United States District Court, M.D. North Carolina
MEMORANDUM OPINION AND ORDER
C. Eagles, District Judge, The plaintiffs seek final court
approval of a settlement agreement with the defendants and
dismissal with prejudice of two consolidated ERISA class
actions. In February 2018, the Court granted preliminary
approval, ordered settlement notice be sent to class members,
and set a fairness hearing for June 18, 2019. No. class
member filed an objection to the proposed settlement. 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 meets the requirements of Rule 23 and is fair,
reasonable, and adequate. The Court will grant the motion and
approve the settlement.
filed Clark v. Duke University in August 2016,
see Doc. 1,  alleging, inter alia, that
defendants: (1) breached their fiduciary duties by causing
the Duke University Faculty & Staff Retirement Plan to
incur unreasonable recordkeeping expenses; (2) committed
prohibited transactions by allowing four vendors to provide
Plan recordkeeping services and receive Plan assets from
which they retained unreasonable compensation; and (3) failed
to prudently monitor Plan investment options resulting in the
use of high-cost, low-performing funds compared to available
alternatives. Docs. 1, 72.
11, 2017, the Court granted in part and denied in part the
defendants' motion to dismiss the amended complaint. Doc.
48. The plaintiffs sought and were granted leave to file a
second amended complaint in December 2017, Doc. 72, and later
moved to further amend their complaint to add Count IX, which
asserted claims of prohibited transactions and fiduciary
breaches arising out of allegations that Duke used Plan
assets to pay for Duke employee salaries and fringe benefits.
Doc. 99. The Court denied the plaintiffs leave to file a
third amended complaint on June 11, 2018. Doc. 107. As a
result, the plaintiffs filed Lucas v. Duke
University on August 20, 2018, asserting those claims
against Duke that the Court denied the plaintiffs leave to
pursue in Clark. See Complaint,
Lucas, No. 1:18-CV-00722, Doc. 1 (M.D. N.C. ). The
defendants filed a motion to dismiss the claims in
Lucas, which the parties briefed in full before
reaching settlement and which was pending at the time of
settlement. See Id. at Doc. 9.
The Court granted class certification in Clark on
April 13, 2018 to a class of:
All participants and beneficiaries of the Duke Faculty and
Staff Retirement Plan from August 10, 2010 through the date
of judgment, excluding Defendants.
Doc. 96 at 21. The Court also appointed named plaintiffs
David Clark, Thomas Mehen, Kathi Lucas, Jorge Lopez, and
Keith Feather as class representatives and Schlichter, Bogard
& Denton as Class Counsel. See Id. at 14, 21.
Clark, the parties have engaged in over two years of
hard-fought litigation that included extensive motions
practice, exchanging over 762, 000 pages of documents, and
taking 7 expert and 20 fact depositions. See Doc.
160-3 at ¶¶ 20, 22, 25. While the Lucas
litigation had yet to proceed to discovery, the formal
discovery obtained in Clark led to the claims
asserted in Lucas, and Class Counsel proffered that
they would not need additional discovery to litigate these
claims. See Doc. 99 at 1, 8.
November 29, 2018, the parties notified the Court that they
reached a settlement in principle in both matters.
See Minute Entry 11/29/2018. On January 16, 2019,
after additional arm's length negotiations with the aid
of a neutral mediator, the parties signed a detailed
settlement agreement. See Doc. 149-2; Doc. 160-3 at
¶ 28. Plaintiffs then moved for preliminary approval of
the settlement. Doc. 149.
requesting and receiving additional briefing from the
parties, see Docs. 155, 156, the Court granted
preliminary approval on February 7, 2019. Doc. 158. The Court
also certified a settlement class of:
All persons who are or were participants or beneficiaries in
the Plan 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 Kyle Cavanaugh, Tim Walsh, James S. Roberts, Rhonda
Brandon, Steve Smith, Anders Hall, Richard Schmalbeck,
Michael Lazar, Dr. Nan Jokerst, Erik Koehrsen, and Jean
Shields. The Class Period is August 10, 2010 through the date
of entry of this Preliminary Order.
Id. at pp. 4-5 ¶ 2. For settlement purposes,
the Court appointed named plaintiffs Lucas, Lopez, and
Feather as class representatives in Lucas, see Id.
at p. 5 ¶ 4; Doc. 149-2 at p. 3 ¶ 2.12 (defining
“Class Representatives”), and consolidated the
Clark and Lucas actions. See Doc.
Court ordered the appointed Settlement Administrator,
Analytics, to notify class members of the settlement and how
to object to the settlement terms. See Doc. 158 at
13-16. The Court permitted any class member to file
objections no later than thirty calendar days before the
fairness hearing scheduled for June 18, 2019. See
Id. at 6, 16-17.
project manager at Analytics affirms that notice was emailed
or mailed to all 58, 594 class members and was published on a
settlement website. Doc. 163-3 at ¶¶ 5-6; see
also Id. at pp. 14-47. This includes 10, 724 former
participants and 47, 870 current participants. Id.
at ¶ 5. Of those notices returned undeliverable,
Analytics was able to identify corrected or updated addresses
for all but approximately 2, 000 class members. See
Id. at ¶¶ 7-8. Analytics also ...