Case 4:11-cv KGB Document 186 Filed 01/12/17 Page 1 of 5 IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS WESTERN DIVISION

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1 Case 4:11-cv KGB Document 186 Filed 01/12/17 Page 1 of 5 IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS WESTERN DIVISION KENNETH WILLIAMS, MARY WILLIAMS, and KENNETH L. WILLIAMS on behalf of themselves and others similarly situated PLAINTIFFS v. Case No. 4:11-cv KGB STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY ORDER DEFENDANT Before the Court is a joint motion to stay and provide class communication filed by plaintiffs Kenneth Williams, Mary Williams, and Kenneth L. Williams ( Plaintiffs ) and defendant State Farm Mutual Automobile Insurance Company ( State Farm ) (Dkt. No. 183). In the motion, Plaintiffs and State Farm request that the Court stay these proceedings pending completion of a claims review process set forth by the parties and approve their proposed class communication. On January 10, 2017, the Court conducted a status conference at which counsel for the parties responded to questions from the Court regarding the proposed claims review process, proposed class communication, and the terms of the settlement. For good cause shown, the Court grants the motion (Dkt. No. 183). In October 2011, Plaintiffs commenced this action by filing their class action complaint against State Farm (Dkt. No. 1). The operative class action complaint in this case was filed on December 2, 2011 (Dkt. No. 17). Subsequently, on April 30, 2015, the Court granted class certification in this matter (Dkt. No. 85). The Court certified the class as follows: Residents of the State of Arkansas who, during the Class Period of October 14, 2006 through the date of resolution of this action, (a) have, had, or were covered under a contract of automobile insurance with Defendant that includes or included an optional med

2 Case 4:11-cv KGB Document 186 Filed 01/12/17 Page 2 of 5 pay and/or PIP coverage, (b) received a payment from Defendant under such coverage, (c) recovered money through settlement or otherwise from a third-party tortfeasor, without the assistance of counsel, and (d) had a portion of such recovery taken by Defendant as subrogation or reimbursement without (i) a judicial determination that the insured was made whole or (ii) any documentation in the claim file of an agreement that the insured was made whole. (Dkt. No. 85, at 2). The United States Court of Appeals for the Eighth Circuit denied State Farm s petition for interlocutory appeal of the class certification order (Dkt. No. 99). On July 29, 2016, the Court, at the request of the parties, referred this matter to Magistrate Judge Patricia S. Harris for the purpose of conducting a settlement conference (Dkt. No. 177). On September 14, 2016, the parties participated in a mediation session before Magistrate Judge Harris and were able to reach a tentative agreement in principle. The parties have since worked together to memorialize the terms and conditions of the settlement and executed a Settlement Agreement (Dkt. No. 183, Ex. 1, Settlement Agreement, at 2 14). Under the terms of the Settlement Agreement, State Farm will undertake a review of its insureds claims files that are currently listed in the class data to determine if the insureds meet the following criteria, consistent with the class definition: (a) they are listed in the Class Data, which is defined by the parties as the over-inclusive list of State Farm s insureds produced in discovery by State Farm for the purpose of providing Class Notice (Dkt. Nos. 183, at 4 n.1; 133); (b) there is no objective documentation in the relevant claim file demonstrating that the individual was represented by an attorney; (c) there is no objective documentation in the individual s claim file memorializing an agreement that the insured was made whole; and (d) there is no documentation that the reimbursement was not med-pay recovery (Dkt. No. 183, Ex. 1, Settlement Agreement, at 5, 3(A)). 2

3 Case 4:11-cv KGB Document 186 Filed 01/12/17 Page 3 of 5 According to the Settlement Agreement, the insureds meeting these criteria shall be deemed Qualifying Insureds. Any dispute between the parties as to whether or not an insured satisfies these criteria for being a Qualifying Insured will be resolved by Magistrate Judge Harris (Dkt. No. 183, Ex. 1, Settlement Agreement, at 6, 3(E)). The parties anticipate that this claims review process will take between six and nine months to complete. The Settlement Agreement further provides that, as a result of State Farm s agreement to issue individual payment checks to all Qualifying Insureds, continued certification of the class will become unnecessary. Accordingly, upon successful completion of the claims review, the parties intend to request that the Court decertify the class. This Court will not review the merits of such a request until the parties formally make the request. Within ten days of entry of an order decertifying the Class, each Qualifying Insured will be issued an individual payment check in an amount equal to the subrogation recovery amount allegedly taken, plus interest at a rate of six percent, less attorneys fees and costs. The reimbursement to be paid to Plaintiffs counsel will be determined by Magistrate Judge Harris (Dkt. No. 183, Ex. 1, Settlement Agreement, at 5 6, 4). In accordance with the proposed class communication and representations made by counsel for Plaintiffs at the status conference that took place January 10, 2017, such reimbursement will not exceed thirty-three percent of the total amount distributed (Dkt. No. 183, Ex. 1, First Proposed Communication, at 16). Each insured listed in the Class Data shall receive written, individual notification of the determination of his or her status, and those not meeting the requirements for being a Qualifying Insured shall be informed of the reason or reasons for the determination. Any insured, other than the Plaintiffs, whose claim is not resolved to his or her satisfaction, whether a Qualifying Insured or not a Qualifying Insured, will retain the ability to bring an individual lawsuit against State Farm. 3

4 Case 4:11-cv KGB Document 186 Filed 01/12/17 Page 4 of 5 For individuals electing to pursue an individual claim against State Farm, State Farm has agreed that it will not raise a statute of limitations defense provided that the individual lawsuit is filed within 90 days of the date of the Court s class decertification order. These rights will be communicated to each insured listed in the Class Data. The Court has reviewed the Settlement Agreement and the proposed class communication regarding the Settlement Agreement and associated claims process (Dkt. No. 183, Ex. 1, Settlement Agreement, at 2 14; Dkt. No. 183, Exs. 1 3, Proposed Communication, at 15 21). While the Court acknowledges that the proposed Settlement Agreement anticipates that the class will be decertified, the Court determines that the parties proposed Settlement Agreement and proposed class communication are fair, reasonable, and adequate. Petrovic v. Amoco Oil Co., 200 F.3d 1140, (8th Cir. 1999). The proposed notice adequately describes the settlement s terms. The proposed notice provides a telephone number for individuals to call to obtain additional information, should they desire to do so, and refers to a website on which the Settlement Agreement will be posted. See Petrovic, 200 F.3d at (analyzing the sufficiency of notice of settlement sent to class members). In addition, the Court concludes that the requested stay would assist the parties in effectuating the claims review process and would conserve judicial resources. See, e.g., Sierra Club v. U.S. Army Corps of Engineers, 446 F.3d 808, 816 (8th Cir. 2006) (acknowledging that a district court has broad discretion to stay proceedings when appropriate to control its docket). The Court grants the motion to stay and provide class communication (Dkt. No. 183). Communication with the class regarding the Settlement Agreement must substantially conform to the Exhibits provided to the Court (Dkt. No. 183, Exs. 1 3, Proposed Communication, at 15 21). 4

5 Case 4:11-cv KGB Document 186 Filed 01/12/17 Page 5 of 5 It is so ordered this 12th day of January, Kristine G. Baker United States District Judge 5