United States District Court, D. Colorado
JAMES DANIEL TUTEN, on behalf of himself and all others similarly situated, Plaintiff,
UNITED AIRLINES, INC., Defendant.
ORDER GRANTING MOTION FOR FINAL APPROVAL OF SETTLEMENT AGREEMENT, MOTION FOR ATTORNEY FEES AND REIMBURSEMENT OF EXPENSES, AND MOTION FOR ORDER APPROVING A SERVICE AWARD FOR CLASS REPRESENTATIVE
WILLIAM J. MARTÍNEZ, District Judge.
On October 31, 2013, the Court entered an Order certifying the Class in this case, appointing Class Counsel and a Settlement Administrator, approving the form of the Notice to the Class, preliminarily approving the proposed Settlement, and setting a final fairness hearing on the Settlement. (ECF No. 52.) The Court held a fairness hearing on May 15, 2014. (ECF No. 70.) Having considered the arguments raised in the briefs and at the hearing, and for the reasons set forth below, the Court grants the parties' Motion for Final Approval of Settlement Agreement (ECF No. 67), Motion for Attorney Fees and Reimbursement of Expenses (ECF No. 61), and Motion for Order to Approve a Service Award for the Class Representative (ECF No. 60).
I. FACTUAL AND PROCEDURAL BACKGROUND
This action was originally filed on June 15, 2012 by James Tuten on behalf of himself and all other pilots that took military leave while working for Defendant United Airlines ("United") between 2000 and 2010 (the "Class" or "Class Members"). (ECF No. 1.) The Complaint alleged that United calculated and made pension contributions for pilots on military leave based on the minimum flight hours guaranteed under the pilots' collective bargaining agreement. ( Id. ) Plaintiff alleged that this violates the Uniformed Services Employment and Reemployment Rights Act ("USERRA"), which requires that pension contributions be calculated based on the average rate of compensation or flight hours during the 12-month period immediately preceding the military leave. ( Id. ) Plaintiff sought a declaration that United's policy violated USERRA, and an order requiring United to compensate the Class in the amount of the full pension contributions required by USERRA. ( Id. )
Before United filed an answer, the parties sought a stay of this case to pursue settlement negotiations. (ECF No. 12.) United volunteered to provide discovery about Class Members, as well as other documents that could facilitate settlement. ( Id. ) The Court stayed the case and later administratively closed the action to allow the parties to pursue a joint resolution. (ECF Nos. 13 & 26.) The case was reopened on August 9, 2013. (ECF No. 26.)
On August 14, 2013, the parties filed a Settlement Agreement ("Settlement") (ECF No. 33) and an unopposed Motion for certification of the Class, preliminary approval of the Settlement, and authorization to send notice of the Settlement to the Class (ECF No. 34). On October 31, 2013, the Court granted the Motion, certifying the Class, appointing Plaintiff's counsel as class counsel ("Class Counsel"), appointing Plaintiff as class representative ("Class Representative"), approving notice to the Class, appointing a Class administrator, and setting a final fairness hearing for May 16, 2014. (ECF No. 52.) The hearing was later changed to May 15, 2014, and an amended notice was mailed to the Class. (ECF No. 62.)
The Settlement is exhaustive, both retrospectively and prospectively, and the Court need not parse all of the details in this Order. Briefly, the Settlement requires United to create a settlement fund of $6.15 million dollars (the "Settlement Fund"), which will be allocated amongst the Class Members pursuant to an agreed upon damages methodology which relies on the employment data provided by United as to each Class Member. (ECF No. 33 §§ II.II, VII, VIII.C.) The Settlement creates a dispute process, whereby a Class Member can challenge this employment data to dispute the amount owed. ( Id. § VIII.C.3.) After each Class Member's eligibility is determined, payments will be made, to the extent possible, into the Class Members' pension accounts in order to preserve favorable tax treatment. ( Id. § VIII.F.2.) Class Counsel estimates that each Class Member will ultimately receive a payment equal or greater than the amount of the underpayment into each Class Member's pension account. (ECF No. 35 ¶ 18.)
The Settlement also provides non-monetary relief to the Class and future United pilots. United agrees to change its method for calculating a pilot's defined pension contribution during periods of long-term military leave. (ECF No. 33 § X.A.) United also agrees to, for the first time, maintain a written policy setting forth its method of calculation. ( Id. § X.B.) Finally, the Settlement improves communication between United and its pilots, both in advance of military leave and after the pilot returns from military leave. ( Id. § X.C-D.)
United agrees to pay the cost of administering the Settlement, and such payment shall not come from the Settlement Fund. ( Id. § VI.A.2.) The Settlement allows Class Counsel to seek attorneys' fees, expenses, and costs, as well as a service award for James Tuten, the Class Representative, in an amount to be approved by the Court. ( Id. § XI.) Finally, the Settlement contains a series of procedures that preserves the rights of pilots that are currently on military leave. ( Id. § VIII.D.)
Notice of the Settlement was mailed to all Class Members in December 2013. (ECF No. 58.) The deadline for any Class Member to object to the Settlement was February 14, 2014; no objections were filed. (ECF No. 55.) The only communication that the Court has received from Class Members were notices from Vincent Alcazar and James Blaisdell that they wish to participate in the Class. (ECF Nos. 59 & 63.)
On January 3, 2014, Plaintiff filed unopposed Motions for approval of a service award for the Class Representative (ECF No. 60) and for the attorneys' fees award contemplated by the Settlement (ECF No. 61). On April 15, 2014, Plaintiff filed an unopposed Motion for Final Approval of Settlement Agreement. (ECF No. 67.) The Court held a fairness hearing on May 15, 2014 during which the parties argued the relative merits of these Motions. (ECF No. 70.) No Class Members appeared at the hearing to object to the fairness of the Settlement, or any of other issues raised in the Motions.
II. MOTION FOR FINAL APPROVAL OF SETTLEMENT
The settlement of a class action may be approved where the Court finds that the settlement is fair, reasonable, and adequate. Rutter & Wilbanks Corp. v. Shell Oil, 314 F.3d 1180, 1186 (10th Cir. 2002). The Court reviews a proposed class action settlement by considering four factors:
(1) whether the proposed settlement was fairly and honestly negotiated;
(2) whether serious questions of law and fact exist, placing the ultimate outcome of the litigation in doubt;
(3) whether the value of an immediate recovery outweighs the mere possibility of future relief after protracted and expensive litigation; and
(4) the judgment of the parties that the settlement is fair and reasonable.
Gottlieb v. Wiles, 11 F.3d 1004, 1014 (10th Cir. 1993). The proponent of the settlement has the burden of showing that the settlement is fair. Id. at 1015. Approval of a proposed settlement is committed to the sound discretion of the trial court. Jones v. Nuclear Pharm., Inc., 741 F.2d 322, 324 (10th Cir. 1984).
With regard to the four factors, the Court finds that the Settlement in this case is the product of arms-length negotiations between experienced counsel. Before the Settlement was reached, Class Counsel undertook voluntary discovery, negotiated over a methodology for estimating damages, and retained an expert to ...