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Florence Wallace, et al v. Robert J. Powell

December 14, 2012

FLORENCE WALLACE, ET AL., PLAINTIFFS,
v.
ROBERT J. POWELL, ET AL.,
DEFENDANTS. WILLIAM CONWAY, ET AL., PLAINTIFFS,
v.
MICHAEL T. CONAHAN, ET AL.,
DEFENDANTS. H.T., ET AL., PLAINTIFFS,
v.
MARK A. CIAVARELLA, JR., ET AL., DEFENDANTS. SAMANTHA HUMANIK, PLAINTIFF,
v.
MARK A. CIAVARELLA, JR., ET AL., DEFENDANTS. RAUL CLARK, ET AL., PLAINTIFFS,
v.
MICHAEL T. CONAHAN, ET AL., DEFENDANTS. WAYNE DAWN, ET AL., PLAINTIFFS,
v.
MARK A. CIAVARELLA, JR., ET AL., DEFENDANTS. ANGELA RIMMER BELANGER, ET AL., PLAINTIFFS,
v.
MARK A. CIAVARELLA, ET AL., DEFENDANTS.



The opinion of the court was delivered by: (judge Caputo)

MEMORANDUM

Plaintiffs in this consolidated action comprising both individual cases and putative class actions have moved for final approval of a settlement agreement (the "Settlement") between Plaintiffs and Defendants Robert K. Mericle and Mericle Construction, Inc. (collectively "Mericle"). (Doc. 1227.) The Settlement received preliminary approval on February 28, 2012. Now, following the final approval hearing held on November 19, 2012, Plaintiffs seek final certification of the Classes for settlement, approval of the Settlement, and an award of attorneys' fees and costs. For the reasons that follow, the Classes will be certified, the Settlement will be approved, and attorneys' fees and costs will be awarded as requested.

I. Background

A. Facts

This civil action arises out of the alleged conspiracy related to the construction of two juvenile detention facilities, and subsequent detainment of juveniles in these facilities, orchestrated by two former Luzerne County Court of Common Pleas judges, Michael Conahan ("Conahan") and Mark Ciavarella ("Ciavarella"). The juvenile detention facilities, PA Child Care ("PACC") and Western PA Child Care ("WPACC"),*fn1 were both constructed by Mericle. Plaintiffs in this action, juveniles or the parents of juveniles who appeared before Ciavarella, seek redress from the former judges, as well as the individuals and business entities involved in the construction and operation of these facilities, for the alleged unlawful conspiracy and resulting deprivations of Juvenile Plaintiffs' rights.

The individual and class complaints assert, in part, the following causes of action against Mericle: (1) 42 U.S.C. § 1983 claims alleging a conspiracy to violate Plaintiffs' constitutional rights; (3) violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961, et seq.; (3) conspiracy to violate RICO; and (4) state-law civil conspiracy.

B. Procedural History

The first of these consolidated cases, Wallace v. Powell, No. 09-CV-286, was filed on February 13, 2009 against multiple Defendants, including Mericle. Although the case was originally filed as a class action, the Wallace complaint was subsequently amended in May 2009 to proceed on behalf of a number of individual juvenile and parent Plaintiffs. Shortly thereafter, Conway v. Conahan, No. 09-CV-291, and H.T. v. Ciavarella, No. 09-CV-357, were filed as putative class actions, both naming Mericle, among others, as Defendants. Subsequently, Humanik v. Ciavarella, No. 09-CV-630, was filed on behalf of a single individual Plaintiff. Collectively, these four cases are the "Civil Actions."

The Conway and H.T. Plaintiffs filed the Master Complaint for Class Actions in June 2009. (Doc. 136.) At the same time, the Wallace and Humanik Plaintiffs filed the Master Long Form Complaint for Individual Actions. (Doc. 134.)

With respect to the Mericle Defendants, they filed various motions to dismiss the actions in 2010 and 2011. The most recent motion to dismiss filed by Mericle and resolved by the Court was granted in part and denied in part on November 30, 2011. (Doc. 1002.) Shortly thereafter, on December 16, 2011, Plaintiffs and Mericle filed a Joint Motion for Preliminary Approval of Class Action Settlement. (Doc. 1005.) On February 28, 2012, following a preliminary approval hearing, the Court issued an order conditionally certifying the Settlement Classes, preliminarily approving the class action settlement, and approving the notice plan. (Doc. 1084.) On November 19, 2012, the Court held a final Settlement approval hearing.

C. The Settlement Agreement

Under the terms of the Settlement Agreement, Mericle and Plaintiffs agree to settle the Civil Actions (i.e., the H.T., Conway, Wallace, and Humanik Actions) to provide a final resolution of Plaintiffs' claims against Mericle and the Luzerne County Parties. Solely for the purposes of settlement, two settlement classes are established: (1) the "Juvenile Settlement Class," which consists of "all juveniles who appeared before former Luzerne County Court of Common Pleas Judge Mark A. Ciavarella between January 1, 2003 and May 28, 2008 [the "Class Period"] who were adjudicated or placed by Ciavarella"; and (2) the "Parent Settlement Class," which is comprised of the parents and/or guardians of juveniles who appeared before Ciavarella between January 1, 2003 and May 28, 2008, and, who in connection with the juvenile's appearance: "(i) made payments or had wages, social security or other entitlements garnished; (ii) had costs, fees, interest and/or penalties assessed against them or their child; (iii) suffered any loss of companionship and/or family integrity." (Doc. 1005, Ex. 1, Master Settlement Agreement, "MSA", ¶ I.A.) The Juvenile Settlement Class and the Parent Settlement Class are referred to collectively as the "Settlement Classes," and the members of the Settlement Classes are the "Settlement Class Members." (Id.)

Pursuant to the terms of the Settlement Agreement, Mericle agrees to pay $17,750,000.00, which will be used to pay settlement costs and claims by Class Members. (Id. at ¶ II.A.)

Under the proposed Allocation Plan, both basic and enhanced benefits are available to qualifying Plaintiffs.

1. Basic Benefits

Basic settlement payments to the Juvenile Settlement Class will be provided as follows: (1) each qualifying Juvenile that was adjudicated by Ciavarella during the Class Period but never spent time in any juvenile detention facility shall receive a payment of $500.00; (2) each qualifying Juvenile who was placed in a detention facility besides PACC or WPACC as a result of an adjudication or placement by Ciavarella during the Class Period shall receive a payment of $1,000.00; and (3) each qualifying Juvenile who was placed in PACC or WPACC as a result of an adjudication or placement by Ciavarella during the Class Period shall receive a payment of $5,000.00.*fn2

Basic settlement payments with respect to the Parent Settlement Class under the Allocation Plan provide each qualifying Parent Settlement Class Member who, as a result of a juvenile's adjudication or placement by Ciavarella during the period of January 1, 2003 and May 28, 2008, (i) made payments to Luzerne County or had wages, social security or other entitlements garnished or withdrawn by Luzerne County; or (ii) had court-ordered services or paid court-ordered costs, fees, interests, and/or penalties assessed against them or their child, shall receive the actual amount of monies paid, garnished, or withdrawn. Due to the overwhelming response of the Parent Settlement Class Members, the proposed allocation to the benefit fund will be insufficient to compensate all qualifying Parent Settlement Class Members' claims. As such, Plaintiffs' counsel seeks approval to contribute a portion of their requested fee to the Parent benefit fund to make up any shortfall.

2. Enhanced Benefits

The Allocation Plan also provides that certain qualifying Juveniles will be entitled to enhanced benefits from the Enhanced Benefit Fund ("EBF"). The EBF will initially contain $8,035,000.00. And, any funds remaining after the basic settlement fund is fully funded will be added to the EBF.

The Allocation Plan consists of seven categories for which a Juvenile may qualify to receive enhanced benefits under the Settlement Agreement.

a. Non-PACC/WPACC Enhancement

The first enhancement is the non-PACC/WPACC enhancement. Under this category, any Juvenile who was placed in a detention facility for ninety (90) days or more as a result of an adjudication or placement by Ciavarella during the Class Period but never spent any time at PACC and/or WPACC shall receive a flat $4,000.00 enhancement payment.

b. Age Enhancement

The second enhancement relates to the age of the Juvenile when adjudicated or placed. Any Juvenile that was thirteen (13) years or younger at the time of his or her first adjudication or placement by Ciavarella during the Class Period shall receive 20 EBF points.*fn3

c. Petition and Detention Days Enhancement

The third enhancement category is the petition and detention days enhancement. Juveniles that were adjudicated delinquent only once during the Class Period (based on only one juvenile petition) and that were also detained or placed at PACC/WPACC for more than ten (10) days as a result of their appearance before Ciavarella shall receive 4 EBF points. And, if the single petition was a first offense, the Juvenile shall receive 8 additional EBF points. Any Juvenile that, during the Class Period, was adjudicated delinquent only twice (based on no more than two separate juvenile petitions) and was detained or placed at PACC/WPACC for more than twenty-five (25) days as a result of that Juvenile's appearance before Ciavarella, shall receive 5 EBF points. Lastly, under the petition and detention days enhancement, if, at any time prior to May 28, 2008, including before January 1, 2003, the Juvenile was adjudicated three (3) times or fewer (based on three or fewer separate juvenile petitions), and the Juvenile was detained or placed at PACC/WPACC for at least one (1) day as a result of his or her appearance before Ciavarella during the Class Period, and the Juvenile was detained or placed at a non-PACC/WPACC facility for more than one hundred eighty days (180) as a result of the appearance(s) before Ciavarella during the Class Period, then the Juvenile shall receive 4 EBF points.

d. Physical Injury or Illness Enhancement

The fourth enhancement category is the physical injury or illness enhancement. A Juvenile that suffered a physical injury or illness, for which he or she received documented treatment from a healthcare professional, either while detained or placed at PACC/WPACC or as a result of the detention or placement at PACC/WPACC during the Class Period, shall receive 3 EBF points. If the physical injury or illness is determined to be severe, the Juvenile shall receive 10 EBF points.

e. Psychological or Emotional Harm Enhancement

The fifth enhancement is for any Juvenile that suffered psychological or emotional harm. Any Juvenile that suffered psychological or emotional harm for which he or she received documented treatment from a licensed mental health professional, either while detained or placed at PACC/WPACC or as a result of the detention or placement at PACC/WPACC by Ciavarella during the Class Period, shall receive 3 EBF points. If the psychological or emotional harm is found to be severe, the Juvenile shall receive 10 EBF points.

f. Adverse Educational Harm Enhancement

The sixth enhancement provides that if a Juvenile's educational progress was adversely affected, including, but not limited to, a documented loss of education credits or loss of a full or partial class year, as a result of having been detained or placed at PACC/WPACC by Ciavarella during the Class Period, the Juvenile shall receive 2 EBF points. If the harm to the Juvenile's educational progress is determined to be severe, the Juvenile shall receive 8 EBF points.

g. Juvenile Suicide Enhancement

Lastly, any Juvenile that committed suicide as a result of having been detained or placed at PACC/WPACC by Ciavarella during the Class Period shall receive 100 EBF points. No verified claims fall into this category according to Plaintiffs.

3. Allocation Plan

Based on these enhancements, the Allocation Plan provides that the EBF will be distributed pursuant to a point system, with the exception of the $4,000.00 flat benefit enhancement to Juveniles that were placed in a non-PACC/WPACC facility for more than ninety (90) days. The EBF points were calculated by the Claims Committee based on its review of the Proof of Claim Forms submitted by each Claimant and a review of all documentation submitted by the Claimant and/or released at the request of the Claimant. And, upon completion of the still ongoing process of calculating the total EBF points, the Claims Committee will tabulate the grand total of all EBF points for all Claimants. This total will then be divided into the total value of the EBF to determine the dollar value of each EBF point.

Settlement Class Members who submitted timely Proof of Claims Forms will receive a "proposed payment amount with a written explanation" from the Claims Committee. If the Settlement Class Member believes the value assigned to his or her claim has been wrongly determined, the Claimant has the option to appeal to the Court-appointed Special Master.

In exchange for the relief provided under the Settlement Agreement, the named Plaintiffs and the Settlement Class Members will release all claims against Mericle and the Luzerne County Parties.*fn4 In addition, Settlement Class Members agree and covenant not to sue Mericle or the Luzerne County Parties over any matter which could have been alleged in these Civil Actions.

4. Notice

Notice of the Settlement was disseminated to potential Settlement Class Members through a variety of means, including direct mailings, a toll-free call center, publication in newspapers, and a website. With respect to direct mailings, Class Counsel mailed a total of 7,354 copies of the Notice of Settlement and Proof of Claim Form to the last known addresses of potential Class Members by first-class and certified mail. Additionally, the toll-free call center established by Class Counsel, which was open to receive calls twenty-four (24) hours a day, seven (7) days a week, received 873 calls regarding the litigation and the terms of the Settlement. And, when the call center's customer service representatives were unable to answer questions about the Settlement, the representatives arranged for the callers to speak with Class Counsel. In addition to direct mailings of the Class Notice, Class Counsel also caused the Notice of Settlement to be published in the Times Leader and the Citizens' Voice. Finally, Class Counsel maintained a website containing information about the Settlement. Since April 1, 2012, the website has received 907 visits.

II. Discussion

A. Class Certification

Even though the Settlement Agreement has already been preliminarily approved, there must still be a final determination as to whether to certify the class and grant final approval of the Settlement. See In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 797 (3d Cir. 1995). The Federal Rules of Civil Procedure provide that class action settlements must be approved by the Court. See Fed. R. Civ. P. 23(e) ("The claims, issues, or defenses of a certified class may be settled . . . only with the court's approval."); see also Ripley v. Sunoco, Inc., - - - F.R.D. - - -, 2012 WL 2402632, at *1 (E.D. Pa. June 26, 2012). However, "the ultimate inquiry into the fairness of the settlement under Fed. R. Civ. P. 23(e) does not relieve the court of its responsibility to evaluate Rule 23(a) and (b) considerations." In re Cmty. Bank of N. Va., 418 F.3d 277, 299 (3d Cir. 2005).

As such, "before approving a class settlement agreement, 'a district court first must determine that the requirements for class certification under Rule 23(a) and (b) are met.'" Sullivan v. DB Invs., Inc., 667 F.3d 273, 296 (3d Cir. 2011) (en banc) (quoting In re Pet Food Prods. Liab. Litig., 629 F.3d 333, 341 (3d Cir. 2010)). Rule 23(a) of the Federal Rules of Civil Procedure contains four threshold requirements which every putative class must satisfy:

(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.

Fed. R. Civ. P. 23(a). These requirements are referred to as numerosity, commonality, typicality, and adequacy of representation. If these four prerequisites are satisfied, "a district court must then determine that the proposed class fits within one of the categories of class actions enumerated in Rule 23(b)." Sullivan, 667 F.3d at 296. Plaintiffs seek certification pursuant to Rule 23(b)(3), under which certification is proper where "the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Fed. R. Civ. P. 23(b)(3).

The "[f]actual determinations necessary to make Rule 23 findings must be made by a preponderance of the evidence. In other words, to certify a class the district court must find that the evidence more likely than not establishes each fact necessary to meet the requirements of Rule 23." In re Ins. Brokerage Antitrust Litig., 579 F.3d 241, 257--58 (3d Cir. 2009) (quoting In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 320 (3d Cir. 2008)).

1. Rule 23(a)

a. Numerosity

The first requirement for a class action is that the class is so numerous that joinder of all members is impracticable. Fed. R. Civ. P. 23(a). "'No single magic number exists satisfying the numerosity requirement." Logory v. Cnty. of Susquehanna, 277 F.R.D. 135, 140 (M.D. Pa. 2011) (quoting Florence v. Bd. of Chosen Freeholders, No. 05--3619, 2008 WL 800970 at *6 (D. N.J. Mar. 20, 2008)). However, the Third Circuit has opined that while there is technically no minimum class size, "generally if the named plaintiff demonstrates that the ...


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