John L. Soileau v. Churchill Downs Louisiana Horseracing Company, L.L.C.,. Churchill Downs Louisiana Video Poker Company, L.L.C.

• Court: Louisiana Court of Appeal
• Decided: December 22, 2021
• Docket: 2021-CA-0022
• Status: Published

Opinion

CORRECTED OPINION

JOHN L. SOILEAU, ET AL. * NO. 2021-CA-0022

VERSUS * COURT OF APPEAL CHURCHILL DOWNS * LOUISIANA HORSERACING FOURTH CIRCUIT COMPANY, L.L.C., * CHURCHILL DOWNS STATE OF LOUISIANA LOUISIANA VIDEO POKER ******* COMPANY, L.L.C., ET AL.

CONSOLIDATED WITH: CONSOLIDATED WITH:

JOHN L. SOILEAU, ET AL. NO. 2021-CA-0049

VERSUS

CHURCHILL DOWNS LOUISIANA HORSERACING COMPANY, L.L.C., CHURCHILL DOWNS LOUISIANA VIDEO POKER COMPANY, L.L.C., ET AL.

JOHN SOILEAU, ET AL. NO. 2021-CA-0199

CHURCHILL DOWNS LOUISIANA HORSERACING COMPANY, L.L.C., CHURCHILL DOWNS LOUISIANA VIDEO POKER COMPANY, L.L.C., ET AL.

APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2014-03873, DIVISION “G-11” Honorable Robin M. Giarrusso, Judge ****** Judge Dale N. Atkins ****** (Court composed of Judge Rosemary Ledet, Judge Tiffany Gautier Chase, Judge Dale N. Atkins) LEDET, J., CONCURS

CHASE, J., CONCURS

Michael David Singletary SINGLETARY & ASSOCIATES, APLC 604 West 13th Street Austin, TX 78701

Alan N. Magenheim, Pro Hac Vice ATTORNEY AT LAW 3701 Kirby Drive Suite 913 Houston, TX 77098

COUNSEL FOR PLAINTIFFS/APPELLANTS, BERNADINE SOILEAU AS INDEPENDENT EXECUTRIX OF THE SUCCESSION OF JOHN SOILEAU, SR., ALVIN BROSSETTE, JUSTIN DEHART, DONALD WATSON, JOSEPH D. MANUCY AND LUCAS CONSTANTIN

Kyle Sherman BRANDT & SHERMAN, LLP 111 Mercury Street Lafayette, LA 70503

COUNSEL FOR PLAINTIFFS/APPELLANTS, JOHN HAMILTON AND DANNY LAVERGNE

David F. Waguespack Matthew J. Fantaci CARVER, DARDEN, KORETZKY, TESSIER, FINN, BLOSSMAN & AREAUX, LLC 1100 Poydras Street, Suite 3100 New Orleans, LA 70163

COUNSEL FOR DEFENDANTS/APPELLEES, CHURCHILL DOWNS LOUISIANA HORSERACING COMPANY, L.L.C. AND CHURCHILL DOWNS LOUISIANA VIDEO POKER COMPANY, L.L.C.

John L. Duvieilh Jennifer A. David JONES WALKER LLP 201 St. Charles Avenue, Suite 4700 New Orleans, LA 70170

COUNSEL FOR DEFENDANT/APPELLEE, LOUISIANA HORSEMEN’S BENEVOLENT AND PROTECTIVE ASSOCIATION 1993, INC. William L. Townsend, III Keenan K. Kelly KELLY & TOWNSEND, LLC 137 St. Denis Street Post Office Box 756 Natchitoches, LA 71457

J. Chris Guillet Ronald E. Corkern, Jr. CORKERN, CREWS & GUILLET, L.L.C. P.O. Box 1036 Natchitoches, LA 71458-1036

COUNSEL FOR DEFENDANTS/APPELLEES, CLASS REPRESENTATIVES, JO BAIA FOREMAN AND KENNETH L. ROBERTS

AFFIRMED December 22, 2021 DNA These three consolidated appeals arise from a class action dispute between

quarter-horse owners, trainers, and jockeys; Churchill Downs Louisiana

Horseracing Company, L.L.C, the owner of the Fair Grounds Race Courts & Slots

Facility in New Orleans, Louisiana; Churchill Downs Louisiana Video Poker

Company, L.L.C.; and the Horsemen’s Benevolent and Protective Association

1993, Inc. These appeals involve the distribution of supplemental purse monies

collected in quarter-horse racing at off-track facilities. Quarter-horse owners,

trainers, and jockeys bring this appeal. They can be divided into two groups but

will hereinafter be referred to collectively as “Appellants.” The first group of

Appellants, which is hereinafter referred to as “Soileau Plaintiffs,” is comprised of

Bernadine Soileau, as independent executrix of the Succession of John Soileau,

Sr.; Alvin Brossette; Justin Dehart; Donald Watson; Joseph Manucy; and Lucas

Constantin. The second group of Appellants, which is hereinafter referred to as

“Hamilton Plaintiffs,” is comprised of some of the class representatives, namely

Danny Lavergne and John Hamilton.

1 Appellees are Jo Baia Foreman1 and Kenneth L. Roberts; Churchill Downs

Louisiana Horseracing Company, L.L.C. (hereinafter referred to as “CDLHR”)

and Churchill Downs Louisiana Video Poker Company, L.L.C. (hereinafter

referred to as “CDLVPC”) (CDLHR and CDLVPC are hereinafter collectively

referred to as “Fair Grounds Defendants”); and the Louisiana Horsemen’s

Benevolent and Protective Association 1993, Inc. (hereinafter referred to as

“HBPA”).

Appellants appeal the trial court’s November 12, 2020 judgment, which

denied Soileau Plaintiffs’ and Hamilton Plaintiffs’ motions to vacate the trial

court’s February 18, 2020 order that preliminarily approved a proposed class

action settlement agreement (hereinafter referred to as “proposed settlement

agreement”), a class,2 class representatives,3 class counsel,4 and deadlines to opt-

out, object, and submit a claim form. They also appeal the trial court’s decision not

to reset those aforementioned class action deadlines in response to orders issued by

1 In the record before this Court, “Jo Baia Foreman” is also sometimes spelled “Jo Baya Foreman.” For consistency, this opinion will only use the spelling “Jo Baia Foreman.” 2 The February 18, 2020 order certified the class as:

All persons and/or entities who are quarter[-]horse owners, quarter[-] horse trainers, and quarter[-]horse jockeys who have won or earned purses at the Fair Grounds Race Course since January 1, 2008, and who claim, claimed, and/or could claim that they are entitled under [] La. R.S. 27:438 to any portion of monies collected from video poker, or which claim, claimed, and/or could claim damages against any Defendant under any theory of recovery of any portion of the monies collected from video poker pursuant to the La. R.S. 27:438. 3 The February 18, 2020 order appointed Mrs. Foreman, Mr. Roberts, Mr. Hamilton, and Mr. Lavergne as class representatives. 4 The February 18, 2020 order appointed Kelly & Townsend, LLC, and Corkern, Crews, Guillet & Johnson, L.L.C. as class counsel.

2 the Louisiana Governor and the Louisiana Supreme Court regarding the COVID-

19 pandemic. (2021-CA-0022). Further, Appellants appeal the trial court’s

February 18, 2020 order granting preliminary approval of the proposed settlement

agreement. (2021-CA-0049). Finally, Appellants appeal the trial court’s January

28, 2021 judgment granting final approval of the proposed settlement agreement.

(2021-CA-0199). For the following reasons, we affirm.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Because these three consolidated appeals involve multiple Appellants and

Appellees, we begin our summary of the factual background and procedural

history with a description of the parties.5

APPELLANTS

Appellants are Bernadine Soileau, as independent executrix of the

Succession of John Soileau, Sr.; Alvin Brossette; Justin Dehart; Donald Watson;

Joseph Manucy; Lucas Constantin; Danny Lavergne; and John Hamilton.

Appellants are divided into two groups. The first group known as Soileau Plaintiffs

is comprised of Bernadine Soileau, as independent executrix of the Succession of

John Soileau, Sr.; Mr. Brossette; Mr. Dehart; Mr. Watson; Mr. Manucy; and Mr.

Constantin. The second group known as Hamilton Plaintiffs is comprised of Mr.

Lavergne and Mr. Hamilton. In a February 18, 2020 order, the trial court, in

pertinent part, appointed Hamilton Plaintiffs as two of the four class

representatives. They signed the proposed settlement agreement but now oppose it.

5 Due to the complexity of this litigation and the numerous parties, we repeat some of the descriptions of the parties and add more details about the parties in this subsequent section.

3 PLAINTIFFS

In the “Petition for Declaratory Judgment, Permanent Injunction, and

Damages – Class Action” (hereinafter “Petition”) filed on April 21, 2014, John

Soileau, Sr.; Alvin Brossette; Justin Dehart; Donald Watson; Joseph Manucy;

Lucas Constantin; Danny Lavergne; John Hamilton; Jo Baia Foreman; and

Kenneth L. Roberts are named as plaintiffs (hereinafter collectively referred to as

“Plaintiffs”). Therein, Plaintiffs described themselves as members of a class of

“Louisiana quarter-horse owners, trainers, and jockeys” who “are ‘horsemen’

entitled to the payment of supplemental purses pursuant to La. R.S. 27:438” and

its predecessor statutes due to underpayment of quarter-horse purses won at the

Fair Grounds Race Course & Slots since 2008.6

APPELLEES

Jo Baia Foreman and Kenneth L. Roberts are named plaintiffs in the

Petition, as previously discussed. In the February 18, 2020 order, the trial court

named them as the other two class representatives. (Though, as previously

mentioned, Mr. Lavergne and Mr. Hamilton are also class representatives, the

phrase “Class Representatives” will hereinafter collectively refer to Mrs.

Foreman and Mr. Roberts only). They signed the proposed settlement agreement

and continue to support it based on their testimony before the trial court.

Churchill Downs Louisiana Horseracing Company, L.L.C. (CDLHR), owns

the Fair Grounds Race Course & Slots facility in New Orleans, Louisiana. It is a

“licensed establishment” under the Video Draw Poker Devices Control Law. La.

R.S. 27:401, et seq. Specifically, it qualifies as a licensed establishment because it

6 Louisiana Revised Statutes 27:438 relates to the “[d]istribution of device revenues” in quarter-horse and thoroughbred horse racing.

4 is a “Louisiana state racing commission licensed race track [and] pari-mutuel

wagering facility.” La. R.S. 27:402(10).

Churchill Downs Louisiana Video Poker Company, L.L.C. (CDLVPC), is a

subsidiary or related business interest of CDLHR according to Plaintiffs’ Petition.

It is a “device owner” under the Video Draw Poker Devices Control Law. La. R.S.

27:401, et seq. Specifically, it qualifies as a device owner because it “owns and

operates . . . video draw poker devices in licensed establishments[,]” including at

the CDLHR-owned Fair Grounds Race Course & Slots facility and at off-track

waging facilities. La. R.S. 27:402(5).

The Louisiana Horsemen’s Benevolent and Protective Association 1993,

Inc. (HBPA), is “designated and recognized as an authorized representative that

shall represent member and other horsemen racing at licensed race meetings held

in the state of Louisiana for the purpose of but not limited to negotiating contracts

for such horsemen with all racing associations licensed by the state of Louisiana,

relative to purses . . . and all other matters of interest and concern to such

horsemen.” La. R.S. 4:179.1.

As noted previously, this matter consists of three consolidated appeals that

are the result of protracted class action litigation that has come before this Court on

multiple occasions. In Soileau v. Churchill Downs Louisiana Horseracing Co.,

L.L.C., 2017-1003, 2017-1004, pp.1-2 (La. App. 4 Cir. 6/13/18), 317 So.3d 491,

493-94, writ denied, 2018-1349 (La. 11/14/18), 256 So.3d 283, this Court

observed:

This lawsuit constitutes complicated and protracted litigation involving a dispute in the horse racing industry between ... [quarter-horsemen] and Churchill Downs Louisiana Horseracing Company, LLC, owner of the Fair Grounds Race

5 Course & Slots facility in New Orleans, and Churchill Downs Louisiana Video Poker Company, LLC.

....

Soileau, et al. v. Churchill Downs Louisiana Horse Racing Co., LLC, et al., 17-0264, slip op. at pp. 1-2 (La. App. 4 Cir. 8/23/2017) (unpub.).

The quarter-horsemen, Mr. Soileau, Mr. Brossette, Mr. Dehart, Mr.

Hamilton, Mr. Lavergne, Mr. Watson, Mr. Munacy, and Mr. Constantin, Mrs.

Foreman, and Mr. Roberts (collectively, “Plaintiffs”) instituted the litigation by

filing a “Petition for Declaratory Judgment, Permanent Injunction, and Damages -

Class Action” on April 21, 2014.7 The Petition averred that Plaintiffs were owners,

trainers, and jockeys of quarter-horses racing at the Fair Grounds and were entitled

to payment of supplemental purse money pursuant to La. R.S. 27:438.8 Soileau,

7 Note that this Court is utilizing “Plaintiffs” when necessary to refer to all plaintiffs named in the Petition. In the instant appeal, however, Plaintiffs disagree on the proposed settlement at issue herein. That is, at this stage of the proceedings, some named Plaintiffs appear as Appellants, and other named Plaintiffs appear as Appellees. 8 Louisiana Revised Statutes 27:438 is titled “Distribution of device revenues; particular licensed establishments; pari-mutuel wagering facilities.” During the relevant time frame, La. R.S. 27:438 provided in pertinent part:

A. The owner of the licensed establishment shall pay twenty percent of the net device revenue derived from the operation of devices at the licensed establishment to be used to supplement purses for horsemen as provided in subsection B of this Section. Such monies shall be made available for use as purses monthly, prior to the twentieth day of the month following the month in which they are earned.

B. Revenues earned or purse supplements under subsection A shall be disbursed, accounted for, and used as follows:

1. Monies earned for purse supplements from devices located at a racing facility currently conducting live racing shall be in addition to all other monies currently provided for purses and purse supplements under other provisions of law and shall be used at the current race meeting.

6 2017-1003, p.5, 317 So.3d at 496. Louisiana Revised Statutes 27:438 requires a

percentage of video poker net device revenue from off-track facilities to be set

aside to supplement the purses issued to the top finishers in horse races.

The April 21, 2014 Petition further contended that Fair Grounds Defendants

disbursed the video poker revenue in favor of the owners of thoroughbred horses in

violation of La. R.S. 27:438. The Petition claimed that Plaintiffs were entitled to

the revenue from the end of the thoroughbred racing in March through the last day

of quarter-horse racing in September, which constitutes approximately half of the

revenue set aside for purses.

By law, quarter-horse racing totals ten days in a fifty-two week period. In

comparison, thoroughbred racing compromises at least eighty days. See La. R.S.

4:214.1(B). It is undisputed that all of the video poker revenue supplemented the

purses of the thoroughbred races. Fair Grounds Defendants did not retain

possession of the video poker revenues, rather, they sent the money to HBPA, and

HBPA distributed the money to thoroughbred races. See La. R.S. 4:179.1 and

4:185. The parties further agreed the disputed video poker funds totaled

$35,820,731.00.

By their First Amended Petition filed on August 14, 2014, Plaintiffs added

HBPA as a defendant. Therein they described HBPA as “organized, in part, to

foster, protect, represent, and promote the welfare and common interest of

2. Monies earned for purse supplements from devices located at a racing facility not currently conducting live racing shall be placed in an interest-bearing account until the first day of the next live race meeting conducted at that facility, at which time the accumulated monies derived from this Paragraph shall be added to all other monies currently provided for purses and purse supplements at that race meeting under other provisions of the law and shall be used at that race meeting.

7 thoroughbred and quarter[-]horse owners and trainers to improve conditions in the

horse racing industry and to improve the relationships between horsemen.” They

further explained that “[m]embership in HBPA is open to those persons who are

licensed owners and/or trainers of thoroughbred and/or quarter[-]racehorses

meeting the minimum requirements established by the bylaws of HBPA and

approved for membership by its board of directors.” Additionally, Plaintiffs noted

in the First Amended Petition that they have all been members of HBPA since at

least 2008 and that, upon information and belief, all members of the class are

members of HBPA. Plaintiffs alleged in the First Amended Petition that “[t]o the

extent that HBPA represented or purported to represent quarter[-]horsemen in

negotiating purses allowing the payment of all La. R.S. 27:438 purse[]

supplements to thoroughbred horsemen, then HBPA breached its statutory duty to

represent the quarter[-]horsemen in good faith.” HBPA receives the purse funds

from the various racetracks in Louisiana and distributes winnings to the owners,

trainers, and jockeys.

In response to the Petition, Fair Grounds Defendants filed an exception of

primary jurisdiction, arguing that the trial court should transfer the matter to the

Louisiana Racing Commission (“Commission”). The trial court agreed and

transferred the matter to the Commission on December 2, 2014 because the

Commission has regulatory and adjudicatory authority over all aspects of

horseracing, which is a highly regulated industry. Soileau, unpub., 2017-0264,

p.2.9

9 This Court denied Plaintiffs’ application for supervisory writs seeking review of the judgment granting the exception of primary jurisdiction. Soileau v. Churchill Downs Louisiana Horse Racing Co., L.L.C., unpub., 2014-1398, p.1 (La. App. 4 Cir. 1/26/15).

8 Thereafter, this matter proceeded before the Commission, with the parties

seeking review of several issues in the district court, as well as in this Court. Fair

Grounds Defendants and HBPA filed exceptions of no right of action before the

Commission. On August 24, 2015, the Commission granted the exceptions.

Thereafter, on September 18, 2015, Plaintiffs filed a petition to appeal that

administrative ruling of the Commission. The trial court heard the appeal and

affirmed the Commission’s ruling. On December 18, 2016, Plaintiffs filed a notice

of appeal to this Court, and this Court remanded the matter for procedural

corrections to the judgment, with which the trial court complied in an amended

judgment dated September 15, 2017.10 On October 31, 2017, Plaintiffs filed a

motion for devolutive appeal from the amended judgment, which the trial court

granted on November 6, 2017. On June 13, 2018, this Court rendered judgment in

favor of Plaintiffs, concluding that they did have a right of action to proceed

against Fair Grounds Defendants and HBPA. See Soileau, 2017-1003, p. 9, 317

So.3d at 498.

On February 28, 2019, Fair Grounds Defendants formally requested that the

Commission set their previously-filed exception of nonjoinder for a hearing. The

hearing occurred on June 24, 2019, and the Commission ultimately denied the

exception. On July 24, 2019, Fair Grounds Defendants filed an appeal of this

ruling.

10 The amended judgment states, in pertinent part: “The Court hereby amends the Judgment dated September 5, 2016 for typographical errors. The Court inadvertently omitted defendant Churchill Downs Louisiana Horseracing Company, LLC. Additionally, the date of the Judgment rendered incorrectly listed the year as 2016.”

9 On or about July 2, 2019, Fair Grounds Defendants advised Plaintiffs that all

persons seeking a horse stall for the 2019 Quarter Horse Meet at the Fair Grounds

would be required to execute a Stall Agreement that waived their claims in the

lawsuit (hereinafter referred to as “2019 Stall Agreement”). On July 3, 2019,

Plaintiffs filed a rule to show cause, in which they asked the Commission to set a

hearing to enjoin Fair Grounds Defendants from requiring execution of the waiver

in the 2019 Stall Agreement. They also asked the Commission to declare the

waiver to be unenforceable. On July 22, 2019, the Commission held a hearing on

the matter and ordered the waiver language to be stricken from the 2019 Stall

Agreement. That same day, Fair Grounds Defendants filed a petition with another

division of the trial court to reverse this ruling. They received a temporary

restraining order, which temporarily prohibited the enforcement of the

Commission’s July 22, 2019 order.

On August 2, 2019, Plaintiffs and Fair Grounds Defendants jointly obtained

an order from the trial court to stay the pending appeals of the two above-discussed

matters, i.e., Fair Grounds Defendants’ appeal of the nonjoinder issue and of the

2019 Stall Agreement issue, pending further settlement discussions.

On September 13, 2019, Plaintiffs, Fair Grounds Defendants, and HBPA

met to discuss a potential settlement. On October 25, 2019, class counsel met with

Plaintiffs to review the terms of the proposed settlement agreement. Soileau

Plaintiffs objected to the proposed settlement agreement. Class counsel withdrew

from representing Soileau Plaintiffs, and the trial court eventually signed an order

enrolling new counsel for Soileau Plaintiffs on February 18, 2020.11 Class counsel

11 On February 18, 2020, the trial court signed an order enrolling Singletary & Associates, APLC, as counsel for Soileau Plaintiffs.

10 continued to represent those Plaintiffs who supported the proposed settlement

agreement, namely Mrs. Foreman, Mr. Roberts, Mr. Lavergne, and Mr. Hamilton.

The trial court eventually named them as representatives of the class in a February

18, 2020 order, and they ultimately executed the proposed settlement agreement.

On January 23, 2020, all enrolled counsel12 filed a “Joint Motion to Set

Court Dates for Class Certification and Related Relief,” and the trial court ordered

a hearing to be held on February 18, 2020. On February 14, 2020, all enrolled

counsel13 filed a “Joint Motion for Preliminary Approval of Class Action

Settlement Agreement and for Related Relief.” In pertinent part, the proposed

settlement agreement provided:

1) Quarter-horse races would receive 12.5% of the video poker purse

proceeds at the Fair Grounds, up to a maximum of $1,000,000.00 per

year;

2) $1,000,000.00 would be designated for the payment of “past due”

claims (from 2008 through the present); the settlement of past due

12 This occurred prior to class counsel, Kelly & Townsend, LLC, and Corkern, Crews & Guillet, L.L.C., withdrawing from their representation of Soileau Plaintiffs and prior to the trial court enrolling new counsel for the Soileau Plaintiffs. Accordingly, Kelly & Townsend, LLC, and Corkern, Crews, and Guillet filed the motion on behalf of Soileau Plaintiffs and Mrs. Foreman, Mr. Roberts, Mr. Lavergne, and Mr. Hamilton. Carver, Darden, Koretzky, Tessier, Finn, Blossman & Areaux LLC filed the motion for Fair Grounds Defendants. Jones Walker, LLP, filed the motion for HBPA. 13 Again, this occurred prior to class counsel, Kelly & Townsend, LLC, and Corkern, Crews & Guillet, L.L.C., withdrawing from their representation of Soileau Plaintiffs and prior to the trial court enrolling new counsel for the Soileau Plaintiffs. Accordingly, Kelly & Townsend, LLC, and Corkern, Crews, and Guillet filed the motion on behalf of Soileau Plaintiffs and Mrs. Foreman, Mr. Roberts, Mr. Lavergne, and Mr. Hamilton. Carver, Darden, Koretzky, Tessier, Finn, Blossman & Areaux LLC filed the motion for Fair Grounds Defendants. Jones Walker, LLP, filed the motion for HBPA.

11 claims would be funded by 25% of the $1,000,000.00 video purse

proceeds for the first four years, with the other 75% of video poker

purse proceeds going to current races for purse supplements;

3) The Fair Grounds would add five extra race days for quarter-horses;

4) Quarter-horse races would receive 30% of the video poker proceeds at

other Louisiana race tracks besides the Fair Grounds; and

5) The Fair Grounds would not enforce waivers contained in the 2019

Stall Agreement or in any other prospective stall agreement.

Notably, the proposed settlement agreement contemplated the Louisiana

Legislature amending current law to reflect this agreement.14

On February 18, 2020, Soileau Plaintiffs filed an opposition to the “Joint

Motion for Preliminary Approval of Class Action Settlement Agreement and for

Related Relief.” In the opposition, counsel for Soileau Plaintiffs requested

additional time to respond to the “Joint Motion for Preliminary Approval of Class

Action Settlement Agreement and for Related Relief.” Soileau Plaintiffs also filed

a motion to substitute counsel.

On the same day that Soileau Plaintiffs filed their opposition, February 18,

2020, the trial court held a hearing on the “Joint Motion for Preliminary Approval

of Class Action Settlement Agreement and for Related Relief.” After the hearing,

the trial court executed an order granting the “Joint Motion for Preliminary

Approval of Class Action Settlement Agreement.” The order certified the proposed

class of quarter-horse owners, trainers, and jockeys who won purses at the Fair

Grounds Race Course from January 1, 2008, and who claimed or could claim

14 By 2020 La. Acts No. 342, §2, the Louisiana Legislature passed the required amendment. Nonetheless, the amendment is contingent on a final judgment being rendered in this case.

12 entitlement to supplement purse funds from video poker revenue. The trial court

named Mrs. Foreman, Mr. Roberts, Mr. Hamilton, and Mr. Lavergne, as

representatives of the class. The trial court ordered opt-out forms to be received by

the HBPA by April 13, 2020; objection forms to be received by the clerk of court

by April 3, 2020; and claim forms to be received by the HBPA by August 1, 2020.

The trial court set a fairness hearing for April 27, 2020. According to counsel for

Fair Grounds Defendants, all counsel received a copy of the February 18, 2020

order in open court. The notice of judgment for this order is dated November 12,

2020.

On April 3, 2020, Soileau Plaintiffs filed a “Motion for Clarification, or in

the Alternative, Motion for Continuance.” In their motion, Soileau Plaintiffs noted

that Louisiana Governor John Bel Edwards issued proclamations and that the

Louisiana Supreme Court issued orders that extended certain legal deadlines in

response to the COVID-19 pandemic. In light of this, Soileau Plaintiffs requested

that the trial court clarify all pending deadlines for the class, including those for

opting out, objecting, and the submission of claims forms, i.e. to clarify whether

those deadlines were affected by the Governor’s proclamations and the Louisiana

Supreme Court’s orders. Alternatively, Soileau Plaintiffs requested a continuance

of all deadlines “in order to maintain the same notice and evaluation periods

between deadlines that were originally contemplated in establishing the Order.”

Considering Soileau Plaintiffs’ motion, the trial court ordered the parties to

participate in a telephone status conference on June 16, 2020. After the telephone

conference, on June 18, 2020, the trial court issued a scheduling order, which

provided:

13 1. The hearing on any dispositive motions or exceptions to the Second Amended Petition of Certain Plaintiffs for Damages is set for July 20, 2020 at 9:00 am. Dispositive motions and/or exceptions to be heard on this date must be filed by July 6, 2020 and any objections thereto filed by July 13, 2020. Churchill Downs Louisiana Horseracing Commission [sic] Company, LLC, Churchill Downs Louisiana Video Poker Company, LLC and Horsemen’s Benevolent and Protective Association have agreed to waive service of the Second Amended Petition.

2. The Fairness Hearing that had been scheduled for April 27, 2020 pursuant to this Court’s Order dated February 18, 2020 is reset to October 7-9, 2020 at 9:00 am.

Though the scheduling order reset the fairness hearing from April 27, 2020, to

October 7-9, 2020, it did not continue the other deadlines, such as the deadline to

opt-out, object, or submit a claim. Soileau Plaintiffs did not seek review of the trial

court’s failure to clarify the deadlines to opt-out, object, or submit claim forms, nor

the trial court’s failure to grant the continuance in the alternative.

On May 28, 2020, Soileau Plaintiffs filed a Second Amended Petition. In

the Second Amended Petition, Soileau Plaintiffs essentially requested that the trial

court appoint them as class representatives and allow them to continue litigating

the merits. The Second Amended Petition identified an identical class and set forth

identical claims and damages. In response to the Second Amended Petition,

HBPA and Fair Grounds Defendants separately filed exceptions of lack of

procedural capacity, prematurity, and lis pendens, as well as a motion to strike.

Soileau Plaintiffs filed an opposition to those exceptions, and Fair Grounds

Defendants filed a reply in support of the exceptions. On July 22, 2020, the trial

court granted the exceptions and dismissed the Second Amended Petition filed by

Soileau Plaintiffs. Soileau Plaintiffs filed an application for supervisory writs

regarding the July 22, 2020 judgment that dismissed their Second Amended

14 Petition. On September 16, 2020, this Court denied the writ application “as the

trial court did not err.”

On September 18, 2020, Soileau Plaintiffs filed a motion to vacate the

February 18, 2020 order. On September 22, 2020, Hamilton Plaintiffs also filed a

motion to vacate the trial court’s February 18, 2020 order. Though Hamilton

Plaintiffs initially agreed to the proposed settlement agreement, signed the

proposed settlement agreement, and were named by the trial court as

representatives of the class, they eventually objected to the proposed settlement

agreement. The trial court held a hearing on the motions to vacate on October 7,

2020, and ultimately denied the motions to vacate on November 12, 2020.

Prior to the fairness hearing scheduled for October 7-9, 2020, Fair Grounds

Defendants filed a brief in support of final approval of the proposed settlement

agreement on September 21, 2020. Fair Grounds Defendants attached numerous

exhibits to their brief and asserted that the factors outlined in La. C.C.P. art. 591

were met for class certification. Further, Fair Grounds Defendants contended the

proposed settlement agreement was fair, reasonable, and adequate according to

Reed v. General Motors Corporation, 703 F.2d 170 (5th Cir. 1983).

Also on September 21, 2020, Soileau Plaintiffs and Hamilton Plaintiffs filed

an “Objection to Fairness Hearing and Subject to that Objection Opposition to the

Entry of Final Judgment on the Proposed Settlement.” They objected to the trial

court holding a fairness hearing by asserting that the Governor’s Proclamations and

the Supreme Court’s orders issued as a result of the COVID-19 pandemic required

the trial court to issue new deadlines to opt-out, object, or submit a claim form.

They also objected to the court holding a fairness hearing by claiming that the

February 18, 2020 order was null due to a lack of service and contended that the

15 class notice was defective. Alternatively, Soileau Plaintiffs and Hamilton

Plaintiffs argued the proposed settlement agreement was not fair, reasonable, or

adequate.

On September 22, 2020, class counsel filed a memorandum in support of the

proposed settlement agreement on behalf of Class Representatives. Class counsel

provided a background of the litigation and the numerous issues presented to the

Commission, the trial court, and this Court. In support of the fairness of the

proposed settlement agreement, class counsel indicated the parties fought

numerous exceptions before the Commission, the trial court, and this Court and

agreed to stay two issues while engaging in settlement negotiations, namely the

issues of nonjoinder and the enforceability of the Fair Grounds’ 2019 Stall

Agreement waivers. Further, class counsel noted the outcome of those two issues

could affect the litigation. Class counsel outlined why they believed the proposed

settlement agreement was fair, reasonable, and adequate. On September 22, 2020,

HBPA filed a memorandum in support of the proposed settlement agreement by

adopting the memorandum filed by class counsel.

Fair Grounds Defendants filed a reply to Soileau Plaintiffs’ objection to the

fairness hearing and opposition to the proposed settlement agreement. Fair

Grounds Defendants submitted that if Soileau Plaintiffs truly believed in their

claim, they would have opted out of the settlement and continued the litigation.

Fair Grounds Defendants noted that, instead, Soileau Plaintiffs objected to the

proposed settlement agreement.

16 FAIRNESS HEARING ON OCTOBER 7, 2020, AND NOVEMBER 17, 2020

The trial court conducted a fairness hearing on October 7, 2020, and

November 17, 2020. During the fairness hearing, the trial court received both

documentary and testimonial evidence.

APPELLEES’ CASE IN CHIEF

Documentary Evidence Presented by Appellees

At the fairness hearing, Appellees introduced numerous exhibits into

evidence. The exhibits numbered one through thirty-three and numbered forty-one

through sixty-one included, in pertinent part, both completed and incomplete opt-in

forms (also referred to as claim forms); both completed and incomplete opt-out

forms; completed objection forms; and claim value calculations.15

15 The exhibits introduced into evidence include:

1. Exhibit #1: Completed Opt-In Forms (also referred to as claim forms)

2. Exhibit #2: Incomplete Opt-In Forms

3. Exhibit #3: Completed Objection Forms

4. Exhibit #4: Completed Opt-Out Forms

5. Exhibit #5: Incomplete Opt-Out Forms

6. Exhibit #6: Objector Claim Value Calculation, Brossette, Alvin,

Owner

7. Exhibit #7: Objector Claim Value Calculation, Brossette, Alvin,

Trainer

8. Exhibit #8: Objector Claim Value Calculation, Dehart, Justin, Owner

9. Exhibit #9: Objector Claim Value Calculation, Dehart, Justin, Trainer

17 10. Exhibit #10: Objector Claim Value Calculation, Connie Nobles and

Guillory Bros., LLC (Lyle and Carl Guillory), Owner

11. Exhibit #11: Objector Claim Value Calculation, JLS Speed Horse

Ranch Inc. (John Soileau), Owner

12. Exhibit #12: Objector Claim Value Calculation, M&D Racing Stables

(Norris Davis & Levi Mays), Owner

13. Exhibit #13: Objector Claim Value Calculation, Manucy, Carly C.,

14. Exhibit #14: Objector Claim Value Calculation, Manucy, Joseph D.,

15. Exhibit #15: Objector Claim Value Calculation, N V Racing (Norris

Davis), Owner

16. Exhibit #16: Objector Claim Value Calculation, Watson, Donald R.,

Jockey

17. Exhibit #17: Objector Claim Value Calculation, Williams, Darrell,

18. Exhibit #18: Incomplete Opt-Out Claim Value, Carter, III, James C.,

19. Exhibit #19: Incomplete Opt-Out Claim Value, Dugas, Carl, Owner

20. Exhibit #20: Completed Opt-Out Claim Value, Demouchet, Ricky

Joseph, Trainer

21. Exhibit #21: Completed Opt-In Claim Value (Total for class)

22. Exhibit #22: No Form Objector Claim Value Calculation, Hamilton,

John E., Jockey

18 23. Exhibit #23: No Form Objector Claim Value Calculation, Lavergne,

Danny, Jockey

24. Exhibit #24: February 18, 2020 Mailing: Notice of Class Settlement

25. Exhibit #25: February and September 2020: Claimant Members

Mailing List

26. Exhibit #26: February 27, 2020 Mailing Transaction Receipt

27. Exhibit #27: February 28, 2020 Mele Printing Invoice

28. Exhibit #28: Non-deliverable Returned Mail Envelopes (3)

29. Exhibit #29: August 2020 Mailing: Class Action Notice Regarding

Date Change of #Fairness Hearing from April 27, 2020, to October 7,

30. Exhibit #30: September 4, 2020 Mailing Transaction Receipt

31. Exhibit #31: September 4, 2020 Mele Printing Invoice

32. Exhibit #32: September 28, 2020 Administrator’s (HBPA’s) Report

by Edwin J. Fenasci

33. Exhibit #33: Administrator’s (HBPA’s) Master Return Mail Log

(Please note that the subsequent exhibits numbered 34 through 40 are not included

in this list because they were proffered but not admitted.)

41. Exhibit #41: Fair Grounds 2019 Stall Application

42. Exhibit #42: 2015 Condition Book Exemplar

43. Exhibit #43: February 18, 2020 Order, which preliminarily approved a

class settlement, a class, class representatives, class counsel, and

deadlines to opt-out, object, and submit a claim form

19 44. Exhibit #44: February 14, 2020 Joint Motion for Preliminary

Approval of Class Action Settlement

45. Exhibit #45: Spreadsheets: Reports of 20% of Video Poker Net

Device Revenue for 2008 - 2019 (in globo)

46. Exhibit #46: July 2, 2014 Letter to Louisiana Racing Commission

from Counsel for Fair Grounds and Excerpts of Commission’s

October 21, 2014 Meeting (in globo)

47. Exhibit #47: August 13, 2018 Letter to Louisiana Racing Commission

from Counsel for Fair Grounds and Excerpts of Commission’s August

28, 2018 Meeting (in globo)

48. Exhibit #48: May 23, 2019 Letter to Louisiana Racing Commission

from Counsel for Fair Grounds and Excerpts of Commission’s June

19, 2019 Meeting (in globo)

49. Exhibit #49: August 20, 2020 Letter to Louisiana Racing Commission

from Counsel for Fair Grounds

50. Exhibit #50: February 21, 2020 Minutes of a Special Meeting of the

Board of Directors of the Louisiana Quarter Horse Breeders

Association (LQHBA)

51. Exhibit #51: March 1, 2020 LQHBA Memorandum to Members

52. Exhibit #52: August 12, 2013 LQHBA Letter to Jeff Traylor, Audit

Director, Louisiana State Police, Gaming Audit Section

53. Exhibit #53: November 26, 2013 LQHBA Letter to Tim Bryant,

President, Fair Grounds

54. Exhibit #54: January 9, 2014 LQHBA letter to Stanley Seelig, HBPA

20 Testimonial Evidence Presented by Appellees

Testimony of Ryan Robicheaux

Ryan Robicheaux testified he is the current President of LQHBA and the

owner of a quarter-horse breeding farm, including quarter-horses that race. Mr.

Robicheaux testified he had been in the quarter-horse business for thirty-one years.

He indicated he accepted the purse amount listed in the condition book prior to

racing horses at the Fair Grounds between 2008 and 2019. Additionally, Mr.

55. Exhibit #55: October 12, 2018 LQHBA letter to Charles Gardiner, III,

Executive Director, Commission

56. Exhibit #56: CDLHR Responses to Request for Admissions

57. Exhibit #57: CDLHR Responses to Interrogatories and Request for

Production

58. Exhibit #58: CDLVPC Responses to Request for Admissions,

Interrogatories, and Request for Production

59. Exhibit #59: HBPA Responses to Request for Admissions,

60. Exhibit #60: Affidavit of Mr. Guillet (one of the attorneys who serves

as class counsel). As of November 17, 2020, Mr. Guillet worked

1,020 hours providing legal services in this matter and paid

approximately $11,597.78 for costs.

61. Exhibit #61: Affidavit of Mr. Townsend (one of the attorneys who

serves as class counsel). As of November 17, 2020, Mr. Townsend

worked 653 hours providing legal services in this matter and paid

approximately $22,070.62 for costs.

21 Robicheaux testified that he understood the terms of the proposed settlement

agreement and supported the proposed settlement agreement. Mr. Robicheaux

claimed the addition of the supplemental 12.5% of video poker purse money would

be very beneficial to quarter-horse breeding and racing in Louisiana. Further, he

asserted the quarter horse-purses would increase by forty to fifty percent. During

cross-examination, Mr. Robicheaux admitted he did not file a claim or opt-in to the

proposed settlement agreement. Mr. Robicheaux noted he was aware that the

disputed video poker funds totaled thirty-five million dollars.

Testimony of Edwin Joseph Fenasci

Edwin Joseph Fenasci, the current executive director of the HBPA, testified

he worked in the racing industry for a total of thirty-eight years. He indicated

HBPA is the appointed administrator in this case. Mr. Fenasci testified that the

Louisiana Legislature tasked HBPA with handling the payout of purses from the

four racetracks to the winners of all races (owners typically receive 80% of the

purse, trainers 10%, and jockeys 10%). Further, he explained HBPA issues checks

to the owners, trainers, and jockeys and thus maintains addresses. Mr. Fenasci

identified Exhibit #25, a list of owners, trainers, and jockeys, along with their

addresses, who won races at the Fair Grounds between 2008 and 2019. He noted

that 3,567 notices of the proposed settlement agreement were mailed to the class

on February 27, 2020, utilizing the information from Exhibit #25. Mr. Fenasci

indicated that the United States Postal Service (hereinafter referred to as “USPS”)

returned four notices as undeliverable16; that HBPA received 179 completed claim

16 Note that Mr. Fenasci testified that USPS returned four notices as undeliverable; but in the record before this Court, Exhibit #28 contains only three notices returned as undeliverable.

22 or opt-in forms; that HBPA received thirty-three incomplete claim or opt-in forms;

and that HBPA received one complete opt-out form and two incomplete opt-out

forms. Additionally, Mr. Fenasci noted the clerk of court received ten completed

objection forms. As requested, Mr. Fenasci testified he performed various

calculations. He calculated the value of the claim of the member who completed an

opt-out form totaled $12,968.49. He further determined the value of the claims of

the members submitting incomplete opt-out forms totaled $2,931.36. Mr. Fenasci

also calculated the value of the claims of the members who submitted completed

claim or opt-in forms totaled $4,610,062.00.

Mr. Fenasci determined the total value of the claims of the ten members

objecting to the proposed settlement agreement as follows:17

a) Mr. Brossette: $43,730.91.18

b) Mr. Dehart: $29,804.93.19

c) Lyle Guillory: $92,875.00.20

d) JLS Speed Horses (Mr. Soileau): $58,698.52.21

17 The total value of the claims of the ten members objecting to the proposed settlement agreement is $518,544.96. 18 Per Exhibit #6 (claim value for Mr. Brossette as an owner, $6,965.83) and Exhibit #7 (claim value for Mr. Brossette as a trainer, $36,765.08). 19 Per Exhibit #8 (claim value for Mr. Dehart as an owner, $2,840.64) and Exhibit #9 (claim value for Mr. Dehart as a trainer, $26,964.29). 20 Per Exhibit #10 (claim for Lyle and Carl Guillory, Guillory Bros., $0; claim for Dwayne J. Saucier and Lyle Guillory, $807.41; claim for Lyle Guillory, $66,562.97; claim for Lyle Guillory and Teddy Abrams, $22,922.22; claim for Lyle Guillory and John Soileau, $0; and Lyle Guillory, Teddy Abrams, Lou Phillips, and Darryl Williams, $2,582.40). 21 Per Exhibit #11 (Objector Claim Value Calculation, JLS Speed Horse Ranch Inc. (John Soileau), Owner).

23 e) M&D Racing Stables: $66,370.48.22

f) Carly Munacy: $0.00.23

g) Joseph Munacy: $34,916.03.24

h) NV Racing: $16,697.52.25

i) Donald R. Watson: $124,912.63.26

j) Darryl Williams: $51,538.94.27

Mr. Fenasci noted Mr. Hamilton, one of the class representatives who initially

supported and signed the proposed settlement agreement, did not submit an

objection form. Mr. Fenasci indicated that he was asked to calculate the value of

Mr. Hamilton’s claim and determined the value was $363,414.46. Additionally,

Mr. Fenasci explained that Mr. Lavergne, one of the other class representatives

who initially supported and signed the proposed settlement agreement, did not

submit an objection form. Mr. Fenasci explained that he was asked to calculate the

value of Mr. Lavergne’s claim, which he determined to be $113,377.56.

Mr. Fenasci identified the condition book for 2015, which the trial court

admitted as Exhibit #42. Mr. Fenasci testified a condition book provides a road

map for trainers so they know the requirements of the race, such as the age and/or

22 Per Exhibit #12 (Objector Claim Value Calculation, M&D Racing Stables (Norris Davis & Levi Mays), Owner). 23 Per Exhibit #13 (Objector Claim Value Calculation, Manucy, Carly C., Owner). 24 Per Exhibit #14 (Objector Claim Value Calculation, Manucy, Joseph D., Trainer). 25 Per Exhibit #15 (Objector Claim Value Calculation, N V Racing (Norris Davis), Owner). 26 Per Exhibit #16 (Objector Claim Value Calculation, Watson, Donald R., Jockey). 27 Per Exhibit #17 (Objector Claim Value Calculation, Williams, Darrell, Owner).

24 weight requirement for a horse to be eligible for participation, as well as the

amount of the purse for that race and the source of the funds for the purse. He

stated HBPA reviews the condition books before the track issues it and works with

each track to insure they offer the races indicated therein. Further, Mr. Fenasci

indicated that the Commission approves the condition book prior to issuance.

Mr. Fenasci testified he attends Commission meetings in his capacity as

executive director of HBPA. Mr. Fenasci stated he attended meetings wherein the

Commission instructed the Fair Grounds to place the disputed video poker funds

into the thoroughbred races.

Mr. Fenasci testified that Exhibit #1 comprises all of the properly completed

and timely submitted opt-in forms (also referred to as claim forms). He recalled

classifying the claim form from Mrs. Foreman, one of the class representatives

who approved the proposed settlement agreement, as timely. Mr. Fenasci

indicated he checked every claim form carefully as they arrived and as the deadline

to submit a claim neared, he checked the postmark to determine if a claim arrived

timely. Mrs. Foreman’s claim form indicates she signed it on August 1, 2020, and

HBPA received it on August 7, 2020. HBPA designated several claim forms

received after August 1, 2020, as timely.

The notice advised the class “THE CLAIM FORM MUST BE

SUBMITTED (MAILED/POSTMARKED) NO LATER THAN AUGUST 1,

2020.” (Emphasis in original). In reviewing exhibit one, this Court notes Mrs.

Foreman’s claim form indicates she signed it on August 1, 2020, and the HBPA

received it on August 7, 2020. Mr. Fenasci designated her claim form filed timely.

Exhibit #1 reveals HBPA designated several claim forms received after August 1,

2020, as timely. For instance, Anthony Arey submitted a claim form signed on

25 July 30, 2020, and it was received by HBPA on August 6, 2020. Frank Cavazos

submitted a claim form signed June 6, 2020, and it was received by HBPA on

August 7, 2020. Andrea G. Lematta submitted a claim form signed July 28, 2020,

and it was received by HBPA on August 6, 2020. Daisy Sanchez submitted a

claim form signed August 1, 2020, and it was received by HBPA on August 5,

2020. Noe R. Sanchez submitted a claim form signed August 1, 2020, and it was

received by HBPA on August 5, 2020. HBPA designated the claim forms timely.

Mr. Fenasci noted Mr. Roberts, one of the class representatives who

approved the proposed settlement agreement, did not submit an individual claim

form. However, Mr. Fenasci indicated Mr. Roberts is a partner/owner with other

entities and that HBPA received claim forms on behalf of Mr. Roberts and

Jumonville Farms, as well as JD&C Jumonville and Mr. Roberts.

On cross-examination, Mr. Fenasci noted Mr. Jumonville signed the claim

forms, not Mr. Roberts. On re-direct, Mr. Fenasci indicated HBPA received several

claim forms for multi-owner accounts signed by a single owner.

Also on cross-examination, Mr. Fenasci agreed Evangeline Downs

distributes video poker proceeds to both quarter-horse and thoroughbred races, but

noted the other tracks do not have poker machines. Mr. Fenasci testified he

believed Evangeline Downs had quarter horse races in 1991 when the Louisiana

Legislature passed the video poker statute, La. R.S. 27:438. He noted the Fair

Grounds did not have set quarter horse races in 1991 except for Champion’s Day,

when there might be a few quarter horse races on that particular day.

Testimony of Bruce Salaid

Bruce Salaid, the executive director of LQHBA, testified he had an

understanding of the proposed settlement agreement and was present when

26 LQHBA passed a resolution supporting the proposed settlement agreement. He

noted that on March 1, 2020, LQHBA issued a detailed letter to their members

urging their 1,700 plus members to support the settlement. At the beginning and

the end of the March 1, 2020 letter, LQHBA urged its members “*****PLEASE

DO NOT OPT OUT OF SETTLEMENT*****.” In addition to the capitalization

and red ink, LQHBA enlarged the font to distinguish the plea from the rest of the

memorandum. Mr. Salaid indicated LQHBA raised the issue of video poker purse

supplements beginning in 2013 and was very aware of the situation. Beginning in

2013, LQHBA sent letters to the State Police, the President of the Fair Grounds,

HBPA, and the Commission claiming quarter-horsemen were entitled to a portion

of the video poker proceeds from Fair Grounds Defendants. Mr. Salaid affirmed

that LQHBA’s vote in support of the proposed settlement agreement was not a

knee jerk reaction.

Mr. Salaid indicated he has owned and raced quarter-horses since 1980-

1981. He stated that he personally looked forward to the additional purse money

and additional race days, believing both were significant, especially after the

COVID-19 pandemic.

During cross-examination, Mr. Salaid acknowledged LQHBA knew the

amount of the disputed purse funds totaled thirty-five million dollars. Mr. Salaid

indicated LQHBA possessed a general idea of the attorneys’ fees included with the

proposed settlement agreement. Further, Mr. Salaid noted LQHBA knew the

proposed settlement agreement allowed the Fair Grounds to seek to move the

quarter-horse races to another track, but noted the proposed settlement agreement

provided the video poker supplemental purse money would transfer from the Fair

Grounds to the receiving track.

27 Mr. Salaid acknowledged he was eligible to file a claim as an owner but that

he had not filed a claim.

Testimony of Kenneth Roberts

Kenneth Roberts, who is a class representative, testified he is an owner and

trainer of quarter-horses. Mr. Roberts indicated he understood the terms of the

proposed settlement agreement. Further, Mr. Roberts stated he discussed the multi-

owner claim with Mr. Jumonville and knew Mr. Jumonville was filing it. Mr.

Roberts noted he intended to submit an individual claim form, though he was not

sure if he did so. He acknowledged he would not participate in the million dollars

for past claims in an individual capacity. Mr. Roberts indicated he still supported

the proposed settlement agreement because it was not about him but about helping

all horsemen. Mr. Roberts acknowledged it was alleged that thirty-five million

dollars was owed for past claims, but he expressed a desire to move forward and

believed the proposed settlement agreement was in the best interest of the quarter-

horse racing industry. Finally, Mr. Roberts indicated he attended proceedings

before the Commission and the district court and was aware Plaintiffs won some

battles and lost some battles.

Testimony of Jo Baia Foreman

Jo Baia Foreman, a class representative, testified she owns quarter-horses.

Mrs. Foreman expressed she understood the terms of the proposed settlement

agreement. She indicated that she believed the proposed settlement agreement was

the best solution for horsemen because she wants horseracing to continue in

Louisiana. The trial court questioned Mrs. Foreman about her enthusiasm for the

additional five days of racing at the Fair Grounds. Mrs. Foreman indicated that she

has to pay a trainer to take her horse(s) to a track. Mrs. Foreman explained with

28 additional race days over several weeks, a horse could run twice, making it easier

to justify the costs of getting the horse to the track. Mrs. Foreman indicated she

attended many of the Commission meetings and was aware Plaintiffs won some

battles and lost some battles during the litigation. She acknowledged the disputed

past due claims are alleged to total just over thirty-five million dollars. However,

Mrs. Foreman testified she supported the proposed settlement agreement because it

provides certainty for the quarter-horse industry.

Mrs. Foreman noted she executed a claim form on August 1, 2020, at the

office of class counsel. She watched class counsel leave with her claim form in an

envelope to deposit it in the mail. Mrs. Foreman stated that if HBPA denied her

claim, she would still support the proposed settlement agreement because it was in

the best interest of Louisiana horsemen.

During cross-examination, Mrs. Foreman explained she lost her claim form

and went to the office of class counsel to obtain another one. Mrs. Foreman

indicated she never believed the class would receive the thirty-five million dollars

and thought, instead, that they were fighting for the future of quarter-horse racing

at the Fair Grounds.

Testimony of Jason Boulet

Jason Boulet indicated he is the senior director of racing at the Fair Grounds.

Mr. Boulet testified that during the first one hundred and seventeen years of racing

at the Fair Grounds, only thoroughbred horses raced there. Mr. Boulet indicated

that, in 2008, the Louisiana Legislature added five quarter-horse race days and

later increased the number of quarter-horse race days to ten. He noted the

minimum number of thoroughbred race days is eighty. Mr. Boulet explained the

29 sources of purse funds are slots, video poker, and pari-mutuel wagering, or funds

from individuals betting on the race.

Mr. Boulet acknowledged that he attends Commission meetings and

possessed personal knowledge of the Commission ordering the Fair Grounds to

place disputed video poker funds into thoroughbred races. Further, he confirmed

that the Fair Grounds paid purses pursuant to the Commission’s directive. Mr.

Boulet acknowledged that the Fair Grounds sought the Commission’s direction in

2014 when Plaintiffs raised the issue because the video poker statute differs from

the slot machine law. He noted the slot machine law specifically mandates seventy

percent of revenue be paid to thoroughbred races and thirty percent of revenue be

paid to quarter-horse races.

Mr. Boulet explained that a condition book informs trainers and owners of

the type of race and purse offered by the Fair Grounds.

Mr. Boulet noted the first five horses to finish a race are entitled to purse

funds. He explained that he never received a complaint about the purses paid to

any quarter-horse owner, trainer, or jockey prior to the filing of suit.

Mr. Boulet read the following waiver from the 2019 Fair Grounds Stall

Agreement:

Applicant does not have any claims against Fair Grounds and to the extent Applicant has any such claims, Applicant knowingly and voluntarily releases any such claims, including but not limited to any and all claims set forth in that certain suit John L. Soileau et al v. Churchill Downs Louisiana Horseracing Company, L.L.C. et al, filed as case no. 14-3873, Div. G, in the Civil District Court for the Parish of Orleans, State of Louisiana, and now pending with the Louisiana Racing Commission.

Mr. Boulet testified approximately 550 - 600 horses were stabled in 2019 during

quarter horse racing days at the Fair Grounds. He stated that all trainers and/or

30 owners of the 550 - 600 horses executed the 2019 Stall Agreement containing the

waiver. Mr. Boulet explained that Fair Grounds Defendants intended to utilize the

stall application containing the waiver in the future.

On cross-examination, Mr. Boulet asserted his belief that applying La. R.S.

27:438 as suggested by Appellants would devastate the thoroughbred industry. He

indicated such an application would result in the quarter-horse races receiving five

and a half months of video poker purse supplemental funds for ten days of racing,

doubling the purses of quarter-horse races, and removing significant funds from

thoroughbred races. Further, Mr. Boulet contended the public interest in quarter-

horse races is not at the same level as that of thoroughbred races. He testified that

for every $100.00 placed in bets on races, less than $1.00 is placed on a quarter-

horse race. Mr. Boulet asserted there is no real fan base because owners and their

guests are the individuals attending quarter-horse races.

Testimony of Arthur Morrell

Arthur Morrell, who is Clerk of Criminal District Court for Orleans Parish,

testified he previously served in the Louisiana Legislature. Mr. Morrell indicated

he served in the Louisiana Legislature from 1984 through 2006 and authored, or

co-authored, 99% of the horse bills passed during his tenure. He acknowledged he

was a member of the Louisiana Legislature at the time of the passage of the bill

regarding video poker purse supplements. In particular, Mr. Morrell indicated the

bill came about after he purchased a horse farm and was approached by other

horsemen who asked how the horse industry could be protected. Mr. Morrell

testified that he “devised a couple of bills”, including the video poker purse

supplement bill to keep the thoroughbred industry in existence by not allowing

video poker machines at a racetrack unless some of the proceeds supplemented the

31 purses. Mr. Morrell noted the Fair Grounds did not conduct quarter-horse races at

the time of the bill’s passage. Mr. Morrell indicated the intent of La. R.S. 27:438,

which is titled “Distribution of device revenues; particular licensed establishments;

pari-mutuel wagering facilities”, was to increase purses for thoroughbred races.

Mr. Morrell explained that the video poker money generated by the enactment of

the bill was for the meets in existence at the time of the creation of the bill. He

noted that at the time of the passage of the bill the Fair Grounds only conducted

thoroughbred horse races. Mr. Morrell noted a portion of the funds did go to the

quarter-horse breeders’ award and that race received video poker funds, but

quarter-horse races did not receive video poker funds.

APPELLANTS’ CASE IN CHIEF

Testimonial Evidence Presented by Appellants

Testimony of Danny Lavergne

Appellants called Danny Lavergne, who was a jockey from 1976 through

2016 when he retired. Mr. Lavergne testified that he won approximately 100 races

at the Fair Grounds. He explained that he raced at the Fair Grounds between 2008

and 2016. Mr. Lavergne indicated some of the jockeys and trainers learned that

the Fair Grounds Defendants withheld money that should have gone to quarter-

horse races and placed the money into thoroughbred races. He recalled meeting

once with a lawyer at the racetrack, but believed he had not spoken to a lawyer

since. Mr. Lavergne did not know the names of the attorneys representing him

previously and testified that he did not know he was a class representative. When

asked about the proposed settlement agreement, Mr. Lavergne noted he got

something in the mail and that Mr. Roberts suggested Mr. Lavergne should sign it,

so he did. Further, Mr. Lavergne explained that he used to ride for Mr. Roberts and

32 believed Mr. Roberts had his best interests at heart. Mr. Lavergne admitted he did

not read all of the proposed settlement agreement or ask a lawyer to review it,

though he should have. He explained that he was now opposed to the proposed

settlement agreement because he learned that the amount alleged to be owed was

thirty-five million dollars. Additionally, Mr. Lavergne stated he spoke with Mr.

Hamilton and Mr. Watson about the amount alleged to be owed and learned it was

thirty-five million dollars. Mr. Lavergne indicated “[a]ll I want is what they said

that they were supposed to do and so, what’s owed to me.”

During cross-examination, Mr. Lavergne noted his signature appeared on the

proposed settlement agreement. He agreed he did not opt-out of the settlement and

did not file an objection to the proposed settlement agreement. Mr. Lavergne

stated his problem with the proposed settlement agreement is that he would only

get $250.00, according to his lawyer, Mr. Brandt, who represented him as of the

day of the hearing. Mr. Lavergne did not know the value of his claim totaled

$113,377.56. He recalled one or two meetings with Mr. Townsend (one of the

attorneys who serves as class counsel) talking to a group that included Mr.

Lavergne, Mr. Roberts, Mr. Hamilton, and Mr. Watson. However, Mr. Lavergne

did not recall participating in a telephone meeting to discuss the terms of the

Testimony of Donald Watson

Donald Watson, a jockey, testified he won quite a few races at the Fair

Grounds. He testified when he won races at Evangeline Downs, Louisiana Downs,

or Delta Downs, they would pay from video poker and slot machine revenue.

Later, Mr. Watson indicated he did not know whether Louisiana Downs and Delta

Downs included video poker revenue with their purse funds. Mr. Watson testified

33 that for what it cost him to come to New Orleans to race, it was not fair to be

cheated out of his money. He noted that he missed weddings, funerals, and

vacations being a jockey. Mr. Watson stated he wanted to continue the litigation.

On cross-examination, Mr. Watson acknowledged additional racing days

would be beneficial. Mr. Watson admitted he attended a meeting with an attorney

at Evangeline Downs, another in Baton Rouge, and one Shreveport. Mr. Watson

declared his objection to the proposed settlement agreement was that it was not fair

to keep the money he worked for and that was supposed to be distributed by the

Fair Grounds. He agreed the value of his claim totaled $124,912.63. Mr. Watson

testified he was not told had he submitted a claim he would have received

approximately $25,000.00.

Testimony of Joseph Munacy

Joseph Munacy, a horse trainer, testified he trained horses that ran at the Fair

Grounds. He testified he did not like the million dollar settlement because he

believed they should receive the money owed to them. Accordingly, Mr. Munacy

expressed a desire to continue the litigation.

During cross-examination, Mr. Munacy acknowledged he participated in

several group meetings and that he had the opportunity throughout the litigation to

discuss the case. Mr. Munacy testified he did not like the cap portion of the

proposed settlement agreement. He noted he always believed the Fair Grounds

should have more days of quarter-horse races. Further, Mr. Munacy stated that

when he raced at the Fair Grounds between 2008 and 2014, he did not complain

about the amount of the purses. Mr. Munacy indicated he reviewed the condition

book for the purse amount and would see the source of the purse funds. He

acknowledged his claim totaled $34,916.03. When informed that people were

34 receiving approximately twenty cents on the dollar if they submitted a claim form,

Mr. Munacy testified more money should be in the settlement and “I think I should

be entitled to what’s mine.”

Testimony of Alvin Brossette

Alvin Brossette, who was a jockey for thirty-eight years, testified he owned

and trained quarter-horses for the last seven or eight years. He indicated by the

time the Fair Grounds held quarter-horse meets in 2008, he trained horses that ran.

Mr. Brossette noted after learning the Fair Grounds did not pay video poker

proceeds to the quarter-horse industry, he instituted suit on behalf of the quarter-

horse industry. Mr. Brossette testified he did not like the proposed settlement

agreement because one million dollars for past claims was not enough when,

according to his interpretation, the amount due was thirty-five million dollars. He

advised he did not like the yearly amount being capped at one million dollars.

Further, Mr. Brossette insisted he was not worried about what he might get

individually but was fighting for the whole industry.

During cross-examination, Mr. Brossette acknowledged receiving a

condition book prior to a race that revealed the purse and the sources of funds for

the purse. Mr. Brossette agreed he decided whether or not to enter a horse in a race

based on the condition book and did not complain about the purse amount until

2014. On re-direct examination, he testified he learned of the terms of the proposed

settlement agreement prior to October 2019 and participated in several settlement

meetings. Mr. Brossette stated he knew the amount in dispute totaled thirty-five

million dollars. Additionally, he indicated he had the opportunity to discuss the

proposed settlement agreement with others. Mr. Brosette noted after the terms of

35 the proposed settlement agreement were revealed, some were in favor of the

proposed settlement agreement and some were against it.

REBUTTAL BY APPELLEES

Jo Baia Foreman Rebuttal Testimony

Appellees recalled Mrs. Foreman. Mrs. Foreman testified she participated in

several meetings pertaining to the proposed settlement agreement. She indicated

that in October 2019, she, Mr. Roberts, and Mr. Brossette attended a meeting in

person with class counsel while Mr. Lavergne, Mr. Hamilton, and Mr. Munacy

participated by telephone. Mrs. Foreman noted after the meeting, some were in

favor of the proposed settlement agreement and some were against it. She also

indicated she knew the amount in dispute potentially totaled thirty-five million

dollars. Mrs. Foreman acknowledged that all Plaintiffs discussed the proposed

settlement agreement amongst themselves to determine whether they supported it

or not.

POST-FAIRNESS HEARING BRIEFS

The trial court granted the parties until December 18, 2020, to submit post-

trial briefs. On December 18, 2020, Soileau Plaintiffs and Hamilton Plaintiffs

submitted a “Post Hearing Brief in Support of Opposition to the Entry of Final

Judgment on the Proposed Settlement [Agreement].” Also on December 18, 2020,

Fair Grounds Defendants filed a “Post Trial Memorandum in Support of Final

Approval of Class Action Settlement.” Mrs. Foreman and Mr. Roberts, as class

representatives, submitted a “Post-Hearing Memorandum in Support of

Settlement” on December 18, 2020. Pursuant to the trial court’s request, Mrs.

Foreman and Mr. Roberts, in their capacity as Class Representatives, also filed a

document titled “Proposed Findings of Fact and Relevant Procedural History.”

36 HBPA filed a “Motion and Incorporated Memorandum in Support to Join and

Adopt the Post-Hearing Memorandum in Support of Settlement and Proposed

Findings of Fact and Law,” i.e., to adopt the Post-Hearing Memorandum and

Proposed Findings of Fact filed by Class Representatives, Mrs. Foreman and Mr.

Roberts. Thereafter, on December 28, 2020, Soileau Plaintiffs and Hamilton

Plaintiffs filed an objection to the “Motion for Final Approval of the Settlement

Agreement,” which was filed by Class Representatives, Mrs. Foreman and Mr.

Roberts; Fairgrounds Defendants; and HBPA.

TRIAL COURT JUDGMENT AND REASONS FOR JUDGMENT

On January 28, 2021, the trial court issued a final judgment, which granted

final approval to the proposed settlement agreement, the class, the class

representatives, the amount of the settlement, the payout procedure, and

$787,500.00 as reasonable attorneys’ fees and reimbursement of expenses for class

counsel. In the trial court’s written reasons for judgment, the trial court

acknowledged the proposed settlement agreement was not perfect because no

settlement is perfect. The trial court believed the proposed settlement agreement

was in the best interests of all. The trial court indicated the need to add the

thoroughbred defendants would lead to additional, years-long litigation at a

considerable expense to all. Further, the trial court indicated it was not impressed

with the testimony of the objectors.

Appellants now seek review of the January 28, 2021 judgment, as well as the

trial court’s November 12, 2020 denial of the Soileau Plaintiffs’ and Hamilton

Plaintiffs’ motions to vacate; failure to reset deadlines in light of the Governor’s

Proclamations and the Supreme Court’s Orders in response to the COVID-19

37 pandemic; and February 18, 2020 grant of the joint motion for preliminary

approval of the proposed settlement agreement.

For purposes of this Opinion, we will consider each consolidated appeal

separately.

DISCUSSION

2021-CA-0022: Appeal of the Trial Court’s Denial of the Motions to Vacate

In this appeal, Appellants seek review of the trial court’s denial of their

motions to vacate.28 The appellants assign three errors:

[1]. The Trial Court erred in denying the [] Motion[s] to Vacate.

[2]. The Trial Court erred in not resetting the deadlines as required by the Governor’s Proclamations and Supreme Court’s Orders in response to COVID-19.

3. The Class Notice is Defective.[29]

Each of these assignments of error is discussed in turn.

Jurisdiction of Moot Issue

Prior to addressing the merits, we note that in this consolidated appeal

Appellants seek review of the judgment, which denied their motions to vacate the

judgment granting preliminary approval to the proposed settlement agreement and

the judgment granting final approval of the proposed settlement agreement. In

28 Note that in their first assignment of error, Appellants state that “[t]he Trial Court erred in denying the Soileau Plaintiffs’ Motion to Vacate.” Soileau Plaintiffs filed their Motion to Vacate on September 18, 2020, and Hamilton Plaintiffs filed their Motion to Vacate on September 22, 2020. Though the assignment of error references only Soileau Plaintiffs’ motion, we consider the trial court’s denial of both motions in this section. 29 Appellants did not assign as error the argument regarding the class notice being defective. Appellants’ brief to this Court includes it as a major heading and designated the argument as number three. Appellees likewise designated their response as number three. For consistency, the Court will utilize the numbering of the parties.

38 2021-CA-0199, Fair Grounds Defendants contend that any objection to the

judgment granting preliminary approval is moot because the trial court held a

fairness hearing on the merits of the proposed settlement agreement and thereafter

granted final approval to the proposed settlement agreement.

In Edward v. Badie, in discussing whether an issue was moot, this Court

indicated:

The Louisiana Supreme Court provided that “[t]he jurisprudence of this Court is well settled that courts will not decide abstract, hypothetical or moot controversies, or render advisory opinions with respect to such controversies.” Cat’s Meow, Inc. v. City of New Orleans Through Dep’t of Fin., 98-0601, p.8 (La. 10/20/98), 720 So. 2d 1186, 1193. Further,

an issue is “moot” when a judgment or decree on that issue has been “deprived of practical significance” or “made abstract or purely academic.” Perschall v. State, 96-0322 (La. 7/1/97), 697 So.2d 240; Louisiana Associated Gen. Contractors, Inc.[v. State Through Div. of Admin., Office of State Purchasing], 669 So.2d [1185] at 1193 [ (1996) ]; American Waste & Pollution Control Co. [v. St. Martin Parish Police Jury], 627 So.2d [158] at 162 [ (1993) ]. A case is “moot” when a rendered judgment or decree can serve no useful purpose and give no practical relief or effect. Robin [v. Concerned Citizens for Better Ed. in St. Bernard, Inc.], 384 So.2d [405] at 405 [(1980)]. If the case is moot, then “‘there is no subject matter on which the judgment of the court can operate.’” St. Charles Parish Sch. Bd. [v. GAF Corp.], 512 So.2d [1165] at 1171 [ (1987) ] (citing Ex parte Baez, 177 U.S. 378, 20 S.Ct. 673, 44 L.Ed. 813 (1900)). That is, jurisdiction, once established, may abate if the case becomes moot. Id.

2019-0332, p. 2 (La. App. 4 Cir. 8/28/19), 282 So.3d 269, 270-71.

In the case sub judice, an argument exists that any claim pertaining to the

judgment granting preliminary approval is moot because the trial court issued a

final judgment approving the settlement. Similarly, any objection to the order

granting preliminary approval to the class and the proposed settlement agreement

39 ceased to exist upon rendition of the final judgment. The joint motion for

preliminary approval served as a procedural vehicle to obtain court approval of the

notice to be disseminated to the class. The notice issued to the class informed the

class of the terms of the proposed settlement agreement; their opportunity to opt-

out, object, or opt-in; and the date of the fairness hearing. The final judgment

approving the class and the proposed settlement agreement occurred after the

issuance of the notice and the opportunity to present testimony and evidence at the

fairness hearing. A decision by this Court pertaining to the order granting

preliminary approval would be deprived of practical significance because there is a

final judgment granting approval of the class and the proposed settlement

agreement.

We note the appeals appeared in a unique procedural posture because

appellate courts typically review an objection to an order granting preliminary

approval prior to the fairness hearing. See, e.g., Pollard v. Alpha Tech., 2010-

0788, p. 53 (La. App. 4 Cir. 8/12/11), 102 So.3d 71, 106 (wherein this Court

reversed the trial court’s judgment granting preliminary approval of a class

settlement prior to the trial court holding a fairness hearing). Herein, Appellants

sought review of the order granting preliminary approval in such close proximity

to the request to review the final judgment that this Court consolidated the appeals.

Nonetheless, appeals are favored by law. Alexander v. La. State Bd. of

Private Investigator Exam’rs, 2019-0778, p. 20 (La. App. 4 Cir. 4/1/20), 293 So.3d

1243, 1256, writ denied, 2020-01072 (La. 11/10/20), 303 So.3d 1039. Further, an

appellant is entitled to seek review of all adverse interlocutory rulings prejudicial

to him when taking an unrestricted appeal from a final judgment. Elysian, Inc. v.

Neal Auction Co., 2020-0674, p. 9 (La. App. 4 Cir. 7/21/21), 325 So.3d. 1075,

40 1083. Thus, we consider the assignments of error pertaining to the preliminary

order and do not deem them moot.

Jurisdiction to Consider the November 12, 2020 Judgment

Prior to addressing the merits of Appellants’ argument, the Court notes that

Fair Grounds Defendants and Class Representatives assert the November 12, 2020

judgment denying the motions to vacate is interlocutory and not appealable. “A

judgment that does not determine the merits but only preliminary matters in the

course of the action is an interlocutory judgment. A judgment that determines the

merits in whole or in part is a final judgment.” La. C.C.P. art. 1841. Notably, “an

interlocutory judgment is appealable only when expressly provided by law.” La.

C.C.P. art. 2083(C). In this instance, the November 12, 2020 judgment denying

the motions to vacate determined preliminary matters and not the merits. Further,

there is no law that expressly provides the right to appeal the denial of a motion to

vacate. Thus, the proper procedural vehicle to seek review of an interlocutory

judgment is by the filing of an application for supervisory writs. Sullivan v. Malta

Park, 2016-0875, p. 4 (La. App. 4 Cir. 1/31/17), 215 So.3d 705, 708; see also

Narcise v. Jo Ellen Smith Hosp., 98-2417, p. 4 (La. App. 4 Cir. 3/10/99), 729 So.2d

748, 751 (wherein this Court noted the plaintiffs filed an application for

supervisory writs asking this Court to consider the merits of the trial court’s denial

of a motion to vacate).

Nonetheless, while an interlocutory judgment may not itself be immediately

appealable, it is nevertheless subject to review by an appellate court when an

appealable judgment is rendered in the case. Elysian, Inc., 2020-0674, p. 9, 325

So.3d. at 1083 (citing People of the Living God v. Chantilly Corp., 251 La. 943,

947-48, 207 So.2d 752, 753 (1968)). “When an unrestricted appeal is taken from a

41 final judgment, the appellant is entitled to seek review of all adverse interlocutory

rulings prejudicial to him, in addition to the review of the final judgment.” Id.

(quoting Wimsatt v. City of New Orleans, 2019-0461, p. 7, n. 6 (La. App. 4 Cir.

12/20/19), 286 So.3d 1217, 1223).

Appellants were not entitled to appellate review of the November 12, 2020

judgment denying the motions to vacate at the time of the lodging of the appeal in

this Court on January 15, 2021, because the judgment was interlocutory. On

January 28, 2021, the trial court rendered a final judgment in this matter.

Appellants sought an unrestricted appeal of the final judgment, and this Court

ordered consolidation of the appeals.30 Thus, this Court will review the

interlocutory judgment, which denied the motions to vacate, as part of the

unrestricted appeal of the final judgment rendered on January 28, 2021.

STANDARD OF REVIEW

Appellate courts review the denial of a motion to vacate under an abuse of

discretion standard. Narcise, 98-2417, p.9, 729 So.2d at 753.

Assignment of Error No. 1 – Denial of the Motions to Vacate

The motions to vacate requested that the trial court vacate the February 18,

2020 order granting preliminary approval of the settlement agreement. Appellants

set forth several arguments to support the assertion that the trial court erred in

denying the motions to vacate.

30 The Court consolidated the cases after the parties filed separate briefs in 2021- CA-0022 and 2021-CA-0049. The parties thereafter filed separate briefs in 2021- CA-0199. There is some overlap in the assignments of error and/or arguments in support thereof. The Court will address the issues raised in the various appeals separately while omitting detailed discussion of the similar assignments and/or arguments.

42 Applicability of La. C.C.P. art. 2002

Appellants first contend the preliminary order is null pursuant to La. C.C.P.

art. 2002(A)(2). That provision states:

A final judgment shall be annulled if it is rendered against a defendant who has not been served with process as required by law and who has not waived objection to jurisdiction, or against whom a valid final default judgment has not been taken.

Appellants aver that Appellees failed to serve them with a copy of the “Joint

Motion for Preliminary Approval of Class Action Settlement Agreement and for

Related Relief.” Thus, Appellants contend the February 18, 2020 preliminary order

is null.

In their Appellee brief, Fair Grounds Defendants first contend the specific

articles governing class actions do not require a contradictory hearing to approve a

preliminary settlement. Fair Grounds Defendants aver La. C.C.P. art. 594, which

pertains to “[d]ismissal or compromise” of a class action, requires the court to hold

a fairness hearing after notice of the proposed settlement has been provided to the

class. In support, Fair Grounds Defendants cite Pollard. Therein, this Court

acknowledged that pursuant to La. C.C.P. art. 594(B), a formal hearing is not

required until after preliminary approval and notice of the compromise has been

provided to the class. Pollard, 2010-0788, p. 5, 102 So.3d at 76. Fair Grounds

Defendants further cite Kent A. Lambert, Class Action Settlements in Louisiana,

61 LA. L. REV. 89, 125 (2000) (noting preliminary approval of a settlement is often

granted with no formal hearing, even at the federal level). Fair Grounds

Defendants also aver La. C.C.P. art. 2002 is not applicable. They note that the

February 18, 2020 order granting preliminary approval of the settlement is not a

final judgment.

43 Similarly, Class Representatives note that Appellants received notice of the

February 18, 2020 hearing in a letter dated January 29, 2020, and sent via Federal

Express. Class Representatives aver that Appellants obtained new counsel; new

counsel appeared at the February 18, 2020 hearing; new counsel argued against

granting preliminary approval of the settlement; and new counsel did not object to

a lack of service during the February 18, 2020 hearing.

We agree the February 18, 2020 order determined preliminary matters and

not the merits. Hence, the February 18, 2020 order is interlocutory. Louisiana

Code of Civil Procedure Article 2002 applies to final judgments. Thus, Appellants’

contention that La. C.C.P. art. 2002 applies is misplaced.

Additionally, La. C.C.P. art. 2002 provides that a final judgment shall be

annulled if rendered “[a]gainst a defendant who has not been served with process

as required by law and who has not waived objection to jurisdiction.” La. C.C.P.

art. 2002(A)(2). In Washington v. Landry’s Seafood House New Orleans, Inc., the

plaintiff claimed the defendant did not properly serve him with a motion. 2014-

0128, p. 4, n. 4 (La. App. 4 Cir. 11/19/14), 154 So.3d 677, 680. This Court

determined that the objection to service was voluntarily waived because the

plaintiff made a general appearance and argued the merits of the motion. Id.

Two Appellants, Mr. Watson and Mr. Brossette, appeared at the February

18, 2020 hearing with counsel. Counsel for Appellants argued the merits of the

motion. At no point did counsel for Appellants object due to a lack of service.

Rather, counsel for Appellants first requested additional time to prepare for the

fairness hearing. Next, counsel for Appellants indicated that he would require two

days to present evidence at the fairness hearing. Appellants voluntarily waived the

right to object to a lack of service when they made a general appearance, argued

44 the merits, and did not object to a lack of service. See Washington, 2014-0128, p.

4, n. 4, 154 So.3d at 680. This argument lacks merit.

Applicability of La. C.C.P. art. 1312

Appellants next cite La. C.C.P. art. 1312, which states that “every pleading

subsequent to the original petition shall be served on the adverse party as provided

by [La. C.C.P. arts.] 1313 or 1314.” Appellants aver that class counsel, Fair

Grounds Defendants, and HBPA filed a joint motion for preliminary approval of

class settlement. Appellants submit that Appellees did not request service on

Appellants, an adverse party. Appellants contend that Appellees failed to comply

with La. C.C.P. art. 1312.

In their briefs, Appellees again note counsel for Appellants appeared on

February 18, 2020, and argued the merits of the motion. Appellees contend that

counsel for Appellants did not object due to a lack of service. Thus, Appellees

conclude that Appellants waived the right to object to a lack of service.

As indicated above, Appellants and their counsel appeared at the February

18, 2020 hearing and did not object to a lack of service. Rather, counsel for

Appellants argued the merits and participated fully in the hearing. Thus,

Appellants voluntarily waived the right to object to a lack of service when they

made a general appearance, argued the merits, and did not object to a lack of

service. See Washington, 2014-0128, p. 4, n. 4, 154 So.3d at 680. This argument

lacks merit.

Applicability of La. C.C.P. art. 963

Appellants further cite La. C.C.P. art. 963, which is titled “Ex parte and

contradictory motions; rule to show cause.” Louisiana code of Civil Procedure

Article 963 provides, in pertinent part, that “[i]f the order applied for by written

45 motion is one to which the mover is not clearly entitled, or which requires

supporting proof, the motion shall be served on and tried contradictorily with the

adverse party.” Appellants suggest that Appellees, as the movers, were not clearly

entitled to the relief sought in the joint motion. Appellants contend that Appellees

were required to serve the adverse parties and try the motion contradictorily.

Appellants aver that they were not served with the joint motion and that the trial

court should have thus vacated the February 18, 2020 order.

In their briefs, Appellees again note counsel for Appellants appeared on

February 18, 2020, and argued the merits of the motion. Appellees contend

counsel for Appellants did not object due to a lack of service. Thus, Appellees

conclude that Appellants waived the right to object to a lack of service.

This Court has acknowledged that a formal hearing is not required until after

preliminary approval and notice of the settlement has been sent to the class. In

Pollard, this Court quoted from the trial court’s reasons for judgment as follows:

The two-step approach for approval of a settlement class is laid out in Gates v. Rohm & Haas Co., 248 F.R.D. 434, 438-439 (E.D. Pa. 2008); Armstrong v. B. Of School Dirs., 616 F.2d 305, 314 (7th Cir. 1980), overruled on other grounds by Felzen v. Andreas, 134 F.3d 873 (7th Cir. 1998); In re Mid-Atlantic Toyota Antitrust Litig., 564 F.Supp. 1379, 1384 (D.Md. 1983); Horton v. Merrill Lynch, Pierce Fenner & Smith, Inc., 855 F.Supp. 825, 827 (E.D. N.C. 1994).

First, the Court issues a preliminary approval of the settlement, where the court reviews the proposed settlement for obvious deficiencies, schedules a fairness hearing, and provides the class with notice of the proposed settlement and hearing. Second, the court considers the final approval of the proposed settlement at a formal fairness hearing during which arguments and evidence are presented in support of and in opposition to the proposed settlement.

On a motion for preliminary approval the Court need only ascertain whether there is “probable cause” to notify the class members of the proposed settlement and to proceed with a fairness hearing. Mid-Atlantic Toyota, 564 F.Supp. at 1384. When making the preliminary determination of fairness of the settlement, the standard is

46 not whether the settlement was the best of all possible deals, but rather, “whether it is fair, adequate, and free from collusion.” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1027 (96 Cir, 1988) [(9 Cir.1998)]. When a proposed settlement appears to fall within the range of possible approval, it is appropriate to issue preliminary approval and direct notice to members of the settlement class. Horton, 855 F.Supp. [825] at 827.

Pollard, 2010-0788, pp. 4-5, 102 So.3d at 75-76.

In this instance, the trial court complied with the two-step approach. The

trial court reviewed the proposed settlement agreement, granted preliminary

approval of the settlement class, and ordered notice of the proposed settlement

agreement be provided to the class. The trial court ordered the notice inform the

class of the deadline to opt-out, object, and submit a claim form, as well as the date

of the fairness hearing. The trial court held a formal fairness hearing on October 7,

2020, and November 17, 2020, during which the parties presented testimony and

evidence in support of, and in opposition to, the proposed settlement agreement.

The Pollard Court further noted that Louisiana courts refer to cases

interpreting the federal class action statute because the Louisiana class action

statute is largely derived from the federal class action statute, which is codified at

Federal Rule of Civil Procedure 23. 2010-0788, p. 11, 102 So.3d at 79-80.

Federal courts often grant preliminary approval of a class settlement with no

formal hearing, much less notice to any named plaintiff who objected to the

settlement. See Kent A. Lambert, Class Action Settlements in Louisiana, 61 LA. L.

REV. 89, 125 (2000). Appellants’ argument that La. C.C.P. art. 963 applied,

thereby requiring service of the joint motion and a contradictory hearing, is

misplaced.

Significantly, to the extent that La. C.C.P. art. 963 applied, class counsel and

the trial court complied. Class counsel informed the named plaintiffs of the terms

47 of the proposed settlement agreement in October 2019. Class counsel provided

notice of the hearing date to the named plaintiffs objecting to the proposed

settlement agreement. Counsel for Soileau Plaintiffs filed an opposition to the

joint motion; appeared at the February 18, 2020 hearing; and argued against the

granting of the joint motion for preliminary approval at the hearing. Additionally,

counsel for Soileau Plaintiffs requested a thirty-day extension to file an opposition

to the joint motion. Counsel for Soileau Plaintiffs also did not object to a lack of

service. Counsel for Soileau Plaintiffs noted that Fair Grounds Defendants and

HBPA had not filed an answer. Further, Counsel for Soileau Plaintiffs provided he

would require two days to present evidence at the fairness hearing. Class counsel

and counsel for Fair Grounds Defendants set forth reasons to move forward with

setting dates to opt-out, object, and submit a claim form. The trial court clearly

held a contradictory hearing as contemplated by La. C.C.P. art. 963. This

argument lacks support.

Applicability of White v. White

Appellants cite this Court’s decision in White v. White, 398 So.2d 1257 (La.

App. 4 Cir. 1981). Therein, this Court declared a judgment of contempt, which

imposed both a fine and a jail term, to be absolutely null because the record

reflected no service and no evidence the appellant received notice of the

proceeding. White, 398 So.2d at 1259. Appellants contend the February 18, 2020

order is likewise an absolute nullity.

In their briefs, Appellees again note that counsel for Appellants appeared on

February 18, 2020, and argued the merits of the motion. Appellees contend that

counsel for Appellants did not object due to a lack of service. Thus, Appellees

conclude that Appellants waived the right to object to a lack of service.

48 We find the facts in White are distinct from those found herein. In White,

the wife filed a rule for contempt and requested service on the husband via the

long-arm statute. White, 398 So.2d at 1258. At the hearing, the wife and her

counsel appeared, but the husband did not. Id. The trial court granted the rule for

contempt, imposed a fine on the husband, and sentenced him to a jail term. Id.

This Court determined:

[A] judgment rendered against a defendant who has not been served with process and who has not entered a general appearance is an absolute nullity. C.C.P. 2594, 2002(2), Thompson v. Courville, 372 So.2d 579 (La. App. 3rd Cir. 1979). Since the record reflects no service whatsoever in this matter, and since there is no evidence of appellant being given notice of the summary proceedings set for October 12, 1979, then the judgment based on this hearing and rendered on October 17, 1979 is an absolute nullity.

Id., 398 So.2d at 1259.

Unlike White, the record herein reflects service of the hearing date. Also,

unlike White, the judgment herein is not an appealable judgment.31 Additionally,

unlike White, Appellants voluntarily waived an objection regarding service by

making a general appearance and arguing the merits of the joint motion without

objection. Thus, Appellants’ reliance upon White is misplaced.

Applicability of Louisiana District Court Rule 9.8

Appellants lastly contend the hearing on the joint motion violated Rule 9.8

of the Louisiana District Court Rules. The pertinent part of La. Dist. Ct. Rule 9.8

states:

In cases other than juvenile and family law proceedings, no hearing on an exception or motion will be scheduled until at least fifteen calendar days after filing. A party seeking to have an exception or motion heard less than fifteen days after filing shall show

31 A judgment imposing sanction for contempt is a final judgment subject to appeal pursuant to La. C.C.P. art. 1915(A)(6).

49 good cause and shall state in the exception or motion the reasons why an expedited hearing is necessary.

Rule 9.8(c), La. Dist. Ct. Rules.

Appellants assert the trial court erred in holding a hearing on February 18,

2020, because the parties filed the joint motion on February 14, 2020, which was

fewer than fifteen days before the hearing. Appellants contend this violates

procedural due process. Appellants did not cite to any law or jurisprudence in

support of the assertion of procedural due process.

In their briefs, Appellees again note counsel for Appellants appeared on

February 18, 2020, and argued the merits of the motion. Appellees also contend

counsel for Appellants did not object due to an alleged violation of La. Dist. Ct.

Rule 9.8. Thus, Appellees conclude that Appellants waived the right to object.

As we previously noted, Class Representatives and Fair Grounds Defendants

filed the joint motion to set hearing dates for class certification and related relief on

January 23, 2020. The trial court set a hearing for February 18, 2020. On January

29, 2020, class counsel notified Appellants of the February 18, 2020 hearing date

by letter sent via Federal Express. Appellants filed an opposition to the joint

motion for preliminary approval of class settlement, appeared at the hearing,

participated in the hearing, and did not object to a violation of La. Dist. Ct. Rule

9.8.

Admittedly, the parties filed the joint motion for preliminary approval on

February 14, 2020, which was four days before the February 18, 2020 hearing.

However, Appellants suffered no prejudice due to the alleged violation of La. Dist.

Ct. Rule 9.8. See In re Succession of Benoit, 2014-0546, p. 4, n. 1 (La. App. 5 Cir.

11/25/14),165 So.3d 1017, 1018 (wherein the appellant asserted a lack of sufficient

50 notice to defend against a summary judgment and the Fifth Circuit Court of Appeal

determined the appellant was not prejudiced because she filed an opposition to the

motion, including three supporting affidavits). As noted, counsel for Soileau

Plaintiffs filed an opposition, appeared at the hearing, and participated in the

hearing. While counsel for Soileau Plaintiffs requested additional time to prepare

for the fairness hearing, counsel then indicated he would require two days to

present evidence at the fairness hearing. Appellants failed to demonstrate any

prejudice due to the alleged violation of La. Dist. Ct. Rule 9.8. This argument

lacks support.

Assignment of Error No. 2 – The Trial Court Erred in Not Resetting Deadlines Due to COVID-19.

Pursuant to the crisis imposed by COVID-19, Governor Edwards issued a

public health emergency declaration on March 11, 2020. 25 JBE 2020. In

connection therewith, the Louisiana Supreme Court issued an order dated March

20, 2020, continuing all civil trial, hearings, and court appearances set between the

date of the order and April 13, 2020. Appellants contend the Governor’s

Proclamations and the Supreme Court’s orders required the rescheduling of the

deadlines (to opt-out or object to the proposed settlement agreement) contained in

the February 18, 2020 preliminary order. Appellants aver the time between the

receipt of the notice and the time to respond was impacted because the deadlines

occurred during the declared state of emergency. Appellants contend any resulting

hearing or order violated the due process rights of the entire class. However,

Appellants did not cite to any law or jurisprudence in support of the assertion of a

violation of due process rights.

51 In their brief, Fair Grounds Defendants explain that Appellants filed a

motion for clarification concerning the deadlines, and, in response, the trial court

set a telephone status conference. During the telephone status conference, the trial

court accommodated the request of Appellants to reschedule the fairness hearing to

October 7 - 9, 2020. Fair Grounds Defendants contend that counsel for Appellants

did not raise the deadlines to opt-out, object, or submit a claim form due to

COVID-19, or otherwise, during the telephone status conference.

Further, Fair Grounds Defendants aver that the plain language of the

Governor’s Proclamations and the Supreme Court orders did not supersede or

vacate any deadline. Rather, Fair Grounds Defendants contend the Governor’s

Proclamations and the Supreme Court’s orders extended certain legal deadlines.

Fair Grounds Defendants note that during the 2020 legislative session, the

Louisiana Legislature enacted Louisiana Act 162, which extended all legal

deadlines impacted by the Governor’s Proclamations to July 6, 2020. 32 Fair

Grounds Defendants submit the Supreme Court’s orders did not vacate the

deadlines to opt-out or object. The Supreme Court’s March 20, 2020 order

addressed “civil trials, hearings and court appearances.” The Supreme Court’s

April 6, 2020 order continued jury trials and non-emergency in person-proceedings

scheduled prior to May 4, 2020, to a date to be reset by trial court order. Fair

Grounds Defendants note the only trial, hearing, or court appearance contained in

the February 18, 2020 order was the fairness hearing, which was originally

scheduled for April 27, 2020, but reset for October 7 - 9, 2020 (and ultimately held

on October 7, 2020, and November 17, 2020).

32 2020 La. Acts 162 was codified as La. R.S. 9:5828 - 5830.

52 Lastly, Fair Grounds Defendants contend that Appellants lack standing to

raise lack of due process as to this issue. Fair Grounds Defendants note that new

counsel represented Appellants and filed objections to the proposed settlement

agreement. Appellants did not opt-out of the proposed settlement agreement. Fair

Grounds Defendants avow the Governor’s Proclamations and/or the Supreme

Court’s orders did not confuse Appellants because they timely filed objections to

the proposed settlement agreement. Further, Appellants fully participated in the

full trial on the fairness of the proposed settlement agreement. Fair Grounds

Defendants aver that Appellants may not now claim confusion to an order after

fully complying with the order.

Likewise, Class Representatives argue that Appellants misconstrue the

Governor’s Proclamations and the Supreme Court’s orders pertaining to COVID-

19. Class Representatives aver that the Governor’s Proclamations and the

Supreme Court’s orders extended deadlines, not vacated deadlines.

This Court first notes that the February 18, 2020 order required class

members to opt-out by April 13, 2020, and to object by April 3, 2020. The

individual Appellants filed their objections to the proposed settlement agreement

timely and failed to present evidence that a single member of the class suffered

confusion about the deadlines due to the Governor’s Proclamations or the Supreme

Court’s orders.

Turning to the language contained in the Governor’s Proclamation itself, the

Proclamation notably declared that legal deadlines were “suspended.”33 The

Supreme Court ordered that all civil trials, hearings, and court appearances were

33 See 30 JBE 2020; 84 JBE 2020.

53 continued and would be re-set.34 Further, the Louisiana Legislature codified the

Governor’s Proclamations and proclaimed:

All prescriptions, including liberative, acquisitive, and the prescription of nonuse, abandonment periods, and all peremptive periods shall be subject to a limited suspension or extension during the time period of March 17, 2020, through July 5, 2020; however, the suspension or extension of these periods shall be limited and shall apply only if these periods would have otherwise expired during the time period of March 17, 2020, through July 5, 2020. The right to file a pleading or motion to enforce any right, claim, or action which would have expired during the time period of March 17, 2020, through July 5, 2020, shall expire on July 6, 2020.

La. R.S. 9:5829(A).

This Court discussed La. R.S. 9:5829(A) in American Global Insurance Co.,

v. 4503 Prytania Street, L.L.C., 2020-0438 (La. App. 4 Cir. 4/4/21), __ So.3d __,

2021 WL 1399742. Therein, this Court determined that “the statutory language [of

La. R.S. 9:5829(A)] is clear and unambiguous. All deadlines were subject to a

‘limited suspension or extension until July 6, 2020.’ Thus, any deadline that would

have expired between March 17, 2020 and July 5, 2020, expired July 6, 2020.”

American Global Ins. Co., 2020-0438, p. 3, 2021 WL 1399742 at *2.

The Governor’s Proclamations and La. R.S. 9:5829(A) did not vacate any

deadlines. Pursuant to the clear and unambiguous language contained in La. R.S.

9:5829(A) and American Global, the deadlines to opt-out or object contained in the

February 18, 2020 order, which are deadlines that would have expired between

March 17, 2020, and July 5, 2020, expired July 6, 2020. 35 Further, the deadlines to

submit opt-out or objection forms did not contemplate a court hearing, trial, or the

like. Thus, the Supreme Court’s orders did not affect the deadlines contained in

34 See La. Sup. Ct. Orders dated March 16, 2020, and March 20, 2020. 35 The Governor’s Proclamations and La. R.S. 9:5829(A) did not impact the August 1, 2020 deadline to mail a claim form.

54 the February 18, 2020 order. The Supreme Court’s orders affected the date of the

fairness hearing. The trial court properly reset the fairness hearing by order.

The Court is cognizant that USPS continued mail service throughout the

COVID-19 pandemic. The February 18, 2020 order set the deadline to file an

objection for April 3, 2020. On April 2, 2020, Appellants all filed objections

timely. Appellants failed to present evidence that any class member encountered

difficulties in receiving or sending mail.

Appellants did not cite any authority for the assertion of a violation of the

due process rights of the members of the class. Considering the importance of the

due process right guaranteed by both the United States and Louisiana

Constitutions, we will briefly address the issue. This Court discussed due process

in the context of a class action and noted:

“Adequate notice is one of the most elementary requirements of procedural due process.” Vincent v. Vincent, 2011-1822, p.13 (La. App. 4 Cir. 5/30/12), 95 So.3d 1152, 1161. “Adequate notice given must be reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and to afford them an opportunity to present their objections.” Id. (citation omitted). Moreover, “procedural due process requires an opportunity to be heard.” Miller v. Crescent City Health Care Ctr., 2011-0403, pp. 3-4 (La. App. 4 Cir. 11/9/11), 78 So.3d 219, 221 (citation omitted).

Claborne v. Hous. Auth. of New Orleans, 2014-1050, pp. 25-26 (La. App. 4 Cir.

4/15/15), 165 So.3d 268, 288.

As indicated earlier, the racing industry is highly regulated by the

Commission. In accordance with laws, regulations, and rules, Fair Grounds

Defendants provide money to HBPA and HBPA pays the owners, trainers, and

jockeys who win quarter-horse and thoroughbred races. HBPA keeps records of

this information and easily compiled the names and addresses of the winners of

quarter-horse races beginning January 1, 2008, through the time of the settlement.

55 HBPA mailed approximately 3,567 notices. USPS returned three or four notices36

as undeliverable. One claimant opted out. Ten class members filed objections.

Approximately 179 class members submitted claim forms.

In Etter v. Hibernia Corp., objectors to a class settlement complained the

notice sent to class members was deficient. 2006-0646, p.12 (La. App. 4 Cir.

2/14/07), 952 So.2d 782, 791. This Court first noted that La. C.C.P. art. 594(A)(2)

requires notice of a settlement to be given in the manner that the court directs.

Etter, 2006-0646, p.12, 952 So.2d at 791. The trial court issued a scheduling order

requiring a notice to be sent to the class members no less than thirty days prior to

the fairness hearing. The parties mailed the notice more than thirty days prior to

the fairness hearing. This Court noted the objectors themselves received notice.

Further, this Court indicated not a single class member sought to extend the time to

object or claimed deprivation of the right to object. This Court determined the

objectors’ complaint about the deficient notice to be without merit. Id.

Likewise, the class members in this case received notice of the proposed

settlement agreement and the date of the fairness hearing. Significantly, no

member of the class requested an extension or otherwise claimed deprivation of the

right to object based on the COVID-19 pandemic or otherwise. Indeed, Appellants

themselves received the notice, complied with the notice by submitting objections

timely, and fully participated in the fairness hearing. There is no evidence that the

failure to set new deadlines and send a new notice violated the due process rights

of any class member. This argument is without merit.

36 As noted previously, Mr. Boulet testified that USPS returned four notices; but in the record before this Court, Exhibit #28 contains only three notices returned as undeliverable.

56 Assignment of Error No. 3 - The Class Notice was Defective

Lastly, in support of the argument the trial court should have vacated the

February 18, 2020 order, Appellants contend the class notice was defective. They

aver that the class notice failed to provide any information concerning the

opposition by a majority of the Plaintiffs; the amount of the disputed purses; the

amount of attorneys’ fees; the fact the court had not ruled on the merits; or the

position of the parties. In support, Appellants reference State v. Sprint Commc’n

Co., L.P., 2003-1264 (La. App. 1 Cir. 10/29/04), 897 So.2d 85, on reh’g (April 6,

2005), writ denied, 2005-1180 (La. 12/9/05), 916 So.2d 1056 and writ denied,

2005-1190 (La. 12/9/05), 916 So.2d 1057 (“Sprint”). However, Appellants cite to

no particular portion of the Sprint opinion.

In response, Fair Grounds Defendants assert the class notice was not

defective. Fair Grounds Defendants note the Sprint court differentiated between

information that must be included and information a trial court should consider for

inclusion in a class notice. Fair Grounds Defendants aver the class notice sent out

in this case was very detailed and included all information required by La. C.C.P.

art. 594.

Fair Grounds Defendants note that Appellants consistently assert that a

majority of the Plaintiffs objected to the proposed settlement agreement. Fair

Grounds Defendants aver that Plaintiffs’ approval to the proposed settlement

agreement is not necessary. Fair Grounds Defendants cite several federal cases in

support of this point. In Charron v. Wiener, 731 F.3d 241, 254 (2d Cir. 2013), the

United States Court of Appeals, Second Circuit, determined:

Finally, to the extent that appellants argue that the rejection of the settlement by all five remaining named class representatives requires its rejection by the Court, we cannot agree. As our sister

57 circuits have noted, the assent of class representatives is not essential to the settlement, as long as the Rule 23 requirements are met. See Elliott v. Sperry Rand Corp., 680 F.2d 1225, 1226, 1228 (8th Cir.1982); Kincade v. Gen.Tire & Rubber Co., 635 F.2d 501, 508 (5th Cir.1981) (“[T]he assent of named plaintiffs is not a prerequisite to the approval of a settlement.” (internal quotation marks omitted)); Laskey v. Int'l Union, 638 F.2d 954, 957 (6th Cir.1981) ( “Accepting a settlement over the objections of the named representatives is not necessarily an abuse of discretion.”); Flinn v. FMC Corp., 528 F.2d 1169, 1174 n. 19 (4th Cir.1975). “Class counsel is supposed to represent the class, not the named parties: that the named parties objected does not prove the settlement was unfair or that the class counsel acted improperly.” Laskey, 638 F.2d at 956. We believe those cases correctly state the law.

731 F.3d 241, 254 (2d Cir. 2013).

Thus, Fair Grounds Defendants aver that the approval of Plaintiffs, whether

a majority or otherwise, was not necessary for the trial court to grant preliminarily

approval of the class settlement.

Likewise, Class Representatives contend that the notice contained all of the

information required by law. The notice defined the class; described the terms of

the proposed settlement agreement; described the payout procedure for past due

claims; informed members of the right to opt-out or object; informed them of the

process to submit a claim; and notified them of the time and place of the fairness

hearing. The notice did not mention attorneys’ fees. Class Representatives note

that Appellees are paying the fees separately from the amount of the settlement.

Further, Class Representatives aver the law does not require that information to be

included.

In Louisiana, class action proceedings are governed by La. C.C.P. art. 591,

et seq. Once a class is certified, the best practicable notice must be provided to the

members of the class. La. C.C.P. art. 592(B)(1). The notice shall include:

(a) A general description of the action, including the relief sought, and the names and addresses of the representative parties or, where

58 appropriate, the identity and location of the source from which the names and addresses of the representative parties can be obtained.

(b) A statement of the right of the person to be excluded from the action by submitting an election form, including the manner and time for exercising the election.

(c) A statement that the judgment, whether favorable or not, will include all members who do not request exclusion.

(d) A statement that any member who does not request exclusion may, if the member desires, enter an appearance through counsel at that member’s expense.

(e) A statement advising the class member that the member may be required to take further action as the court deems necessary, such as submitting a proof of claim in order to participate in any recovery had by the class.

(f) A general description of any counterclaim brought against the class.

(g) The address of counsel to whom inquiries may be directed.

(h) Any other information that the court deems appropriate.

La. C.C.P. art. 592(B)(2).

As this matter involves a proposed settlement or compromise of a class

action, La. C.C.P. art. 594 is implicated. Louisiana Code of Civil Procedure

Article 594(A) mandates notice of the proposed settlement or compromise be

provided to all members of the class in the manner directed by the trial court.

After the class receives notice, then the trial court “shall order a hearing to

determine whether the proposed compromise is fair, reasonable, and adequate for

the class. At such hearing, all parties to the action, including members of the class,

shall be permitted an opportunity to be heard.” La. C.C.P. art. 594(B).

The first requirement is that the notice contain a general description of the

action, including the relief sought and the names and addresses of the

representative parties, or, where appropriate, the identity and location of the source

59 from which the names and addresses of the representative parties can be obtained.

The notice herein provided the title of the action, including the trial court’s docket

number. The notice indicated the Petition claimed Fair Grounds Defendants failed

to pay supplemental purse money from video poker revenue to quarter-horse races

as required by La. R.S. 27:438. The notice averred the Petition claimed HBPA

allowed this to happen. The notice set forth the defenses of Fair Grounds

Defendants: La. R.S. 27:438 does not apply to quarter-horse races, and the

revenues were distributed in accordance to the terms set forth in the condition

books, orders of the Commission, and other Louisiana law, such that the claims

were barred by estoppel. The notice indicated Fair Grounds Defendants disputed

liability. The notice provided the names of the Class Representatives and that the

addresses of the Class Representatives were located in the record.

The second requirement mandates that the notice inform the class members

that they had the right to exclude themselves from the action. The notice herein

included the approved opt-out form and instructed the class members desiring to

exclude themselves that they must complete the opt-out form and return it to

HBPA. The notice included the address for HBPA and provided the deadline to

opt-out.

The third requirement mandates inclusion of a statement that informs the

class they will be bound by the judgment, favorable or not, if they do not opt-out.

The notice herein informed class members if they did not opt-out, the judgment

would be binding on them.

The fourth requirement is inclusion of a statement that a member who does

not opt-out may enter an appearance through counsel. The notice provided that a

member could file an objection through counsel who enrolled in the lawsuit.

60 The fifth requirement is inclusion of a statement advising the member that

they may be required to submit a claim form. The notice herein advised members

who wished to participate in the settlement to return the attached claim form.

Specifically, the notice advised the class members to return the completed form to

HBPA, provided HBPA’s address, and set forth the deadline to submit the claim

form.

The sixth requirement mandates inclusion of any counterclaim brought

against the class. In this instance, Fair Grounds Defendants and HBPA did not file

any counterclaims. Notably, Fair Grounds Defendants had the owners execute the

2019 Stall Agreement that contained a waiver of claims against Fair Grounds

Defendants. The notice therein warned those desiring to opt-out that Fair Grounds

Defendants intended to raise the waiver as a defense in any litigation. While the

warning is a defense and not a counterclaim, the inclusion of the warning speaks to

the thoroughness of the notice.

The seventh requirement is inclusion of the address of counsel to whom the

class member may direct inquiries. The notice herein informed class members they

could direct inquiries to class counsel and provided the addresses and telephone

numbers of class counsel.

The last requirement is inclusion of any other information the court deems

appropriate. In this instance, no one requested the inclusion of other information.

The court did not deem the inclusion of any other information appropriate.

Appellants claimed certain information was required to be included in the

notice pursuant to Sprint. In Sprint, the First Circuit Court of Appeal determined:

Notice required to be sent in a class action must provide the class members with information sufficient to consider the terms of the proposed settlement and determine whether there is a basis for

61 challenging the proposed settlement. See In re Shell Oil Refinery, 155 F.R.D. 552, 558 (E.D.La.1993). Further, notice in a class action should: describe succinctly and simply the substance of the action and the positions of the parties; identify the opposing parties, class representatives, and counsel; indicate the relief sought; explain any special risks of class members, such as being bound by the judgment, while emphasizing that the court has not ruled on the merits of any claims or defenses; and, describe clearly the procedures and deadlines for opting out. Robert H. Klonoff and Edward K.M. Bilich, Class Actions and Other Multi-Party Litigation, p. 393 (West 2000), citing Manual for Complex Litigation (Third), § 30.21 (1995).

2003-1264, pp. 10-11, 897 So.2d at 93 (emphasis added).

Herein, the notice outlined the terms of the proposed settlement agreement.

It informed the members they were eligible for a cash payment for past claims

from the settlement amount of $1,000,000.00. In addition to a cash payment for

past claims, the proposed settlement agreement included guaranteed funds for

future purse supplements. Not only did the parties agree to the purse supplements

for the future, the parties requested the Louisiana Legislature amend existing

legislation adopting the terms of the proposed settlement agreement. As amended,

La. R.S. 27:438 specifies “[t]welve and one-half percent of the monies earned for

such purse supplements shall be used to supplement purses for quarter[-]horse

races at that licensed eligible facility, or as authorized by R.S. 4:147.1,[37] up to a

maximum of one million dollars per state fiscal year.” La. R.S. 27:438(B)(2)(a).

Additionally, Fair Grounds Defendants agreed to increase the number of quarter-

horse racing days from ten to fifteen. The notice informed the class that Fair

Grounds Defendants disputed all liability in the case and set forth numerous

defenses asserted by Fair Grounds Defendants, including: 1) La. R.S. 27:438 does

not allocate funds to quarter-horsemen thus the class should not have received the

37 Louisiana Revised Statutes 4:147.1 is titled “Commission; purse supplements; additional or substitute races and race days; force majeure.”

62 purse supplements described therein; 2) the funds were disbursed to horsemen in

accordance with approved condition books; 3) the funds were disbursed to

horsemen by orders of the Commission; 4) the funds were disbursed to horsemen

in accordance with Louisiana law; and 5) Plaintiffs’ claims were barred by

estoppel. The class members possessed sufficient information regarding the terms

of the proposed settlement agreement and the defenses asserted by Fair Grounds

Defendants to make an informed decision to opt-out, object, submit a claim form,

or do nothing.

Further, the notice herein described the substance of the action and the

positions of the parties; identified the opposing parties, class representatives, and

counsel; indicated the relief sought; explained any special risks of class members,

such as being bound by the judgment; and described clearly the procedures and

deadlines for opting out and objecting. In this instance, the notice did not specify

whether the court had ruled on the merits of the claims or defenses. However,

whether the court ruled on the merits or defenses is not information required by the

class action statutes. Notably, in Sprint, the First Circuit Court of Appeal indicated

that information should be included, not that it must be included in the notice.

2003-1264, pp. 10-11, 897 So.2d at 93. There is no requirement that the notice

include the amount in controversy, reveal that some named plaintiffs oppose the

settlement, specify the number of members in the class, or provide the amount of

attorneys’ fees. Additionally, the public record of this proceeding identified the

disputed amount of video poker purse funds; revealed that the trial court had not

ruled on the merits; demonstrated that some named plaintiffs opposed the

settlement; listed the number of members in the class; and provided the amount of

attorneys’ fees, as well as the fact that the attorneys’ fees are in addition to the

63 settlement amount, i.e., the fees will not reduce the $1,000,000.00 settlement

amount for past due claims.

The notice herein complied with the statutory requirements. HBPA mailed

the notice well in advance of the fairness hearing, which gave every member the

opportunity to consult outside counsel, ask questions of the class counsel, opt-out,

or object. The trial court properly approved the notice of the proposed settlement

agreement. As the trial court did not abuse its discretion, the November 12, 2020

judgment denying the motions to vacate is affirmed.

2021-CA-0049: Appeal of the Trial Court’s Preliminary Approval of the Proposed Settlement Agreement

In this appeal, Appellants seek review of the trial court’s February 18, 2020

order, which granted preliminary approval of the settlement agreement. Appellants

assign five errors:

[1]. The Trial Court erred in granting the “Joint Motion for Preliminary Approval of Settlement Agreement.

[2]. The Trial Court erred in not resetting the deadlines as required by the Governor’s Proclamations and Supreme Court’s Orders in response to COVID-19.

3. The class notice is defective.[38]

4. [Appellees] have failed to dispute the allegations of the petition(s) and therefore the Court is without any evidence from [Appellees] to determine whether there is probable cause to notify the class of the proposed settlement.

5. Issues Raised by Soileau Plaintiffs’ Second Amended Petition Have Never Been Admitted or Denied by [Appellees] as Required by Louisiana Code of Civil Procedure Articles 1001-1006; and Therefore, Have Not Been Addressed by the Court.

38 Appellants did not assign the last three contentions as error or include them as an issue presented for review, but they did include them as major headings in the argument and designated them as numbers three, four, and five. Likewise, Appellees responded to the arguments with corresponding numbers. For consistency, this Court will utilize the numbering of the parties.

64 Each of these is discussed in turn.

Jurisdiction to Consider the February 18, 2020 Judgment

Appellants seek review of the February 18, 2020 judgment, which granted

the “Joint Motion for Preliminary Approval of Class Action Settlement Agreement

and for Related Relief.” The February 18, 2020 order set deadlines to opt-out,

object, and submit a claim form, as well as set a date for the fairness hearing.

Appellees aver that the February 18, 2020 order is interlocutory. Thus, Appellees

contend this Court lacks jurisdiction to consider the merits of the February 18,

2020 order.

We agree the February 18, 2020 order did not determine the merits in whole

or in part. Thus, it is interlocutory and not appealable unless expressly provide by

law. See La. C.C.P. art. 2083(C). The February 18, 2020 order grants preliminary

approval of the class. The class action statutes expressly provide that one may take

a suspensive or devolutive appeal from an order or judgment maintaining a class

action. La. C.C.P. art. 592(A)(3)(c). Nonetheless, Appellants’ arguments

substantively do not address the certification of the class. Thus, La. C.C.P. art. 592

does not provide authority for an express appeal of an interlocutory judgment.

Nonetheless, as indicated previously, while an interlocutory judgment may

not itself be immediately appealable, it is nevertheless subject to review by an

appellate court when an appealable judgment is rendered in the case. Elysian,

Inc., 2020-0674, p.9, 325 So.3d at 1083 (citing People of the Living God, 251 La.

at 947-48, 207 So.2d at 753).

Appellants were not entitled to appellate review of the February 18, 2020

judgment granting preliminary approval of the settlement agreement at the time of

65 the lodging of the appeal in this Court on February 1, 2021, because the judgment

was interlocutory. However, on January 28, 2021, the trial court rendered a final

judgment in this matter. Thereafter, Appellants sought an unrestricted appeal of the

final judgment, and this Court ordered consolidation of the appeals. Thus, this

Court will review the interlocutory judgment, which granted preliminary approval

of the proposed settlement agreement, as part of the unrestricted appeal of the final

judgment rendered January 28, 2021.

This appeal seeks review of the February 18, 2020 order granting

preliminary approval of the settlement agreement. Appellate courts review a trial

court’s decision on a motion for preliminary approval of a class settlement under

the abuse of discretion standard. In Pollard, this Court reviewed a judgment

granting a motion for preliminary approval of a class settlement. Pollard, 2010-

0788, p.10, 102 So.3d 79. This Court determined the following fundamentals

guide the Court’s review of class certification cases:

Furthermore,

“[f]our fundamentals guide our review of class certification cases[:] (1) the standard of our review is abuse of discretion; (2) we are to be guided by the state and federal jurisprudence interpreting Federal Rule 23 and our own law; (3) for purposes of certification, a court is not permitted to review the claims in a case on their substantive merits; and (4) the burden is on the plaintiffs to establish that the statutory criteria for a class certification are met.” Duhe v. Texaco, 2008-0665, p. 3 (La. App. 3d Cir. 12/10/08), 998 So.2d 1220, 1222–1223, citing Duhe v. Texaco, 779 So.2d 1070 [(La. App. 3 Cir. 2/7/01)].

Id.

66 Assignment of Error No. 1 - The Trial Court Erred in Granting the Joint Motion for Preliminary Approval of the Proposed Settlement Agreement

In support of this assignment, Appellants repeat their argument from

assignment of error number one in 2021-CA-0022. Specifically, Appellants

contend that Appellees failed to serve the joint motion as required by La. C.C.P.

art. 2002; La. C.C.P. art. 963; La. C.C.P. art. 1312; and this Court’s decision in

White. Appellants aver that the joint motion and hearing date did not comply with

La. Dist. Ct. Rule 9.8. Thus, Appellants conclude that this Court should reverse

the February 18, 2020 judgment, which granted preliminary approval of the

proposed settlement agreement. Appellants cite no new law or jurisprudence in

support of their argument. For the reasons set forth above, we find this assignment

of error to be without merit.

Assignment of Error No. 2 - The Trial Court Erred in Not Resetting Deadlines Due to COVID-19

In support of this assignment, Appellants reassert the same argument from

assignment of error number two in 2021-CA-0022. Appellants contend that the

trial court erred in not resetting deadlines (to opt-out, etc.) as required by the

Governor’s Proclamations and Supreme Court’s Orders in response to the COVID-

19 pandemic. Appellants contend this Court must vacate the February 18, 2020

order, which granted preliminary approval of the proposed settlement agreement,

due to the failure to reset those deadlines. Appellants cite no new law or

jurisprudence in support of their argument. For the reasons set forth above, we

find this assignment of error to be without merit.

Assignment of Error No. 3 - The Class Notice was Defective

In support of this assignment, Appellants reassert the same argument from

assignment of error number three in 2021-CA-0022. Appellants contend the notice

67 failed to provide an accurate characterization of the matter. Thus, Appellants

conclude the defect in the notice could not be cured by a fairness hearing.

Appellants cite no new law or jurisprudence in support of their argument. For the

reasons set forth above, we find this assignment of error to be without merit.

Assignment of Error No. 4 - The Trial Court Lacked Evidence to Determine There was Probable Cause to Notify the Class of the Proposed Settlement Agreement

In support of this assignment of error, Appellants contend Fair Grounds

Defendants and HBPA did not answer the petition. Appellants aver that the trial

court lacked evidence to determine whether probable cause existed to notify the

class of the proposed settlement agreement. Appellants note that a court must

conduct preliminary approval of the proposed settlement agreement and determine

whether it is within the range of possible approval, or, in other words, whether

probable cause exists to notify the class of the proposed settlement agreement.

Then, the court conducts a fairness hearing wherein the court affords all parties an

opportunity to be heard on the proposed settlement agreement. Appellants insist

that without an answer, the trial court could not determine whether the proposed

settlement agreement was within the range of possible approval. In support,

Appellants cite Horton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 855 F.

Supp. 825 (E.D. N.C. 1994).

Additionally, in the summary of their argument, Appellants contend the trial

court failed to issue an order containing detailed factual findings with respect to the

factors necessary for class certification. Appellants cite La. C.C.P. arts. 591(A),

591(B)(1)(b), and 591(B)(3) in support. Appellants failed to brief this contention

in the “Argument” section of their brief to this court.

68 In their brief, Fair Grounds Defendants submit that Appellants’ claim that

the trial court could not settle the class action absent the filing of an answer is

baseless. Fair Grounds Defendants note that Appellants cited Horton, 855 F.Supp

825. Fair Grounds Defendants argue that nothing in the Horton decision supports

Appellants’ argument. Fair Grounds Defendants contend this matter did not just

“fall in the lap” of the district court. Rather, Fair Grounds Defendants aver that the

parties litigated this matter for six years before the Commission, the district court,

and this Court. Fair Grounds Defendants submit the trial court acquired substantial

knowledge of the claims and defenses of the parties over the years and that a

formal answer would not add anything to the understanding of the trial court in this

matter.

Fair Grounds Defendants aver that the trial court did not err in declining to

produce written detailed factual findings. Fair Grounds Defendants note that

written reasons are required if a party makes a request no later than ten days after

notice of the order. La. C.C.P. art. 592(A)(3)(c). Fair Grounds Defendants assert

no party requested written reasons for the class certification.

Fair Grounds Defendants contend that Appellants’ argument regarding the

February 18, 2020 order is moot. Fair Grounds Defendants submit that the trial

court issued a final judgment on the settlement, which mooted any argument

regarding the preliminary order.

In their response, Class Representatives aver that Fair Grounds Defendants

disputed the claims in every pleading they filed since 2014. Class Representatives

reference the memorandum in support of the exceptions of primary jurisdiction, no

cause of action, and nonjoinder of proper parties-in-interest, which Fair Grounds

Defendants filed in 2014. Therein, Fair Grounds Defendants averred that “[t]he

69 Plaintiffs’ interpretation of the statute governing video poker purse funds is not

only incorrect and contrary to other provisions of Louisiana’s racing law, but

would result in absurdly overfunding quarter horse purses to the great detriment of

thoroughbred purses.”

In Pollard, this Court determined that when considering a motion for

preliminary approval, the trial court “need only ascertain whether there is

‘probable cause’ to notify the class of the proposed settlement and to proceed with

a fairness hearing.” Pollard, 2010-0788, p. 8, 102 So.3d at 78. If the proposed

settlement falls within the range of possible approval, the court may grant

preliminary approval and direct notice of the settlement to the class. Id.

Appellants contend the trial court could not determine probable cause

without an answer on file, citing Horton. In Horton, the court did not imply or

affirmatively state probable cause could not be determined without an answer on

file. This Court found no reported decision that requires a defendant to file an

answer prior to preliminary approval of a class settlement. Significantly, in one

instance, the court found deficiencies and denied the motion for preliminary

approval. Munday v. Navy Fed. Credit Union, unpub., SACV 15-1629-JLS

(KESx), 2016 WL 7655796, at *5 (C.D. Cal. May 26, 2016). The court required

that the parties cure the deficiencies by a certain date and then file a renewed

motion for preliminary approval of a class action settlement. Munday, SACV 15-

1629-JLS (KESx), 2016 WL 7655796, at *5. If the parties failed to file the

renewed motion by the specified date, then the court ordered the defendant to file

an answer or otherwise respond to the complaint. Id. Thus, the court determined it

could grant preliminary approval of the class settlement absent an answer.

70 Moreover, since the filing of the initial petition in 2014, the trial court

presided over numerous hearings. Beginning in 2014, Fair Grounds Defendants, in

various pleadings, set forth the substance of their defenses to the claims. In the

memorandum in support of the exceptions of primary jurisdiction, no cause of

action, and nonjoinder of proper parties-in-interest filed on August 11, 2014, Fair

Grounds Defendants averred that “[t]he Plaintiffs’ interpretation of the statute

governing video poker purse funds is not only incorrect and contrary to other

provisions of Louisiana’s racing law, but would result in absurdly overfunding

quarter-horse purses to the great detriment of thoroughbred purses.” On October

19, 2014, Fair Grounds Defendants filed exceptions to the First Amended Petition.

In their memorandum in support, Fair Grounds Defendants averred that La. R.S.

27:438 passed years before mandatory quarter-horse racing at the Fair Grounds.

Fair Grounds Defendants claimed that if the Louisiana Legislature had intended for

La. R.S. 27:438 to apply to quarter-horse races, the Louisiana Legislature would

have done so specifically. The same trial judge presided over all of the

proceedings in civil district court. The trial court, over a period exceeding six

years, gained knowledge of the defenses to the claims asserted in the petitions

sufficient to determine probable cause.

Appellants cite La. C.C.P. art. 592 in support of their argument that the trial

court did not issue an order containing detailed factual findings. However, no

provision of La. C.C.P. art. 592 required the trial court to set forth detailed factual

findings. Rather, La. C.C.P. art. 592 provides:

If the court finds that the action should be maintained as a class action, it shall certify the action accordingly. If the court finds that the action should not be maintained as a class action, the action may continue between the named parties. In either event, the court shall give in writing its findings of fact and reasons for judgment provided

71 a request is made not later than ten days after notice of the order or judgment.

La. C.C.P. art. 592(A)(3)(c)(emphasis added). Appellants failed to make a request

to the trial court to provide its findings of fact in writing. This assignment of error

Assignment of Error No. 5 - The Trial Court Failed to Address the Issues Raised in the Second Amended Petition

Lastly, Appellants contend Fair Grounds Defendants and HBPA have not

admitted or denied the issues raised in the Second Amended Petition. Appellants

conclude the trial court did not address the issues contained therein. Further,

Appellants aver La. C.C.P. arts. 1001 - 1006 required Fair Grounds Defendants and

HBPA to dispute the issues raised in the Second Amended Petition, including

whether Appellants committed conversion and/or conspired together to commit

conversion; whether Appellants breached a fiduciary duty and/or conspired

together to breach a fiduciary duty; whether Appellants breached a statutory duty

and/or conspired together to breach a statutory duty; and whether Appellants

invaded the business interests of the class and/or conspired together to invade the

business interests of the class.

In response, Fair Grounds Defendants contend that Appellants

mischaracterize La. C.C.P. art. 1004. Fair Grounds Defendants aver that La.

C.C.P. art. 1004 does not deem admitted any allegation that a defendant does not

deny. Rather, Fair Grounds Defendants note that La. C.C.P. art. 1004 provides that

an allegation not denied in an answer is admitted. They note that their voluminous

pleadings state why the claim to thirty-five million dollars is baseless. Further,

Fair Grounds Defendants assert that Appellants failed to cite any case or other

72 legal authority to support their argument that an answer was required before

preliminary approval of the proposed settlement agreement.

Additionally, Fair Grounds Defendants aver the list of “justiciable issues” is

inflammatory and refuted by allegations in Appellants’ own Second Amended

Petition, as well as in publicly available information. For instance, Fair Grounds

Defendants note that Appellants’ claim that Fair Grounds Defendants committed

conversion is a justiciable issue. Fair Grounds Defendants assert that the Second

Amended Petition admitted the disputed funds were disbursed to thoroughbred

horsemen and, inherently, no conversion took place. They also contend the

publicly available information refutes the other justiciable issues. Specifically, Fair

Grounds Defendants note that the publicly available information includes the

orders issued by the Commission to Fair Grounds Defendants and HBPA to

disburse the funds into the thoroughbred meet; the approved condition books for

all races at the Fair Grounds revealing the sources of purse funds; HBPA records

pertaining to the disbursement of the purse funds; and the State and the

Commission audits of the purse funds.

Class Representatives note that the trial court granted the exceptions filed by

Fair Grounds Defendants and Class Representatives in response to the Second

Amended Petition. Class Representatives aver this Court denied Appellants’

application for supervisory writs. Thus, Class Representatives contend they were

not required to answer the Second Amended Petition.

Appellants’ argument is unfounded. The trial court dismissed the Second

Amended Petition. This Court denied Appellants’ application for supervisory

writs. There is no Second Amended Petition for Fair Grounds Defendants or

HBPA to answer or for the trial court to consider. Further, as detailed above, an

73 answer is not required prior to a court granting preliminary approval to a class

settlement. The voluminous record contains sufficient evidence for the trial court

to make a probable cause determination and grant preliminary approval of the

proposed settlement agreement. Our review of the record shows that the trial court

possessed sufficient knowledge of the issues, including an understanding of the

numerous defenses Fair Grounds Defendants intended to assert, to grant

preliminary approval and instruct counsel to notify the class. As the trial court did

not abuse its discretion, the February 18, 2020 judgment granting preliminary

approval of the proposed settlement agreement is affirmed.

2021-CA-0199: Appeal of the Trial Court’s January 28, 2021 Final Judgment Approving the Proposed Settlement Agreement

In this appeal, Appellants seek review of the trial court’s January 28, 2021

final judgment, which followed the fairness hearing on October 7, 2020, and

November 17, 2020, and granted approval to the proposed settlement agreement,

the class, the class representatives, the amount of the settlement, the payout

procedure, and $787,500.00 as reasonable attorneys’ fees and reimbursement of

expenses for class counsel. Appellants assign as error that “[t]he [t]rial [c]ourt

abused its discretion in approving the [proposed] [s]ettlement [a]greement”. They

list seven issues presented for review:

A. Did the trial court err in approving the Settlement Agreement when no Defendant filed an Answer to the allegations and 8 out of 10 original plaintiffs, including class representatives, objected to the Settlement Agreement?

B. Did the trial court err in approving the Settlement Agreement when the Foreman Plaintiffs and Defendants failed to meet their burden showing the Settlement Agreement was in the best interests of the class?

C. Did the trial court err in approving the Settlement Agreement when Notice of Class Settlement was inadequate?

74 D. Did the trial court abuse its discretion by approving the Settlement Agreement when the objection, opt out and opt in deadlines have yet to run?

E. Did the trial court err in approving the Settlement Agreement when the Class Representatives failed to represent the class and fairly and adequately protect the interests of the class and their claims were not typical of the claims of the class as a whole?

F. Did the trial court abuse its discretion by approving the Settlement Agreement when the Soileau Plaintiffs filed their Second Amended Petition?

G. Did the trial court abuse its discretion by approving the Settlement Agreement when the Settlement Agreement is void “ab initio” by its own terms?

We address each issue listed by Appellants in turn.

Jurisprudence has long noted that “[t]he public interest strongly favors the

voluntary settlement of class actions.”39 Hays v. Eaton Grp. Attorneys, L.L.C.,

unpub.,17-88-JWD-RLB (M.D. La. Feb. 4, 2019), 2019 WL 427331 at *8 (quoting

In re Oil Spill by Oil Rig Deepwater Horizon in Gulf of Mexico, on April 20, 2010,

(E.D. La. 2012), 910 F.Supp.2d 891, 930, aff’d sub nom., In re Deepwater

Horizon, 739 F.3d 790 (5th Cir. 2014)). “Because the public interest strongly

39 In the concurring opinion in Orrill, it was noted: One reason that class action settlements are favored, by way of example, is that “[i]n Orleans Parish, the Civil District Court has seen on average more than 20,000 suits per year over the last decade with an upward trend.” [Lambert, supra, at 127] at n.7. As an inevitable result, “[e]ven one large class action suit . . . can forestall justice to literally thousands of litigants in these over-burdened state trial courts, as well as consume an inordinate amount of appellate court resources.” Id. (citing Dawn M. Barrios, The Long and Winding Road for Spitzfaden, Louisiana’s Breast Implant Class Action: Ad Astra per Aspera, 74 TUL. L.REV.1941 (2000)).

Orrill v. AIG, Inc., 2009-0888, p.16 (La. App. 4 Cir. 4/21/10), 38 So.3d 457, 467- 68 (Belsome, J., concurring).

75 favors the voluntary settlement of class actions, there is a strong presumption in

favor of finding the settlement fair, reasonable and adequate.” Hays, 2019 WL

427331 at *8 (quoting In re Oil Spill, 910 F.Supp.2d at 930-31). Thus, an

appellate court may not overturn a trial court’s approval of a proposed settlement

absent an abuse of discretion. Orrill, 2009-0888, p.11, 38 So.3d at 464 (citing

Reed, 703 F.2d at 172).

Issue (A) - The Trial Court Erred in Approving the Settlement Because No Defendant Filed an Answer

Appellants contend courts utilize a two-step approach in approving a class

settlement. In support, Appellants cite Armstrong v. Board of School Directors of

City of Milwaukee, 616 F.2d 305, 312 (7th Cir. 1980).40 Therein, the United States

Court of Appeals, Seventh Circuit, indicated a court must first determine whether

the proposed settlement is within the range of possible approval or whether there is

probable cause to notify the class of the settlement. Armstrong, 616 F.2d at 314.

If the court finds the settlement is within the range of possible approval, the court

allows the parties to notify the class of the settlement and holds a fairness hearing,

at which all interested parties have the opportunity to be heard, before the court

determines whether the settlement is fair, reasonable, and adequate. Id.

Appellants contend the trial court could not determine whether the proposed

settlement agreement was within the range of possible approval or whether

40 Armstrong was overruled on other grounds in Felzen v. Andreas, 134 F.3d 873 (7th Cir.1998), aff’d sub nom. California Pub. Employees’ Ret. Sys. v. Felzen, 525 U.S. 315; 119 S.Ct. 720; 142 L.Ed.2d 766 (1999)(overruling the portion of Armstrong allowing a nonparty to appeal from a decision in a class action). Appellants also cite In Re Mid-Atlantic Toyota Antitrust Litig., 564 F. Supp. 1379, 1384 (D. Md. 1983) in support.

76 probable cause existed to notify the class of the proposed settlement agreement

because no defendant filed an answer. In support of this proposition, Appellants

again cite Horton.

Further, Appellants repeat the assertion that the trial court did not issue

specific and detailed factual findings regarding the preliminary approval of the

proposed settlement agreement. In support, Appellants again cite La. C.C.P. art.

592.

Appellants contend the trial court could not supply the affirmative defenses

for Appellees. For this point, Appellants cite Dofflemyer v. Gilley, 384 So.2d 435

(La. 1980) and Prestenbach v. Sentry Insurance Co., 340 So.2d 1331 (La. 1976).

They cite to no particular portion of the cases.

In support of this argument, Appellants again contend that a defendant shall

file an answer, in which the defendant must admit or deny each allegation in the

petition. They further assert that if the defendant fails to admit or deny an

allegation in the petition, the allegation is treated as admitted. Appellants cite to

La. Civil Law Treatise, Civil Proc., §6.9. Appellants argue that Appellees are

attempting to settle the lawsuit when the court has not considered the claims that

Fair Grounds Defendants and HBPA committed conversion, conspiracy, breach of

fiduciary duties, breach of statutory duties, and invasion of the business interests of

Plaintiffs.

In response, Fair Grounds Defendants aver nothing in Horton supports

Appellants’ argument that an answer is required for a trial court to grant

preliminary approval of a proposed class settlement.41 Fair Grounds Defendants

41 On June 10, 2021, HBPA filed a motion to adopt the brief filed by Fair Grounds Defendants.

77 note the parties have litigated this matter for over six years before the Commission,

the district court, and this Court. Fair Grounds Defendants aver the voluminous

record provided the trial court with ample knowledge of the issues in this matter to

determine whether the settlement is within the range of possible approval.

Fair Grounds Defendants contend the trial court was not required to issue

written reasons. Fair Grounds Defendants note written findings are required when

a party requests those findings within ten days after the notice of the order or

judgment, as provided in La. C.C.P. art. 592(A)(3)(c). Fair Grounds Defendants

aver that Appellants failed to make such a request.

Fair Grounds Defendants argue the trial court could issue final approval of

the class settlement absent an answer. They note that Appellants cited no law or

jurisprudence in support of their argument. Further, Fair Grounds Defendants aver

the trial court received pre- and post- trial briefs addressing the merits, including

defenses, and possessed sufficient information and evidence to determine whether

the proposed settlement agreement was fair.

Fair Grounds Defendants next assert that Appellants misstate the wording of

La. C.C.P. art. 1004. Specifically, Fair Grounds Defendants note that La. C.C.P.

art. 1004 provides that allegations that are not denied in the answer are deemed

admitted. They argue that nothing in La. C.C.P. art. 1004 supports Appellants’

contention that allegations are admitted absent an answer.

Fair Grounds Defendants aver the trial court did not supply affirmative

defenses to Fair Grounds Defendants and HBPA. Fair Grounds Defendants note

the fairness hearing did not lead to a ruling on the merits. Rather, Fair Grounds

Defendants explain that the trial court considered the legal issues and the evidence

78 presented at the fairness hearing to determine whether the proposed settlement

agreement was fair. They contend that Appellants had every opportunity to present

evidence to contradict or refute the defenses asserted in the pleadings but failed to

do so.

Fair Grounds Defendants aver that Appellants failed to cite any law or

jurisprudence to support their argument that the trial court lacked authority to

approve the proposed settlement agreement because the trial court never

considered “justiciable issues,” such as whether Fair Grounds Defendants

committed conversion. Additionally, Fair Grounds Defendants argue that

Appellants possessed the opportunity to present evidence and testimony at the

fairness hearing that they believed the trial court should consider. Fair Grounds

Defendants note the testimony presented by Appellants consisted of the objectors

wanting more money.

Likewise, Class Representatives note the cases relied on by Appellants do

not hold that a defendant must file an answer to settle a case. Class

Representatives note that Fair Grounds Defendants and HBPA have sought

outright dismissal by filing various exceptions. Further, Class Representatives

note that Fair Grounds Defendants set forth various defenses in the memorandum

filed to support their exceptions. Additionally, Class Representatives aver the trial

court was not required to analyze the merits of the claims asserted in the Second

Amended Petition.

As we determined earlier, the Horton court did not imply or affirmatively

state probable cause could not be determined without an answer on file. The

Horton court indicated:

79 First, the court conducts a preliminary approval or pre- notification hearing to determine whether the proposed settlement is “within the range of possible approval” or, in other words, whether there is “probable cause” to notify the class of the proposed settlement. . . . [A]ssuming that the court grants preliminary approval and notice is sent to the class, the court conducts a “fairness” hearing, at which all interested parties are afforded an opportunity to be heard on the proposed settlement. The ultimate purpose of the fairness hearing is to determine if the proposed settlement is “fair, reasonable, and adequate.”

Horton, 855 F.Supp. at 827.

As previously noted, the Munday court determined it could grant preliminary

approval of the class settlement absent an answer. Munday, SACV 15-1629-JLS

(KESx), 2016 WL 7655796, at *5. Further, as we earlier stated, the trial court

possessed a plethora of pleadings to determine probable cause in this case.

Appellants point to the trial court’s reasons for judgment wherein the trial

court indicated that it had considered the complete legal and factual issues.

Appellants conclude the trial court could not consider the complete legal and

factual issues without an answer on file or deposition testimony. However, as

detailed above, the trial court possessed sufficient information regarding the

defenses of Fair Grounds Defendants and HBPA.42

42 Further, the procedural posture of the case indicates that Fair Grounds Defendants sought to have the case dismissed outright by its exceptions and still had a pending exception (the exception of nonjoinder) at the time of the proposed settlement agreement. Based on the procedural posture of the case, Fair Grounds Defendants were not required to file an answer until resolution of the exception. Louisiana Code of Civil Procedure Article 1001 is titled “Delay for Answering” and provides:

A defendant shall file his answer within fifteen days after service of citation upon him, except as otherwise provided by law.

When an exception is filed prior to answer and is overruled or referred to the merits, or is sustained and an amendment of the petition ordered, the answer shall be filed within ten days after the exception is

80 Appellants’ contention that no depositions were taken is confounding

because there is no evidence in the record that Appellants sought to take a single

deposition in the six-plus months between the trial court’s February 18, 2020 order

and the October 7, 2020 fairness hearing. Further, there is no requirement that the

parties take depositions prior to approval of a settlement agreement.

Appellants assert that a defendant shall file an answer and admit or deny

each allegation in the petition. They claim that if a defendant fails to admit or deny

an alleged fact in the petition, the fact is treated as admitted. Appellants cite the

Louisiana Civil Law Treatise in support.

Chapter Five of the Louisiana Code of Civil Procedure, which includes

Articles 1001 - 1006, is titled “Answer.” In particular, La. C.C.P. art. 1004

provides, in pertinent part, that “[t]he answer shall admit or deny the allegations of

fact contained in each paragraph of the petition, and all such allegations, other than

those as to the amount of damages, are admitted if not denied in the answer.” The

plain language of the article does not support Appellants’ contention that the

allegations are deemed admitted absent an answer. Rather, the article clearly

provides the allegations are admitted if not denied in the answer.

Appellants submit the trial court did not consider whether Fair Grounds

Defendants and HBPA committed conversion, conspiracy, breach of fiduciary

duties, breach of statutory duties, and invasion of the business interests of

overruled or referred to the merits, or ten days after service of the amended petition.

The court may grant additional time for answering.

(Emphasis added.)

81 Plaintiffs. Significantly, the trial court conducted the required fairness hearing

during which Appellants possessed the opportunity to present evidence and

testimony. Appellants submitted no testimony or evidence to support their claims

that Fair Grounds Defendants and HBPA committed conversion, conspiracy,

breach of fiduciary duties, breach of statutory duties, and invasion of the business

interests of Plaintiffs. The trial court considered the testimony and evidence

presented at the fairness hearing. As will be discussed in more detail later in this

Opinion, the trial court considered the required factors prior to determining the

proposed settlement agreement was fair, reasonable, and adequate. This argument

is without merit.

Issue (B) - Appellees Failed to Prove the Proposed Settlement Agreement was in the Best Interests of the Class

Appellants aver a compromise must be fair, reasonable, and adequate for the

class, citing La. C.C.P. art. 594(B). Appellants contend in order to determine

whether a compromise is fair, reasonable, and adequate, the court must consider

the factors found in the concurring opinion in Orrill, 2009-0888, p.16, 38 So.3d at

470 (Belsome, J., concurring). Appellants list those factors as:

(1) The existence of fraud or collusion behind the settlement;

(2) The complexity, expense, and likely duration of the litigation;

(3) The stage of the proceedings and the amount of discovery

conducted;

(4) The probability of Plaintiff’s success on the merits;

(5) The range of possible discovery;[43]

43 Note that in Orrill, 2009-0888, p.16, 38 So.3d at 470 (Belsome, J., concurring), this factor is listed as “range of possible recovery”; however, in their brief to this

82 (6) The opinions of class counsel, class representatives, and absent

class members;

(7) The risks of establishing damages;

(8) The ability of the defendants to withstand a greater judgment;

and

(9) The range of reasonableness of the settlement fund in light of

[the] best possible recovery.44

(1) The existence of fraud or collusion behind the settlement

Appellants conclude that the settlement is attorney-driven. They aver that

Class Representatives were uninformed as to their own claims. In particular,

Appellants point to the number of class members not participating in the

settlement. Appellants contend, therefore, that the optics reflect negatively on the

reasons for the push of the proposed settlement.

(2) The complexity, expense, and likely duration of the litigation

Appellants contend the case is not complex and merely involves whether

Fair Grounds Defendants owe the class $35,820,731.00. Additionally, Appellants

assert the parties conducted little discovery and normal discovery would allow for

expeditious resolution of the matter.

Court, Appellants list this factor as “range of possible discovery” and brief it as such. 44 In actuality, the concurrence mentioned the six factors found in in Reed v. General Motors Corporation, 703 F.2d 170, 172 (5th Cir. 1983) and the nine factors found in Girsh v. Jepson, 521 F.2d 153, 156 (3d Cir. 1975). Orrill, 2009- 0888, p.16, 38 So.3d at 470 (Belsome, J., concurring). Appellants themselves combined the factors in their brief to this Court.

83 (3) The stage of the proceedings and the amount of discovery completed

Appellants insist that Fair Grounds Defendants and HBPA have not filed an

answer and that the parties only conducted limited discovery. Further, Appellants

assert no dispositive motions have been filed since 2018.

(4) The probability of plaintiffs’ success on the merits

Appellants note that Evangeline Downs conducts racing and has video poker

machines. Additionally, Appellants aver Evangeline Downs pays the video poker

purse supplement in accordance with La. R.S. 27:438. Further, Appellants submit

discovery would bolster the likelihood of success on the merits.

(5) The range of possible discovery

Appellants contend glaring questions remain that could be addressed through

rudimentary discovery, such as the specifics of insurance coverage; who decided to

skip funding the quarter-horse meet; the role of the then-executive director of

HBPA, Mr. Alfortish; and whether Fair Grounds Defendants obtained permission

from the Commission or the Louisiana Legislature in 2008 to “‘skip over’ the

[q]uarter[-h]orse meet rather than pay the purses like Evangeline Downs does . . .

.”

(6) The opinions of class counsel, class representatives, and absent class members

Appellants assert that Class Representatives called witnesses who supported

the proposed settlement agreement. However, Appellants aver the failure of these

witnesses to file a claim defeats their contention. In particular, Appellants point to

the testimony of Mr. Salaid, the executive director of LQHBA, who stated that

LQHBA encouraged members to support the proposed settlement agreement.

Appellants also note that as an owner, Mr. Salaid was eligible to file a claim but

84 did not. Appellants conclude that Mr. Salaid’s failure to file a claim indicates that

he did not support the proposed settlement agreement.

Additionally, Appellants assert Mr. Roberts and Mrs. Foreman likewise

claimed to support the proposed settlement agreement but did not file a claim

properly.

In further support of their argument that the proposed settlement agreement

does not meet this factor, Appellants aver Mr. Lavergne stated he no longer

supported the proposed settlement agreement because he believed it was not close

to what was owed and he would not benefit from additional races as he retired

from riding as a jockey. Appellants note Mr. Watson and Mr. Munacy likewise do

not support the proposed settlement agreement because it does not provide enough

money and they want to continue the litigation. Appellants state Mr. Brossette

opposed the proposed settlement agreement because he believed the amount was

insufficient and he did not believe a cap should exist on future amounts.

Appellants conclude that Class Representatives failed to submit evidence to

prove the proposed settlement agreement was fair, reasonable, or adequate.

Additionally, Appellants assert that their witnesses proved the settlement is unfair,

unreasonable, and inadequate.

(7) The risks of establishing damages

Appellants assert the calculation of damages has not been contested. They

contend whether Fair Grounds Defendants and/or HBPA is liable for

$35,820,731.00 is a question for the judge or jury.

85 (8) The ability of the defendants to withstand a greater judgment

Appellants note that Fair Grounds Defendants and HBPA did not file an

answer. Thus, Appellants aver any evidence, testimony, or pleading which

questions Appellees’ ability to withstand a greater judgment is not proper.

(9) The range of reasonableness of the settlement fund in light of the best

possible recovery

Appellants contend the proposed settlement agreement would potentially

pay 3% of the amount of the current undisputed video poker purse funds. They

submit the proposed settlement agreement caps future video poker funds at one

million per year. In conclusion, Appellants argue that the range of settlement funds

is not reasonable considering the amount owed.

In their brief, Fair Grounds Defendants contend the trial court is to

determine whether a settlement is fair, reasonable, and adequate, citing In re

Corrugated Container Antitrust Litig., 643 F.2d 195, 212 (5th Cir. 1981). To

determine whether a settlement is fair, reasonable, and adequate, Fair Grounds

Defendants submit the trial court considers the six factors enunciated in Reed:

(1) [T]he existence of fraud or collusion behind the settlement;

(2) [T]he complexity, expense, and likely duration of the litigation;

(3) [T]he stage of the proceedings and the amount of discovery

completed;

(4) [T]he probability of plaintiffs’ success on the merits;

(5) [T]he range of possible recovery; and

(6) [T]he opinions of class counsel, class representatives, and absent class

members.

Reed, 703 F.2d at 172.

86 1) No existence of fraud or collusion behind the settlement

Fair Grounds Defendants assert Appellants did not allege, and did not

establish, fraud or collusion behind the proposed settlement agreement. Fair

Grounds Defendants note that Class Representatives expressed an understanding of

the proposed settlement agreement and the reasons it was beneficial to the class.

Fair Grounds Defendants aver that Appellants claim that Class Representatives

were uninformed and the proposed settlement agreement was attorney-driven, but

failed to cite to any portion of the record to support the allegations. To the

contrary, Fair Grounds Defendants note that Class Representatives expressed an

understanding of the proposed settlement agreement and the reasons that it was

beneficial to the class. Regardless, Fair Grounds Defendants contend the false

allegations do not suggest fraud or collusion.

2) The litigation is complex; continued litigation would be costly and time- consuming

Fair Grounds Defendants argue the case raised numerous complex issues,

including whether the Commission possessed jurisdiction; whether Plaintiffs had a

right of action; whether the claims are prescribed; whether the claims are barred by

the Commission’s orders directing the funds be distributed to the thoroughbred

races; whether La. R.S. 27:438 provides a civil remedy; whether the claims were

barred by the releases claimed in the 2019 Stall Agreement; and whether Plaintiffs

had to join the thoroughbred horsemen who received the funds.

Further, Fair Grounds Defendants argue the case requires interpretation of

racing and gaming law and regulations. In support of their argument, Fair Grounds

Defendants cite Louisiana Division of Horsemen’s Benevolent & Protective

Association v. Louisiana State Racing Commission, 391 So.2d 589 (La. App. 4 Cir.

87 1980), writ not considered sub nom., Louisiana Division of Horsemen’s Benevolent

& Protective Association v. Louisiana State Racing Commission, 397 So.2d 1362

(La. 1981). Therein, this Court recognized that the Louisiana Legislature granted

the Commission the “broadest power possible” over the racing industry. Id.

Fair Grounds Defendants contend resolution of the remaining issues would

have required years more of litigation, in various forums, at a considerable

expense.

3) The stage of the proceedings and the amount of discovery completed support a finding the proposed settlement agreement was fair

Fair Grounds Defendants aver this factor considers whether the parties have

a full understanding of the legal and factual issues at the time the agreement is

reached, citing Manchaca v. Chater, 927 F. Supp 962, 967 (E.D. Tx. 1996). In

support, Fair Grounds Defendants further note a great amount of time on formal

discovery is not required, citing In re Corrugated Container Antitrust Litigation,

643 F.2d at 211. Additionally, they cite In re Educ. Testing Serv. Praxis Principles

of Learning & Teaching, Grades 7 - 12 Litig., 447 F.Supp.2d 612 (E.D. La. 2006).

Therein, the court indicated that if the plaintiff has “taken affirmative steps to

gather data on the claims at issue, and the terms of the settlement or settlement

negotiations are not patently unfair, the Court may rely on counsel’s judgment that

the information gathered was enough to support a settlement.” In re Educ. Testing

Serv. Praxis Principles of Learning & Teaching, Grades 7 - 12 Litig., 447

F.Supp.2d at 620.

Fair Grounds Defendants contend that Plaintiffs filed the petition over seven

years ago, numerous other pleadings have been filed, and the parties engaged in

88 extensive discovery. Accordingly, Fair Grounds Defendants submit additional

discovery would not lead to new “facts” being discovered.

4) The probability of plaintiffs’ success on the merits is slight

Fair Grounds Defendants note their brief in support filed in the trial court

detailed numerous reasons why Appellants would have little chance of success on

the merits.45 In particular, Fair Grounds Defendants aver that Appellants failed to

address the merits of any of their asserted defenses. Additionally, Fair Grounds

Defendants note that Appellants misinterpret La. R.S. 27:438 and that their

interpretation would lead to an absurd result. Further, Fair Grounds Defendants

contend La. R.S. 27:438 provides no civil remedy; Appellants’ claims are barred

by prescription; the Commission ordered funds be distributed to the thoroughbred

meet; many in the class signed the 2019 Stall Agreement containing a waiver of

the claims; and the owners, trainers, and jockeys accepted the purse listed in the

condition books by entering and riding horses in the races set forth in the condition

books. Fair Grounds Defendants contend the owners, trainers, and jockeys are thus

estopped from asserting entitlement to purses not listed in the condition books.

Fair Grounds Defendants note the only argument on the merits set forth by

Appellants is that Evangeline Downs paid video poker purse supplements.

However, Fair Grounds Defendants aver Evangeline Downs is not paying video

poker purse supplements in the manner provided by La. R.S. 27:438. Rather,

according to Fair Grounds Defendants, Evangeline Downs pays video poker purse

supplements 70% to thoroughbreds and 30% to quarter-horses, and Evangeline

Downs follows the split set forth in the slot machine statute. Fair Grounds

45 Fair Grounds Defendants refer to the Brief in Support of Final Approval and the Reply to Objection to Fairness Hearing.

89 Defendants note the slot machine statute specifically references thoroughbreds and

quarter-horses but La. R.S. 27:438 lacks such a reference.

5) The range of possible recovery supports a finding the settlement is fair

In support of satisfaction of this factor, Fair Grounds Defendants cite In re

Heartland Payments Sys., Inc. Customer Data Sec. Breach Litig., 851 F.Supp.2d

1040 (S.D. Tex. 2012). Therein, the court indicated this factor requires a court to

“establish the range of possible damages that could be recovered at trial and, then,

by evaluating the likelihood of prevailing at trial and other relevant factors,

determine whether the settlement is pegged at a point in the range that is fair to the

plaintiff settlors.” In re Heartland Payments Sys., Inc. Customer Data Sec. Breach

Litig., 851 F.Supp.2d at 1067 (quoting In Re Corrugated Container Antitrust Litig.,

643 F.2d. 195, 213 (5 Cir. 1981)).

Fair Grounds Defendants argue that Appellants failed to provide a range of

recovery or refute the numerous bars to recovery. Instead, Fair Grounds

Defendants note that Appellants set forth questions that do not relate to the range

of possible recovery. Further, Fair Grounds Defendants aver that in Appellants’

brief to this Court, they raise an issue as to the former executive director of HBPA,

Mr. Alfortish. Fair Grounds Defendants argue that Appellants did not refer to Mr.

Alfortish in the trial court proceedings and may not raise an issue concerning Mr.

Alfortish for the first time on appeal.

6) The opinions of class counsel, class representatives, and absent class members support a finding the settlement is fair

Fair Grounds Defendants note class counsel support the proposed settlement

agreement, as do Class Representatives. Specifically, Fair Grounds Defendants

explain that both Mrs. Foreman and Mr. Roberts testified in support of the

90 proposed settlement agreement. Further, Fair Grounds Defendants contend Mrs.

Foreman filed a claim that HBPA deemed timely. Fair Grounds Defendants aver

Mr. Roberts did not file an individual claim, but is participating in the settlement

through the claim filed for his partnership with Jumonville Farms. Additionally,

Fair Grounds Defendants contend there is no requirement that Class

Representatives participate in a settlement because the consideration for the court

is whether the settlement is fair and adequate to the class as a whole.

Next, Fair Grounds Defendants submit the evidence demonstrated the absent

class members support the proposed settlement agreement. They note HBPA

mailed 3,567 notices, and the USPS returned three or four as undeliverable. Fair

Grounds Defendants submit HBPA received 179 claim forms representing 250

accounts timely. The value of the claims totaled $4,610,062.00. Fair Grounds

Defendants also note HBPA deemed twenty-six claim forms representing thirty-

three accounts incomplete. In contrast, Fair Grounds Defendants point out that the

clerk of court received only one opt-out form timely, along with two incomplete

opt-out forms. The value of the claim of the individual who opted out totaled

$12,968.49. Further, Fair Grounds Defendants note HBPA received only ten

objections with a value of $534,434.56.

The Fair Grounds defendants point to the testimony of Mr. Salaid, the

Executive Director of LQHBA, and Mr. Robichaux, the President of LQHBA.

Both Mr. Salaid and Mr. Robichaux testified in support of the proposed settlement

agreement. Mr. Robichaux specified the proposed settlement agreement was

“very, very beneficial to us.”

Fair Grounds Defendants also point to the witnesses called by Appellants.

Specifically, Fair Grounds Defendants note Mr. Lavergne and Mr. Watson are

91 jockeys, not horsemen pursuant to La. R.S. 4:143. Thus, Fair Grounds Defendants

contend Mr. Lavergne and Mr. Watson are not entitled to receive purse funds.

Rather, Fair Grounds Defendants submit the owners pay the jockeys from the

owners’ purse proceeds and inherently represent the jockeys.

Additionally, Fair Grounds Defendants contend Mr. Lavergne signed the

proposed settlement agreement and did not file an objection to the proposed

settlement agreement. Fair Grounds Defendants aver the doctrine of estoppel

prevents Mr. Lavergne from objecting to the proposed settlement agreement that

he signed. In support, Fair Grounds Defendants cite Lowman v. Merrick, 2006-

0921 (La. App. 1 Cir. 3/23/07), 960 So.2d 84. Therein, the court explained:

[T]he doctrine of judicial estoppel prohibits parties from deliberately changing positions according to the exigencies of the moment. The doctrine is intended to prevent the perversion of the judicial process and prevents “playing ‘fast and loose with the courts.’” New Hampshire v. Maine, 532 U.S. 742, 750, 121 S.Ct. 1808, 1814-1815, 149 L.Ed.2d 968 (2001) (quoting Stretch v. Watson, 6 N.J.Super. 456, 469, 69 A.2d 596, 603 (1949), rev'd in part, 5 N.J. 268, 74 A.2d 597 (1950)).

Lowman, pp.12-13, 960 So.2d at 92.

Fair Grounds Defendants argue even if the trial court considered Mr.

Lavergne’s objection, he and the others testified they should receive the money

owed to them. Fair Grounds Defendants contend no settlement pays everything,

especially in a case where the claims are legally and factually baseless.

Additionally, Fair Grounds Defendants note that Appellants did not complain

about the purses at the time of the race. Further, Fair Grounds Defendants argue

that Appellants did not explain why they did not opt-out of the settlement if they

did not like the terms.

92 Fair Grounds Defendants aver the fact that ninety percent or more of the

class members did not file a claim does not establish that those class members

disapproved of the proposed settlement agreement. Rather, Fair Grounds

Defendants contend the failure to submit a claim more likely reflects indifference

or disagreement with the position of the Appellants. That is, Fair Grounds

Defendants suggest the industry standard is to enter a race based on the condition

book and accept the purse offered therein. Further, Fair Grounds Defendants note

the response rate is within, and even above, the range of responses in other class

action cases where the court found a settlement to be fair, adequate, and

reasonable. They cite several cases in support including Duncan v. JPMorgan

Chase Bank N.A., SA-14-CA-00912-FB, 2016 WL 4419472 *6 (W.D. Tex.

5/24/16)(22.8% response rate determined to be “extremely high participation

rate”); In re Pool Products Distribution Mkt. Antitrust Litig., MDL 2328, 2015 WL

3486434 *7 (E.D. La. 6/2/15)(settlement approved with 2.3% response rate); and

Touhey v. United States, EDCV 08-01418-VAP, 2012 WL 3179036 *7 (C.D. Cal.

7/25/11)(2% response rate deemed muted but positive and weighed in favor of

approval of settlement).

In their brief, Class Representatives first note the duty owed by class counsel

is to the class and not to the special desires of named plaintiffs. Parker v.

Anderson, 667 F.2d 1204, 1211 (5th Cir. 1982). “It has been held that agreement of

the named plaintiffs is not essential to approval of a settlement which the trial court

finds to be fair and reasonable.” Parker, 667 F.2d at 1211. “[T]he named

plaintiffs should not be permitted to hold the absentee class hostage by refusing to

assent to an otherwise fair and adequate settlement in order to secure their

individual demands.” Id.

93 Similar to Fair Grounds Defendants, Class Representatives submit the trial

court considers the six factors enunciated in Reed. Class Representatives contend

application of the six factors support approval of the settlement.

1) No existence of fraud or collusion behind the settlement

Class Representatives aver the record proves the length and veracity of the

litigation. They note the parties fought various issues in three forums over

numerous years prior to reaching a proposed settlement agreement.

2) The complexity, expense, and likely duration of the litigation

Class Representatives note the purpose of settlement is to avoid the delay

and uncertainty of trial, citing Jenkins v. Trustmark National Bank, 300 F.R.D.

291, 303 (S.D. Miss. 2014). They aver significant uncertainty exists regarding the

ultimate interpretation of La. R.S. 27:438. Further, Class Representatives note

issues regarding the 2019 Stall Agreement and the exception of nonjoinder remain.

3) The stage of the proceedings and the amount of discovery completed

Class Representatives note the jurisprudence requires that counsel have an

adequate appreciation of the merits before negotiating, citing Moore v. Halliburton

Co., 2004 WL 2092019 at *7 (N.D. Tex. 9/9/04). “The law is clear that early

settlements are to be encouraged, and accordingly, only some reasonable amount

of discovery should be required to make these determinations.” Ressler v.

Jacobson, 822 F.Supp. 1551, 1555 (M.D. Fla.1992).

Additionally, Class Representatives submit class counsel engaged in a

reasonable amount of discovery. In particular, Class Representatives note the

parties filed over 150 pleadings in the various forums. Hence, Class

Representatives conclude class counsel possessed an adequate appreciation of the

merits prior to engaging in settlement negotiations.

94 4) The probability of plaintiffs’ success on the merits

Under this factor, Class Representatives note several risks are associated

with continuing the litigation and not settling. Specifically, Class Representatives

contend the risks arise due to the uncertainty of the interpretation of La. R.S.

27:438; the difficulty in maintaining a class given the waiver contained in the 2019

Stall Agreement; the difficulty in claims for future purse supplements if Fair

Grounds Defendants succeed in moving the race dates; a delay caused by Fair

Grounds Defendants’ pending exception of nonjoinder; and the difficulty in

proceeding before the Commission that ordered Fair Grounds Defendants to pay

the video poker purse supplement funds to the thoroughbred meet.

Class Representatives contend the litigation will continue for several years

absent the proposed settlement agreement. Considering the risks, factually and

legally, Class Representatives aver the settlement is fair. In support, Class

Representatives cite Bennett v. Behring Corp., 96 F.R.D. 343 (S.D. Fla. 1982),

aff’d, 737 F.2d 982 (11th Cir. 1984). Therein, the court noted the plaintiffs faced a

myriad of factual and legal problems. Bennett, 96 F.R.D. at 349. The court found

“the likelihood of success on the merits in this case is very low. It would seem

unwise, therefore, to risk the substantial benefits which the settlement confers upon

the class to the vagaries of a trial.” Id., 96 F.R.D. at 350.

5) The range of possible recovery

Class Representatives cite Parker in support of their argument under this

factor. In Parker, the court indicated a proposed settlement may amount to a

fraction of the potential recovery and not be grossly inadequate and subject to

disapproval. Parker, 667 F.2d at 1209-1210, fn.6 (quoting City of Detroit v.

Grinnett Corp., 495 F.2d 448, 455 (2d Cir. 1974)). “In fact there is no reason, at

95 least in theory, why a satisfactory settlement could not amount to a hundredth or

even a thousandth part of a single percent of the potential recovery.” Id. (quoting

City of Detroit, 495 F.2d at 455, n.2).

In particular, Class Representatives note the petition asserted claims for past

due and future funds. They contend that Fair Grounds Defendants asserted

numerous defenses to the past due funds of $35,820,731.00. Additionally, Class

Representatives admit the settlement agreement provides one million dollars to

satisfy past due claims.

As for the future, Class Representatives note that Fair Grounds Defendants

sought to move the dates of the quarter-horse meet. If successful, there would be

no video poker purse supplemental funds for quarter-horse meets according to

Appellants’ interpretation of La. R.S. 27:438. The proposed settlement agreement

guarantees 12.5% of the video poker funds, up to one million dollars, indefinitely,

regardless of the quarter-horse race dates. Further, the proposed settlement

agreement provides five additional days of racing for quarter-horses.

6) The opinions of class counsel, class representatives, and absent class members

Class representatives note the jurisprudence provides the opinion of class

counsel should be accorded great weight when the court evaluates a proposed

settlement, citing Klein v. O’Neal, Inc., 705 F.Supp.2d 632, 649 (N.D. Tex. 2010).

In particular, Class Representatives observe that class counsel argued in favor of

the proposed settlement agreement in the memorandum in support of settlement

filed on September 21, 2020, in which they opine no better result is available

through litigation. Class Representatives also point to their own testimony in

support of the proposed settlement agreement.

96 7. Fairness of attorneys’ fees

In their discussion regarding this factor, Class Representatives acknowledge

that Appellants did not directly challenge the amount of attorneys’ fees on appeal.

As the court retains authority to review and approve attorneys’ fees pursuant to La.

C.C.P. art. 594, Class Representatives contend the attorneys’ fees are fair

considering the amount of money involved, the skill of the attorneys, and the

amount of work necessarily undertaken, citing Jungeblut v. Parish of Jefferson,

485 So.2d 974, 979 (La. App. 5 Cir. 1986). Class Representatives aver class

counsel worked over 1,650 hours since 2014 and expended $34,000.00 in costs.

Further, Class Representatives contend the amount of the attorneys’ fees,

$787,500.00, will not be paid from the settlement; rather, it is in addition to the

settlement funds.

We note court approval is necessary to compromise or settle a class action.

La. C.C.P. art. 594(A)(1). The compromise or settlement must be fair, reasonable,

and adequate for the class. La. C.C.P. art. 594(B). No reported decision by a

Louisiana state court sets forth a specific method for determining whether a

compromise or settlement is fair, reasonable, and adequate. As noted earlier, this

Court indicated Louisiana courts are guided by Federal Rule of Civil Procedure 23

and jurisprudence interpreting same. Pollard, 2010-0788, p.10, 102 So.3d at 79.

Federal Rule of Civil Procedure 23 requires court approval to settle a class action

and specifies:

(2) Approval of the Proposal. If the proposal would bind class members, the court may approve it only after a hearing and only on finding that it is fair, reasonable, and adequate after considering whether:

(A) the class representatives and class counsel have adequately represented the class;

97 (B) the proposal was negotiated at arm’s length;

(C) the relief provided for the class is adequate, taking into account:

(i) the costs, risks, and delay of trial and appeal;

(ii) the effectiveness of any proposed method of distributing relief to the class, including the method of processing class-member claims;

(iii) the terms of any proposed award of attorney’s fees, including timing of payment; and

(iv) any agreement required to be identified under Rule 23(e)(3); and

(D) the proposal treats class members equitably relative to each other.

Fed. R. Civ. P. 23(e).

Various federal circuits developed factors to determine whether a settlement

is fair, reasonable, and adequate. Appellants suggest this Court should apply a

combination of the nine factors announced by the Third Circuit in Girsh and the

six factors announced by the Fifth Circuit in Reed. In contrast, Class

Representatives and Fair Grounds Defendants contend this Court should only

apply the six factors announced by the Fifth Circuit in Reed. Notably, the factors

utilized by all circuits tend to overlap.46

46 For instance, the United States Court of Appeal, First Circuit, declared:

The case law offers ‘laundry lists of factors’ pertaining to reasonableness, but ‘the ultimate decision by the judge involves balancing the advantages and disadvantages of the proposed settlement as against the consequences of going to trial or other possible but perhaps unattainable variations on the proffered settlement.’ Nat'l Ass'n of Chain Drug Stores v. New England Carpenters Health Benefits Fund, 582 F.3d 30, 44 (1st Cir.2009). ‘If the parties negotiated at arm's length and conducted sufficient discovery, the district court must presume the settlement is

98 A review of the factors announced in Reed reveals they more closely align

with the language found in Federal Rule of Civil Procedure 23(e). Further, the

reasonable. In re Pharm. Indus. Average Wholesale Price Litig., 588 F.3d 24, 32-33 (1st Cir.2009).

Bezdek v. Vibram USA, Inc., 809 F.3d 78, 82 (1st Cir. 2015).

On the other hand, the United States Court of Appeals, Second Circuit, utilizes nine factors, as does the United States Court of Appeals, Third Circuit. See Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 117 (2d Cir. 2005). The nine factors include:

(1) the complexity, expense and likely duration of the litigation; (2) the reaction of the class to the settlement; (3) the stage of the proceedings and the amount of discovery completed; (4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of maintaining the class action through the trial; (7) the ability of the defendants to withstand a greater judgment; (8) the range of reasonableness of the settlement fund in light of the best possible recovery; and (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation.

Wal-Mart Stores, Inc., 396 F.2d at 117.

The United States Court of Appeals, Fourth Circuit, determines fairness by looking at whether the negotiations were conducted at arms’ length and considering whether:

The district court’s assessment of the adequacy of the settlement was likewise based on . . . (1) the relative strength of the plaintiffs’ case on the merits, (2) the existence of any difficulties of proof or strong defenses the plaintiffs are likely to encounter if the case goes to trial, (3) the anticipated duration and expense of additional litigation, (4) the solvency of the defendants and the likelihood of recovery on a litigated judgment, and (5) the degree of opposition to the settlement.

In re Jiffy Lube Sec. Litig., 927 F.2d 155, 159 (4th Cir. 1991).

The United States Supreme Court has not issued an opinion on this matter. Presumably, the United States Supreme Court has not done so as there is no real dispute between the circuits considering the factors announced by the various circuits overlap.

99 United States Court of Appeals, Fifth Circuit, oversees appeals from all of the

federal district courts in Louisiana. Thus, we will utilize the factors announced in

Reed to determine whether the proposed settlement agreement herein is fair,

adequate, and reasonable.

1) The existence of fraud or collusion behind the settlement

The federal jurisprudence reveals a protracted period of litigation prior to

settlement is evidence of a lack of fraud or collusion. See Jones v. Gusman, 296

F.R.D. 416, 467 (E.D. La. 2013).

Appellants assert the proposed settlement agreement was attorney-driven

and claimed the Class Representatives being uninformed of their own claims

proved the settlement was attorney-driven.

The testimony and evidence presented at trial reveal that Class

Representatives submitted claims and supported the proposed settlement

agreement. Further, the record reveals a protracted period of litigation prior to

settlement. The parties litigated this case over six years before the Commission,

the trial court, and this Court. Fair Grounds Defendants filed exceptions seeking

outright dismissal of the claims asserted in the petition. Class Representatives

testified that Plaintiffs won some battles and lost some battles, as is demonstrated

by the voluminous record. Notably, even Mr. Brossette agreed after learning the

terms of the proposed settlement agreement, that Plaintiffs discussed the settlement

amongst themselves. There is no evidence class counsel pressured any plaintiff to

settle, or engaged in fraud or collusion. The record does not support Appellants’

argument. Thus, this factor supports approval of the proposed settlement

100 2) The complexity, expense, and likely duration of the litigation

In analyzing this factor, the trial court may consider “the time and money the

litigants will save, and the savings the judicial system will realize, if the settlement

is approved - evaluating whether settling avoids the ‘risks and burdens of

potentially protracted litigation.’” In re Train Derailment Near Amite Louisiana,

CIV.A. MDL NO. 1531, 2006 WL 1561470, at *21 (E.D. La. May 24, 2006)

(quoting Ayers v. Thompson, 358 F.3d 356, 369 (5th Cir. 2004)).

Appellants aver this case involves damages that are not disputed and

contends it is not complex. They assert the parties conducted little discovery and

there was no fact witness testimony, no expert testimony, and no depositions.

However, Appellants failed to present evidence they attempted to conduct

any discovery. Appellants and Appellees both presented fact witnesses at the

fairness hearing; yet Appellants neglect to explain how expert testimony would

have helped the trial court understand an issue in the case.

Notably, this matter involves consideration of complex racing and gaming

statutes and regulations, including interpretation of La. R.S. 27:438. At the time of

its adoption, the Fair Grounds conducted no quarter-horse races. The Commission

approves the condition books that state the amount of the purse offered and the

sources of the purse funds. The Commission knew that Fair Grounds Defendants

and Evangeline Downs paid video poker funds differently. After the litigation

commenced, the Commission ordered Fair Grounds Defendants to pay the disputed

video poker funds to the thoroughbred meet. Absent settlement, the duration of the

litigation might be considerable. For example, Fair Grounds defendants seek to

join the thoroughbred horsemen who won races during 2008 through 2019 and

received the disputed video poker supplement purse funds. Additionally, Fair

101 Grounds defendants assert numerous defenses in the pleadings including

prescription, waiver based on the 2019 Stall Agreement, and estoppel based on the

Commission’s orders. Thus, the matter is complex. Further, continued litigation

would be expensive to the litigants and time-consuming to the trial court.

The record does not support Appellants’ argument. Thus, this factor

supports approval of the proposed settlement agreement.

3) The stage of the proceedings and the amount of discovery completed

This factor requires the district court to “determine whether the parties are in

a position to assess their respective cases and to make reasonable decisions with

respect to settlement, considering the information to which they are privy and the

stage of the proceedings when the tentative deal is struck.” In re Train Derailment

Near Amite Louisiana, CIV.A. MDL NO. 1531, 2006 WL 1561470, at *22.

Appellants assert that Fair Grounds Defendants and HBPA have not filed an

answer, the discovery conducted has been limited, and no dispositive motions have

been filed since 2018.

However, Class Representatives introduced evidence that the parties

engaged in discovery, including responses to requests for admissions, responses to

first set of interrogatories, and responses to requests for production of documents.

The parties filed over 150 pleadings between the proceedings conducted before the

Commission, the district court, and this Court over six-plus years. The parties are

in a position to assess their cases and make reasonable decisions with respect to the

On February 18, 2020, the trial court granted preliminary approval of the

proposed settlement agreement. The trial court held the fairness hearing on

October 7, 2020, and November 17, 2020. Accordingly, Appellants possessed

102 time to conduct discovery and the ability to do so. See Kent A. Lambert, Class

Action Settlements in Louisiana, 61 LA. L. REV. 89, 116 (2000) (noting that

“objectors are entitled, as a general matter, to pursue reasonable discovery

necessary for them fully to evaluate and address a proposed settlement”). There is

no evidence that Appellants conducted any discovery, despite the opportunity to do

so.

Accordingly, the record does not support Appellants’ argument. Thus, this

factor supports approval of the proposed settlement agreement.

4) The probability of plaintiffs’ success on the merits

This factor requires the trial court to determine:

[W]hether the ‘relief’ provided to the class in the compromise agreement being considered is ‘adequate’ in light of the strengths and weaknesses of the plaintiffs’ case. If rejection of the proposed settlement and resort [to] further litigation is unlikely to lead to a far greater relief for the class than the relief provided in the proposed compromise agreement, then this Reed factor weighs in favor of the proposed settlement. Ayers, 358 F.3d at 373.

In re Train Derailment Near Amite Louisiana, CIV.A. MDL NO. 1531, 2006 WL

1561470, at *23.

Appellants aver that Evangeline Downs pays video poker purse supplements

according to the statutory language, but the Fair Grounds does not. They contend

the court must decide the discrepancy between the methods of payments. To this

end, Appellants claim rudimentary discovery would bolster the likelihood of their

success on the merits.

However, Appellants’ argument ignores the testimony that Evangeline

Downs pays video poker purse supplements to both thoroughbred and quarter-

horse meets utilizing the percentage split provided in La. R.S. 27:361. Mr. Fenasci

explained Evangeline Downs pays 70% of video poker proceeds to the

103 thoroughbred meet and 30% to the quarter horse meet. Louisiana Revised Statutes

27:361 provides that the racetracks with slot machines shall pay a percentage of

proceeds to horse races, with 70% going to the thoroughbred meet and 30% going

to the quarter-horse meet. Louisiana Revised Statutes 27:438 does not provide for

a percentage split of video poker proceeds. Thus, Evangeline Downs does not pay

video poker purse supplements according to Appellants’ interpretation of La. R.S.

27:438.

Appellants insist the trial court is unable to weigh the probability of their

success absent an answer on file. As we previously indicated, this contention lacks

merit.

At first glance, a plain reading of La. R.S. 27:428 supports Appellants’

argument. However, at the time La. R.S. 27:438 passed, the Fair Grounds solely

sponsored thoroughbred races. Appellants ignore the unrefuted testimony of the

Honorable Mr. Morrell, a member of the Louisiana Legislature at the time of the

passage of La. R.S. 27:438.47 Mr. Morrell testified he authored, or co-authored,

every bill pertaining to horse racing during his tenure in the Louisiana Legislature,

including La. R.S. 27:438. He stated La. R.S. 27:438 was to supplement the purses

of thoroughbred races at the Fair Grounds.

Notably, by law, the Fair Grounds holds eighty thoroughbred race days and

ten quarter-horse race days. Fair Grounds Defendants noted quarter-horse races

account for less than 1% of bets placed at its facilities. Fair Grounds Defendants

aver it would be absurd to award nearly half of the video poker purse supplements

47 Similarly, in Orrill, this Court noted class counsel presented witnesses at the fairness hearing who testified to the defenses that would be presented at a trial on the merits, i.e., if the court did not approve the settlement. 2009-0888, p.10, 38 So.3d at 463.

104 to the quarter-horse meet when the quarter-horse meet is merely ten days and

accounts for less than 1% of bets placed at its facilities.

Further, this is not an instance wherein Fair Grounds Defendants converted

the funds to their own use. Fair Grounds Defendants instead paid the disputed

video poker funds to thoroughbred meets. Significantly, after the filing of the

Petition and with full knowledge of Plaintiffs’ claims, the Commission ordered

video poker funds to be paid to the thoroughbred meet. Thus, it is unlikely a court

would award the entirety of the $35,820,731.00 to Plaintiffs.

While recognizing there is some validity to the arguments of Appellants and

Appellees, courts need not determine the precise merits of the claims asserted in

the petitions and the defenses thereto because the point of settlement is to avoid

trial. See Reed, 703 F.2d at 172 (recognizing the court is not to try the case), and

Klein v. O’Neal, Inc., 705 F.Supp.2d 632, 648 (N.D. Tex. 2010) (while the court

weighs the facts and law, the court should not reach conclusions as to the ultimate

merits of the claims and defenses). Thus, while recognizing the validity of the

claims and defenses, this Court is not reaching a conclusion as to the ultimate

merits thereof.

Nonetheless, when considering the various defenses, it would be unwise “to

risk the substantial benefits which the settlement confers upon the class to the

vagaries of a trial.” Bennett, 96 F.R.D. at 350. This factor supports approval of

the settlement.

This factor requires the Court to determine whether the proposed settlement

agreement reflects “a fair, reasonable, and adequate estimation of the value of the

case considering what might or could happen at trial.” In re Train Derailment

105 Near Amite Louisiana, CIV.A. MDL NO. 1531, 2006 WL 1561470, at *24. “The

fact that a proposed settlement . . . only amount[s] to a fraction of the potential

recovery does not, in and of itself, mean that the proposed settlement is grossly

inadequate and should be disproved.” Parker, 667 F.2d at 1201, n. 6 (quoting City

of Detroit v. Grinnell Corp., 495 F.2d 448, 455 (2nd Cir. 1974)).

Appellants simply aver the settlement would pay a mere 3% of the

undisputed amount of unpaid purse funds. Nonetheless, considering what might

happen at trial in light of the numerous defenses asserted by Fair Grounds

Defendants as detailed above, the proposed settlement agreement is a fair,

reasonable, and adequate estimation of the value of the case. The class will receive

one million dollars for past due claims (25% paid yearly out of the video poker

proceeds for four years), have guaranteed funds for future races, and have

additional racing dates at the Fair Grounds. Significantly, the proposed settlement

agreement also clarified that quarter-horse meets will receive 30% of video poker

proceeds at other Louisiana racetracks besides the Fair Grounds. Further, if the

Fair Grounds moves the race dates, the quarter-horse meet would receive the same

payout. The Louisiana Legislature amended La. R.S. 27:438 to reflect the

pertinent terms of the proposed settlement agreement so that it will take an act of

the legislature to change the guaranteed percentage of video poker proceeds or the

number of quarter-horse race days.48

In their brief to this Court, Appellants reference the role of Mr. Alfortish, the

then-executive director of HBPA in 2008 when the Fair Grounds began hosting

quarter-horse races. However, Appellants did not mention the role of Mr. Alfortish

48 This Court recognizes that the Louisiana Legislature conditioned the amendment on a final judgment approving the settlement.

106 until after trial in their post-hearing brief. This Court recently indicated “[i]t is

well-established that appellate courts will not consider issues raised for the first

time on appeal, which are not pleaded in the court below and which the trial court

has not addressed.” Watson v. Woldenberg Vill., Inc., 2020-0453, p.6 (La. App. 4

Cir. 7/7/21), __ So.3d __, 2021 WL 2820469 at *3. As Appellants did not raise the

issue of Mr. Alfortish’s role in the trial court timely, Mr. Alfortish’s role will not

be considered by this Court. Further, Appellants failed to make clear how the role

of Mr. Alfortish relates to the range of possible recovery.

This factor supports approval of the settlement.

6) The opinions of class counsel, class representatives, and absent class members

In Klein, the district court noted:

The Fifth Circuit has repeatedly stated that the opinion of class counsel should be accorded great weight. Recognizing that various class members may have different priorities in a class action, the Fifth Circuit has concluded:

Where there is disagreement among the class members concerning an appropriate course of action, it may be impossible for the class attorney to do more than act in what he believes to be the best interests of the class as a whole. If the attorney’s decision in the face of such disagreement affects each class member more or less equally, and no allegation is made that the rights of a definable minority group within the class were sacrificed for the benefit of the majority, the attorney’s views must be accorded great weight, and the trial judge’s decision to ratify the attorney’s action will seldom be overturned.

Klein, 705 F.Supp.2d at 649 (quoting Pettway v. Am. Cast Iron Pipe Co., 576 F.2d

F.2d 1157, 1216 (5th Cir. 1978)).

In this instance, class counsel submitted a brief prior to the fairness hearing

detailing support for the proposed settlement agreement, as well as a post-hearing

107 brief. Class counsel has participated in this litigation since 2014. The proposed

settlement agreement will affect each class member more or less equally.

Appellants contend Mr. Roberts did not file a claim and did not know how

much his claim was potentially worth. Notably, Mr. Roberts testified he knew Mr.

Jumonville submitted claim forms on behalf of the partnership in which Mr.

Roberts is a partner. Further, Mr. Roberts acknowledged he supported the

proposed settlement agreement even if he would not participate individually in the

million dollars for past due claims. He indicated the settlement was not about him,

but about helping all horsemen. Mr. Roberts explained that he attended

proceedings before the Commission and the district court and that he knew the

Plaintiffs won some battles and lost some battles.

Mrs. Foreman testified in support of the proposed settlement agreement.

The trial court commented on Mrs. Foreman’s enthusiasm for the additional race

dates. Appellants contend Mrs. Foreman did not file a claim timely; however, Mrs.

Foreman testified she executed her claim form on August 1, 2020, in the office of

class counsel and watched class counsel walk out of the office to place the

envelope in the mail. Mr. Fenasci stated HBPA received Mrs. Foreman’s claim

timely. Nonetheless, Mrs. Foreman indicated if HBPA denied her claim, she still

supported the proposed settlement agreement. Mrs. Foreman testified the proposed

settlement agreement was in the best interest of Louisiana horsemen.

Additionally, class counsel presented the testimony of Mr. Robicheaux who

testified the proposed settlement agreement would be very beneficial to quarter-

horse racing. Mr. Robicheaux indicated he understood the terms of the proposed

settlement agreement and knew the disputed funds totaled thirty-five million. He

asserted quarter-horse purses would increase by forty to fifty percent. Additionally,

108 Mr. Robicheaux noted the memorandum sent to the 1,700 members of the LQHBA

requested its members: “****PLEASE DO NOT OPT OUT OF

SETTLEMENT*****.”

Mr. Salaid, the executive director of LQHBA, likewise testified in support of

the proposed settlement agreement. He averred the additional purse funds and

additional race days were significant to quarter-horse racing. Further, Mr. Salaid

indicated LQHBA first raised the issue of the video poker proceeds in 2013 and

was very aware of the situation.

Appellants point to the testimony of Mr. Lavergne, an original plaintiff who

objected to the proposed settlement agreement. However, Mr. Lavergne actually

signed the proposed settlement agreement and did not file an objection form

timely.

In Lowman v. Merrick, 2006-0921, pp. 12-13 (La. App. 1 Cir. 3/23/07), 960

So.2d 84, 92, the First Circuit Court of Appeal explained:

The doctrine of judicial estoppel prohibits parties from deliberately changing positions according to the exigencies of the moment. The doctrine is intended to prevent the perversion of the judicial process and prevents “playing ‘fast and loose with the courts.’” New Hampshire v. Maine, 532 U.S. 742, 750, 121 S.Ct. 1808, 1814-1815, 149 L.Ed.2d 968 (2001) (quoting Stretch v. Watson, 6 N.J.Super. 456, 469, 69 A.2d 596, 603 (1949), rev’d in part, 5 N.J. 268, 74 A.2d 597 (1950)).

Initially, Mr. Lavergne executed the proposed settlement agreement,

indicating approval of its terms. During the fairness hearing, Mr. Lavergne

claimed he no longer approved of the proposed settlement agreement. While Mr.

Lavergne’s change of heart might have resulted from an error, Mr. Lavergne may

not “play fast and loose” with the courts by deliberately changing his position

according to the exigency of the moment. That is, Mr. Lavergne stated his attorney

told him he would only receive $250.00 from the settlement. However, according

109 to HBPA, if Mr. Lavergne had submitted a claim form timely, he would have been

entitled to approximately 21.69% of $113,377.56 ($24,591.59).

Appellants note Mr. Watson, a jockey, and Mr. Munacy, a trainer, testified

they did not support the proposed settlement agreement. Mr. Watson and Mr.

Munacy claimed the proposed settlement agreement did not provide the money

they are owed for risking their lives. Likewise, Appellants point to Mr. Brossette’s

testimony wherein he objected to the proposed settlement agreement. Mr.

Brossette indicated he objected because a million dollars was not sufficient for the

past claims and because he did not like the cap on future payments.

Notably, the trial court’s reasons for judgment indicated it was not

impressed with the testimony of the objectors. This Court has long noted “[t]he

trial court sitting as a trier of fact is in the best position to evaluate the demeanor of

the witnesses, and its credibility determinations will not be disturbed on appeal

absent manifest error.” Patterson v. Charles, 2019-0333, p.9 (La. App. 4 Cir.

9/11/19), 282 So.3d 1075, 1082. In this instance, all of the testimony of Appellants

focused on what they believed Fair Grounds Defendants and HBPA owed them

individually, though Mr. Brossette did also state he did not like the cap on future

payments. Yet, Appellants presented no testimony or evidence to support their

interpretation of La. R.S. 27:438 and the claim of entitlement to more money. In

contrast, Class Representatives and their witnesses focused on the benefits to the

racing industry, and the class, as a whole. Fair Grounds Defendants presented the

testimony of Mr. Morrell, who testified La. R.S. 27:348 was to provide funds to the

thoroughbred meets at the Fair Grounds at the time of its adoption. Further, while

Mr. Watson and Mr. Munacy claimed they wanted to continue with the litigation,

they did not opt-out of the settlement. Had Mr. Watson and Mr. Munacy opted out

110 of the settlement, they could have continued litigating their individual claims

against Fair Grounds Defendants and HBPA. Instead, Mr. Watson and Mr.

Munacy elected to object to the proposed settlement agreement.

Additionally, Appellants point out that Mr. Roberts did not know the value

of his claim. Mr. Roberts possessed individual and joint claims. That Mr. Roberts

did not know the value of his claims is not surprising. Further, Appellants ignore

that Mr. Lavergne believed he would only receive $250.00, according to his

attorney, when the value of his claim totaled $113,377.56 and entitled him to

approximately $24,591.59. Similarly, Mr. Watson agreed the value of his claim

totaled $124,912.63, but testified he did not know he would have received

approximately $25,000.00 had he submitted a claim form.

The record reveals the trial court did not err in making its credibility

determinations. Thus, this Court will not disturb the trial court’s credibility

determinations.

As for the absent class members, HBPA received 179 claim forms

representing 250 accounts with a value of $4,610,062.00, plus twenty-six

incomplete claim forms. HBPA received one completed opt-out form, plus two

incomplete forms. HBPA also received ten objections with a value of

$534,434.56. However, courts have approved settlement agreements with a lower

percentage of participation. See, e.g., In re Pool Products Distribution Mkt.

Antitrust Litig., MDL 2328, 2015 WL 3486434, at *7 (E.D. La. June 2, 2015)

(approving settlement agreement with a 2.3% claim rate) and Strong v. BellSouth

Telecommunications, Inc., 173 F.R.D. 167, 169 (W.D. La. 1997), aff’d, 137 F.3d

844 (5th Cir. 1998) (settlement agreement approved with a response rate of 4.3%).

111 The 5.4% response rate in this case is more than adequate to support approval of

the settlement agreement.

Moreover, a larger number of objectors would not prohibit approval of the

proposed settlement agreement. In E.E.O.C. v. Hiram Walker & Sons, Inc., 768

F.2d 884, 891 (7th Cir. 1985), the court approved a settlement agreement when the

objectors totaled just under fifteen percent. Therein, the Court noted:

The only case of which we are aware in which the number of objectors was the key factor in reversing approval of a decree is Pettway v. American Cast Iron Pipe Co., 576 F.2d 1157 (5th Cir.1978), cert. denied, 439 U.S. 1115, 99 S.Ct. 1020, 59 L.Ed.2d 74 (1979). In that case, approximately seventy percent of the relevant subclass objected to a back pay settlement. The court acknowledged that district courts could approve a decree despite a large number of objectors, id. at 1215, 1217, but, under the circumstances, concluded that the number of objectors indicated that there was something unfair about the decree, id. at 1216, 1218. In opposition to Pettway stand Reed v. General Motors Corp., 703 F.2d 170 (5th Cir.1983), and TBK Partners, Ltd. v. Western Union Corp., 675 F.2d 456 (2d Cir.1982), in which forty percent and fifty-five percent, respectively, of the affected claimants objected, but the courts still affirmed the district courts’ approval of the decrees. These cases established that, without more, a large number of objectors will not result in the reversal of a district court’s approval of a consent decree.

Hiram Walker & Sons, Inc., 768 F.2d at 891-92.

Herein, Appellants did not reach a forty, fifty-five, or seventy percent

objection rate. They allege entitlement to more money, but failed to present

evidence to support their claim, and failed to present testimony or evidence to

refute that presented by Class Representatives and Fair Grounds Defendants.

Appellants contend more than ninety percent of the class did not file a claim.

Any contention the members of the class who did not submit a claim, objection, or

opt-out form disapprove of the settlement is conjecture. Appellants failed to

submit evidence to support the allegation that a failure to submit a claim form

equals disapproval of the settlement. Notably, Appellants possessed the

112 opportunity to question Mr. Salaid and Mr. Robicheaux as to why they did not

submit a claim form but failed to do so. As Fair Grounds Defendants argue, it is

equally plausible that failure to submit a form equals indifference or even

disagreement with the lawsuit (because horsemen enter races based on the

condition book and receive the purses stated therein). In this case, the low number

of objections and members who opted out compared to the number of claim forms

received indicates approval of the proposed settlement agreement from the absent

class members.

The testimony and evidence reveal class counsel, Class Representatives, and

absent class members support the settlement. Thus, this factor favors approval of

the proposed settlement agreement.

Considering the application of the Reed factors, we find the compromise or

settlement is fair, reasonable, and adequate for the class. This assignment is

without merit.

Issue (C) - The Class Notice Was Inadequate and Deficient

Appellants again contend the notice of the proposed settlement agreement

sent to the class was deficient because it lacked the information required by Sprint.

For the reasons described in 2021-CA-0022, Assignment of Error No. 3, we find

this contention without merit.

Appellants assert only 5.4% of the class submitted any response. Appellants

conclude the fact that more than 90% of the class did not file a claim raises

questions about the notice and the methods of responding during the pandemic.

Additionally, Appellants aver a major concern in class action proceedings is

communication between the class and the court. They contend the court should

develop appropriate means to provide information to and handle inquiries from the

113 members of the class. They conclude the notice herein deprived the class of its

right to weigh involvement in the proposed settlement agreement.

In their brief to this Court, Fair Grounds Defendants assert the class notice

was not defective. Instead, Fair Grounds Defendants note the class notice sent out

in this case was very detailed and included all information required by La. C.C.P.

Class Representatives contend HBPA prepared spreadsheets listing the

names and addresses of the owners, trainers, and jockeys who won a quarter-horse

race since 2008. HBPA mailed 3,567 notices utilizing the spreadsheets. Class

Representatives note USPS returned four notices as undeliverable. One individual

opted out, ten individuals objected, and 179 claims form representing 250 HBPA

accounts were submitted timely.

Additionally, Class Representatives aver the notice contained all of the

information required by law. They contend the notice defined the class, described

the settlement terms, the payout procedure, informed the class of the right to opt-

out or object and the process to do so, and informed the class of the date of the

fairness hearing. In conclusion, they state the notice was reasonably calculated to

apprise interested parties of the action and afford them an opportunity to present

any objections.

As previously discussed, the notice included all of the information required

by La. C.C.P. arts. 591 and 594. Further, Appellants failed to cite to any

jurisprudence to support their argument that the low number of responses renders

the notice defective due to confusion. We previously indicated courts frequently

approve settlement agreements with a lower response rate. Appellants presented

no evidence that the notice or the COVID-19 pandemic confused a single member

114 of the class. The reasons why a potential member of a class may elect not to

submit a claim form are too numerous to conclude that a failure to respond results

from any particular reason. Significantly, the notice did not confuse Appellants or

the 179 individuals who did file claims. That is, Appellants submitted their

objections timely, as did the 179 class members submitting claims forms. This

argument lacks merit.

Issue (D) - The Deadlines to Object, Opt-Out, and Opt-In Have Yet to Run

Appellants repeat their argument that the Governor’s Proclamations and the

Supreme Court’s orders pertaining to the COVID-19 pandemic vacated and set

aside the deadlines to object, opt-out, and opt-in. They suggest that a class

member may not have received a notice sent to a business address or post office

box because people were told to stay home. Thus, Appellants conclude the court

conducted a fairness hearing without the class receiving the required notice of its

right to opt-out or object.

Additionally, Appellants contend the mailing of the second notice, which

advised the class of the new date of the fairness hearing, added to the confusion of

the class. They point to the testimony of Mr. Roberts and contend he had no idea

how to proceed with his claim form because of the situation brought on by

COVID-19.

In response, Fair Grounds Defendants aver the plain language of the

Governor’s Proclamations and the Supreme Court orders did not supersede or

vacate any deadline but extended certain legal deadlines. They note that the

Louisiana Legislature enacted Louisiana Act 162 of 2020 and specifically extended

all legal deadlines impacted by the Governor’s Proclamations to July 6, 2020.

115 Louisiana Revised Statutes 9:5829(A) provides the time periods were suspended or

extended through July 5, 2020, and expired on July 6, 2020.

Fair Grounds Defendants also aver Appellants’ reliance upon Mr. Roberts’

testimony to support its argument is misplaced. Instead, Fair Grounds Defendants

note Mr. Roberts stated he relied on the claim filed by Mr. Jumonville.

In their brief to this Court, Class Representatives aver that Appellants raised

this issue in a motion for clarification or continuance. They contend that

Appellants abandoned the motion after filing the Second Amended Petition.

Additionally, Class Representatives argue the plain language of Louisiana

Act 162 of 2020 does not support Appellants’ argument. Instead, Class

Representatives contend that Louisiana Act 162 of the 2020 legislative session

extended all deadlines in the Governor’s Proclamations to July 6, 2020. Class

representatives assert Louisiana Act 162 of 2020 did not vacate the deadlines;

rather, it extended the deadlines to opt-out or object to July 6, 2020.

As previously discussed, the Governor’s Proclamations and the Supreme

Court’s orders did not vacate or supersede the deadlines contained in the February

18, 2020 order. The Governor’s Proclamation provided that legal deadlines were

suspended.49 The Louisiana Legislature codified the Governor’s Proclamations

and proclaimed all prescriptive periods during March 17, 2020, through July 5,

2020, shall be subject to a limited suspension or extension and expire on July 6,

2020. See La. R.S. 9:5829(A). In American Global Insurance Co., 2020-0438,

p.3, __ So.3d at __, 2021 WL 1399742 at *2, this Court determined La. R.S.

9:5829 was clear and unambiguous. “All deadlines were subject to a ‘limited

49 30 JBE 2020, 84 JBE 2020.

116 suspension or extension until July 6, 2020.’ Thus, any deadline that would have

expired between March 17, 2020 and July 5, 2020, expired July 6, 2020[.]” Id.

The Supreme Court ordered that all civil trials, hearings, and court

appearances were continued and would be re-set.50 The Supreme Court’s orders

did not address other legal deadlines such as the opt-out, object, or opt-in deadlines

at issue herein.

Appellants contend a potential member of the class might receive mail at a

business address or post office box and did not receive the notice due to the public

being told to stay home. HBPA mailed the notices on February 27, 2020.

Presumably, most members received the notice prior to the Governor’s March 22,

2020 Proclamation issuing a general stay-at-home order.51 Moreover, Appellants’

argument that a member would have believed the deadlines were set aside relies

purely on conjecture. Notably, Appellants themselves did not believe the

Governor’s Proclamations or the Supreme Court’s orders vacated the deadlines in

the notice because they filed their own objections in the time set forth in the notice.

Appellants also submit HBPA mailed a notice of the new fairness hearing to

the members of the class, adding to the confusion. They continue to rely on

conjecture to support their argument. Again, Appellants themselves were not

confused as they appeared and testified at the fairness hearing. They also presented

no evidence that a single class member was confused by the notice of the new date

of the fairness hearing.

Appellants aver if Mr. Roberts, a class representative, was unsure of how to

handle his claim form, then other members of the class could not be expected to

50 La. Sup. Ct. orders dated March 16, 2020 and March 20, 2020. 51 See 33 JBE 2020.

117 know how to proceed. A review of Mr. Roberts’ testimony does not support

Appellants’ contention. Class counsel questioned Mr. Roberts as follows:

Q. Did you intend to submit a claim form?

A. I intended and I kind of felt during the pandemic, if I mailed or I

didn’t mail it, it really - -

Q. You’re not sure - -

A. - - I’m not sure, I’m going to be honest to you. I - - I just - - I’m

really not sure.

In this instance, Mr. Roberts did not express he did not know how to handle

his claim form. Rather, he testified he was not the sure if he mailed the claim form

during the pandemic. This assignment lacks merit.

Issue (E) - The Class Representatives Failed to Fairly and Adequately Protect the Interests of the Class and Did Not Have Claims Typical of the Class as a Whole

Appellants note Mr. Roberts is a trainer and Mrs. Foreman is an owner.

They contend Mr. Roberts and Mrs. Foreman did not file claims timely and did not

protect their own interests. Thus, Appellants conclude Mr. Roberts and Mrs.

Foreman could not protect the interests of the class.

Additionally, Appellants note the class consists of owners, trainers, and

jockeys. They argue the jockey representatives, Mr. Lavergne and Mr. Hamilton,

no longer supported the proposed settlement agreement. Thus, Appellants contend

Mr. Roberts and Mrs. Foreman could not protect the interests of the jockeys.

Further, Appellants submit Mr. Roberts and Mrs. Foreman could not protect the

interests of retired jockeys such as Mr. Brossette.

In their brief to this Court, Fair Grounds Defendants aver that Appellants

provided no support for the claim that a jockey needed to represent the class

118 members who are jockeys. Fair Grounds Defendants cite Duhon v. Harbor

Homeowners’ Ass’n, Inc., 2015-0852 (La. App. 4 Cir. 6/30/16), 197 So.3d 322.

Class representatives are considered adequate if “the claims of the proposed class

representatives [are] a cross-section of, or typical of, the claims of all class

members.” Duhon, 2015-0852, p. 9, 197 So.3d at 329. Fair Grounds Defendants

contend that Appellants failed to submit evidence to support the claim that the

interests of the jockeys are distinct from the rest of the class. Rather, Fair Grounds

Defendants again submit owners inherently represent jockeys because of how the

jockeys are paid.

In their response, Class Representatives aver one of every type of person in

the class is not required to serve as a representative, citing Andrews v. Trans Union

Corp., 2004-2158, p.6 (La. App. 4 Cir. 8/17/05), 917 So.2d 463, 468. Rather, the

claims of the representatives “must be a cross section of, or typical of the claims of

the other class members.” Andrews, p.6, 2004-2158, 917 So.2d at 468.

Additionally, Class Representatives assert Mr. Roberts and Mrs. Foreman

both have past due claims and future claims under the legal theories applicable to

all claimants. Thus, they contend the claims of Mr. Roberts and Mrs. Foreman are

typical of the claims of the other class members.

Further, while noting there is no requirement that a class representative file a

claim form, Class Representatives aver the evidence revealed Mrs. Foreman filed

her claim form timely and Mr. Roberts’ partnerships filed claim forms timely.

Thus, Class Representatives contend Appellants misconstrue Mr. Roberts’

testimony regarding his individual claim form. They submit Mr. Robert’s

testimony reveals he could not remember whether he had filed his claim but did

recall the partnerships filed claims.

119 We note that to certify a class, the trial court must find that the

representative parties will fairly and adequately protect the interests of the class.

La. C.C.P. art. 591(A)(4).52 “Adequacy of representation for class certification

requires that the claims of the proposed class representatives be a cross-section of,

or typical of, the claims of all class members.” Duhon, 2015-0852, p.9, 197 So.3d

at 329 (quoting Husband v. Tenet Health Sys. Med. Ctr., Inc., 2008-1257, p.11,

(La. App. 4 Cir. 8/12/09), 16 So.3d 1220, 1230). The plaintiffs do not have to

produce an individual representing every type of claim. Andrews v. Trans Union

Corp., 2004-2158, p.6 (La. App. 4 Cir. 8/17/05), 917 So.2d 463, 468.

In Duhon, this Court acknowledged four factors are relevant to this inquiry,

namely:

(1) The representative must be able to demonstrate that he or she suffered an actual injury;

(2) The representative should possess firsthand knowledge or experience of the conduct at issue in the litigation;

(3) The representative’s stake in the litigation, that is, the substantiality of his or her interest in winning the lawsuit, should be significant enough, relative to that of other class members, to ensure that representative’s conscientious participation in the litigation; and

(4) The representative should not have interests antagonistic to or in direct conflict with those of other class members.

Duhon, 2015-0852, p.9, 197 So.3d at 329 (Claborne, 2014–1050, pp. 14-15, 165

So.3d at 282).

52 La. C.C.P. art. 591 provides five prerequisites that must be met to qualify for class certification: (1) numerosity; (2) commonality; (3) typicality; (4) adequacy of representation; and (5) objectively defined class. The appellants do not challenge the trial court’s finding that the class representatives met the other four prerequisites for class certification. Nonetheless, a review of the record finds the trial court did not abuse its discretion in certifying the class as the evidence supports a finding of numerosity, commonality, and typicality. Further, the judgment objectively defines the class.

120 Mr. Roberts and Mrs. Foreman demonstrated they suffered an actual injury.

Mr. Roberts, through his partnership, and Mrs. Foreman, individually, both

submitted claim forms for past due claims. They both spoke of the benefit

additional race days and purse funds provide to quarter-horse racing for the future.

They demonstrated knowledge and experience of the conduct at issue in the

litigation, the failure to pay video poker purse funds to quarter-horse races. The

interests of Mr. Roberts and Mrs. Foreman in the litigation are significant, and they

conscientiously participated in the litigation by attending meetings, Commission

hearings, and court hearings. Their interests are not antagonistic to or in direct

conflict with those of the other class members. In this instance, the Fair Grounds

offers a single purse per race. From that purse, the winning owners, trainers, and

jockeys receive a set percentage. Thus, the higher the purse, the more money each

owner, trainer, and jockey is entitled to according to the set percentage.

Mr. Brossette asserted future race dates and purses do not benefit him

because he is retired from racing. However, Mr. Brossette did not submit a claim

form to participate in the past due claims, did not present evidence to support his

contention he should be paid more money for past due claims, and did not opt-out

of the settlement.

The trial court determined Mr. Roberts and Mrs. Foreman fairly and

adequately represented the class. Considering the Duhon factors, the trial court did

not abuse its discretion in finding Mr. Roberts and Mrs. Foreman fairly and

adequately represented the class. This assignment is without merit.

121 Issue (F) - The Trial Court Erred in Approving the Proposed Settlement Agreement When Soileau Plaintiffs Filed a Second Amended Petition

Appellants next aver Soileau Plaintiffs possessed authority to file the Second

Amended Petition. They contend neither Fair Grounds Defendants nor HBPA

filed an answer and the court did not certify a class pursuant to La. C.C.P. art. 592.

Thus, Appellants conclude that Soileau Plaintiffs possessed procedural capacity to

file the Second Amended Petition.

Additionally, Appellants argue they cannot be forced to opt-out of their own

case without due process. In this regard, Appellants aver they were not served

with the joint motion that excluded them from being class representatives and they

were never provided with new dates to object, opt-out, or opt-in. Further,

Appellants note they filed a motion for clarification requesting the court continue

all deadlines. They again insist the Governor’s Proclamations and Supreme

Court’s orders continued the dates to object, opt-out, and opt-in.

In their response, Fair Grounds Defendants contend the Code of Civil

Procedure includes articles on class action lawsuits and the settlement of such

lawsuits, citing La. C.C.P. arts. 591-597. If members of the class do not wish to

participate in the settlement but wish to continue with the lawsuit, the members

opt-out of the settlement. Fair Grounds Defendants aver Appellants elected not to

opt-out of the settlement. They argue that to allow objecting members of the class

to proceed with an identical class action petition/proceeding would turn

Louisiana’s class action settlement law on its head.

Class Representatives note the trial court denied Appellants’ attempt to take

over the class by the filing of the Second Amended Petition naming the exact same

class. The trial court granted the exceptions filed by Fair Grounds Defendants and

122 HBPA. Class Representatives also note that Appellants filed an application for

supervisory writs and this Court issued a writ denial, stating the trial court did not

err.

In support of their argument, Class Representatives point to their opposition

to the application for supervisory writs. Therein, they noted that Appellants

possessed the opportunity to opt-out but did not. Class Representatives contended

that Appellants could have opted out and possessed the right to file amended

claims in their individual capacity. Instead, Appellants elected to file objections to

the proposed settlement agreement. Class Representatives asserted that Appellants

had no right to amend the petition on behalf of the class to void the court-approved

We note that Appellants filed a Second Amended Petition after the trial

court certified the class for settlement purposes. It sought to certify an identical

class with the exact claims seeking the same damages, but to have the court

appoint Appellants as class representatives. After the filing of the Second

Amended Petition, Appellees filed exceptions of lack of procedural capacity,

prematurity, and lis pendens.53 The trial court granted the exceptions and

dismissed the Second Amended Petition. Appellants sought review and this Court

denied the application for supervisory writs “as the trial court did not err.”

Nonetheless, the “denial of supervisory writs does not bar . . .

reconsideration of the same issue argued in the writ application when an appeal is

taken from a final judgment.” Guilbeaux v. Lupo Enterprises, L.L.C., 2021-0053,

pp.7-8 (La. App. 4 Cir. 5/19/21), __ So.3d __, 2021 WL 1997293 (quoting Lake

53 Appellants do not contest the trial court’s grant of the exceptions of prematurity and lis pendens.

123 Air Capital II, L.L.C. v. Perera, 2015-0037, p.8 (La. App. 4 Cir. 5/13/15), 172

So.3d 84, 88). Thus, the merits of the argument will be addressed.

This Court discussed the exception of lack of procedural capacity in Rain

CII Carbon, L.L.C. v. Recon Eng'g, Inc., 2018-0916, p.4 (La. App. 4 Cir. 5/1/19),

270 So.3d 785, 788. Therein, this Court explained that appellate courts apply the

de novo standard of review to a trial court’s ruling on the dilatory exception of

procedural capacity. Id. This Court further indicated:

[t]he dilatory exception of lack of procedural capacity raises the issue of want of capacity of the plaintiff to institute and prosecute the action and stand in judgment, and/or challenges the authority of a plaintiff who appears in a purely representative capacity.” English Turn. [Prop. Owners Ass’n v. Taranto, 2016-0319], p.6, 219 So.3d [381,] 387. See also Harvey v. State, 2014-0156, p.12 (La. App. 4 Cir. 12/16/15), 183 So.3d 684, 695, writ denied, 2016-0105 (La. 3/4/16), 188 So.3d 1060. The exception “tests a party’s legal capacity to bring suit.” Mt. Zion Baptist Ass’n v. Mt. Zion Baptist Church # 1 of Revilletown Park, 2016-0151, p.5 (La. App. 1 Cir. 10/31/16), 207 So.3d 414, 417, writ denied, 2016-2109 (La. 2/3/17), 215 So.3d 697.

Rain CII Carbon, L.L.C., 2018-0916, p.4, 270 So.3d at 788.

A class action suit is “a lawsuit in which the court authorizes a single person

or a small group of people to represent the interests of a larger group.” BLACK’S

LAW DICTIONARY 284 (9th ed. 2009). Louisiana Code of Civil Procedure

Articles 591 - 597 specifically govern class action lawsuits. One of the purposes of

class action proceedings is to avoid the risk of “[i]nconsistent or varying

adjudications with respect to individual members of the class which would

establish incompatible standards of conduct for the party opposing the class.” La.

C.C.P. art. 591(B)(1)(a). After appointment, class representatives are to represent

absent class members. See Claborne, 2014-1050, p.14, 165 So.3d at 282 (where

this Court acknowledged class representatives are to fairly and adequately

represent the class).

124 Another purpose of class action lawsuits is to advance the efficiency and

economy of multi-party litigation. Lightfoot v. District of Columbia., 233 F.R.D.

28, 30 (D.D.C. 2006). “[T]he class-action device saves the resources of both the

courts and the parties by permitting an issue potentially affecting every class

member to be litigated in an economical fashion under Rule 23.” Lightfoot, 233

F.R.D. at 30 (quoting Chang v. United States, 217 F.R.D. 262, 268 (D.D.C. 2003).

The courts have long noted there is overriding public interest in favor of

settlement of class action lawsuits. Cotton v. Hinton, 559 F.2d 1326, 1331 (5th

Cir. 1977). Additionally, one author noted:

Class action settlements offer obvious benefits to litigants and courts alike by providing a valuable mechanism for disposing of massive lawsuits that threaten to usurp huge amounts of resources and time. At the same time, such settlements afford the members of plaintiffs' classes with certainty in their recovery, while simultaneously providing class action defendants with the benefits of res judicata extended across an entire class of potential claimants.

Kent A. Lambert, Class Action Settlements in Louisiana, 61 LA. L. REV. 89, 89

(2000) (footnotes omitted).

Interpreting the class action procedural law in the manner suggested by

Appellants would result in chaos in class action proceedings. While the trial court

first certified the class for settlement purposes, allowing the filing of the Second

Amended Petition would have resulted in the voidance of the proposed settlement

agreement; the usurpation of Mr. Roberts and Mrs. Foreman as class

representatives without the filing of a formal motion to remove class

representatives; the usurpation of class counsel without the filing of a formal

motion to remove class counsel; and the disbandment of the settlement class.

Allowing Appellants to file the Second Amended Petition would also result in

potentially inconsistent adjudications, waste resources, result in confusion within

125 the class because the class received notice of the settlement, and destroy the

certainty of the proposed settlement agreement. Appellants’ interpretation would

result in a disservice to the very purposes of class action proceedings. Thus,

Appellants lack capacity to act on behalf of the existing class. Concluding

otherwise would allow Appellants to hold the remaining class members hostage.

See, e.g., Parker, 667 F.2d at 1211 (“the named plaintiffs should not be permitted

to hold the absentee class hostage by refusing to assent to an otherwise fair and

adequate settlement”). The law provided Appellants with the right to opt-out of

the settlement and proceed with their claims individually, and to file amended

petitions pertaining to their individual claims. Instead, Appellants elected to object

to the proposed settlement agreement. They possessed no authority to file the

Second Amended Petition with respect to the class. A de novo review reveals the

trial court did not err in granting the exception and dismissing the Second

Amended Petition. This assignment lacks merit.

Issue (G) - The Settlement Agreement is Void “Ab Initio” by Its Own Terms

Appellants aver the trial court erred in approving the proposed settlement

agreement because it is void by its own terms. Appellants note the proposed

settlement agreement provides for an opt-out threshold of $50,000.00. Thus, if the

claims of the class members who opt-out totals more than $50,000.00, the

proposed settlement agreement is void unless otherwise stipulated in writing.

Appellants argue their claims total more than $50,000.00. Thus, Appellants

conclude the proposed settlement agreement is void.

In their brief to this Court, Fair Grounds Defendants aver there is no support

for Appellants’ contention they met the opt-out threshold. Fair Grounds

126 Defendants contend that Appellants did not opt-out of the settlement. Instead of

opting out, Appellants elected to file objections to the settlement.

Similarly, Class Representatives argue that Appellants mislead the court by

contending their claims exceed $50,000.00 and that the proposed settlement

agreement is thus void. Class Representatives aver the proposed settlement

agreement provides that if the value of the claims of the members opting out

reaches $50,000.00, the proposed settlement agreement is void unless otherwise

provided in writing. Class Representatives contend that Appellants did not opt-out.

Thus, the value of their claims is immaterial. Class Representatives note the

testimony and evidence reveal one class member submitted a valid opt-out form

and the value did not reach $50,000.00.

In reviewing the proposed settlement agreement, we note it provides that if

the value of the claims of the members who opt-out reaches $50,000.00, the

agreement is void ab initio. Appellants contend the claim of Mr. Brossette is

$36,765.00 and that of Mr. Dehart is $29,804.93. Accordingly, Appellants

conclude the threshold amount was thus met. However, this argument is misplaced.

Mr. Brossette and Mr. Dehart did not opt-out. Rather, they submitted objections to

the proposed settlement agreement. The notice provided specific instructions on

submitting a claim form, an objection, and opting out. The notice detailed the

difference between the choices. No law or jurisprudence allows Appellants the

opportunity to change their mind and convert an objection into an opt-out form.

Appellants’ argument lacks legal and factual support and is without merit.

Our review of the record reveals the proposed settlement agreement is fair,

reasonable, and adequate. Thus, the trial court did not abuse its discretion in

granting final approval of the proposed settlement agreement.

127 DECREE

For the foregoing reasons, the trial court’s judgments denying the motions to

vacate (2021-CA-0022), granting preliminary approval of the proposed settlement

agreement (2021-CA-0049), and granting final approval of the proposed settlement

agreement (2021-CA-0199) are affirmed.

AFFIRMED