WALKER v. HIGHMARK BCBSD HEALTH OPTIONS, INC.

District Court, W.D. Pennsylvania·Decided December 13, 2022·No. 2:20-cv-01975·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

CHRISTOPHER JAMES WALKER, KIM STERLING, and ERNIE FISHER, on behalf of 2:20-CV-01975-CCW themselves and all others similarly situated,

Plaintiff,

v.

HIGHMARK BCBSD HEALTH OPTIONS, INC., COTIVITI, INC.,

Defendants.

OPINION Before the Court is the Plaintiffs’ Unopposed Motion for Preliminary Approval of Class Action Settlement and Certification of Settlement Class. See ECF No. 112. For the reasons that follow, the Motion will be GRANTED. I. Background On November 30, 2020, Plaintiff Christopher James Walker filed a class action complaint in the Court of Common Pleas of Allegheny County against Highmark BCBSD Health Options, Inc. (“Highmark”), alleging that Highmark violated the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. (“TCPA”). ECF No. 1-1 ¶¶ 1, 51–55. Specifically, Mr. Walker asserted that Highmark violated the TCPA by using automated and pre-recorded messages to call his and putative class members’ cellphones without those individuals’ consent. Id. ¶¶ 19–29. Mr. Walker brought a single claim under the TCPA, seeking injunctive, declaratory, and monetary relief, including treble damages and attorneys’ fees. Id. at 11. On December 21, 2020, pursuant to 28 U.S.C. §§ 1331 and 1441, Highmark timely removed the case to the United States District Court for the Western District of Pennsylvania. ECF No. 1 ¶¶ 10–13, 20. Highmark then filed a motion to dismiss for lack of jurisdiction, which Mr. Walker opposed. ECF Nos. 10 & 24. Subsequently, Mr. Walker filed a motion to remand, as well as a motion to stay. ECF Nos. 12 & 14. Highmark opposed both. ECF Nos. 18 & 19. The Court

denied all three motions. ECF Nos. 22, 23, & 28. On August 5, 2021, Mr. Walker filed a First Amended Complaint. ECF No. 38. With consent from Highmark, Mr. Walker filed a Second Amended Complaint to include Cotiviti, Inc. as another defendant (collectively “Defendants”), alleging that Cotiviti also engaged in placing automated and pre-recorded calls to individuals, including Mr. Walker, without any consent. ECF Nos. 68 & 71 ¶ 1. Starting in mid-2021, the parties conducted discovery on the issue of class certification for over a year. See ECF Nos. 36, 93, & 99. During this time, the Court resolved several discovery disputes. ECF Nos. 41 & 70. In addition, Cotiviti filed a motion to dismiss, which the Court

denied. ECF Nos. 78 & 90. On July 29, 2022, the Court was advised that the parties reached a settlement with the assistance of a mediator. Shortly thereafter, Mr. Walker filed a final Third Amended Complaint to include additional named plaintiffs, see ECF No. 111 (including Kim Sterling and Ernie Fisher as named plaintiffs),1 and on November 18, 2022, Mr. Walker filed the instant Motion, seeking preliminary approval of a class action settlement and conditional certification of a class for settlement purposes, which neither Highmark nor Cotiviti oppose, see ECF No. 112.

1 Mr. Walker, Ms. Sterling, and Mr. Fisher are collectively referred to as “Plaintiffs.” II. Standard of Review “The claims, issues, or defenses of a certified class—or a class proposed to be certified for purposes of settlement—may be settled . . . only with the court’s approval.” Fed. R. Civ. P. 23(e). Furthermore, where the settlement would bind class members, “the court may approve [the settlement] only after a hearing and only on finding that it is fair, reasonable, and adequate.” Fed.

R. Civ. P. 23(e)(2). Accordingly, “when a district court is presented with a class settlement agreement, the court must first determine that ‘the requirements for class certification under Rule 23(a) and (b) are met, and must separately “determine that the settlement is fair to the class under [Rule] 23(e).”’” In re NFL Players Concussion Injury Litig. (“NFL II”), 775 F.3d 570, 581 (3d Cir. 2014) (quoting Sullivan v. DB Invs., Inc., 667 F.3d 273, 319 (3d Cir. 2011)). Courts in the Third Circuit generally follow a two-step process for approval of class settlements. First, “the parties submit the proposed settlement to the court, which must make ‘a preliminary fairness evaluation.’” In re NFL Players’ Concussion Injury Litig. (“NFL I”), 961 F. Supp. 2d 708, 713–14 (E.D. Pa. 2014) (quoting Manual for Complex Litigation (Fourth) § 21.632

(2004) (“MCL”)). At the preliminary approval stage, the bar to meet the “fair, reasonable and adequate” standard is lowered, and the court is required to determine whether “the proposed settlement discloses grounds to doubt its fairness or other obvious deficiencies such as unduly preferential treatment of class representatives or segments of the class, or excessive compensation of attorneys, and whether it appears to fall within the range of possible approval.” NFL I, 961 F.Supp.2d at 714. According to the United States Court of Appeals for the Third Circuit, there is “an initial presumption of fairness when the court finds that (1) the negotiations occurred at arm’s length; (2) there was sufficient discovery; (3) the proponents of the settlement are experienced in similar litigation; and (4) only a small fraction of the class objected.” In re GMC Pick-Up Truck Fuel Tank Prods. Liab. Litig. (“GMC”), 55 F.3d 768, 785 (3d Cir. 1995).2 Even though there is a “strong presumption” in favor of class settlements, Ehrheart v. Verizon Wireless, 609 F.3d 590, 595–96 (3d Cir. 2010), “preliminary approval is not simply a judicial ‘rubber stamp’ of the parties’ agreement.” NFL I, 961 F. Supp. 2d at 714 (citation omitted).

As such, “[j]udicial review must be exacting and thorough,” id. (quoting MCL § 21.61), such that “[p]reliminary approval is appropriate where the proposed settlement is the result of the parties’ good faith negotiations, there are no obvious deficiencies and the settlement falls within the range of reason.” Zimmerman v. Zwicker & Assocs., P.C., No. 09-3905 (RMB/JS), 2011 WL 65912, at *2 (D.N.J. Jan. 10, 2011) (citation omitted); see also, In re Warfarin Sodium Antitrust Litig., 391 F.3d 516, 534 (3d Cir. 2004) (“In cases such as this, where settlement negotiations precede class certification, and approval for settlement and certification are sought simultaneously, we require district courts to be even ‘more scrupulous than usual’ when examining the fairness of the proposed settlement.”).

If approval of the proposed class settlement is sought contemporaneously with certification of the class—that is, when the parties agree to a class-wide settlement “before the district court has issued a certification order under Rule 23(c)”—“‘the certification hearing and preliminary fairness evaluation can usually be combined.’” NFL II, 775 F.3d at 582 (quoting MCL § 21.632). When doing so,

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WALKER v. HIGHMARK BCBSD HEALTH OPTIONS, INC., (W.D. Pa. 2022).

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