Case 1:09-md-02036-JLK Document 4366 Entered on FLSD Docket 09/06/2018 Page 1 of 12 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA MIAMI DIVISION CASE N O. 1:09-M D-02036-JLK THIS DOCUMENT RELATES TO: FOURTH TRANCHE ACTION H arris v. Associated Bank, N A. W.D. W is. Case No. 3:l0-cv-1 82-BBC S.D. Fla. Case No. 1 : 10-cv-22948-JLK ORDER ON JOINT STIPULATION AND PROPOSAL FOR PHASE IIDISTRIBUTION OF SETTLEMENT FUNDS TO PARTICIPATING SETTLEMENT CLASS MEM BERS ()n September 2018, Settlement Class Counsel and Associated Bank, N.A. (ûlassociated Bank'l filed a Joint Stipulation and Proposal for Phase 11 Distribution of Settlement Ftmds to Participating Settlement Class M embers ( tsti p ulation and Proposal'). 1 (DE # 4365). The Court now enters this Order based on the Stipulation and Proposal. BACKGROUND ()n August 2, 2013, this Court granted Final Approval to the Settlem ent with Associated Bank. (DE # 3576). On August 5, 2013, the Court entered Final Judgment incorporating the Final Approval Order. (DE # 3577). The Setlement included a Settlement Fund of $13,000,000 to be used to pay: (i) al distributions to eligible Setlement Class M embers who do not opt-out of the Setlement; (ii) al Court-awarded attomeys' fees, costs and expenses of Class Counsel; (ii) al Court-awarded Service Awards to the Plaintiffs; (iv) payment of expenses resulting from 1 A l capitalized term s have the sam e m eaning ascribed to them in the Setlem ent Agreem ent and Release and Amendment to Setlement Agreement and Release (colectively, the ûw greemenf') atached to the Amended M otion for Final Approval (DE # 3472-1 and 3472-2) and the Final Approval Order (DE # 3576).
Case 1:09-md-02036-JLK Document 4366 Entered on FLSD Docket 09/06/2018 Page 2 of 12 investing the Setlement Fund, if any; (v) al1 invoices of the Tax Administrator to perform taxrelated services for the Escrow Account; (vi) any and al1 Taxes; (vi) additional fees, costs and expenses not specificaly enumerated in the Agreement, subject to agreement and approval of Settlement Class Counsel and counsel for Associated Barlk and the Court; and (vii) disposition ofresidual funds after distribution of payments to Settlement Class M embers. (Agreement! 52). ln addition to the Setlement Fund, Associated Barlk was obligated to pay: (i) the costs of Notice to the Setlement Class and for the senices of the Notice Administrator; and (i) the Settlement Adm inistrator's fees and costs in connection with the implementation and administration of the Settlement. (Agreement! 53). Pursuant to the Agreement (Section XIl1), Associated Bank and the Settlement Administrator timely distributed Setlem ent Class M em ber Paym ents from the N et Settlem ent Fund to eligible Settlement Class M embers (the 'Thase l Distribution'). See Declaration of Kevin Skenandore!! 3-7 (ûtadmin. Dec1.'). Associated Bank issued credits to 80,273 Accounts of eligible Curent Account Holders in the aggregate amount of $3,216,510.68. 1d. at! 6. The Settlement Administrator caused to be m ailed a total of l 53,423 checks in the aggregate amount of $5,642,227.70 to eligible Past Account Holders as well as those eligible Current Account Holders for whom it was not feasible to issue credits to their Accounts. at! 7. The Settlement Administrator also m ade reasonable efforts to locate proper addresses for al eligible Settlement Class Members whose Phase l Distribution checks were not mailed due to undeliverable addresses and/or were returned by the United States Postal Service (CûUSPS') as tmdeliverable, and re-mailed those checks to updated addresses, if obtained. 1d. at!! 9-10. Fo low ing the void date for a1 Phase 1 D istribution checks, the Setlem ent A dm inistrator voided all checks that had not been negotiated and com pleted a form al reconciliation of the
Case 1:09-md-02036-JLK Document 4366 Entered on FLSD Docket 09/06/2018 Page 3 of 12 Setlement Fund. Admin. Decl. at! 13. The residual balance remaining in the Settlement Fund is currently $ 1,067,765.84. fj. at! 15, This balance includes: (a) the amount associated with retum ed and/or uncashed Phase I Distribution checks that w ere m ailed to eligible Settlem ent Class M embers but were retumed by the USPS as undeliverable; (b) the amount associated with Phase I Distribution checks that could not be mailed to eligible Settlem ent Class M embers because the Settlement Administrator was unable to locate reasonably reliable addresses; and (c) the amount associated with Phase I Distribution checks that were m ailed and not returned by the USPS, but not timely negotiated by Settlement Class Members. 1d. at! 13. The Agreement provides that any residual funds remaining one year and thirty (30) days after the date the Settlement Adm inistrator mails the first Settlement Class M ember Paym ent shal be distributed (a) first, to Associated Bartk to reimburse it for the actual amounts paid by Associated Bank to the Settlement Administrator or N otice Administrator for costs of Class Notice and Settlement Administration (kisettlement Notice and Administration Costs'l; (b) second, any rem aining funds shal be distributed on a pro rata basis to pm icipating Settlement Class Members who received Settlement Class Member Payments pursuant to Section XII of the Agreem ent, to the extent feasible and practical in light of the costs of adm inistering such subsequent paym ents unless the am ounts involved are too sm all to m ake individual distributions econom icaly viable or other specific reasons exist that would m ake such further distributions impossible or unfair or (c)third, if the costs of preparing, transmitting and administering subsequent payments to pm icipating Settlement Class M embers who received Setlem ent Class M ember Paym ents are not feasible and practical to make individual distributions economically viable, or other specific reasons exist that w ould m ake such further distributions im possible or unfair, Settlement Class Counsel and counsel for Associated Bank shall jointly propose a plan
Case 1:09-md-02036-JLK Document 4366 Entered on FLSD Docket 09/06/2018 Page 4 of 12 for distribution of the residual funds consistent with the American Law lnstitute, Principles of Wgpvp/: f itigation j 3.07(c), and wil file the plan for the Court's consideration. After consultation with the Parties, the Court shal have the discretion to approve, deny, am end or m odify, in whole or in part, the proposed plan for distribution of the residual funds in a m nnner consistent with the American Law lnstitute, Principles ofaggregate L itigation j 3.07(c). The residual funds shal not be used for any litigation purpose or to disparage any Party. (Agreement! 89). The Agreem ent also provides that al1 costs associated with the disposition of residual funds - whether through additional distributions to Settlem ent Class M em bers or through an altemative plan approved by the Court - shal be borne by and paid solely from the Settlement Fund. Under no circum stances shal Associated Bank have responsibility for any costs associated w ith the disposition of residual funds w hether through additional distributions to Setlement Class Members and/or through an altemative plan approved by the Court. (Agreement! 89(d)). The Setlem ent A dm inistrator has detennined that the total am ount of Setlem ent N otice and Administration Costs paid by Associated Bank was $497,813.80. Of this total amount, $463,290.64 was reimbursed to Assoeiated Bank on M arch 16, 2016. Admin. Decl. at!( 16. Setlem ent Class Counsel and Associated Bank have conferred with each other, and with the Settlement Adm inistrator, and agree that, folowing reimbursem ent of Setlement Notice and Administration Costs to Associated Bank, it is feasible and practical to distribute the residual funds rem aining in the Setlem ent Fund, on a pro rata basis, to Setlem ent Class M em bers w ho participated in the Phase 1 Distribution by receiving Setlement Class M ember Payments (the kphase 1 Distribution'). For purposes of the Phase 11 Distribution, Setlement Class Counsel
Case 1:09-md-02036-JLK Document 4366 Entered on FLSD Docket 09/06/2018 Page 5 of 12 and Associated Bank recomm end that Setlem ent Class M em bers wil be eligible to receive apro rata distribution provided:(a) they participated in the Phase l Distribution by receiving Settlem ent Class M ember Paym ents thzough a credit to their Accounts or by tim ely negotiating their Phase I Distribution checks; and (b) the pro rata amount of their Phase 1 Distribution will be equal to or greater than Five Dollars ($5.00). FINDINGS OF FACT Based on the inform ation contained in the Stipulation and Proposal and the accompanying declaration of the Settlem ent Adm inistrator, the Court m akes the follow ing findings : Pursuant to the Agzeement, Associated Balk and the Settlem ent Adm inistrator timely completed the Phase I Distribution to eligible Settlement Class Members. Admin. Decl.!! 3-7. Following the Eft-ective Date, the Settlement Administrator and Associated Bank distributed Settlement Class Member Payments from the Net Setlement Fund totaling $8,986,994.90 in accord with the Settlement. 1d. at IJ 5. Associated Bank issued credits to 80,273 Accounts of eligible Curent Account Holders in the aggregate am ount of $3,216,510.68. 1d. at! 6. The Setlement Administrator caused to be mailed a total of 153,423 checks in the aggregate am ount of $5,642,227.70 to eligible Past Account Holders as well as those eligible Current Account Holders for whom it was not feasible to issue credits to their Accounts. 1d. at! 7. A total of 4,596 checks in the aggregate nm ount of $123,813.01 w ere not m ailed to eligible Settlement Class M em bers who were Past Account Holders as wel as those eligible Current Account H olders for whom it w as not feasible to issue credits to their A ccounts because their addresses, after trace efforts conducted by the Setlem ent A dm inistrator during the notice program, proved to be undeliverable. A n additional 108 checks with an aggregate nm ount of 5
Case 1:09-md-02036-JLK Document 4366 Entered on FLSD Docket 09/06/2018 Page 6 of 12 $4,443.51 were not m ailed to eligible identifiable Settlem ent Class M embers after cross-refening their names against a database of non-payable individuals or entities m aintained by the Office of Foreign Assets Control (CtOFAC'), an agency of the U.S. Department of Treasury. 1d. at! 8. The Settlement Adm inistrator made reasonable efforts to locate proper addresses for all eligible Se tlem ent Class M em bers whose Phase l Distribution checks were not m ailed due to undeliverable addresses and/or were retunzed by the United States Postal Service (CSUSPS') as undeliverable, and re-mailed those checks to updated addresses, if obtained. Admin. Decl.!! 9-10. 3. Pursuant to the Setlement, the void date for payments passed after one hundred and eighty (180) days and folowing an additional grace period, a1l checks that had not been negotiated were voided. Admin. Decl.! 12. Folowing the void date for all Phase 1 Distribution checks, the Setlem ent Administrator completed a fonnal reconciliation and determined that the residual balance remaining in the Setlement Fund is cunrntly $1,067,765.84. Admin. Decl. at! 15. This balance includes: (a) the amount associated with returned and/or uncashed Phase 1 Distribution checks that were mailed to eligible Settlement Class Members but were returned by the USPS as undeliverable; (b) the amount àssociated with Phase I Distribution checks that could not be m ailed to eligible Settlem ent Class M em bers because the Settlem ent Adm inistrator was unable to locate reasonably reliable addresses;and (c) the amount associated with Phase 1 Distribution checks that were m ailed and not returned by the USPS, but were not tim ely negotiated by Settlement Class M embers. fj. at!! 8, 13(c). 5. As noted above, Phase 1 Distribution checks in the aggregate amount of $1,399,325.41 were not tim ely negotiated by eligible Setlem ent Class M embers. A dmin. Decl. 6
Case 1:09-md-02036-JLK Document 4366 Entered on FLSD Docket 09/06/2018 Page 7 of 12 at! 13(c). Setlement Class Members who did not timely negotiate their Phase 1 Distribution checks have manifested their intent not to pm icipate in further distributions from this Settlement. The significant administrative costs associated with printing and mailing Phase 1 Distribution checks are not justified for Setlement Class Members who previously demonstrated their intent not to participate in the distributions from this Settlem ent by failing to negotiate their Phase 1 Distribution checks. 6. The adm inistrative fees and costs associated with a Phase 11 Distribution are substantial and m ust be paid out of the residual settlement ftm ds available for distribution to eligible Setlement Class M embers. The fixed adm inistrative fees and costs associated with a Phase 11 Distribution process wil be $81,563. Admin. Decl. at! 19. Every additional dolar spent on adm inistrative fees and costs m eans a do lar less available for the Phase 11 Distribution to eligible Settlem ent Class M em bers. Based on the administrative fees and costs associated with printing and m ailing Phase 11 Distribution checks, the m inimum am ount for Phase 11 Distribution checks shall be Five Dolars ($5.00). Phase 11 Distribution checks shal have a void date of ninety (90) days from issuance. 8. The Court recognizes that folowing completion of the Phase 11 Distribution process, there wil stil rernain sorne residual funds resulting fror.n Phase 1 Distribution that were not tim ely negotiated or deliverable. Admin. Decl. at! 20. The Court linds that al1 funds remaining folowing completion of the Phase 11 Distribution (due to uncashed or undeliverable Phase 11 Distribution checks) should be distributed pursuant to each applicable state's unclaim ed funds law s. U nclaim ed property and escheatlnent of intangible personal property is frequently used when the nam e and dom icile of 7
Case 1:09-md-02036-JLK Document 4366 Entered on FLSD Docket 09/06/2018 Page 8 of 12 the property's owners are know n to the parties involved in a class action settlem ent, as they are here. Admin. Decl. at! 20. The purpose of unclaimed property laws is to reunite unclaimed funds with their rightful owners, and to prevent unjust enrichment of companies or other entities that have no interest in nor right to the unclaim ed property. Id. The unclaim ed property and escheatment process has been used in administering residual funds for num erous class action setlem ents and is an appropriate and efficient m ethod to handle the anticipated residual funds rem aining following completion of the Phase 1 distribution process. Id. The unclaimed property and escheatmentprocess will be handled by the Settlem ent Administrator and wil be based on the Phase 1 Distribution am ounts that are not negotiated and paid. Admin. Decl. at! 21. Under this process, the Settlement Administrator wil hold whatever amount of funds remains in the Setlem ent Fund folowing completion of the Phase 1 Distribution process for a period of three (3) to tive (5) years, depending on and as required by the applicable state laws. D uring that lkdorm alzcy period,' eligible Setlem ent Class Members who did not timely negotiate their Phase 11 Distribution checks wil be able to contact the Setlement Administrator to request issuance of their funds. 1d. At the end of the donuancy period, the Settlement Administrator wil fonvard the remaining am ounts and the nam es, addresses and individual Phase 11 Distribution award amounts to the appropriate atlthorities in a1 applicable states. f#. The state authorities wil then hold, process and handle such funds in accordance with their respective unclaimed property and escheatm ent laws. The fixed fees and costs associated with the Settlem ent Administrator's work on the unclaim ed property and escheatm ent process wil be $82,943, which am ount will be withheld and deducted from the amount available for the Phase 11 Distribution. Admin. Decl. at! 22. 8
Case 1:09-md-02036-JLK Document 4366 Entered on FLSD Docket 09/06/2018 Page 9 of 12 Im plem entation of the Phase 11 Distribution, followed by the unclaimed funds and escheatm ent process described above,wil effectuate a complete and final distribution of al rem aining settlem ent funds to eligible Settlem ent Class M em bers. CONCLUSIONS Setlem ent Class Counsel, Associated Bank and the Settlement Administrator have done an exemplary job in undertaking and implementing the process of distributing the proceeds of this Setlement, and in m aking recommendations to the Court regarding a Phase 11 Distribution process. The Court com m ends Setlem ent Class Counsel, A ssociated Bank and the Setlem ent Administrator for developing and presenting a plan that wil, upon com pletion, have distributed as much of the N et Setlem ent Fund as possible to eligible Settlement Class M em bers. Based on the findings of fact set forth above and the recomm endations of Settlem ent Class Counsel and A ssociated Bank, the Court hereby ORDERS AND ADJUDGES as folows: Setlem ent Class Counsel's and Associated Bank's Joint Stipulation and Proposal for a Phase 11 Distribution to Participating Setlem ent Class M embers, and for disposition of al remaining unclaimed funds and the escheatm ent process of the residual balance following completion of the Phase 11 distribution process, is APPR OVED as set forth herein; B. The Settlement Adm inistrator is authorized and directed to reim burse Associated Bank the total am ount of $34,523.16 for Settlem ent Notice and Adm inistration Costs paid by A ssociated Bank since M arch, 2016., The Settlem ent A dm inistrator is thereafter directed to determ ine the total am ount ofresidual funds available for the Phase 11 Distribution; 9
Case 1:09-md-02036-JLK Document 4366 Entered on FLSD Docket 09/06/2018 Page 10 of 12 The Setllem ent Adm inistrator is authorized and directed to update addresses for a1 eligible Settlement Class M em bers who previously received Account Credits or whose Phase 1 Distribution checks were previously negotiated', The Settlem ent Adm inistrator is directed to prepare and undertake a Phase 11 Distribution, on a pro rata basis, by issuing and m ailing checks to al1 eligible Setlem ent Class Members, except as excluded below in subparagraph (G), on a date to be determined by the Setlement Administrator, in consultation with Settlem ent Class Counsel and Associated Bank; The amount of the Phase 1 Distribution shal consist of the residual balance, less Phase 11 Distribution adm inistrative fees and costs in the total amount of $8 1,563, and fees and costs of $82,943 associated with the unclaimed f'unds and escheatment of the residual balance folowing completion of the Phase 11 Distribution process; G. The folowing categories of Setlem ent Class M em bers shal not be eligible to receive a Phase 11 Distribution: (a) Settlement Class Members whose Phase I Distributicm checks were not mailed because the Setlement Administrator was unable to obtain valid updated addresses following reasonable efort and expense; (b) Settlement Class M embers whose Phase I Distribution checks were m ailed and returrted by the USPS, where the Setlem ent Administrator was unable to obtain updated addresses believed to be valid following reasonable effort and expense', (c) Setlement Class M embers whose Phase 1 Distribution checks were mailed and not retunzed by the USPS, but who failed to timely negotiate such checks; and (d) Settlement Class M em bers w hose Phase 11 D istribution checks would be less than a m inim um thzeshold am ount of Five Dolars ($5.00),' H. The checks to be issued as part of the Phase 11 Distribution shal have an expiration date of ninety (90) days folowing issuance, and the Settlement Administrator is 10
Case 1:09-md-02036-JLK Document 4366 Entered on FLSD Docket 09/06/2018 Page 11 of 12 authorized to re-issue and/or re-m ail Phase 11 Distribution checks one tim e only that w il be valid for thirty (30) days from the date of reissuance, provided the Phase 1 Distribution checks requested to be re-issued are retumed as undeliverable within thirty (30) days of issuance or the Settlement Class M ember contacts the Settlement Administrator within thirty (30) days after issuance of the Phase 11 Distribution checks to request re-issuance; 1. W ithin thirty (30) days folowing completion of the Phase 11 Distribution and final reconciliation by the Settlem ent A dm inistrator, Se tlem ent Class Counsel shal file a final report detailing the results of the Phase 11 Distribution, including the total num ber and amount of Phase 11 Distribution checks that were mailed, the total number and nmount of Phase 11 Distribution checks that w ere tim ely negotiated, the total num ber and am ount of Phase 11 D istribution checks that were not tim ely negotiated, and the total num ber and am ount of Phase 11 D istributions that will be held by the Settlement Adm inistrator pursuant to the unclaimed funds and escheatment process described herein', Any and all residual am ounts remaining folowing the Phase 11 Distribution shall be treated as unclaim ed funds pursuant to the laws of the states where the intended Setlement Class M ember-recipients of such Phase 11 Distributions are dom iciled based upon their last known addresses. The Setlement Adm inistrator shal handle the unclaim ed funds and escheatment process, and the calculation of the unclaimed l'unds and escheatm ent shall be based upon the undeliverable and uncashed distribution checks from the Phase 11 Distribution. The Setlem ent Administrator shal provide Setlement Class Counsel and Associated Bartk and its counsel w ith periodic reports identifying the ow ners, their respective states of dom icile, and corresponding am ounts of al unclaim ed funds, and such reports shall be m ade available to the Court for in camera inspection, if requested', and 11
Case 1:09-md-02036-JLK Document 4366 Entered on FLSD Docket 09/06/2018 Page 12 of 12 A 1 costs associated with the effort to undertake and complete the Phase 11 Distribution, and the unclaimed funds and escheatm ent process folowing completion of the Phase 11 Distribution, shal be bom e by and paid solely from the Setlem ent Fund. Associated Bank shal not be required, under any circum stances, to pay any additional amounts in connection with this Setlem ent to any Setlem ent Class M ember, the Setlem ent Administrator, Class Counsel or third parties associated with the Phase 11 Distribution, the unclaim ed funds and escheatment process and any ancilary m aters addressed in this Order. DONE AND ORDERED in Cham bers at the Jam es Lawrence King Federal Justice th d f September, 2018. Building alzd U nited States Courthouse in M iam i, Florida, this 5 ay o * ''', JAMES LA RENCE KING NITED STATES DISTRICT JU SOUTHERN DISTRICT OF FLO A k cc: A 1l Counsel of Record 12