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Glenn Gates, et al v. Rohm and Haas Company

March 23, 2011

GLENN GATES, ET AL.,
PLAINTIFFS,
v.
ROHM AND HAAS COMPANY, ET AL.,
DEFENDANTS.



The opinion of the court was delivered by: Gene E.K. Pratter,j.

MEMORANDUM

Liaison Counsel for the Medical Monitoring Settlement Class and Defendant Modine Manufacturing Company are jointly seeking the Court's authorization for the distribution of unclaimed funds remaining in the settlement class fund to charitable organizations. Liaison Counsel and Modine identified possible charitable recipients-including the Gavers Community Cancer Foundation, Johnsburg Educational Partnership Foundation Inc., McHenry County Community Foundation, McHenry High School District 156 Foundation Inc., and Neighbors Helping Neighbors Charity, NFP-and proposed allocations for cy pres funds. For the reasons set forth below, the Court directs the remaining funds be distributed as cy pres distributions to each of those five charitable organizations enumerated above according to the allocation shares and conditions described below.

BACKGROUND

Glenn and Donna Gates, on behalf of themselves and all others similarly situated, filed suit against Modine Manufacturing Company and other defendants pursuant to the Comprehensive Environmental Response Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. § 9601, et seq., and state law for damages allegedly resulting from contamination by pollutants generated and released by Modine, among others. In January 2008, Plaintiffs and Modine entered into a Settlement Agreement, subject to the Court's approval, to resolve the claims Plaintiffs asserted against Modine on behalf of themselves and two proposed settlement classes, a Medical Monitoring Settlement Class and a Property Damage Settlement Class.*fn1

Among other things, the Settlement Agreement established the Medical Monitoring Settlement Class fund, a $1.4 million fund for payments to Medical Monitoring Settlement Class claimants, "allowing for reimbursement of up to $1,400 for any Medical Monitoring Settlement Class member to obtain an MRI or other appropriate screening or test . . . and the expense of reading and reporting on the results . . . ." See Settlement Agreement (Docket No. 155-2). The Agreement required that the medical monitoring claimants avail themselves of such procedures within six months of the date the Agreement became final "or forfeit their right to participate in the medical monitoring relief." Id.

The Agreement also provided for the disposition of excess undistributed Medical Monitoring Settlement Class funds. Section IX(E) of the Agreement provides:

If there are any funds remaining [after a request for disbursement for claims received 180 days after the finalization of the agreement and/or to pay for additional medical monitoring procedures], Class Counsel shall petition the Court to pay them over to a local Section 501(c)(3) charity for the benefit of the McCullom Lake Village. Any payment to a local Section 501(c)(3) charity shall be subjected to the Court's prior approval, and Modine shall be entitled to notice and an opportunity to be heard as to the charity proposed by Plaintiffs or otherwise to be selected.

Id. Accordingly, possible recipients for any remaining funds must be local Section 501(c)(3) charitable organizations that benefit McCullom Lake Village. Once Modine has had notice and opportunity to be heard, the donation of any remaining funds is contingent upon the Court's approval.

After a fairness hearing, the Court approved the Settlement Agreement. Gates v. Rohm and Haas Co., Civil Action No. 06-1743, 2008 WL 4078456 (E.D. Pa. Aug. 22, 2008). In its approval order, the Court retained jurisdiction over the performance of the Agreement. Id. at *12 ("The Court retains jurisdiction of all matters relating to the interpretation, administration, implementation, effectuation, and enforcement of the Settlement.").

CY PRES DISTRIBUTION

"When an aggregate class recovery is not fully allocated to class members, the unclaimed portion may be distributed for the indirect or partial benefit of the class under cy pres principles."

3 Alba Conte & Herbert B. Newberg, Newberg on Class Actions § 10:16 (4th ed. 2002). In the class action context, courts have used cy pres principles to distribute remaining unclaimed settlement funds to accomplish an indirect benefit for the class. See In re Linerboard Antitrust Litig., MDL No. 1261, 2008 WL 4542669 (E.D. Pa. Oct. 3, 2008) (applying the cy pres doctrine in distributing unclaimed settlement funds in a class action); Schwartz v. Dallas Cowboys Football Club, Ltd., 362 F. Supp. 2d 574 (E.D. Pa. 2005) (applying cy pres principles to determine the distribution of excess class settlement funds); In re Matzo Food Prods. Litig., 156 F.R.D. 600, 605 (D.N.J. 1994) (discussing cy pres as a principle for possible distribution of remaining funds in the context of preliminary approval).*fn2 Courts generally "have approved charitable donations to organizations geared toward combating harms similar to those that the injured the class members. Such a donation may serve the cy pres principle of indirectly benefitting all class members." Linerboard, 2008 WL 4542669, at *3 (quotations and citations omitted).

"Federal courts have broad discretionary powers in shaping equitable decrees for distributing unclaimed class action funds." Six (6) Mexican Workers v. Arizona Citrus Growers, 904 F.2d 1301, 1307 (9th Cir.1990) (citing Van Gemert v. Boeing Co., 739 F.2d 730, 737 (2d Cir.1984)). In applying cy pres principles, the court appropriately may consider: "(1) the objectives of the underlying statute(s), (2) the nature of the underlying suit, (3) the interests of the class members, and (4) the geographic scope of the case." Schwartz, 362 F. Supp. 2d at 576 (citing In re Airline Ticket Comm'n Antitrust Litig., 307 F.3d 679, 682 (8th Cir. 2002)). Additionally, the Court recognizes that, even in the absence of any philanthropic interests previously expressed by the Class or by counsel, a "frequent use of class funds not accruing to the class members is a donation to a public or ...


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