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Sims v. BB&T Corp.

United States District Court, M.D. North Carolina

May 6, 2019

ROBERT SIMS, et al., Plaintiffs,
v.
BB&T CORPORATION, et al., Defendants. BREWSTER SMITH, JR., et al., Plaintiffs,
v.
BB&T CORPORATION, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          Catherine C. Eagles, District Judge.

         The plaintiffs seek court approval of a settlement agreement with the defendants and dismissal of this ERISA class action with prejudice. In December 2018, the Court granted preliminary approval and ordered notice of the settlement be issued to putative class members. No. class member filed an objection to the proposed settlement. The Court held a fairness hearing on May 1, 2019. After considering the record, the proposed settlement agreement, the supporting memorandum and exhibits, and the statements of counsel during the fairness hearing, the Court finds that the settlement has met the requirements of Rule 23 and is fair, reasonable, and adequate. The motion will be granted.

         I. Procedural History

         In September 2015, plaintiff Robert Sims and others sued BB&T Corporation, its employee benefits plan committee, board of directors, compensation committee, investment advisor, and certain employees for violations of the Employee Retirement Income Security Act of 1974. Doc. 1.[1] In October 2015, plaintiff Brewster Smith and others filed a similar lawsuit. Complaint, Smith v. BB&T Corp, No. 1:15-CV-841, Doc. 1 (M.D. N.C. Oct. 8, 2015). The Court consolidated the two cases in November 2015. Doc. 33. After motions to dismiss were resolved, largely but not entirely in the plaintiffs' favor, see Docs. 58, 150, the Court certified a class in August 2017 of:

All current and former participants and beneficiaries of the [Plan] from January 1, 2007 through the date of judgment, who were injured by the conduct alleged in the Second Amended Complaint, excluding the Defendants.

Doc. 223 at 2, 12 (alteration in original).

         After discovery, see Doc. 266, the Court granted in part and denied in part the defendants' motion for summary judgment. Doc. 369. Several claims remained for trial. Doc. 369 at 8-9, 13-15, 16-18, 19, 22, 25-26 (denying summary judgment on claims based on acts or omissions between September 2009 and September 2012, fees paid to Sterling, excessive fees and underperforming mutual funds, the Bank Investment Contract, failure to monitor, certain prohibited transactions, and a claim for other equitable relief).

         The parties engaged in ongoing mediation, see Doc. 188; Doc. 439 at 2, and less than a week before trial, the parties advised the Court that they reached a settlement of all claims. Minute Entry 10/25/2018. Class Counsel filed a consent motion on November 30, 2018, for preliminary approval of a settlement agreement that would settle all remaining claims, Doc. 436, which the Court granted. Doc. 439. The Court also ordered notice to be sent to class members, setting a deadline for objections of 30 days before the fairness hearing, i.e., April 1, 2019. Id. at ¶ 4. Later, the Court granted a joint motion by the parties to amend the class action settlement agreement to clearly exclude the BB&T defendants by amending the Settlement Class to comprise:

[A]ll persons who participated in the Plan and had an Active Account at any time during the Class Period, including any Beneficiary of a deceased person who participated in the Plan at any time during the Class Period, and/or Alternate Payee, in the case of a person subject to a Qualified Domestic Relations Order who participated in the Plan at any time during the Class Period. Excluded from the Settlement Class are the BB&T Defendants.

Doc. 443 (emphasis on added text). Class Counsel also filed a motion for attorney's fees. Doc. 444. No. class members objected to any aspect of the proposed settlement or to the motion for attorney's fees.

         Class Counsel filed a consent motion for final approval of the settlement on April 17, 2019, two weeks before the scheduled fairness hearing. In support of the motion, Class Counsel provided a memorandum from Gallagher Fiduciary Advisors, LLC, the independent fiduciary who reviewed the settlement on behalf of the BB&T employee retirement plan. Doc. 446-1. Gallagher concluded, after reviewing the proposed settlement, documents from the litigation, and interviewing counsel for the plaintiffs, that the settlement resulted from an arms-length negotiation and was reasonable. Id.

         Class Counsel also attached to the motion an affidavit from the project manager at Analytics Consulting LLC, who stated that Analytics received data for the addresses of 72, 632 Settlement Class Members from the defendants and mailed notices to these addresses. Doc. 446-2 at ¶¶ 5-6. Analytics also verified that the Notices and Claims Form were published on a Settlement website maintained by Class Counsel. Id. at ¶ 5. Analytics confirmed that USPS provided 928 updated addresses and returned 2, 802 notices as undeliverable, of which Analytics was able to locate 2, 119 new addresses through Experian. Id. at ¶ 7. Analytics also maintained a toll-free phone number, receiving 1, 660 calls and resulting in 33 additional notices mailed. Id. at ¶ 8. As of April 15, Analytics had received 9, 032 completed Claim Forms out of 30, 611 former participants. Id. at ¶¶ 6, 9. The settlement does not require the 42, 021 current Plan participants to submit a claim form to receive settlement payments. Id. at ¶ 6; Doc. 436-2 at pp. 19-20 ¶¶ 6.5, 6.6.

         At the fairness hearing held on May 1, 2019, Class Counsel stated the Administrator received a total of 11, 509 claim forms from former Plan participants by the April 22, 2019, deadline, which is over one third of the 30, 611 former participants identified and considered a high percentage in these matters. While individual recoveries will vary according to the settlement formula, the average recovery will be approximately $342. The parties also filed materials confirming compliance with notice requirements to state and federal government officials under the Class Action Fairness Act, 28 U.S.C. § 1715, see Docs. 448, 448-1, 448-2, and an amended attorney's expenses request. See Docs. 449, 449-1, 449-2. No. class member filed any objections to the terms of the settlement or the request for attorneys' fees.

         II. The Proposed ...


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