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Hill v. Hill Brothers Construction Company, Inc.

United States District Court, N.D. Mississippi, Oxford Division

January 3, 2018

ROBERT K. HILL, et al. PLAINTIFFS
v.
HILL BROTHERS CONSTRUCTION COMPANY, INC, et al. DEFENDANT

          FINAL JUDGMENT AND ORDER APPROVING THE CLASS SETTLEMENT

          SHARION AYCOCK UNITED STATES DISTRICT JUDGE.

         This matter arises on Plaintiffs' Unopposed Motion for Final Approval of Class Action Settlement and Certification of the Settlement Class [275]. Having considered the Settlement Agreement, Plaintiffs' Unopposed Motion and Memorandum in Support of Final Approval of Class Action Settlement and Certification of Settlement Class and all other evidence submitted, the Court finds as follows.

         Facts and Procedural History

         Plaintiffs originally filed a two-count complaint on September 29, 2014 for Plan-wide relief pursuant to Section 502(a) of the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §1132(a), on behalf of a class consisting of all current and former participants in the ESOP Plan. In Plaintiffs' Count I, the Plaintiffs alleged that Defendants negligently breached their fiduciary duties to Plaintiffs by failing to manage prudently and loyally the Plan's investments in HBC's securities and by failing to provide complete and accurate records and information to Plan participants regarding the Company's financial condition and the prudence of investing in Company stock. In Count II, the Plaintiffs alleged that Defendants breached their fiduciary duties to Plaintiffs, the Plan, and the putative class, by failing to monitor adequately other persons to whom management/administration of Plan assets was delegated. On July 15, 2015, the Plaintiffs filed their Third Amended Complaint, adding Count III, and alleging that Defendants breached their fiduciary duties to the Plaintiffs, the Plan, and the putative class, by theft of corporate opportunity - specifically with regard to the Defendants' relationships with Hill Brothers Leasing and Xcavators, Inc.

         After extensive discovery and motion practice, the Parties mediated this matter. The Parties finalized an agreement, which culminated in the Memorandum of Settlement Agreement on August 8, 2016, followed by the execution of a Settlement Agreement on March 23, 2017.

         On May 3, 2017, the Parties attended a hearing for preliminary approval of the proposed settlement and class certification. On May 9, 2017, this Court entered an order [269] granting preliminary approval (the “Preliminary Approval Order”) of the settlement between the parties. The Court further approved the class notice.

         Notice was then sent to all class members with additional mailings to members whose mail was returned. No objections were filed by any class member from the time Notice commenced to the date of this order, and only one individual class member chose to opt out. On July 26, 2017, counsel for the Class, Diandra S. Debrosse Zimmermann, filed an affidavit detailing Class counsel's efforts in locating and notifying all class members [274], in Exhibit 3.

         Thereafter, Plaintiffs filed their unopposed Motion for Final Approval of Class Action Settlement and Certification of the Settlement Class. On August 15, 2017, the Court held a fairness hearing (the “Fairness Hearing”), for which members of the Settlement Class had been given appropriate notice and were invited, including those with any objections. An opportunity to be heard was given to all persons requesting to be heard in accordance with the Preliminary Approval Order. No persons other than the Parties appeared in Court seeking to address the settlement pursuant to the Settlement Agreement. Therefore, the Court grants the Motion for Final Approval of Class Action Settlement and Certification of the Settlement Class for the reasons that follow.

         Standard

         Regarding the class-action settlement approval, a district court has discretion to approve such a settlement under Rule 23(e) if the settlement is fair, adequate, and reasonable. Ayers v. Thompson, 358 F.3d 356, 368 (5th Cir. 2004) (citing Parker v. Anderson, 667 F.2d 1204, 1209 (5th Cir. 1982)). In assessing whether the settlement is reasonable, the Fifth Circuit has set forth six key points, or “Reed factors, ” which should be considered. These factors are: (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 completed; (4) the probability of plaintiffs' success on the merits; (5) the range of possible recovery; and (6) the opinions of class counsel, class representatives and absent class members.” Reed v. General Motors Corp., 703 F.2d 170, 172 (5th Cir. 1983).

         As to the final certification of the class, Federal Rule of Civil Procedure 23 generally applies with full force even when certification is solely for settlement purposes. See Amchem Prods. Inc. v. Windsor, 521 U.S. 591, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997). Of course, in the settlement context the district court need not consider “whether the case, if tried, would present intractable management problems, for the proposal is that there be no trial.” Id. at 620, 117 S.Ct. 2213. However, the court's consideration of the other factors in Rule 23 is of “vital importance, ” and demands “undiluted, even heightened” attention in the settlement context. Amchem Prods., Inc., 521 U.S. at 620, 117 S.Ct. 2231. The familiar Rule 23 requirements are numerosity, commonality, typicality, and adequacy of representation.

         Analysis

         I. Class Action Settlement Approval

         In order to approve the settlement the Court must ensure that all pertinent Rule 23 requirements have been met. Generally, courts use the aforementioned Reed factors to ensure that the settlement is fair, adequate and reasonable. Furthermore, the Court must also direct notice in ...


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