UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
IN RE DOMESTIC AIRLINE TRAVEL ANTITRUST LITIGATION MDL Docket No. 2656 Misc. No. 15-1404 (CKK) This Document Relates To:
ALL CASES
MEMORANDUM OPINION (May 9, 2019)
Presently before the Court is Plaintiffs’ [299] Motion for Final Approval of Settlement
Agreements with Southwest Airlines Co. and American Airlines, Inc. (“Pls. Motion”). Class
Plaintiffs, on their own behalf and on behalf of the Settlement Classes, as defined herein, move for
final approval of the settlements (“Settlements”) reached with Defendants Southwest Airlines Co.
(“Southwest”) and American Airlines, Inc. (“American”). Plaintiffs’ Motion, which is fully
briefed and ripe for adjudication, was the subject of a March 22, 2019 Fairness Hearing, where the
following persons gave oral presentations: Michael Hausfeld and Adam Zapala, Interim Class
Counsel (hereinafter referred to as “Settlement Class Counsel”); Roberta Liebenberg, Counsel for
Southwest; Richard Parker, Counsel for American, and Class Members Theodore Frank and
Michael Suessmann. Counsel for Non-Settling Defendants Delta Air Lines, Inc. and United
Airlines, Inc. were also present in the courtroom, as were several other Class Members. Upon consideration of the pleadings, 1 the relevant legal authorities, and the entire record
in this case, the Court GRANTS Plaintiffs’ [299] Motion for Final Approval of Settlement
Agreements with Southwest and American for the reasons described herein.
I. BACKGROUND
A. The Multidistrict Litigation
The United States Judicial Panel on Multidistrict Litigation (“the Panel”) consolidated 23
actions pending in seven districts involving claims that four major airlines —Southwest,
American, Delta Air Lines, Inc. (“Delta”), and United Airlines, Inc. (“United”) — violated Section
1 of the Sherman Act, 15 U.S.C. § 1, by colluding to limit capacity and increase prices for domestic
airfares. The Panel transferred these consolidated actions to this Court on October 13, 2015. The
Panel subsequently transferred additional related actions to be consolidated into the instant
litigation, and at present, there are a total of 105 cases consolidated in this action.
On October 30, 2015, the Court entered its [4] Initial Practice and Procedure Order Upon
Transfer Pursuant to 28 U.S.C. § 1407, in which the Court set out a general outline of how it
intended to proceed in this matter. On February 4, 2016, the Court appointed Hausfeld LLP and
Cotchett, Pitre & McCarthy LLP as Interim Co-Lead Counsel (“Settlement Class Counsel”), and
on March 25, 2016, Plaintiffs filed their Consolidated Amended Class Action Complaint. See
1 Settlement Agrmt. between Pls. and Southwest, ECF No. 196-2 (Ex. A); Settlement Agrmt. between Pls. and American, ECF No. 248-2 (Ex. A); Pls.’ Mot. for Final Approval of Settlement Agreements (“Pls.’ Mot.”), ECF No. 299; Pls.’ Mem. In Support of Pls’ Mot. for Final Approval (“Pls.’ Mem.”), ECF No. 299-1; the Objections filed by various Class Members, ECF Nos. 301, 302, 309, 311, 316, 318, 319, 320, 321, 326, 329 [see Appendix A (list), ECF No. 334- 1]; Pls.’ Omnibus Resp. to Objections, ECF No. 334; and Reply in support of Objection by Paul DeMott, ECF No. 339, which was accepted by the Court for consideration in lieu of any oral argument by Mr. DeMott or his counsel at the Fairness Hearing. 2 Order Appointing Plaintiffs’ Interim Class Counsel, ECF No. 76; Consolidated Amended Class
Action Complaint, ECF No. 91. On May 11, 2016, Defendants filed their [106] Motion to Dismiss
Plaintiffs’ Consolidated Amended Complaint, which was denied by this Court. See Order, ECF
No. 123; Memorandum Opinion, ECF No. 124. The Court entered a [152] Scheduling Order on
January 30, 2017; discovery commenced shortly thereafter and continues for the two Non-Settling
Defendants, Delta and United. Fact discovery closes on July 31, 2019; summary judgment
motions, if any, are due on December 16, 2019; and a class certification briefing schedule will be
determined following resolution of any summary judgment motions. See Stipulated Am. Sch.
Order, ECF No. 290.
B. The Settlements with Southwest and American
On December 27, 2017, Plaintiffs filed their [196] Motion for Preliminary Approval of
Settlement with Defendant Southwest Airlines Co., which included a declaration by counsel in
support of the motion, and a copy of the Plaintiffs’ Settlement Agreement with Southwest
(“Southwest Settlement Agreement”). Pursuant to the Southwest Settlement Agreement,
Southwest stipulates to the certification of the following Settlement Class:
All persons and entities that purchased air passenger transportation services for flights within the United States and its territories and the District of Columbia from Defendants or any predecessor, subsidiary or affiliate thereof, at any time between July 1, 2011 and December 20, 2017. Excluded from the class are governmental entities, Defendants, any parent, subsidiary or affiliate thereof, Defendants’ officers, directors, employees, and immediate families and any judges or justices assigned to hear any aspect of this action.
Southwest Settlement Agreement, ECF No. 196-2 (Ex. A), at 10; Pls.’ Mem., ECF No. 299-1, at
6.
The Southwest Settlement Agreement is considered an “ice-breaker settlement” because it
3 is the first settlement in the litigation. The Southwest Settlement Agreement requires Southwest
to make a $15 million cash payment. Southwest is required further to significantly cooperate with
Plaintiffs regarding the pursuit of their case against the Non-Settling Defendants by: (1) providing
a full account of information known to Southwest that is relevant to the claims asserted in the
Action; (2) arranging an informational meeting or meetings between Settlement Class Counsel and
an industry expert, with some payment provided by Southwest; (3) using its best efforts to make
available for interviews up to seven current or former Southwest employees at the Vice President
level or lower; (4) using its best efforts to make available for depositions up to three current or
former Southwest employees; (5) using its best efforts to make available up to two current or
former Southwest employees to provide a declaration or affidavit; (6) providing information
gathered from senior executive management through an attorney proffer session, and using best
efforts to later provide some of it in an affidavit or declaration; and (7) using its best efforts to
make available for testimony at trial one then-current Southwest employee at the Vice President
level or lower who possesses information that would assist the Plaintiffs at trial. Southwest
Settlement Agreement, ECF No. 196-2 (Ex. A). In exchange for the payment of cash and
cooperation, Settlement Class Members release Southwest from any and all claims that were or
could have been alleged in this legal action arising out of the identical factual predicate. The
Southwest Settlement was preliminarily approved by this Court on January 3, 2018. See Order
Preliminarily Approving Settlement with Defendant Southwest, ECF No. 197. Settlement Class
Counsel was ordered to submit to the Court for approval a Notice Plan for purposes of advising
the Settlement Class members of their rights.
On March 23, 2018, Plaintiffs’ filed their [218] Motion for Approval of Settlement Notice
4 Program, and in connection with the documentation filed with that [218] Motion, the Court
instructed the Plaintiffs to provide additional information. See April 16, 2018 Minute Order; April
25, 2018 Minute Order.
On June 15, 2018, Plaintiffs filed their [248] Motion for Preliminary Approval of
Settlement with Defendant American Airlines, Inc., which included a declaration by counsel in
support of the motion, and a copy of the Settlement Agreement with American (“American
Settlement Agreement”). Pursuant to American Settlement Agreement, American stipulates to the
certification of the following Settlement Class:
All persons and entities that purchased air passenger transportation services for flights within the United States and its territories and the District of Columbia from Defendants or any predecessor, subsidiary or affiliate thereof, at any time between July 1, 2011 and June 14, 2018. Excluded from the class are governmental entities, Defendants, any parent, subsidiary or affiliate thereof, Defendants’ officers, directors, employees, and immediate families and any judges or justices assigned to hear any aspect of this action.
American Settlement Agreement, ECF No. 248-1 (Ex. A) at 10; Pls.’ Mem., ECF No. 299-1, at
13.
The settlement with American requires it to make a $45 million cash payment. American
is required further to significantly cooperate with Plaintiffs regarding the pursuit of their case
against the Non-Settling Defendants by: (1) responding to questions regarding American’s
documents and transactional data; (2) using its best efforts to make available for depositions up to
three current or former American employees; (3) using its best efforts to make available current
and former American employees, for the provision of declarations, certifications, and affidavits
regarding the authenticity and certification of documents; and (4) at Plaintiffs’ request, meet and
confer regarding additional deposition, declarations and/or affidavits. American Settlement
5 Agreement, ECF No. 248-2 (Ex. A) at 18-20. In exchange for the payment of cash and
cooperation, Settlement Class Members release American from any and all claims that were or
could have been alleged in this legal action arising out of the identical factual predicate. 2
On June 16, 2018, this Court granted preliminary approval of the Plaintiffs’ settlement with
Defendant American. Order granting Motion for Preliminary Approval of Settlement with
Defendant American Airlines, Inc., ECF No. 249. On August 2, 2018, Plaintiffs made a [257]
Motion for Approval of Settlement Notice Program, which combined notice for both the Southwest
and American Settlements. The Notice Program proposed direct notice by email, to be
supplemented by publication through print and media outlets, as well as additional online services.
The Settlement Notice Program was approved by this Court in its [267] Order and [268]
Memorandum Opinion, wherein the Court deemed that the proposed notice via email and
publication was the “best notice practicable under the circumstances of this case[,]” consistent with
the standard set forth in Fed. R. Civ. P. 23(c)(2)(B). Memorandum Opinion, ECF No. 268, at 6,
13; Fed. R. Civ. P. 23 (c)(2)(B) (requiring the court to direct to class members “the best notice that
is practicable under the circumstances, including individual notice to all members who can be
identified through reasonable effort”). On December 5, 2018, Plaintiffs filed their [299] Motion
for Final Approval of Settlement Agreements with Southwest Airlines Co. and American Airlines
Inc.
2 Both Settlement Agreements exclude from the release claims for product liability, personal injury, breach of warranty, breach of contract, violation of the Uniform Commercial Code or any other claims not related to the subject matter of the Complaint. Southwest Settlement Agreement, ECF No. 196-2 (Ex. A) ¶ 34; American Settlement Agreement, ECF No. 248-2 (Ex. A) ¶ 34. Furthermore, claims against Non-Settling Defendants are not released. Southwest Settlement Agreement ¶ 63; American Settlement Agreement ¶ 63. 6 C. Class Notice
This case involves a class of approximately 100 million Class Members. Notice was
provided to potential Class Members — consistent with the Settlement Notice Program approved
by the Court — via direct email, paid media and online outreach. See Declaration of Shannon R.
Wheatman, Ph.D. (‘Wheatman Decl.”), ECF No. 299-3 ¶¶ 10-25. The Notice Program also
included a settlement website, a toll-free number, and a post office box whereby Class Members
could obtain answers to questions about the Settlements. Id. ¶¶ 26-30. Kinsella Media, LLC
(“Kinsella”), the notice provider, used the email contact information provided by Southwest,
American and the Non-Settling Defendants to provide direct email notice to 181,836,321 valid
email addresses. Id. ¶¶ 10-12. Notice was also provided through national publications, an earned
media program (a press release targeting journalists and influencers in the travel industry), an
online outreach program (targeting bloggers, reporters, etc.) and digital advertising such as internet
and banner advertisements online. 3 Id. ¶¶ 18-20, 24-25. “The direct notice combined with paid
media delivery is estimated to have reached 72.3% of airline flyers.” Pls.’ Mem., ECF No 299-1,
at 15; Wheatman Decl. ¶ 22.
D. Objections and Plaintiffs’ Response
When Class Members received notice regarding the proposed Settlements, they were
permitted the opportunity to opt out of and/or to file objections to the proposed Settlements.
Objections received from Class Members were recorded on the Court’s docket, see Appendix A,
ECF No. 334-1, and they were considered by the Court. Plaintiffs filed their [334] Omnibus
3 OnFebruary 25, 2019, this Court entered an Order granting the Plaintiffs’ Motion to Disburse Funds for Costs of Class Notice from the Qualified Settlement Fund. See Order, ECF No. 343. 7 Response to the Objections on February 14, 2019. A Fairness Hearing was held on March 22,
2019, to consider the Plaintiffs [299] Motion for Final Approval of Settlement and the Objections
thereto.
II. LEGAL STANDARD
Federal Rule of Civil Procedure 23 (e) provides that: “The claims, issues or defenses of a
. . . class proposed to be certified for purposes of settlement [ ] may be settled, voluntarily
dismissed or compromised only with the court’s approval.“ If notice of the proposal is being
provided to the class, “[t]he court must direct notice in a reasonable manner to all class members
who would be bound by the proposal” if giving such notice is warranted by the parties’ showing
that the court will likely be able to approve the proposal and certify the class for purposes of the
judgment. Fed. R. Civ. P. 23 (e)(1)(B)(i) and (ii). Pursuant to Rule 23(e)(2), the court may approve
a proposal that binds class members “only after a hearing and only on finding that it is fair,
reasonable, and adequate.” Fed. R. Civ. P. 23(e)(2); Thomas v. Albright, 139 F. 3d 227, 231 (D.C.
Cir. 1998) (citation omitted) (a court must determine if a settlement is “fair, adequate, and
reasonable and is not the product of collusion between the parties.”).
In determining whether a proposal is fair, reasonable and adequate, courts look to whether:
(1) the class representatives and class counsel have adequately represented the class; (2) the
proposal was negotiated at arm’s length; (3) the relief provided was adequate; and (4) the proposal
treats class members equitably relative to each other. Fed. R. Civ. P. 23 (e)(2)(A)-(D). The
question of whether the relief provided is adequate involves looking at: (1) the costs, risks and
delay of trial; (2) the effectiveness of the proposed means of distributing relief to the class,
8 including the processing of claims; (3) the terms of any award of attorneys’ fees, including the
timing; and (4) any agreement identified in connection with settlement. Fed. R. Civ. P.
23(e)((2)(C)(i)-(iv).
While courts have discretion to decide whether or not to approve a proposed settlement,
see Mayfield v. Barr, 985 F.2d 1090, 1092 (D.C. Cir. 1993), that discretion “is constrained by the
principle of preference favoring and encouraging settlement in appropriate cases.” In re Vitamins
Antitrust Litig. (“Vitamins”), 305 F. Supp. 2d 100, 103 (D.D.C. 2004) (internal quotation marks
omitted); In re Lorazepam & Clorazepate Antitrust Litig., 205 F.R.D. 369, 375 (D.D.C. 2002)
(while courts may “scrutinize the terms of the settlement,” a court’s discretion to reject a settlement
must be balanced against the preference in favor of settlements). Class action settlements are
favored as a matter of public policy in the District of Columbia Circuit. See United States v MTU
Am. Inc., 105 F. Supp. 3d 60, 63 (D.D.C. 2015) (“Settlement is highly favored, as “[n]ot only the
parties, but the general public as well, benefit from the saving of time and money that results from
the voluntary settlement of litigation.”) (quoting Citizens for a Better Env’t. v. Gorsuch, 718 F. 2d
1117, 1126 (D.C. Cir. 1983)), Freeport Partners, LLC v. Allbritton, No. Civ. A. 04-2030, 2006
WL 627140, at *8 (D.D.C. Mar. 13, 2006) (In this Circuit, public policy “favors settlement of class
actions.”).
The District of Columbia Circuit does not employ a single test for evaluating a proposed
settlement under Rule 23(e); however, courts in this Circuit generally consider the following five
factors: (1) whether the settlement is the result of arm’s length negotiations; (2) the terms of the
settlement in relation to the strength of the plaintiffs’ case; (3) the status of the litigation at the
time of settlement; (4) the reaction of the class; and (5) the opinion of experienced counsel. In re
9 Vitamins, 305 F. Supp. 2d at 104; see also, e.g., Howard v. Liquidity Servs. Inc., No. CV 14-1183
(BAH), 2018 WL 4853898, at *4 (D.D.C. Oct. 5, 2018); Ceccone v. Equifax Info. Servs., LLC, No.
13-cv-1314, 2016 WL 5107202, at *8 (D.D.C. Aug. 29, 2016).
III. ANALYSIS OF THE PROPOSED SETTLEMENT
The Southwest and American Settlement Agreements (hereinafter referred to collectively
as the “Settlements”) will be considered together as they are similar in terms of the consideration
provided (payment of cash and cooperation); the same legal standards set forth in Rule 23 apply
to both; and the objections in this case do not distinguish between the Southwest and American
Settlements. In analyzing the proposed Settlements, this Court will first address the factors set
forth in Rule 23, followed by the factors set forth in Vitamins that are not duplicative of the Rule
23 factors.
A. Is the Settlement Fair, Reasonable and Adequate?
“A presumption of fairness, adequacy and reasonableness may attach to a class settlement
reached in arm’s-length negotiations between experienced, capable counsel after meaningful
discovery.” Meijer Inc. v. Warner Chilcott Holdings Co. III, Ltd., 565 F. Supp. 2d at 49, 55
(D.D.C. 2008) (Kollar-Kotelly, J.) (quoting In re Vitamins Antitrust Litig., 305 F. Supp. 2d at 104).
Looking at the first two factors addressed in Rule 23(e)(2)(A) & (B) — adequate representation of
the class and negotiation of the proposal at arm’s length — the Court notes that the objections
submitted in response to the proposed Settlements do not dispute that the Settlements were reached
through arm’s length negotiations between experienced, capable counsel after meaningful
discovery. Nor does anyone contest that the proposed Settlements treat class members equitably
relative to each other. Fed. R. Civ. P. 23(e)(2)(D). The final factor — adequacy of the relief
10 proposed in the Settlements, pursuant to Rule 23(e)(2)(C)—was addressed in detail at the Fairness
Hearing, and it is discussed below.
1. Adequacy of Settlement
To determine whether relief is adequate, pursuant to Rule 23, courts look at: (1) the costs,
risk and delay of trial; (2) the effectiveness of the proposed means of distributing relief to the class,
including the processing of claims; (3) the terms of any award of attorneys’ fees, including the
timing, and (4) any agreements identified in connection with the settlement. Fed. R. Civ. P. 23
(e)(2)(C)(i)-(iv). The fourth factor — agreements in connection with the settlement — is
inapplicable in this case.
At the March 22, 2019 Fairness Hearing, the Court began its inquiry about the adequacy
of the Settlement by noting that Rule 23 contains the following commentary:
The Court would look to the conduct of the litigation and then the negotiations leading up to the proposed settlement. Attention to these matters is an important foundation for scrutinizing the substance of the proposed settlement. The focus on this point is on the actual performance of counsel acting on behalf of the class. The nature and amount of discovery in this and other cases or the actual outcome of other cases may indicate whether counsel negotiating on behalf of the class had an adequate information base. . . . Another central concern would relate to the costs and risks involved in pursuing a litigated outcome. Often, courts may need to forecast the likely range of possible class-wide recoveries and the likelihood of success in obtaining such results.
March 22, 2019 Transcript of Fairness Hearing (“Tr.”), ECF No. 354, at 8:17-9:8 (quotation marks
omitted).
a. Costs, Risks, and Delay of Trial
Settlement Class Counsel discussed the risks inherent in this antitrust litigation, which
include the “multitude of challenges or obstacles which [the Defendants, in their motion to dismiss]
contended the Plaintiffs could not and would not meet to establish accountability;” Tr. at 11:10-
11 14; the probabilities with regard to summary judgment; obstacles in class certification, preparation
and argument of Daubert motions, and the trial itself. See generally In re Vitamin C Antitrust
Litig., No. 06-MD-1738, 2012 WL 5289514, at *4 (E.D.N.Y. Oct. 23, 2012) (“Federal antitrust
cases are complicated, lengthy, and bitterly fought, . . . , as well as costly.”) Other factors
considered by Settlement Class Counsel included unfavorable holdings in recent antitrust cases,
disputes regarding the amount and type of discovery produced by the Defendants, the prospect of
prolonged litigation, the costs associated with experts and discovery, and the Department of
Justice’s closing of its investigation into Defendants’ actions. 4 Settlement Class Counsel
summarized the negotiations process as “look[ing] at what you feel are the strengths of your case
and understand[ing] the limits of those strengths and the obstacles being placed, both procedurally
and factually.” Tr. at 10:23-11:1-4; see Vista Healthplan, Inc. v. Warren Holdings Co. III, Ltd.,
246 F.R.D. 349, 362 (D.D.C. 2007) (“It is obvious that Plaintiffs faced significant risks in
establishing both liability and damages and in continuing to trial, and that the fairness, adequacy,
and reasonableness of the settlement must be viewed in light of these considerations.”); see also
In re Lorazepam & Clorazepate Antitrust Litig., MDL No. 1290, 2003 WL 22037741, at *4
(D.D.C. June 16, 2003) (weighing risks and costs of continued litigation, which “operate to reduce
the total potentially recoverable damages in this case).
Counsel for Southwest agreed that each side pointed out the “weaknesses and strengths of
its positions, as well as the risks that the other side faced.” Tr. at 46:15-19. Southwest was
4 At the Fairness Hearing, Southwest’s counsel stated her understanding that the DOJ investigation is “not officially closed, but [they] have not heard from DOJ for several years [s]o [their] view is that it’s closed but not officially closed. Tr. at 83:22-84:1. 12 distinguished by its Counsel as a low-cost carrier operating on a point-to-point network as
compared to the legacy airlines operating on a hub-and-spoke network. Tr. at 47:3-9. Counsel
noted that Southwest’s focus was on “low costs, low fares and all-inclusive pricing,” and
furthermore, Southwest increased its capacity during the class period, which flies in the face of
claims about limiting capacity. Tr. at 47:10-22.
According to Settlement Class Counsel, balancing potential weaknesses of Plaintiffs’ case
and risks of failure against the strengths and merits of their case was done with an eye toward
opportunities for settlement, which would result in payment of money for the Class Members and
cooperation by the settling Defendants. See generally In re Linerboard Antitrust Litig., 203 F.R.D.
197, 208 (E.D. Pa. 2001) (“[P]laintiffs have an incentive to prove a case against all defendants
[and] [i]t is in plaintiffs’ interest to maximize potential recovery against all defendants and to
demonstrate the full extent of the alleged conspiracy.”) Settlement Class Counsel considered that
the cooperation proffered by Southwest would provide “significant resource information as to the
nature, scope and operation of the industry which would be of assistance [ ] in the further
prosecution, [ ] of the case.” Tr. at 16:3-9. The Southwest Settlement also had the distinction of
being an “icebreaker settlement,” demonstrated by the fact that four months after the Southwest
Settlement, American started negotiating with the Plaintiffs. Tr. at 48:17-49:1. See In re Processed
Egg Prod. Antitrust Litig., 284 F.R.D. 249, 276 (E.D. Pa. 2012) (granting approval of “ice-breaker”
settlement with cooperation provision that “aid[ ] the Plaintiffs in prosecuting and resolving their
claims against the other Defendants”); In re Linerboard Antitrust Litig., 292 F. Supp. 2d 631, 643
(E.D. Pa. 2003) ($7.2 million settlement had “significant value” because “early settlement with
one of many defendants can “break the ice” and bring other defendants to the point of serious
13 negotiations”). Counsel for Southwest noted that “in an icebreaker settlement, the first settling
defendant does typically get a discounted amount because [of] the significant value in and of itself
as an icebreaker settlement and also because of the cooperation provisions,” Tr. at 49:2-7, but
counsel noted that the portion of the Settlement Funds (the cumulative $60 million collected from
Southwest and American) contributed by Southwest in this case ($15 million) is in line with other
icebreaker settlement amounts. Tr. at 60:19-25; see In re Transpacific Passenger Air Transp.
Antitrust Litig., No. C 07-05634, 2015 WL 3396829, at *1, 4 (N.D. Cal. May 26, 2015) (approving
a $39 million settlement involving eight of the defendant airlines and a class of hundreds of
thousands).
Settlement Class Counsel indicated that negotiations between the parties did not necessitate
the involvement of a mediator because of the “longstanding relationships, both adversarial and
collegially” between counsel. Tr. at 15:3-19; Tr. at 46:9-14. The Southwest Settlement was
“reached after extensive arm’s-length, good-faith negotiations” that were “conducted over almost
a four-month period and after two and a half years of hard-fought litigation” which included
motions to dismiss and extensive discovery. Tr. at 46:3-8. “At the time of [Southwest] settlement,
Plaintiffs were in receipt of and had conducted an extensive review of the over 450,000 documents
Defendants had produced to the United States Department of Justice as part of its investigation”
and Plaintiffs received “an additional 180,000 documents produced by American” and “88,000
documents produced by sixteen third parties.” Memo. in Support of Pls.’ Mot. for Final Approval,
ECF No. 299-1, at 9-10.
Settlement Class Counsel had to “weigh the value of [Defendant’s cooperation] in going
forward and then look at what amount monetarily would make sense in conjunction with what
14 [they] considered the value of cooperation to proceed.” Tr. at 16:23-17:1. For the Southwest
Settlement, the parties arrived at “$15 million being equally unacceptable to both sides, but fair in
terms of resolving Southwest’s accountability in the matter along with what [Settlement Class
Counsel] considered and measured as the value of the cooperation.” Tr. at 17:10-14. Furthermore,
under the Southwest Settlement, “all of Southwest’s sales remain in the case as a basis for damages
against the Non-Settling Defendants under joint and several liability, under the antitrust laws [a]nd
numerous courts have recognized that a provision that preserves joint and several liability is an
important factor in final approval of a settlement.” Tr. at 50:3-10. “[S]ettlements do not prejudice
class members’ ability to recover the full amount of their damages should the non-settling
Defendants be found liable and, in fact, increase the likelihood of such recovery because of the
cooperation provisions in those agreements.” Pls’ Omnibus Resp., ECF No. 334, at 20; see In re
Auto Parts Antitrust Litig., No. 12-MD-02311, 2018 WL 7108016, at *5 (E.D. Mich. Nov. 6, 2018)
(granting final approval to settlement between Auto Dealers and Certain Defendants and noting
that the non-settling defendants remained jointly and severally liable for damages relating to sales,
less the amounts paid in settlement). In that case, the court noted that “[c]onsequently, the
Settlements will not limit the Settlement Classes’ right to recover the full amount of the damages
available under the law from the non-settling defendants, against whom the Auto Dealers continue
to prosecute their claims in those parts of the cases that have not been fully resolved.” Id.
When questioned by the Court about whether there was a range contemplated for the
monetary component of the settlement in the instant case, Settlement Class Counsel indicated that
“[t]he range was not tied in this matter [to a] specific value of commerce or an amount of damage”
but was instead based on counsel’s “half-century career and experience in antitrust early
15 settlements.” Tr. at 19:7-21; Tr. at 46:9-14 (indicating that counsel for Southwest who negotiated
the settlement each had over 40 years of antitrust class-action experience); see also Radosti v.
Envision EMI, LLC, 717 F. Supp. 2d 37, 56 (D.D.C. 2010) (“the opinion of experienced counsel
‘should be afforded substantial consideration by a court in evaluating the reasonableness of a
proposed settlement.’”) (quoting Cohen v. Chilcott, 522 F. Supp. 2d 105, 121 (D.D.C. 2007)). In
the instant case, vouchers were considered by Settlement Class Counsel but were rejected for the
initial settlement in favor of a combination of cash and cooperation, which was deemed significant.
Settlement Class Counsel noted that settlement discussions with Southwest began with the
consideration of nonmonetary terms first – specifically, what Southwest “could provide that would
assist [Plaintiffs] in prosecuting the case against the remaining Defendants” including
“agree[ments] in advance that they would make certain people available to [Plaintiffs] after they
told [them] which people it is that [they] should be focusing on: interviews, . . . , informal, with
Southwest officials; meetings with Southwest industry experts; trial testimony; production of
documents . . . authenticity declarations as well as the stipulation of class certification.” Tr. at
16:3-22. “[S]imilar to Southwest, [American] [was] amenable to significant cooperation,” Tr. at
23:2-3; see Tr. at 51:18-21 (noting that American’s cooperation provisions include “explaining
documents and responding to reasonable questions on the documents.”) “What [Plaintiffs] needed
to do [was to] pick up more of the pieces and have someone assist [them] in guiding how those
pieces get put together in terms of prosecuting the remainder of the claims.” Tr. at 24:8-15.
Settlement Class Counsel indicated that the ongoing cooperation provided by Southwest and
American has proved to even be “[m]ore [valuable] than [they] thought.” Tr. at 23:18-24; see Tr.
at 49:8-13 (where Southwest counsel notes that the cooperation agreements are “quite extensive”
16 with some “unique and different features”). See also In re Packaged Ice Antitrust Litig., No. 08-
MD-01952, 2011 WL 717519, at *10 (E.D. Mich. Feb. 22, 2011) (noting cooperation “has already
been beneficial to the Plaintiffs in their continued prosecution of their claims against the non-
settling Defendants”).
Settlement Class Counsel employed a similar approach in its settlement with Defendant
American, focusing on cooperation provisions as well as “what new amount would signify a
material advancement of the value to the class from a monetary perspective.” Tr. at 24:2-7. The
negotiations with American “came at a time when [American] had literally produced 1.5 million
pages of documents,” which was both extensive and expensive. Tr. 52 at 1-13. Moreover,
Plaintiffs had “received over six million documents produced by Defendants” and “cooperation
from Southwest that informed their negotiations with American.” Pls.’ Mem., ECF No. 299-1, at
12. In arriving at a figure of $45 million, Settlement Class Counsel noted that “[i]t was significant
along with the cooperation as to what would materially advance the value of the class in relation
to the remaining Defendants who would be responsible for the full damage trebled. . . ” Tr. at 25:3-
8; see, e.g., Meijer, Inc., 565 F. Supp. 2d at 56 (granting final approval to settlement between direct
purchaser plaintiffs and Warner Chilcott Defendants, and noting that at the fairness hearing, Class
Counsel mentioned that with the prospect of joint and several liability and of treble damages, the
direct purchaser plaintiffs could still recover a significant damages award); In re Corrugated
Container Antitrust Litig., No. MDL 310, 1981 WL 2093, at *17 (S.D. Tex. June 4, 1981) (noting
that the partial settlements preserved plaintiffs’ ability to seek the entire amount of damages from
non-settling defendants weighed in favor of settlement approval).
This Court finds that the cost and risk analysis undertaken by Settlement Class Counsel, in
17 connection with counsel for Southwest and American, weighs in favor of approving the
Settlements as adequate. The Settlements were negotiated over time, by competent and
experienced counsel who had access to a large body of information through discovery. Settlement
Class Counsel weighed the costs and risks of continued litigation versus entering into an
“icebreaker” settlement with Southwest and a subsequent settlement with American, both of which
provided Settlement Funds for the Class Members as well as continued cooperation to aid Plaintiffs
in their litigation against the Non-Settling Defendants. Furthermore, the Settlements do not limit
the Class Members’ ability to obtain joint and several liability and treble damages against those
Non-Settling Defendants, which would increase the Total Funds Available for Distribution.
Accordingly, evaluation of the “costs and risks” factor favors finding the Settlements adequate.
b. Effectiveness of proposed means of distribution and processing of claims
The Court inquired next about the “terms of the plan of allocation or distribution” in the
context of Rule 23 commentary, which provides that:
The relief that the settlement is expected to provide to class members is a central concern. Measuring the proposed relief may require an evaluation of any proposed claims process. Often, it’ll be important for the Court to scrutinize the method of claims processing to ensure that it facilitates filing legitimate claims. And a claims-processing method should deter and defeat unjustified claims, but the Court should be alert to whether the claims process is unduly demanding and to make sure that those that are part of the class that should make claims, make them.
TR. at 26:9-22. The Court asked Settlement Class Counsel to explain their proposed means of
distribution and processing of claims.
Settlement Class Counsel indicated that the distribution of the Settlement Funds will be
deferred until the end of the entire case when there is a better indication of the Total Funds
Available for Distribution (total money collected based on the resolution of the case against all
18 four Defendants) and amount of damages suffered by Class Members, so that Settlement Class
Counsel will be better able to compute “what value in proportion to the damage [is available] for
class reimbursement.” Tr. at 28:11-20. Class Members will be notified regarding the claims
process (and their right to object) in a manner similar to the way in which they received initial
notification of the settlement. Information provided to Class Members as to their potential
recovery, which is dependent on the number of claims, will help Class Members decide whether
to object and/or make a claim. Settlement Class Counsel volunteered that they can “work with
[their] claims administrator in terms of coming up with a range or at least providing guideposts to
class members.” Tr. at 36:13-15. A claims administrator will review any claims made by Class
Members, and the distribution method will be “pro rata,” Tr. at 30:3-11, with a “pro rata, per capita
return to class members.” Tr. at 35:4-6.
The Settlement Agreements provide that Defendants Southwest and American “take no
position with respect to such proposed plan of allocation or such plan as may be approved by the
Court.” Southwest Settlement Agreement, ECF No. 196-2 ¶ 40; American Settlement Agreement,
ECF No. 248-2 ¶ 40.
Settlement Class Counsel argued that “it’s not an impediment to approval of the settlement
that the actual amount to be distributed to class members” is not known at this time. Tr. at 58:22-
59:1. “[F]inal approval is not precluded simply because the settlements and/or the class notice did
not contain a distribution plan or did not provide specificity with respect to what each class member
will ultimately receive.” Pls.’ Omnibus Resp., ECF No 334, at 26. See In re Drexel Burnham
Lambert Group, Inc., 130 B.R. 910, 925 (S.D.N.Y. 1991) (“It is not an impediment to approval of
the Settlement that the actual amounts to be distributed to Class members will be subject to further
19 allocation procedures.”), aff’d, 960 F.2d 285 (2d Cir. 1992); In re Corrugated Container Antitrust
Litig., 643 F. 2d 195, 223-24 (5th Cir. 1981) (finding that the district court did not abuse its
discretion when it approved a notice of settlement that did not give “an estimated range of unitary
recovery), cert. denied, 456 U.S. 998 (1982); In re NASDAQ Market-Makers Antitrust Litig., 187
F.R.D. 465, 480 (S.D.N.Y. 1998) (“[I]t is appropriate, and often prudent, in massive class actions
to follow a two-stage procedure, deferring the Plan of Allocation until after final settlement
approval[.]”).
In a case such as this, involving a large number of Class Members and two Non-Settling
Defendants, it would be inefficient to distribute and process claims until the entire case has been
resolved through litigation or otherwise and the Total Funds Available for Distribution are known.
The Court finds that Settlement Class Counsel has demonstrated the adequacy of the Settlements
with regard to their proposed means of distributing and processing claims, which will be done
through a second notice to Class Members, followed by a right to object and/or file a claim.
c. Attorneys’ Fees
Plaintiffs requested previously that this Court hold in abeyance their request for $15 million
in attorneys’ fees until Settlement Class Counsel presents the Court with a motion to distribute the
Total Funds Available for Distribution, and the Court granted that request. See Plaintiffs’ [305]
Request to Hold in Abeyance, in Part, Plaintiffs’ Motion for Attorneys’ Fees; see also January 4,
2019 Minute Order staying Plaintiffs’ request for attorneys’ fees and future litigation expenses
until further Order of this Court. At the beginning of the March 22, 2019 Fairness Hearing, the
Court noted that the issue of attorneys’ fees is not under consideration in connection with approval
of the Southwest and American Settlements. Accordingly, this factor of attorneys’ fees does not
20 weigh into any adequacy determination by the Court.
d. Other Factors Considered in the Vitamins case
Several of the factors from the Vitamins litigation have already been addressed herein;
namely: (1) arm’s length negotiations; (2) terms of the settlement in relation to the strength of the
case; (3) the status of the litigation at the time of settlement; and (4) the opinion of experienced
counsel. A factor that has not been addressed is the reaction of the class. That will be addressed
in Section IV. below.
IV. OBJECTIONS TO THE PROPOSED SETTLEMENTS
In approving class action settlements, courts gauge the reaction of the class by looking at
the number of objections as compared to the overall size of the class. See Vitamins, 305 F. Supp.
2d at 105. In this case, the settlement class is comprised of approximately 100 million Class
Members, and there were initially 23 responses objecting to the settlement (“Objections”) filed on
behalf of 25 Class Members. See Appendix A (Objections), ECF No. 334-1 (listing names of the
persons who objected and the additional information regarding the objection). Accordingly, the
objectors are but a tiny fraction of the class. See, e.g. Kifafi v Hilton Hotels Ret. Plan, 999 F. Supp.
2d 88, 101 (D.D.C. 2013) (Kollar-Kotelly, J.) (out of a class of 23,000 persons, five raised
objections, and this weighed in favor of approval); Cohen v. Chilcott, 522 F. Supp. 2d 105, 119
(D.D.C. 2007) (Kollar-Kotelly, J.) (finding the small number of objections indicative of fairness
and reasonableness); Tromble v. Natl. City Bank, 826 F. Supp. 2d 179, 200-01 (D.D.C. 2011)
(finding class reaction positive where there were only 10 objections out of over 13 million class
members). But see Reynolds v. King, 790 F. Supp. 1101, 1109 (M.D. Ala. 1990) (“[W]here the
class is large and there is no evidence that most of its members are particularly interested in the
21 litigation, a court should view the absence of any objections from the majority with caution.”)
One Objection was withdrawn because it dealt primarily with legal fees and future
litigation expenses, and the Court had stayed consideration of attorneys’ fees and future litigation
expenses. See Shimshon Wexler’s Withdrawal of Objection, ECF No. 347. There were a number
of other similarly premature Objections relating to the amount and timing of payment of attorneys’
fees (DeMott, Doe, Bednarz/Frank, Harris, Johnson, Nash, Suessmann, Yazdani) 5 and future
litigation expenses (Argie). The remaining Objections raise issues that fall into the following
categories: (1) the settlement amounts are too small (Argie, Baker, Bednarz/Frank, DeMott,
Klover, Suessmann, Willett, Zajac); (2) it’s not clear how much the class members will receive
because of a lack of adequate information (Chen, Bednarz/Frank, DeMott, Harris, Liebich,
Suessmann, Weissman, Yazdani, Zajac); (3) the Settlement Funds may be subject to a cy pres
distribution (Anaya, Argie, Chen, Bednarz/Frank, Johnson, Klover, Liebich, Nash, Weissman,
Yazdani); and (4) the Settlements do not provide for injunctive relief (Yazdani). See Tr. at 6:3-8.
Class Members’ Objections regarding attorney’s fees were deemed premature because the
attorneys’ fees issue will not be addressed until the entire case has been resolved. Similarly,
uncertainty about the settlement amounts to be received by Class Members is also a premature
basis for an objection until such time as the case against the remaining two Defendant airlines has
been resolved and the Total Funds Available for Distribution are known. There is a procedure in
place whereby Class Members will receive notification of a plan of allocation/distribution,
including information regarding the range of settlement, and there will be an opportunity to make
5 The Court refers to the Class Members who objected by their last names. See Appendix A. 22 claims and/or objections at that time regarding settlement amounts. All other Class Member
objections will be addressed by this Court.
A. The Possibility of a Cy Pres Distribution
The Court noted that although a cy pres distribution is disfavored, it could become an issue
“if there’s not enough claims so there’s money left over,” which indicates that “[counsel] wouldn’t
be doing [their] job.” Tr. at 37:14-18. The alternative scenario that could lead to a cy pres
distribution would be if there are “so many claims and there’s not enough money in this to make
it worthwhile to be distributed” because it would be “outweighed . . . by the cost of disbursing the
money.” Tr. at 37:19-23. In their Objection, two Class Members proffered that vouchers sent via
electronic mail might be fairer and would avoid the costs of mailing checks. Objection of
Alexander and Michelle Zajac, ECF 301, at 11-15; see also Objection of Paul DeMott, ECF No.
321, at 39 (discussing vouchers as part of the settlement). Settlement Class Counsel have noted
that they will “work with the Claims Administrator to determine at what level distribution is not
economically feasible; i.e., the ‘break-even point.’” Pls.’ Omnibus Resp., ECF No. 334, at 28.
Furthermore, they will explore various cost-effective ways of facilitating the distribution of the
Total Funds Available for Distribution.
In their Omnibus Response, Plaintiffs note that the argument by Class Member Theodore
Frank that cy pres awards may be used to divert the Settlement Funds from the Class Members for
the personal benefit of counsel “disregards this Court’s role in carefully scrutinizing any proposed
cy pres recipient but is also entirely without factual support.” Pls.’ Omnibus Resp., ECF No. 334,
at 29; Frank Objection, ECF No. 329, at 5-6. See Diamond Chemical Co. v. Akzo Nobel Chemicals,
B.V., 517 F. Supp. 2d 212, 217-18 (D.D.C. 2007) (Kollar-Kotelly, J.) (where a cy pres distribution
23 was proposed and granted only after every class member who filed a claim received at least trebled
damages and there were efforts to locate additional class members); see also Diamond Chemical
Co. v. Akzo Nobel Chemicals B.V., No. 01-cv-2118, 2007 WL 2007447, at *3-5 (D.D.C. July 10,
2007) (Kollar-Kotelly, J.) (examining the appropriateness of the cy pres recipient and the proposed
use of the funds).
Settlement Class Counsel agreed that cy pres distribution is disfavored but acknowledged
that “[t]here is always the possibility that the take rate will not equal, . . ., the fund available.” Tr.
at 38:13-14. See generally Pollard v. Remington Arms Co., LLC, 320 F.R.D. 198, 214 (W.D. Mo.
2017) (gathering numerous examples of cases featuring claims rates between ~ .25% and ~ 2%).
Settlement Class Counsel was emphatic however in stating that there is “no intention to cy pres
this entire fund . . . [or] [any] desire to cy pres this entire fund [and] . . . no need to claim that
there’s a cy pres to this entire fund “ or to think that “there’s any reasonable basis for any fear that
anyone would request such a remedy in this matter at either this stage or at any subsequent stage
of this litigation[.]” Tr. at 74:19-75:4. Settlement Class Counsel noted further that in some instances
where a portion of the fund has not been distributed, “if class members have not received 100
percent of three times their damage, there can be a second distribution to those who made the
claim. . . ” Tr. at 38:20-25.
While “precise distribution amounts cannot be calculated until the claims process has been
completed, Plaintiffs expect meaningful distributions to class members that submit qualifying
claims, assuming the claims rate in this case is comparable to the claims rates in other antitrust and
consumer class actions.” Pls.’ Omnibus Resp., ECF No. 334, at 27. See, e.g., Sullivan v. DB
Investments, Inc., 667 F.3d 273, 329 n.60 (3d Cir. 2011) (en banc) (noting that the claims rates do
24 not normally exceed 7% “even with the most extensive notice campaigns.”); In re Apple iPhone 4
Prods. Liab. Litig., No. 10-md-2188 RMW, 2012 WL 3283432, at *1 (N.D. Cal. Aug. 10, 2012)
(claims rate was ~.25% for $15 cash payment in settlement involving at least 20 million iPhone
owners). Given these historical claims rates, it is unlikely that there will be a cy pres distribution due
to a combination of a large number of claims and resulting miniscule pro rata settlement distribution
amounts. On the flip side, Settlement Class Counsel noted that, in a case such as this, which
involves “corporate users of [ ] flight reservations,” he would anticipate an “aggressive[ ]
submi[ssion] [of] claims” by those corporate entities. Tr. at 74:4-16.
Whether the need for a cy pres distribution will arise, and if so, in what amount, cannot be
known at this stage of the proceeding, but this uncertainty should not act as a bar to the approval
of the Settlements, particularly in light of Settlement Class Counsel’s intention to maximize the
distribution to Class Members and this Court’s own disinclination toward cy pres distributions.
Accordingly, the Class Members’ objections regarding the cy pres distributions are deemed
insufficient to affect approval of the Settlements.
B. Lack of Injunctive Relief
A lack of injunctive relief included in the Settlements was raised in one Objection.
Settlement Class Counsel explained that:
Traditionally, there is no follow-on injunction to an antitrust violation which has ended as of the time of either the beginning of the complaint or at the time, . . ., of a settlement or a judgment. Normally, you ask for injunctive relief where violations that are claimed to have occurred in the past are continuing because there’s no change in the behavior or the conduct in the industry. To date, we have no indication that that’s true with regard to this matter presently or going forward. So there does not seem to be, you know, a basis for an injunction prohibiting conduct which presently does not exist nor for which there is, particularly given the attention paid to this, should ever rationally be engaged in again.
Tr. at 39:7-22. 25 Plaintiffs assert that “courts repeatedly reject the argument that the lack of injunctive relief
renders a settlement unfair, particularly where, as here, the injunctive relief provision would
require the settling party to simply abide by the law. See Kanrst Envtl. Educ. & Prot., Inc. v. U.S.
EPA, 403 F. Supp. 2d 74, 82 (D.D.C. 2005) (noting that “a court cannot merely give parties a broad
order to obey the law” . . . and commenting that “[e]njoining the defendants from violating the
[relevant statute], . . ., would merely require them to obey the law.”), aff’d, 475 F.3d 1291 (D.C.
Cir. 2007). As aptly explained in an airlines antitrust case filed in the Northern District of Georgia:
[W]hile the settlement releases defendants from claims for certain past practices, nothing prevents a class member from pursuing a suit against defendants for future misconduct of the type complained of in the present case. The Court agrees with the plaintiffs that the best assurance against future antitrust violations by defendants is the persistent threat of litigation by any class member. The Court finds that the right to bring claims against defendants for future misconduct is a valuable right of every class member. The absence of injunctive relief, therefore, does not render the settlement unfair.
In re Domestic Air Transp. Antitrust Litig., 148 F.R.D. 297, 337 (N.D. Ga. 1993). See generally
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 635 (1985) (“Without
doubt, the private cause of action plays a central role in enforcing this regime. . . . [and] [t]he
treble-damages provision wielded by the private litigant is a chief tool in the antitrust enforcement
scheme, posing a crucial deterrent to potential violators.”)
This Court finds that the Settlements may be approved despite the lack of injunctive relief
as such injunctive relief here would serve no purpose other than directing that Defendants obey
the law. See, e.g., Pigford v. Glickman, 185 F.R.D. 82, 110-11 (D.D.C. 1999) (approving class
settlement and rejecting class member objection that “the absence of any such prospective
injunctive relief renders the settlement as a whole unfair”), aff’d, 206 F.3d 1212 (D.C. Cir. 2000).
Accordingly, the objection based on a lack of injunctive relief is deemed insufficient to affect
26 approval of the Settlements.
C. Size of Settlement Amounts
The Court permitted Class Members Theodore Frank (“Mr. Frank”) and Michael
Suessmann (“Mr. Suessmann”) an opportunity to speak on behalf of the Objectors at the Fairness
Hearing. See Order Regarding Procedures for the March 22, 2019 Fairness Hearing, ECF No. 342,
at 6. Mr. Suessmann stated his “concern [that] the notice provided to the class is inadequate” in
part because the notice discusses a “right to object” and “[i]nherent in that is the idea that we’re
provided information from which we can make decisions about whether to object or not” but the
“information in the notice that [he] received was not sufficient for [him] to be able to tell whether
the settlement was fair and reasonable.” Tr. at 69:14-24-70:1-2. Mr. Suessmann specified that he
was “not worried about the distribution and allocation” but was instead worried about “liability,
because there’s nothing in there that says how the [Settlement Funds] numbers were arrived at,”
when you look at airline profits. Tr. at 70:12-23; see also DeMott Objection, ECF No. 321, at 38-
39 (questioning the relationship of the settlement amounts to the class’s damages); Sajak
Objection, ECF No. 301, at 11-12, 15 (same).
Mr. Suessmann did not dispute that experienced counsel negotiated an arm’s length
settlement before arriving at the Settlement Funds amounts, which together with the Defendants’
cooperation, provide relief for the Class Members; rather, he appeared curious about any formula
that was used to arrive at the $15 million and $45 million amounts. As explained in Section III
(A)(1)(a) herein, these ultimate numbers were derived through extensive negotiations between
counsel who all have a great deal of experience in litigating class action antitrust lawsuits.
Furthermore, it is unclear if Mr. Suessmann has placed any value on the cooperation provided by
27 Defendants Southwest and American. See also Liebich Objection, ECF No. 321, at 13 (where
Class Member Jason Liebich, through counsel, asserted that the value of the cooperation by
Southwest and American was “speculative,” but cited no support for this assertion). At the
Fairness Hearing, the Court inquired as to whether the cooperation by the settling Defendants has
proven to be valuable, and Settlement Class Counsel indicated that the significant cooperation
provided by Southwest and American in “la[ying] out to [counsel] where they thought [they]
should be looking, why [they] should be looking there, how [they] should go about looking” has
been even “[m]ore [valuable] than [counsel] thought,” Tr. at 23:2-9; 23:18-24. Nor is it clear if
Mr. Suessmann’s objection accounts for Southwest’s role as an “icebreaker,” or the litigation risks
and costs of continued litigation, which were discussed in considerable detail in Plaintiffs’ Motion
for Final Approval and Omnibus Response and at the Fairness Hearing. As previously noted, this
Court is satisfied with the explanation of the Settlement Funds amounts, and this objection relating
to size of the Settlement Funds is rejected.
In a Reply filed by Class Member Paul DeMott, Mr. DeMott, through counsel, notes that
even while Settlement Class Counsel cites “persuasive authority holding that the parties are not
required to provide estimates of damages” he objects to counsel’s failure to provide such estimate
in this case — where counsel allegedly possesses that information — on grounds that it will hinder
this Court in making a reasoned decision. DeMott Reply, ECF No. 339, at 8-10. The Court notes
that Mr. DeMott’s assumption that Settlement Class Counsel had information reflecting an
accurate estimate of damages in this case relies on a footnote in the Omnibus Response that
includes the word “estimates,” and it is belied by counsel’s statements during the hearing. See Tr.
at 18:2-7 (“It wasn’t, for example, looking at the totality of the revenue of affected commerce and
28 saying, what does $15 million or what does any amount of money compare as the numerator to a
denominator of the total revenue? We weren’t quite sure what the total revenue was, nor what [ ]
shape [ ] the case might take depending upon discovery advances.”); Tr. at 24:16-22 (answering
the Court’s question whether there was “any particular formula or way of deciding” to triple the
settlement amount for American, counsel stated that “[i]n terms again of an ultimate damage
calculation, you know, through economic regression, no.”) Furthermore, any estimate of damages
relevant to the early settlement by one defendant in a multi-defendant case does not give the full
picture of all potential damages (especially where such damages from the remaining defendants
may be ultimately enhanced through cooperation with the settling defendant) and as noted above,
such estimate may not be viewed in a vacuum but rather, it must be weighed against the risks and
costs of continued litigation. Accordingly, objections related to counsel’s “failure” to provide at
this time a damages estimate are insufficient to affect approval of the Settlements.
D. Issues regarding Notice Provided to Class Members
At the Fairness Hearing, Mr. Frank indicated that he was not contesting the settlement
amount, Tr. at 63:25-64:1-9, but instead focused on the fact that there was no information about
the allocation plan and “[Settlement Class Counsel] didn’t even give a metric, an algorithm for
determining, Yes, we’re going to give money to the class or No, we’re going to give money to cy
pres.” Tr. at 63:19-21. Mr. Frank stated that “if they’re going to have a claims process, they need
to disclose what that claims process is. Pro rata is probably fine. But they need to set that forward
and bind themselves to it.” Tr. at 64:17-20. The Court noted that, pursuant to the Settlement
Agreements, Defendants Southwest and American are not involved and do not provide input in
the claims process and distribution of settlement proceeds. The Court did not view this as a defect
29 in the settlement, instead noting that “[i]t seems to me that you would want the Plaintiff to be the
one to figure it out.” Tr. at 66:6-12.
The balance of Mr. Frank’s objection regarding the lack of a distribution formula has been
addressed previously by this Court in Section III (A)(1)(b). There is a two-stage procedure for
notice to Class Members prior to the claims process and distribution of the Total Funds Available
for Distribution. The first stage provided notice of the Settlements which was consistent with the
notice required pursuant to Fed. R. Civ. P. 23(c)(2)(B), which sets forth seven items that must be
clearly and concisely stated. The second stage — which will occur after the entire case is resolved
— will provide Class Members with notification of the Total Funds Available for Distribution and
information about the claims process, including the manner in which to make an objection and/or
a claim, and possible ranges of recovery based on hypothetical claims percentages. Accordingly,
Mr. Frank’s objection to the lack of information about the claims process and distribution of
settlement proceeds is rejected
Mr. Suessmann alleged a different deficiency in the notice that Class Members received
insofar as the notice failed to indicate what documents would have to be provided in connection
with the submission of Class Members’ claims and whether Class Members or counsel would
provide the underlying data to support such claims. Settlement Class Counsel and counsel for
Southwest and American explained that Class Members who received the notice are in the
database, and there will be provisions made at the time when claims are filed regarding alternative
means for submitting claims, such as by affidavit, if certain paper records are not available to Class
Members. Accordingly, the Court finds that counsel have provided an explanation in response to
Mr. Suessmann’s “objection” regarding lack of clarity about provision of claims documentation,
30 and this “objection” will be rejected at this time. Class Member Stephan Willett objected to one
sentence in the class notice, which contained the word “and,” when he thought it should be an “or,”
and some language that he found confusing regarding the postmark/receipt date, Willett Obj., ECF
No. 309, at 10-11, but the Court disagrees with this objection which does not affect the validity of
the Settlements.
V. OTHER CONSIDERATIONS - DEFENDANTS’ COOPERATION
The Court considered delaying a final approval of the Southwest and American Settlements
until after resolution of the case as to all Defendants. In considering this option, the Court inquired
as to whether Defendants Southwest and American would continue to cooperate with the Plaintiffs
pursuant to the terms of the Settlement Agreements, if the Court were to delay approval of the
Settlements until the entire case was resolved. Counsel for Southwest and American both indicated
that a postponement would pose “[r]eal risks” to their cooperation, Tr. at 45:13-15, because it
would “deprive the Plaintiffs of the finality of this and it would deprive what [Southwest]
bargained for as Defendant in terms of the finality of the settlement.” Tr. at 44:8-12; see Tr. at
51:15-25 (noting that American paid “fair value,” and wanted “finality”). “And we need finality
so that we get the releases from the claims, we get the benefit of the settlement to which we
bargained for.” Tr. at 84:8-11. “[W]ithout having finality, we’re really not getting the benefit of
our bargain . . . to pay a certain amount to get out of this litigation, so we could stop the flow of
expenses in terms of, . . ., the costs of discovery and the costs of experts [and] [w]e’ll continue to
have to monitor this litigation and incur significant costs [so] [w]ithout finality, we may also have
to consider the rescission provisions in the settlement agreement.” Tr. at 84:24-85:7. Counsel for
Southwest stressed further that, without finality, there could be a “significant chilling effect on
31 early icebreaker settlements,” Tr. at 85:8-14, and she noted that “a really important point here is
the fact that all of the sales remain in the case and that they would be available for [ ] a claim for
damages against the nonsettling Defendants[,]” which benefits ultimately the Class Members in
terms of the Total Funds Available for Distribution. Tr. at 85:15-18.
Counsel for American emphasized that if the Settlements are not approved at this time and
approval was delayed, it would be “extraordinarily disruptive” in light of the payments made and
cooperation provided by American and Southwest. Tr. at 54:14-25. A delayed approval of the
settlement would “present[ ] American with an . . . immense, practical problem” because if there
is no release, “then we have to go back to preparing for trial” since they did not get the “benefit of
[their] bargain.” Tr. at 86:7-14.
Settlement Class Counsel asserted that postponing approval of the Settlements would
create “uncertainty [ ] as to whether or not the Defendants will continue to cooperate” by producing
materials informally and permitting informal interview. Tr. at 55:18-56:23. Settlement Class
Counsel noted that this lack of finality may jeopardize the Plaintiffs’ case against the remaining
Non-Settling Defendants. Counsel for Southwest noted that it would be a “logistical quagmire in
terms of not knowing what [the] status was” and accordingly, “finality is needed.” Tr. at 60:3-5.
See In re Cathode Tube (CRT) Antitrust Litig., MDL No. 1917, 2015 WL 9266493, at *6 (N.D.
Cal. Dec. 17, 2015) (finding that “the ‘provision of such assistance is a substantial benefit to the
classes and strongly militates toward approval of the Settlement Agreement’”) (quoting In re
Linerboard Antitrust Litig., 292 F. Supp. 2d 631, 643 (E.D. Pa. 2003)); see also Precision Assocs.,
Inc. v. Panalpina World Transport (Holding) Ltd., No. 08-cv-42, 2013 WL 4525323, at *9
(E.D.N.Y. Aug. 27, 2013) (involving an extensive agreement to cooperate); in re Packaged Ice
32 Antitrust Litig., No. 08-MD-01952, 2011 WL 717519, at *10 (E.D. Mich. Feb. 22, 2011) (noting
cooperation “has already been beneficial to the Plaintiffs in their continued prosecution of their
claims against the non-settling Defendants”); In re Corrugated Container, 1981 WL 2093, at *16
(“The cooperation clauses constituted a substantial benefit to the class.”)
As part of their respective Settlements with the Plaintiffs, Defendants Southwest and
American agreed to cooperate with the Plaintiffs by providing information through documents,
informal interviews, consultations with industry experts, and deposition/trial testimony, affidavits
and declarations, and this information will be used to assist Plaintiffs in their continuing litigation
against the Non-Settling Defendants. Both Southwest and American confirmed at the Fairness
Hearing that their cooperation would not be forthcoming in the event that this Court delays final
approval of the Settlements, as they would again have to begin litigating this case. Accordingly,
this factor of continued cooperation by Southwest and American, which benefits the Plaintiffs in
their litigation against the Non-Settling Defendants, further weighs in favor of this Court approving
the Settlements at this time.
VI. CONCLUSION
For the foregoing reasons, the Court rejects the objections of the Class Members and grants
approval of the Southwest Settlement and the American Settlement on the basis that they are fair,
reasonable, and adequate as to and in the best interest of the Class Members, within the meaning
of and in compliance with the requirements of Federal Rule of Civil Procedure 23, and considering
33 the factors discussed in the Vitamins case. An appropriate Order accompanies this Memorandum
Opinion.
/s/ COLLEEN KOLLAR-KOTELLY UNITED STATES DISTRICT JUDGE