Carlin v. DairyAmerica, Inc. ( 2022 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 EASTERN DISTRICT OF CALIFORNIA 6 7 GERALD CARLIN, JOHN RAHM, PAUL CASE NO. 1:09-CV-0430 AWI-EPG 8 ROZWADOWSKI and DIANA WOLFE, individually and on behalf of themselves 9 and all other similarly situated, AMENDED ORDER ON PLAINTIFFS’ MOTION FOR APPROVAL OF CY 10 Plaintiffs, PRES DISTRIBUTION AND SUPPLEMENTAL PAYMENT TO 11 v. CLAIMS ADMINISTRATOR 12 DAIRYAMERICA, INC., and (Doc. Nos. 600, 602) CALIFORNIA DAIRIES, INC. 13 Defendants 14 15 16 On May 8, 2019, the Court issued an order that approved the class settlement in this case. 17 See Doc. No. 586. On January 12, 2022, Plaintiffs’ filed a motion to approve a supplemental 18 payment to the claims administrator and to distribute the remaining class funds through the cy 19 pres doctrine. See Doc. No. 600. No interested party has objected or responded to Plaintiffs’ 20 motion in any way. The Court vacated a scheduled hearing on Plaintiffs’ motion and took the 21 matter under submission on February 9, 2022. See Doc. No. 601. On February 14, 2022, the 22 Court issued an order that granted Plaintiffs’ motion. See Doc. No. 602. However, this order 23 erroneously omitted a cy pres recipient. See id. To remedy this situation, the Court will vacate 24 its prior order and issue this amended order. 25 Plaintiffs’ Arguments 26 Plaintiffs represent that of the net $25,774,997.41 settlement fund, $507,383.00 remains 27 undistributed after the issuance of 25,578 checks. A total of 763 checks remain uncashed. 28 Plaintiffs represent that a second pro rata distribution of the remaining funds would be too 1 modest to be meaningful. Administrative costs would likely be an additional $35,000 to $40,000 2 and the individual pro rata checks would likely be around $19. Thus, distribution of the 3 remaining funds through a second supplemental payment to the administrator and to seven 4 organization through cy pres is warranted. The seven organizations are non-profit organizations 5 that benefit dairy farmers in numerous ways including providing agricultural education, building 6 leadership skills for students, seeking economic justice for family farms, and fighting 7 monopolistic pressures against small and family farms. These organizations were also selected 8 through consultation with the four representative plaintiffs. 9 With respect to supplemental fees, authorization was previously granted for 10 administrative fees of $418,000.00. An additional payment of $290,393.02 is appropriate 11 because: (1) the class size was more than double what was anticipated; (2) collecting the 12 identities and milk production of class members was highly complex and required data 13 harvesting from eleven Federal Milk Marketing Orders (“FMMO”) across the country; (3) one 14 FMMO supplied incomplete data, which necessitated additional mailings and produced 15 duplicative claim forms; (4) the claim forms exceeded expectations because the of the 16 unexpected large class size (16,000 expected but 27,000 received); (5) more call center contacts 17 were received than expected due to large class size; (6) 320 disputed claims were expected, but 18 2,500 disputed claims were actually received, which required review, validation, and resolution; 19 and (7) the initial cost estimate did not include tax reporting costs as those were unknown at that 20 the time of estimate. Because of the additional work stemming from the unexpectedly large and 21 complex claims data, the supplemental fee is appropriate. 22 Legal Standard 23 The “cy pres doctrine allows a court to distribute unclaimed or non-distributable portions 24 of a class settlement fund to the next best class of beneficiaries.” Lane v. Facebook, Inc., 696 25 F.3d 811, 819 (9th Cir. 2012). That is, cy pres allows a court to “put the unclaimed fund to its 26 next best compensation use, e.g. for the aggregate, indirect, prospective benefit of the class. 27 Nachsin v. AOL, LLC, 663 F.3d 1034, 1038 (9th Cir. 2011). “Cy pres distributions must 28 account for the nature of the plaintiff’s lawsuit, the objectives of the underlying statutes, and the 1 interests of the silent class members, including their geographic diversity.” Id. at 1036; see also 2 id. at 1039-40. Cy pres is frequently used in the class action settlement context “where the proof 3 of individual claims would be burdensome or distribution of damages costly.” Six Mexican 4 Workers v. Arizona Citrus Growers, 904 F.2d 1301, 1305 (9th Cir. 1990). 5 Discussion 6 First, with respect to the request for supplemental funds, the Court has reviewed the 7 briefing and the detailed declaration of the administrator’s Senior Vice President. The 8 declaration is consistent with the representations and arguments made in Plaintiffs’ motion. 9 Given the complex issues surrounding FMMO’s, the unexpectedly large class size, and the 10 challenges that resulted from the unexpectedly large class size, the Court finds that the additional 11 funds requested, $290,393.02, is appropriate. 12 Second, this case was a class action brought on behalf of dairy farmers in 25 states 13 regarding improperly reported dairy product prices, which resulted in lower prices in the USDA 14 process for pricing raw milk. The evidence before the Court is that a further pro-rata distribution 15 of funds would result in significant additional administrative costs, but very little additional pay 16 off to qualified class members. Further, the seven organizations selected by Plaintiffs have a 17 national presence and are not strictly local. The seven organizations work to further the interests 18 of dairy producers (particularly family dairies) in a number of areas, including pricing and anti- 19 trust matters. In the absence of an opposition, and given the information provided by Plaintiffs, 20 the Court finds that a cy pres distribution of the remaining $211,915.61 to the seven 21 organizations identified is appropriate because those organizations either address the objective of 22 the regulations at issue, seek to strengthen and protect the interests of the class in their endeavors 23 as dairy producers, and/or are reasonably certain to provide benefits to the class. See Nachsin, 24 663 F.3d at 1036, 1038-40. 25 ORDER 26 Accordingly, IT IS HEREBY ORDERED that: 27 1. The prior order on Plaintiff’s motion for cy pres distribution and for supplemental 28 administrative fees (Doc. No. 602) is VACATED; 1} 2. Plaintiffs’ motion for cy pres distribution and for supplemental administrative fees (Doc. 2 No. 600) is GRANTED; 3] 3. $290,393.02 from the Net Settlement Fund is authorized to be distributed to Rust 4 Consulting, Inc. for its claims administration costs; 5| 4. $211,915.61 (or any residual amount remaining in the fund in a similar proportion as 6 shown below) is authorized to be distributed to the following cy pres recipients: 7 a. $50,000 to the Family Farm Defenders; 8 b. $36,915.61 to the National Family Farm Coalition; 9 Cc. $25,000 to the National Future Farmers of America; 10 d. $25,000 to the National Farmers Union; 11 e. $25,000 to the National Dairy Producers Organization; 12 f. $25,000 to Farm Action; and 13 g. $25,000 to the Organization for Competitive Markets. 14 15 IT IS SO ORDERED. 16| Dated: _ February 14, 2022 7 Sy, : 7 Cb Lei SENIOR DISTRICT JUDGE 17 18 19 20 21 22 23 24 25 26 27 28