions in Exhibit A to the Final Judgment. Conclusion Based on the foregoing, it is ORDERED and ADJUDGED as folows: Settlem ent Class Counsel, PNC, and the Setlem ent Administrator are hereby authorized and directed to proceed with the distribution of Setlem ent Fund Payments to eligible Setlem ent Class M em bers as soon as possible, but no later than 60 days from the entry of the Order. Except as otherwise provided herein, PNC and the Settlement Administrator shall utilize the sam e procedures for distribution of Settlem ent Fund Payments as set forth in the Settlement. PNC shal issue accotmt credits to a1 eligible Settlem ent Class M embers who are Current Account Holders, and the Settlement Adm inistrator shal mail checks to al1 eligible Past Accotmt H olders at their last known addresses. 6

7 Case 1:09-md JLK Document 3804 Entered on FLSD Docket 03/07/2014 Page 7 of 8 W ithin 60 days folowing entry of an Order authorizing distribution of Settlem ent F'und Payments to eligible Settlem ent Class M em bers, PNC and the Setlem ent Adm inistrator shal distribute Settlem ent Fund Paym ents to al1 eligible Setlem ent Class M embers who w ere previously sent Postcard N otice and/or who filed Claim s utilizing the same procedures for distribution of Settlem ent Fund Paym ents as set forth in the Settlem ent. These Settlement Fund F'ayments shall be distributed to approxim ately 600,000 eligible Settlem ent Class M embers unafected by PNC'S data eror described in the Joint M otion. At the sam e tim e as the foregoing Settlement Fund Paym ents are distributed, the Settlem ent Administrator shal also m ail Settlement Fund Paym ents in the form of checks to approxim ately 360,000 Settlem ent Class M em bers who were not previously mailed Postcard Notice as a result of PNC'S data error discussed in the Joint M otion. The check stub on these checks shal contain substantialy the folowing language: This check is your paym ent for settlem ent of a class action law suit settlement in the cases brought against PNC Bank, N.A. that were made part of In Re: Checking Account Overdraḥ L itigations Case No. 1:09-md JLK. You may go to m.pncbankoverdrahsedlem ent.com to read about the lawsuit and the settlem ent. Although Notice was previously provided to the Settlem ent Class, the Court has decided that you should be given an additional 30 days to exclude yourself from the Settlem ent, should you choose to do so. If you wish to exclude yourself from the Setlem ent you must sign the enclosed Check Stub where indicated below and m ail this form, along with the attached undeposited check, to PNC Overdraft Settlem ents PO Box 3219, Portland, Oregon no later than IDATE TO BE INSERTED BASED ON 30 DAYS FROM DATE OF CHECK M AILINGI. lf you deposit this check, you relinquish your additional right to opt-out of the Settlement, and wil be bound by the terms of the Settlem ent and the Final Judgm ent. lf you do not sign this Check Stub and return it along with the undeposited check, by (DATE TO BE INSERTED BASED ON 30 DAYS FROM DATE OF CHECK M AILINGI, you will remain bound by the term s of the Settlement and Final Judgm ent. lf you do not opt out, we encotlrage you to promptly deposit the check. 7

8 Case 1:09-md JLK Document 3804 Entered on FLSD Docket 03/07/2014 Page 8 of 8 The exclusion language that wil appear above the signature line on the check stub shal read as folows: tiby signing belom I elect to exclude myself from the PNC O verdraft Settlem ent-' 4. Settlem ent Class Cotmsel and PNC shal file a report with the Court w ithin sixty (60) days folowing the distribution of the Settlement Ftmd Payments pursuant to this Order, advising the Court that distribution of Settlement Ftmd Payments has occurred as provided herein, and notifying the Court of any additional issues that may arise in connection therewith. As part of their report, Settlem ent Class Counsel and PNC shal include a list of al1 Settlem ent Class M embers who received Settlement Fund Paym ent checks with the foregoing m essage and who timely and properly submit requests for exclusion within the additional 30-day period provided herein. The list of those Settlem ent Class M embers shal also be filed separately as an Addendum Exhibit A-1 to the Final Judgm ent, updating the list of exclusions in Exhibit A to the Final Judgment. (DE # 3581). Except as specificaly m odified by this Order, a11 term s and provisions of the Settlement (DE # , ), the Final Approval Order (DE # 3580), and the Final Judgment (DE # 3581) remain unchanged. DONE AND ORDERED in Chambers at the James Lawrence King Federal Justice Building and United states courthouse in M iami, Florida this day of M arch, JAMES LAW RENCE KI NITED STATES DISTR ICT DG E SOUTHERN DISTRICT OF FL RIDA Copies fum ished to: Counsel of Record 8