UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION. Plaintiffs, Defendants.

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1 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 1 of 31 Pg ID UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION PAT CASON-MERENDA and JEFFREY A. SUHRE on behalf of themselves and others similarly situated, Plaintiffs, Case No Hon. Gerald E. Rosen v. VHS of MICHIGAN, INC., d.b.a. DETROIT MEDICAL CENTER, et al., Defendants. PLAINTIFFS MOTION TO DISTRIBUTE SETTLEMENT FUNDS AND PAY AND REIMBURSE FINAL EXPENSES

2 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 2 of 31 Pg ID Plaintiffs Pat Cason-Merenda and Jeffrey Suhre, on behalf of themselves and the certified Class, hereby move the Court for an order authorizing Class Counsel to distribute the Settlement Funds and pay and reimburse certain additional expenses associated with the claims process that have been incurred over and above previous estimates. In support of this motion, Plaintiffs rely upon the accompanying Memorandum of Law and exhibits submitted therewith. DATED this 7th day of June KELLER ROHRBACK L.L.P. By /s/mark A. Griffin Mark A. Griffin Lynn L. Sarko Raymond J. Farrow Tana Lin 1201 Third Avenue, Suite 3200 Seattle, WA Tel : Daniel A. Small COHEN MILSTEIN SELLERS & TOLL, PLLC 1100 New York Avenue, NW, West Tower, Suite 500 Washington D.C Tel: David P. Dean JAMES & HOFFMAN 1130 Connecticut Avenue, NW, Suite 950, Washington, DC Tel:

3 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 3 of 31 Pg ID E. Powell Miller (P39487) Sharon S. Almonrode MILLER LAW FIRM 950 W. University Drive, Suite 300 Rochester, MI Tel: (248) Attorneys for Plaintiffs 2

4 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 4 of 31 Pg ID UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION PAT CASON-MERENDA and JEFFREY A. SUHRE on behalf of themselves and others similarly situated, Case No v. Plaintiffs, Hon. Gerald E. Rosen VHS of MICHIGAN, INC., d.b.a. DETROIT MEDICAL CENTER, et al.., Defendants. PLAINTIFFS MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISTRIBUTE SETTLEMENT FUNDS AND PAY AND REIMBURSE EXPENSES

5 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 5 of 31 Pg ID TABLE OF CONTENTS I. INTRODUCTION...3 II. STATEMENT OF FACTS...8 A..Background...8 B..Claims Administration Claim Form Mailing and Receipt Processing of Customized Claims Processing of Generic Claims Processing of Deficient Claims...14 C..Distribution of the Settlement Funds...16 III. CONCLUSION

6 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 6 of 31 Pg ID STATEMENT OF ISSUES PRESENTED 1. Should the Court approve distribution of the net settlement funds including an allocation of any unclaimed funds to an appropriate cy pres recipient? 2. Should the Court approve payment and reimbursement of expenses associated with the claims administration process? Plaintiffs Answer to Both Questions Presented: Yes. 2

7 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 7 of 31 Pg ID I. INTRODUCTION The Court previously approved the procedures followed by the Claims Administrator and Class Counsel in processing the claims of 10,930 nurses who sought a share of previous seven settlements in this matter. Order Granting Plaintiffs Motion to Distribute Settlement Funds and Pay and Reimburse Final Expenses (ECF 860). On January 27, 2016 the Court approved a new claims process through which nurses could seek a share of the monies available as a result of the Settlement with Detroit Medical Center (hereinafter the DMC Settlement ). Final Order and Judgment as to VHS of Michigan, Inc., d/b/a Detroit Medical Center (ECF 970). That procedure allowed the 10,930 nurses who previously submitted approved claims to be paid automatically, and gave a second chance to nurses who had not previously submitted a claim to do so, by returning a claim form substantially identical those used in association with prior settlements. Class Counsel are pleased to report that as a result of this process an additional 4,524 nurses have submitted Claim Forms that Counsel recommend be approved for payment. If the Court approves these claims, approximately 70% of the Class will be receiving a check, a remarkably high claims rate. The procedures followed in this claims process, described in more detail below, are substantively identical to those previously approved by the Court. Unfortunately, because the claims rate for this second class process was higher than Class Counsel had 3

8 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 8 of 31 Pg ID estimated, the estimates for the costs that Counsel provided to the Court in December of 2015 have turned out have been slight underestimates of the final costs associated with processing the 4,695 claim forms received. Plaintiffs therefore seek approval for reimbursement (and payment to the Claims Administrator) of some additional sums for costs incurred over and above those previously approved by the Court for claims administration. Those sums (detailed below) add up to an additional $38, If all cost withdrawals requested are approved, then, after adding the residual sums from previous settlements, but not including interest earned (which will not be known precisely until the day funds are transferred), the total available for distribution will be $26, , and the average amount received by each of the 15,587 claimants that Class Counsel recommend for approval, will be almost $1,700. Plaintiffs therefore move this Court at this time for approval of the claims process and for recovery of the additional costs incurred over and above those previously estimated. Specifically, Plaintiffs seek entry of the accompanying Distribution Order and request that the Court: (1) Approve the procedures used and actions taken by Rust Consulting ( Rust or the Claims Administrator ) and Class Counsel in disseminating the customized and generic claim forms to potential members of the Class. The claim forms were the Court-approved means by which class members could seek to share 4

9 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 9 of 31 Pg ID in funds obtained in the settlement with Defendant VHS Michigan, Inc., d/b/a Detroit Medical Center ( Detroit Medical Center ). The total amount of such settlement funds, plus all accrued interest and any undistributed funds from the prior settlements approved by the Court are referred to herein as the Settlement Funds. (2) Approve the procedures used and actions taken by Rust and Class Counsel for the administration of the DMC Settlement. (3) Approve the claims submitted by the claimants ( Authorized Claimants ) listed in Exhibit A to the Declaration of Chris Pikus ( Pikus Declaration ), Senior Project Manager for Rust who oversaw Rust s administration of the Settlement. This list includes all persons who submitted approved claims by returning Court-approved claim forms for the DMC Settlement, and all persons who had previously submitted a Court-approved claim to one or more of the previous seven settlements. (4) Reject the 42 claims set forth in Exhibit B to the Pikus Declaration which have been determined ineligible because either the claimants are not members of the Class or they have not provided the necessary information (signed their form, provided a Social Security Number, or provided the required documentation to support a claim if they returned a Generic Claim Form) despite being given an opportunity to cure that deficiency; 5

10 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 10 of 31 Pg ID (5) Reject the 7 claims set forth in Exhibit B to the Pikus Declaration which have been determined ineligible because they were both post marked after the claim deadline stated on their Claim Form and were received by the Claims Administrator after May 6, 2016, the date when significant costs were incurred computing the data submitted with this Motion, which would have to be recomputed were additional late claims to be allowed; (6) Reject the entitlement to any monies from the DMC Settlement of the names associated with the 8,869 Rust ID numbers 1 who were sent claim forms set forth in Exhibit C to the Pikus Declaration because they did not return a completed claim form prior to May 6, 2016; (7) Approve the disbursement of $38, from the Settlement Funds to reimburse Class Counsel for final expenses incurred (or to be incurred) over and above the amount estimated in connection with the claims administration process, as described in the Declaration of Raymond J. Farrow ( Farrow Declaration ), attached hereto as Exhibit 2. This amount includes $27, in additional costs 1 This represents far fewer than 8,869 persons (and even less class members) since this list will include many duplicates both of people who did make claims (under a different name and/or address) and people who were sent more than one claim form and did not return any of the multiple forms they were sent. In addition, some claim forms were sent to people as to whom it was uncertain whether they were members of the Class. 6

11 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 11 of 31 Pg ID incurred by Rust Consulting (the claims administrator), $6,470 in additional accounting fees and costs associated with the Qualified Settlement Fund where the settlement fund has been stored, $3, in additional claims examination and evaluation costs incurred by Cornerstone Associates, and $1, in additional out of pocket expenses incurred by Class Counsel. (8) Approve the withholding of applicable state and federal income taxes from class member distributions, as provided below and in the Pikus Declaration. (9) Authorize Rust to distribute the Settlement Funds, net of any expenses and payments awarded pursuant to this motion (hereinafter the Net Settlement Fund ), to the Authorized Claimants in proportion to their Relevant Pay, as provided by the Court-approved Plan of Allocation (except that no claimant will receive less than $15 as previously approved by the Court). The Authorized Claimants percentage shares of the Net Settlement Fund, as calculated by Rust, appear in Exhibit A to the Pikus Declaration. (10) Authorize the payment of any unclaimed residual funds after the expiration date on all mailed checks (a date to be set four months after the mailing date) as a cy pres payment to a nursing scholarship fund at Wayne State University s College of Nursing. In support of this Motion, Plaintiffs state the following: 7

12 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 12 of 31 Pg ID II. STATEMENT OF FACTS AND ANALYSIS A. Background After the Court issued its Opinion and Order regarding Plaintiffs Motion for Class Certification (ECF No. 819) certifying a Class and reinstated that ruling after an attempt at appellate review (ECF No. 842), Plaintiffs settled with the last remaining defendant, Detroit Medical Center, for a total payment of $42 million to the Class. This Court granted final approval to that Settlement, ECF No. 970, and awarded attorney s fees, reimbursement of costs, and payment of incentive payments from that Settlement. ECF No On December 11, 2015, Plaintiffs requested that the Court: 1) approve two types of claim forms; 2) approve Plaintiffs proposed allocation plan for distributing the settlement money pro rata based on each Settlement Class member s eligible pay (except that any claimant with a small claim would be sent a $15 floor amount); 3) set a deadline after entry of the Court s order to mail the claim forms to class members; and 4) require that completed claim forms be signed and mailed to the Claims Administrator, postmarked no later April 16, ECF No The Court then granted Plaintiffs Motion regarding claim procedures, including approving the Claim Forms to be sent to Settlement Class members, on 8

13 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 13 of 31 Pg ID January 27, ECF No The Court also approved distribution to any person who had submitted an approved claim to previous settlements. 2 B. Claims Administration 1. Claim Form Mailing and Receipt On February 16, 2016, Rust sent Customized Claim Forms to 11,001 addresses for individuals whose Relevant Pay information was in the database compiled by Plaintiffs experts from the payroll and human resources data produced by Defendants and Generic Claim Forms to 2,586 addresses, all by firstclass mail. Pikus Decl. at 9. On that same date, Rust sent 10,930 individuals a Notice of Claim Letter informing them that they did not need to submit a Claim Form as one is already on file from the previous Claim Form mailing. Id. Subsequently, an additional 13 claim forms were mailed to persons who proved they were members of the class but had not received a form (twelve custom and one generic). 3 Id. at 15. In total, then, customized claim forms were sent to 11,013 persons. Each customized claim form stated the total amount of Relevant 2 Excluding APNs who were part of the Oakwood Settlement Class but are not part of the certified Class entitled to share in the DMC Settlement and excluding persons only employed after December of 2006 who were part of the Beaumont and Trinity Settlement Classes but are not part of the certified Class entitled to share in the DMC Settlement. None of these people were sent a Notice of Claim. 3 In each case investigation revealed that the person had been sent a claim form but had changed address (often many times) and/or changed name since 2006 so had not received that form. 9

14 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 14 of 31 Pg ID Pay determined by analysis of Defendants data produced during the litigation. Id. at 9. Class members had the option either to accept this figure or to dispute it and provide documentation to support any additional amount of Relevant Pay claimed. The Generic Claim Form was mailed to 2,587 individuals whose pay information does not appear in Plaintiffs experts database or for certain other settlement class members. 4 This form required a claimant to state his or her Relevant Pay and provide supporting documentation. Id. at 8. Both the customized and generic forms required claimants to certify their membership in the Settlement Class and the accuracy of the information they provided. Following the November 21, 2013 mailing, Rust, to the extent better addresses could be determined, promptly r ed claim forms that were returned as undeliverable with or without forwarding addresses. Pikus Decl. at The Claims Administrator operated a toll-free telephone number, clearly printed on all of the customized and generic claim forms and listed on the website to field calls from potential class members who had questions or required assistance with the claims process. Id. at 5. Either the 4 Other circumstances that led to a nurse being sent a generic claim form were previously described in the declaration of Raymond J. Farrow in Support of Plaintiffs Motion for Final Approval of Four Settlements and for Approval of Proposed Plan of Allocation 8. ECF No

15 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 15 of 31 Pg ID Claims Administrator or Class Counsel and their staff have responded to every (non-hang-up) telephone call and to s or faxes. Id. Over 900 calls were received and responded to by Rust, id., and over 4,400 calls were received by Class Counsel (many of the callers were able to obtain the information they needed from a detailed and constantly updated recorded message, but hundreds of whom talked to a paralegal or other knowledgeable person). Farrow Decl. 4. Class counsel also received and responded to over 400 s. Id. Class Counsel also continued to operate the settlement website on which class members could view settlement-related documents or obtain contact information for the Claims Administrator and Class Counsel. Id. at 6. Rust received 4,695 claim forms, of which 150 were initially determined to be duplicates. Pikus Decl. at 12. Of the non-duplicates, 4,641 were postmarked on or before April 16, 2016, the deadline for submission of claims set by the Court. Id. at 12. Rust received 54 additional claim forms postmarked after the April 6, 2016 deadline, of which 40 were received before May 6, Id Processing of Customized Claims. Rust reviewed each returned Customized Claim Form to determine its timeliness and completeness and whether the claimant had disputed the pre-printed 5 A particularly high proportion of the late mailed claim forms were missing signatures and/or social security numbers and so were rejected on that basis. See Pikus Decl. Ex. B. 11

16 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 16 of 31 Pg ID Relevant Pay amount. Id. at If the Relevant Pay figure was disputed, Class Counsel reviewed the accompanying documentation provided by the claimant for authenticity and sufficiency. Farrow Decl. at 8. If the documentation (usually W-2 forms) satisfied these criteria, it was cross-checked against Defendants payroll data to ensure that the claimant was a class member during all of the periods for which he or she submitted documentation. Id. at 9. If a claimant failed to provide adequate documentation or the payroll data indicated that the individual was not a class member during certain claimed portions of the class period, Class Counsel mailed a letter to the claimant informing him or her of that fact, allowing them to cure any defect. Id. at 10. If an individual claimed additional Relevant Pay for the same time period and hospital as reflected in Plaintiffs database, and the additional amount was supported by adequate documentation, the claimant was credited with the claimed amount. Id. at 11. Class Counsel wrote to every individual who had disputed his or her Relevant Pay setting forth the decision that had been made and the reason for that decision. Each was given an opportunity to dispute that determination. If someone supplied additional information after receipt of that letter their dispute was further reviewed in light of the additional information provided. Id. at

17 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 17 of 31 Pg ID Processing of Generic Claims Rust and Class Counsel followed a similar procedure for generic claimants. Specifically, Rust reviewed each returned Generic Claim Form to determine its timeliness and completeness. If a claimant provided documentation, it was reviewed by Class Counsel to determine its authenticity and sufficiency. Id. at Claimants were mailed follow-up letters if they failed to provide adequate documentation, providing them with an opportunity to cure the defect. Id. at 19. The majority of Generic claimants who sent in documentation provided W-2 forms or paystubs to substantiate their claims. Id. at 17. Although a W-2 form or paystub can demonstrate that a claimant was paid a certain amount of wages by a Defendant hospital during the class period, it cannot establish that those wages were earned in an in-class job title. Id. In order to determine whether the claimant received the wages in an in-class job, Class Counsel provided lists of such claimants to their database experts with requests for relevant information. Id. at Using the hospital databases, sometimes with needed assistance from their experts, it was possible to determine whether and when these individuals held inclass job titles, and the wages they received in such jobs during the class period. Id. 6 In fact, it was determined that most of the people who returned generic forms were people who had also been sent a custom form (often under a different name, always at a different address) and so their claims could be approved on that basis even without full documentation. 13

18 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 18 of 31 Pg ID Generic claims were disallowed or adjusted if Class Counsel s review revealed that the individual was not a class member during any of the class period or during less of the class period than claimed. Id. at 19. Through this process Class Counsel were able to determine that 63 of the 182 returned Generic Claim Forms represented claims by Settlement class members who had adequately documented their Relevant Pay, 59 were determined to be duplicates (i.e. either from a person who returned both a Custom and a Generic Claim Form or from a person who did not need to submit a claim and had been sent a Notice of Claim letter informing them of that fact), and 30 were determined to be from people who were not members of the class or who failed to include adequate documentation to support their claim. Id. at Processing of Deficient Claims If a claim was deficient because it was not signed or was missing a social security number, 7 Rust mailed letters to these claimants notifying them of the deficiency and providing them an opportunity to correct the problem. Pikus Decl. at of 34 people sent such deficient letters subsequently cured the deficiency. Id. All claimants received final determination letters that indicated whether their claim would be accepted in full, accepted in part, or denied. In 7 Claimants were required to provide social security numbers so that the Claims Administrator could discharge tax reporting and withholding requirements. 14

19 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 19 of 31 Pg ID addition, if applicable, the letter provided the claimant with his or her final Relevant Pay determination. Farrow Decl. at 10. Throughout the entire claims process, Class Counsel engaged in extensive correspondence and communication with the claimants with the goal of ensuring that valid claimants received credit for all Relevant Pay. Id. at 23. As of the date of this filing, Rust and Class Counsel are unaware of any unresolved objection to the proposed rejection or reduction of a claim. Id. at 25. As to persons who submitted a claim that was postmarked after the claims deadline (April 16, 2016) but received by the Claims Administrator before May 6, 2016, each was sent a letter which explained that counsel would submit their claim to the Court, but it would be for the Court to decide whether to approve that claim. The text of the letter sent by the Claims Administrator reads: You will have received a letter from the Claims Administrator notifying you that your completed claim form was mailed after the Court-established deadline for submitting claims and so Court approval would be required to process your claim. Class Counsel have decided to relieve you of the burden of notifying the Court of your late claim, but emphasize that it will still be up to the Court to decide whether to accept any or all late claims. We will propose to the Court that your claim and other otherwise valid claims received at the offices of the Claims Administrator as of Friday May 6 be approved, and Counsel have instructed the Claims Administrator to prepare a distribution plan based on these claims. Class Counsel will not propose to the Court that any additional late claims received after May 6 be accepted because doing so will adversely impact the Class because of the additional costs that would be incurred by the Claims 15

20 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 20 of 31 Pg ID Administrator to process additional claims and to prepare a revised plan of distribution. Id. at 26. People whose claim was received after May 6 have been sent a letter informing them that their claim is beyond the deadline and can only be approved if they seek relief from the Court for their failure to comply with the Claim Form instructions. Id. at 27. C. Distribution of the Settlement Funds The amount collected in the DMC Settlement, less all amounts previously approved by this Court to be withdrawn amounts to $ 26,047, This amount is the $42 million collected through the approved settlements, minus the following amounts: Farrow Decl. Ex. A. $36,000 in incentive awards for the Named Plaintiffs, Pat Cason- Merenda and Jeffrey Suhre; $15,816, awarded as reimbursement of out-of-pocket expenses and payment of attorneys fees; $100,870 in estimated expenses for administering the claims process. The Net Settlement Fund to be distributed to Authorized Claimants consists of these monies, (i) plus $131, in unclaimed funds from the prior settlements (see Order Granting Plaintiffs Motion Request for Approval for Allocation of Unclaimed Residual Funds (ECF No. 958)); (ii) minus any additional amounts which may be awarded by the Court to reimburse Class Counsel and Rust for 16

21 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 21 of 31 Pg ID additional expenses associated with administering the claims process above the sum estimated in December of 2015; (iii) plus any additional interest earned up to the time the funds are transferred to Rust for distribution. If the final expenses of Plaintiffs counsel (detailed below) are reimbursed as requested (including the final charges and expenses of Rust, Cornerstone and Merrill/DTI discussed below), then the Net Settlement Fund available for distribution to Authorized Claimants as of June 1, 2016 would be $26,140, (plus interest), and the average amount per recommended Authorized Claimant before tax withholding would be slightly under $1,700. See Farrow Decl and Ex. A. 8 In December of 2015, Class Counsel presented the Court with Rust s estimate that it would incur costs of $87,370 associated with administering the claims process. See Declaration of Mark A. Griffin at 26 (ECF No. 962). Class Counsel also estimated an additional $13,500 in costs associated with the work to be done by Cornerstone Associates analyzing the hospital databases to verify claimant job titles and other information. Id. at 13. The number of claim forms that required analysis (either because it was a generic form, or a custom form challenging Relevant Pay, or to determine whether 8 All these figures do not include interest earned on the various funds, the amount of which will depend on the exact date of transfer of funds for distribution. 17

22 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 22 of 31 Pg ID the form was a duplicate of another clam form or from a person who was sent Notice of Claim under a different name or at a different address) was significant. 384 of the submitted claim forms required analysis and assistance from the database experts retained by Class Counsel to extract relevant data from the hospitals numerous (and disparate) human resource databases to resolve issues with those claims. Farrow Decl. at 9, 18. In addition, assistance was required with regard to all self-identifiers (people who had heard about the case in some way and called requesting they be sent a claim form) to determine their eligibility to make a claim (or lack thereof, in almost all cases). In addition, the number of telephone calls and queries received far exceeded what Class Counsel had anticipated (many of these being from people who received a Notice of Claim letter telling them they did not need to do anything to receive money from this settlement, yet they called to inquire about how they could make a claim anyway). As a result, the actual costs incurred to date by Cornerstone Associates in analyzing the hospital databases are slightly higher than estimated, $19, rather than $13,500. In addition, Rust s current estimate of costs incurred to date plus costs to complete the claims distribution process are higher than previously reported, at 18

23 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 23 of 31 Pg ID $115, rather than $87, Id. 27, 29; Pikus Decl Rust s work includes, without limitation, mailing the claim forms to class members, processing and auditing claim forms, providing information to, and responding to queries from Class Counsel about claims submitted, identifying deficient or rejected claims, mailing deficiency letters, notifying claimants of the status of their claim, maintain a toll free telephone line and responding to over 900 queries to that line, and reviewing and auditing all attempts to cure deficient claims. Id. As of June 30, 2014, Class Counsel have incurred $8, in costs incurred by Keller Rohrback for mailing, printing, telephone costs and other similar items administering the claims process. Farrow Decl. at Finally, based on past experience, even when Authorized Claimants are sent their checks, there will inevitably be a number who will have follow-up queries or issues to be resolved. Class Counsel will maintain the toll-free number opened for this case in order to deal with such inquiries. Counsel estimate, based on the amount they spent to date and their experience in other litigation, that these costs will likely amount to $2,500. Id. at 30. In addition, Class Counsel have received a late bill from 9 These amounts exclude $19, mentioned in the Pikus Declaration as an amount invoiced in October 2015 as part of Rust s costs, because that amount was included in Plaintiffs prior estimated costs and have already been reimbursed. 19

24 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 24 of 31 Pg ID Merrill/DTI for database and document storage costs for $2, Id. at Finally, Class Counsel have incurred (or will incur) total accounting costs associated with tax filings for the QSF accounts in which settlement funds have been held of $12,970 rather than the $6,500 that their accountant had estimated in December of Id. at 32. Class Counsel are requesting reimbursement of these additional expenses, whether incurred or anticipated, beyond those previously approved at this time. The total sum requested for all these items equals $38, Id. at 3 and Ex. A. Federal and state taxing authorities require that employer and employee taxes be withheld on the wage portion of each claimant s distribution. Consistent with the advice of tax attorneys who have been consulted by Class Counsel, Plaintiffs propose to treat each Authorized Claimant s distribution as wages and withhold federal and state taxes therefrom. Rust, through its tax department, will determine the tax liability of each Authorized Claimant and withhold that amount. Pikus Decl. at 16. Of the 4,695 claims received as of May 6, 2016 (eliminating duplicates), Rust and Class Counsel have determined that 4,641 were timely submitted, and 10 Class Counsel had informed all vendors they needed to provide full invoices prior to December 2015 to be included in Counsel s fee and cost petition, yet this invoice was only received in the Spring of Class Counsel have successfully negotiated the original amount billed down considerably because of this late billing. Id

25 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 25 of 31 Pg ID that an additional 54 claims were untimely because they were postmarked after the submission deadline of April 16, Id. at 12. Plaintiffs propose that of the 54 late claims received, the Court include 40 of those late claims that were received prior to May 6, 2016 in the distribution because their tardiness caused no prejudice and they are otherwise valid. 11 Rust has provided a spreadsheet identifying the claims recommended for approval by their claim number, the validated Relevant Pay amount, and the proposed pro rata allocation of the Net Settlement Fund. Id., Exhibit A. Plaintiffs seek the Court's approval to distribute that pro rata portion of the Net Settlement Fund to each Authorized Claimant (or $15, which is less), after withholding applicable taxes. Class Counsel has determined that 42 persons who returned a claim form are ineligible to receive any of the Net Settlement fund because the claimant: (1) held only an out-of-class job title during the class period; (2) worked only at a non- Defendant hospital during the class period; (3) failed to provide adequate documentation (despite being given an opportunity to cure) and could not be verified as a class member through Defendants payroll data; (4) failed to sign the claim form (despite being given an opportunity to cure); or (5) failed to provide a 11 Because Class Counsel asked Rust to prepare all supporting materials for this Motion and undertake the calculations necessary to inform the Court of the percentage awards to each class member on May 6, 2016, adding new claimants whose forms arrived after that date would involve significant additional costs associated with re-doing all those calculations and tables. 21

26 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 26 of 31 Pg ID social security number (despite being given an opportunity to cure). Id. at 12, 19. These claims are listed in Exhibit B to the Pikus Declaration along with the claimed Relevant Pay amount and the reason for their proposed rejection. Plaintiffs request that the Court reject all of these claims. Id. In addition, seven persons who returned claim forms are deemed ineligible because their claim forms were both postmarked after the claims deadline and their Claim Form was not received by May 6, These potential claimants are listed in Exhibit B to the Pikus Declaration. 12 In summary, the claims process by which Rust, under the supervision and with the assistance of Class Counsel, has determined the proper allocation of the Net Settlement Fund among class members has produced the following results: Claims recommended for approval: 4,524 Late claims recommended for approval 40 Customized Claims recommended for acceptance of challenge to stated pay: Customized Claims recommended for rejection of challenge to stated pay: Generic Claims recommended for rejection as non-class 30 member: Incomplete claims recommended for rejection Of the 14 claim forms received after May 6, seven were either unsigned or mossing a social security number or both. Those are also listed on Pikus Ex. B. 22

27 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 27 of 31 Pg ID D. Distribution of Residual Settlement Funds Class Counsel propose that after the date when all distributed checks expire (which they recommend be four months after the date of mailing), and sufficient time has been allowed for all timely deposited checks to have cleared, that any residual unclaimed funds should be distributed pursuant to the cy pres doctrine. Class Counsel believe, based on past experience distributing funds in this case, that this will be the most appropriate use of any unclaimed funds because the cost of mailing an additional distribution of checks to class members will use up almost all of any amount likely to remain. In selecting an appropriate use of residual unclaimed funds under the cy pres doctrine, it is important that the use selected be one that has some relation to the members of the class or to the purpose of the litigation, with a geographic mission that relates to the class. C.f., AMERICAN LAW INSTITUTE, PRINCIPLES OF THE LAW OF AGGREGATE LITIGATION Section 3.07 (2010). With that principle in mind, and following what was done with residual funds in the similar nurse wage antitrust matter in Albany, New York, Class Counsel propose that any unclaimed funds be donated to the Wayne State University College of Nursing to fund scholarships for 23

28 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 28 of 31 Pg ID nurses. 13 See, Order Authorizing Pro Rata Distribution to Additional Class Member and Cy Pres Distribution of Residual Settlement Funds, Fleischman v. Albany Med. Ctr., No (N.D.N.Y. Dec. 17, 2013) (approving payment of residual funds to the Karen Swanick Scrivani 94 Memorial Scholarship fund at Hudson Valley Community College (a fund devoted to nursing students)). 14 III. CONCLUSION Based on the foregoing, Plaintiffs respectfully request that this Court approve the procedures used and actions taken by Rust and Class Counsel for the administration of the Settlements and approve the distribution of the Settlement Funds as set forth in this Motion and the accompanying proposed Distribution Order. DATED this 7th day of June Respectfully submitted: KELLER ROHRBACK L.L.P. By /s/raymond J. Farrow Mark A. Griffin Lynn L. Sarko Raymond J. Farrow 13 While Class Counsel propose this destination for residual funds consistent with their experience in Albany, there can be no doubt there are many equally worthwhile recipients of these monies consistent with the requirements of the ALI Principles. This Court is well within its discretion to select an alternative consistent with those guiding principles. 14 Attached as Exhibit 2 to Farrow Declaration. 24

29 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 29 of 31 Pg ID Tana Lin 1201 Third Avenue, Suite 3200 Seattle, WA Tel : Daniel A. Small Sharon Robertson COHEN MILSTEIN SELLERS & TOLL, PLLC 1100 New York Avenue, NW, West Tower, Suite 500 Washington D.C Tel: David P. Dean JAMES & HOFFMAN 1130 Connecticut Avenue, NW, Suite 950, Washington, DC Tel: E. Powell Miller (P39487) Sharon S. Almonrode MILLER LAW FIRM 950 W. University Drive, Suite 300 Rochester, MI Tel: (248) Joseph Goldberg FREEMAN, BOYD, HOLLANDER, GOLDBERG, URIAS, & WARD, P.A. 20 First Plaza, Suite 700, Albuquerque, NM Tel: (505) Charles E. Schaffer LEVIN, FISHBEIN, SEDRAN & BERMAN 510 Walnut Street, Suite

30 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 30 of 31 Pg ID Philadelphia, PA Tel: (215) Fax: (215) Daniel M. Cohen CUNEO GILBERT & LADUCA, LLP 106-A S. Columbus Street Alexandria, VA Tel: (202) Fax: (202) Daniel E. Gustafson GUSTAFSON GLUEK PLLC 120 So. 6th Street, Ste Minneapolis, MN Tel: (612) Fax: (612) Attorneys for Plaintiffs 26

31 2:06-cv GER-DAS Doc # 973 Filed 06/07/16 Pg 31 of 31 Pg ID UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION PAT CASON-MERENDA and JEFFREY A. SUHRE on behalf of themselves and others similarly situated, Case No v. Plaintiffs, Hon. Gerald E. Rosen VHS of MICHIGAN, INC., d.b.a. DETROIT MEDICAL CENTER, et al.., Defendants. CERTIFICATE OF SERVICE I hereby certify that on June 7, 2016, I electronically filed the foregoing document with the Clerk of the Court using the ECF system which will send notification of such filing to the counsel of record for all parties for Civil Action No. 2:06-cv GER-DAS, and I hereby certify that there are no individuals entitled to notice who are non-ecf participants. /s/ Raymond J. Farrow Keller Rohrback L.L.P Third Avenue, Suite 3200 Seattle, WA Phone: rfarrow@kellerrohrback.com 27