curtis anderson's plea against nfl concussion settlement

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Nos. 15-2206, 15-2217, 15-2230, 15-2234, 15-2272, 15-2273, 15-2290, 15-2291, 15-2292, 15-2294, 15-2304, and 15-2305

IN RE: NATIONAL FOOTBALL LEAGUE PLAYERS CONCUSSION INJURY LITIGATION

Curtis L. Anderson,

Appellant in 15-2230

(E.D. Pa. No. 2-12-md-02323)

BRIEF OF APPELLANT

On Appeal From the United States District Court For the Eastern District of Pennsylvania

Anita B. Brody, District Judge

George W. Cochran 1385 Russell Drive Streetsboro, Ohio 44241 T: 330.626.5600 F: 330.230.6136 [email protected] Counsel to Appellant Curtis L. Anderson

Case: 15-2230 Document: 003112052962 Page: 1 Date Filed: 08/23/2015

TABLE OF CONTENTS

Table of Contents……………………………………………………...…….i

Table of Authorities………………………………………………..…….….iii

Statement of Jurisdiction…………...………………………………………..1

Statement of the Issues ........................................………………..…….……2

Related Cases and Proceedings………………………………………………3

Statement of the Case………………………………………………………..4

Statement of the Facts……………………………………………………….7

Summary of Argument………………………………………..…..…..……10

Argument………………………………………………………………...…12

I. The District Court Abused Its Discretion By Ignoring Appellant’s Fundamental Right To Object To The Proposed Class Settlement Due Solely To De Minimus Tardiness Regarding a Compulsory Deadline That Actually Undermined the Court’s Own Plan For Evaluating Its Fairness…………………………….12 A. Standard of Review…………………………………………………………….12

B. Because The Stated Rationale For Striking Appellant’s Objections Contradicted The Only Legitimate Basis For Imposing An Objection Deadline, The District Court Abused Its Discretion……………………………………….12

II. The District Court Also Abused Its Discretion By Depriving

Appellant of His Separate Right To Legal Representation at the Fairness Hearing Even Though It Was Expressly Guaranteed By The Notice of Class Settlement……………………………………………………………..16

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III. The District Court Also Abused Its Discretion By Approving A

Class Notice That Failed To Disclose The Impact Of Governmental Subrogration On Class Distributions…………………………………18 A. The Class Notice’s Failure to Disclose The Impact Of

Subrogation Offsets On Class Distributions Violated Members’ Due Process Right To Adequate Notice And An Opportunity To Be Heard Prior To Releasing Their Claims……………….18

B. The Class Notice Failed To Apprise Class Members of Subrogation’s Significant Impact On Their Distributions…….21

C. The Current Subrogation Scheme Is Incomprehensible To The Class and Unworkable In Practice…………………………….22

IV. The District Court Also Abused Its Discretion By Approving A Settlement That Treats Identically Situated Class Members

Differently Based Upon an Arbitrary Cut-off Date.............................25 Conclusion……………………………………………………………………25 Certifications ................................................................................................... ..26,27 Certificate of Service ...................................................................................... 27

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TABLE OF AUTHORITIES Page Armstrong v. Board of School Directors, 616 F.2d 305 (7th Cir. 1980)…………………………………………………… 19 Bowen v. SouthTrust Bank of Alabama, 760 F.Supp. 889 (M.D.Ala. 1991)………………………………………………… 13 Brown v. Ala. Dept. of Transp., 597 F.3d 1160, 1173 (11th Cir.2010)…………………………………………………… 14,17 Citizens for Police Accountability Political Comm. V. Browning, 572 F.3d 1213 (11th Cir.2009)…………………………………… 14 Devlin v. Scardelletti, 536 U.S. 1 (2002)……………………………… 13 Hansberry v. Lee, 311 U.S. 32 (1940)………………………………… 19 Henderson v. Eaton, No. Civ.A. 01–138, 2002 WL 31415728 (E.D.La. Oct. 25, 2002)…………………………………………. 15 Hirshon v. Republic of Bolivia, 979 F.Supp. 908 (D.D.C.1997)………. 15 In re General Motors Corp. Engine Interchange Litigation, 594 F.2d 1106, 1120 (7th Cir. 1979), cert. denied, --- U.S. ----, 100 S.Ct. 146, (1979)…………………………….. 19 In re Prudential Ins. Co. of Am. Sales Practices Litig., 148 F.3d 283 (3d Cir. 1998)……………………………………. 20 Moreland v. Rucker Pharmacal Co., 63 F.R.D. 611 (W.D.La.1974)………………………………………………….. 19 Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950)… 20 National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639 (U.S.Pa.,1976)……………………………………. 16

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Petrovic v. Amoco Oil Co., 200 F.3d 1140 (8th Cir. 1999)…………. 20 Rodriguez v. West Publ’g Corp., 563 F.3d 948 (9th Cir. 2009)……….. 20 Sullivan v. DB Investments, Inc., 667 F.3d 273 (3rd Cir. 2011)………… 12 Williams v. Morgan, 111 U.S. 684 (1884)…………………………….. 13

Rules

Fed. Rule Civ. Proc. 23………………………………………………... 20

L.A.R. 28.1(b)…………………………………………………………. 12

Statutes

Medicare Secondary Payer Act [42 U.S.C. § 1395y(b)(2)]…………… 18

Medicaid [42 U.S.C. § 1396a(a)(25)]…………………………………. 18

Treatises

2 H. Newberg & A. Conte, Class Actions § 11.55…………………… 13

3 Herbert B. Newberg et al., Newberg on Class Actions § 8:32 (4th ed. 2012)…………………………………………………. 20 3B Moore's Federal Practice, P 23.80(1)…………………………….. 19

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STATEMENT OF JURISDICTION

1. District Court’s Jurisdiction. The District Court had jurisdiction over

this case under 28 U.S.C. §1332(d) based upon diversity of citizenship,

and because the total amount in controversy exceeds

$5,000,000.

2. Appellate Jurisdiction. This Court has jurisdiction pursuant to 28

U.S.C. § 1291. The district court entered its order and final judgment

on April 22, 2015. A. 40. Appellants filed their Notice of Appeal on

May 14, 2015. A. 4.

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STATEMENT OF THE ISSUES

1. Did the district court abuse its discretion by ignoring Appellant’s fundamental right

to object to the proposed class settlement based solely on his de minimus tardiness to a

compulsory deadline that actually undermined the Court’s own plan for evaluating the

settlement’s fairness? (This issue was raised in Appellant’s objections and

response to Appellees’ motion to strike objections. Doc. Nos. 6248 and 6255. It was

overruled in the district court's opinion. A.4411.)

2. Did the district court abuse its discretion by depriving Appellant of his right to

legal representation at the fairness hearing expressly guaranteed in the notice of class

settlement? (This issue was raised in Appellant’s objections and response to

Appellees’ motion to strike objections. Doc. Nos. 6248 and 6255. It was overruled

in the district court's opinion A.4411.)

3. Did the district court abuse its discretion by approving a class notice that failed

to disclose the impact of subrogration on class distributions? (This issue was

raised in Appellant’s objections but was not considered at the fairness hearing.

Doc. No. 6248.)

4. Did the district court abuse its discretion by approving a settlement that treats

class members differently based upon an arbitrary cutoff date? (This issue was

raised in Appellant’s Objections and at the Fairness Hearing. Doc. No. 6248, A.

5402-5460. It was overruled in the district court's opinion. A. 58.)

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RELATED CASES AND PROCEEDINGS

This appeal has been consolidated with eleven other appeals from the

district court's approval order. This case was before this Court previously on

an appeal of preliminary approval. See In re National Football League Players

Concussion Injury Litigation, 775 F.3d 570 (3rd Cir. 2014).

Several other appeals have been filed from the district court's settlement

approval. Nos. 15-2206, 15-2217, 15-2234, 15-2272,15-2273, 15-2290, 15-2292,

15-2294, 15-2304, 15-2305. The Court consolidated the appeals in an order

entered on June 16, 2015, noting that the parties “may file a consolidated brief or

join in or adopt portions by reference”. Doc. No. 00311992229.

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STATEMENT OF THE CASE

This appeal arises from the settlement of a class action lawsuit against the

NFL by a class of retired NFL players for injuries caused by traumatic brain

injury sustained while playing in the NFL. The centerpiece of this litigation

when it was filed was the condition known as Chronic Traumatic

Encephalopathy, or CTE, the disease that is commonly referred to as the

"industrial disease" of the NFL. Of the 79 former NFL players who have had

their brains autopsied following their deaths, 76 were found to have evidence of

CTE. A. 138, A. 5416.

Over the course of the litigation, Class Counsel, despite having alleged

claims for personal injury related to CTE in the complaints, lost confidence in

the viability of the CTE diagnosis, conceding that the science on CTE was too

immature to support recovery for class members suffering from that condition.

Rather than amending the class definition or deleting the CTE claims from the

complaint, however, Class Counsel proceeded to settle those claims for no

compensation, while obtaining recovery for other, rarer, conditions that are not

exclusively associated with head trauma. Class Counsel explicitly conceded

that this tradeoff had taken place, and that releasing all future CTE claims for no

compensation had been traded for enhanced compensation for Alzheimer's,

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Parkinson's Disease and ALS. A. 3860 ("Expanding the settlement to

include CTE would have meant making cuts elsewhere, such as abandoning

coverage for ALS, Alzheimer's Disease, or Parkinson's Disease."). The long-

form notice of class settlement did not disclose these deficiencies. A.1542.

Neither did it warn that failure to meet the objection deadline operates as a

waiver of a class member’s rights. To the contrary—the notice represented that:

On or before November 3, 2014, you may ask the Court for permission to speak at the Fairness Hearing. The Court will determine whether to grant you permission to speak. To make such a request, you must send written notice to the Court stating your intention to speak at the In re National Football League Players’ Concussion Injury Litigation, No. 2:12-md-02323 Fairness Hearing. Be sure to include your name, address, telephone number, and your signature. Your request to speak must be sent to the Court at the address in Question 35. (emphasis original) Appellant’s seventeen objections to the settlement (along with notice of his

intent to appear at the fairness hearing) were entered into the record two days after

the postage deadline approved by the Court. As explained in Appellant’s Notice,

there was just cause for this nominal tardiness:

For cause, Anderson hereby requests the Court’s consideration of his objections despite missing the official deadline for timely submission by two days. First, Anderson only recently learned that the class notice does not accurately summarize the actual settlement. Second, Anderson’s tardiness is de minimus. Third, it will not unduly delay proceedings or prejudice the parties. Fourth, all objectors have been given permission to supplement their objections after the fairness hearing. Finally, class counsel has not moved for a fee award or supported its fee request.

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Nonetheless, Plaintiffs moved to strike Appellant’s objections on timeliness

grounds one week later. Doc. No. 6253. By that time, the district court had already

decided to allow all parties (including objectors) to file supplemental briefs after

the fairness hearing on November 19, 2015. Doc. No. 6203. In the interest of

judicial economy, the court also asked objector counsel to avoid duplicating

arguments by agreeing to appoint representative advocates. A.3078.

After a joint meeting of objector counsel, Appellant’s attorney was selected

to present one of the main arguments at the fairness hearing. Just two days before

the hearing would commence, however, the district court granted Plaintiffs’ motion

to strike Appellant’s objections and even prohibited his counsel from making an

appearance. A.4411, A.4412. After the fairness hearing, numerous objectors were

able to bolster their factual and legal arguments against the settlement’s fairness by

submitting supplemental briefs pursuant to the court’s prior order. Ultimately, the

court approved the settlement as presented over all objections. A.58.

As a result of striking Appellant’s objection, numerous concerns about

governmental subrogation overlooked in the class notice were silenced because no

other objector had raised the issue. These concerns include: (1) that

Medicare/Medicaid subrogation rights will block payments to class members; (2)

that the concept of subrogation offsets is too complex for most class members to

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comprehend; (3) that the offsets could not be calculated in a meaningful way for

class members to decide whether to object or to opt out of the settlement; (4) that a

global resolution of Medicare’s subrogation rights is equally problematic; (5) that a

Medicare settlement could not be allocated in a manner that allows each class

member to estimate his own offset anyway; (6) that the “Lien Resolution

Administrator” will not be appointed until after expiration of the appeal period;

and (7) that no reasonable solution to any of the foregoing problems had been

reached among the parties. Accordingly, Appellant filed his Notice of Appeal on

May 15, 2015. A.6.

STATEMENT OF FACTS

This class action was brought by a class of retired players for injuries

caused by head trauma suffered while playing in the NFL. The centerpiece of

this action when it was filed was a claim for compensation for Chronic

Traumatic Encephalopathy, or CTE, a disease which, as of the writing of this

Brief, can only be diagnosed through an autopsy. Class Counsel knew when they

filed this lawsuit that there was no way of proving that a former player had CTE

while that player was living. Nevertheless, despite this enormous defect in their

case for CTE, Class Counsel alleged claims for relief related to CTE for all

retired players, not just on behalf of those who had died by the time of filing.

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Indeed, the main reason why the issue of the danger of concussions in the

NFL had come to prominence was the high-profile suicides of former players

such as Junior Seau and Dave Duerson, whose brains were later found to have

the marker of CTE during autopsy. These high profile deaths brought

unprecedented media attention to the danger of repeated concussions and the

disease of CTE that had previously gone underreported. This media spotlight, in

turn, led to the filing of this class action lawsuit seeking compensation for the

debilitating symptoms of CTE, including the symptom of suicidality that

characterizes CTE.

The lawsuit also made claims for other diseases associated with head

trauma, including Parkinson's Disease, Alzheimer's, and ALS, even though

these diseases affect a far smaller number of retired players than CTE does,

and also afflict many people who never suffered head trauma. A. 691.

Moreover, only one of these diseases was represented by a Lead Plaintiff –

Kevin Turner suffered from ALS at the time he filed this lawsuit. There is no

Lead Plaintiff suffering from Parkinson's Disease, Alzheimer's, Level 1.5 or

Level 2 Dementia, or CTE. Shawn Wooden, the only other Lead Plaintiff

besides Kevin Turner, currently claims to be suffering from no compensable

condition, but alleges that he may develop CTE in the future. A. 5360.

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As the Plaintiffs and the NFL argued vociferously at the fairness hearing,

the Plaintiffs never had any realistic chance of prevailing on their CTE claims

on behalf of living players, because the science on CTE is too nascent and

undeveloped. Only deceased players can be diagnosed with CTE. Therefore,

Class Counsel filed this case knowing they had no chance of prevailing on the

CTE claims, but filed them anyway as a bargaining chip to trade away in

settlement negotiations for enhanced compensation of other diseases that will

affect a small minority of class members.

In 2014, the parties entered into a settlement of the claims alleged in this

litigation that compensates five defined conditions at set dollar amounts that

decline as the age at which the former player is diagnosed goes up, and also vary

depending on years played in the NFL. A. 1497. The covered conditions are

Parkinson's, Alzheimer's, ALS and Level 1.5 and Level 2 Cognitive Impairment.

A. 1507. CTE is compensated only for those former players who died prior to the

date of settlement, July 7, 2014, a date which was later moved to the date of the

district court's approval order, April 22, 2015. A. 1466.

Only a small percentage of class members are expected to qualify for

compensation for the five diseases other than CTE. The NFL and Class Counsel

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have estimated that the total number of class members who will qualify for

payment is 3488 of the 20,500 former players in the class. A.1738. The vast

majority of class members, however, will probably die with evidence of CTE in

their brains. The settlement only compensates a handful of such players -- those

who died prior to April 22, 2015.

SUMMARY OF ARGUMENT

1. Judicial deadlines for objecting to class settlements serve the

legitimate purpose of preventing eleventh-hour challenges that prejudice the parties

without just cause. The following circumstances surrounding the district court’s

decision to strike Appellant’s objections clearly demonstrate an abuse of this

discretion: (1) Appellant’s objections were filed no later than others meeting the

postage deadline; (2) the parties’ own deficient class notice was directly

responsible for Appellant’s tardiness; (3) the timing of Appellant’s objections did

not prejudice the parties in any way; (4) refusing Appellant’s counsel the

opportunity to present argument at the fairness hearing was a separate violation of

the class notice. Accordingly, the order striking Appellant’s objections should be

reversed so that the merits of Appellant’s arguments can be considered on appeal.

2. The class notice’s failure to disclose subrogation’s impact on class

distributions violated members’ due process right to adequate notice and a

10


meaningful opportunity to be heard before releasing their claim. A proper notice

would have disclosed that: (1) Medicare/Medicaid subrogation offsets may

completely block payments to class members; (2) these potential offsets cannot be

calculated in any meaningful way that would aid a class member’s decision on

whether to object or opt out of the settlement; (3) neither could the equally

problematic global resolution of Medicare’s subrogation rights enable a class

member to calculate his offset; (4) the “Lien Resolution Administrator” designated

to champion class members’ rights in this critical area will not be appointed until

after expiration of the appeal period; and (5) no reasonable solution to any of the

foregoing problems has been reached among the parties.

3. The approved settlement impermissibly treats similarly situated

class members differently based solely upon an arbitrary cutoff date for Death

with CTE compensation, thereby releasing future CTE claims (held by the

majority of the class) without any consideration. Because the study of CTE is

still in its infancy, a current diagnosis requires dissecting the brain after death.

Instead of releasing future CTE claims prematurely, Class Counsel should

have limited the class to former players presently suffering from a "well-

defined and robustly studied condition". Claims for the undeveloped and

immature condition known as CTE should have been excluded.

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ARGUMENT

I. The District Court Abused Its Discretion By Ignoring Appellant’s Fundamental Right To Object To The Proposed Class Settlement Due Solely To De Minimus Tardiness Regarding a Compulsory Deadline That Actually Undermined the Court’s Own Plan For Evaluating Its Fairness.

A. Standard of Review.

A district court’s approval of a class action settlement is reviewed for

abuse of discretion. Sullivan v. DB Investments, Inc., 667 F.3d 273, 295 (3rd

Cir. 2011). Whether the lower court used the correct legal standard is

reviewed de novo. Id. The district court’s decision to strike Appellant’s

objections and prohibit his counsel from appearing at the fairness hearing

should be reviewed for abuse of discretion. This Court’s review of the district

court’s approval of the settlement itself, however, is plenary since the

incorrect legal standard was applied. L.A.R. 28.1(b)

B. Because The Stated Rationale For Striking Appellant’s Objections Contradicted The Only Legitimate Basis For Imposing An Objection Deadline, The District Court Abused Its Discretion.

This appeal provides a unique opportunity to clarify how a district court can

prevent undue prejudice from a tardy objection without unduly silencing a class

member’s voice. The key is looking beyond an arbitrary date to the policy behind

it. A class member’s fundamental right to register objections to a proposed

12


settlement prior to the fairness hearing has been consistently recognized under the

Federal Rules of Civil Procedure. See Fed. Rule Civ. Proc. 23(e) (“A class action

shall not be dismissed or compromised without the approval of the court, and

notice of the proposed dismissal or compromise shall be given to all members of

the class in such manner as the court directs”); see also 2 H. Newberg & A. Conte,

Class Actions § 11.55, p. 11–132 (3d ed. 1992) (explaining that Rule 23(e) entitles

all class members to an opportunity to object).

The District Court’s approval of the settlement in the present case—binding

Appellant as a member of the class—amounted to a “final decision of

[Appellant’s] right or claim” that triggered his right to appeal. Williams v. Morgan,

111 U.S. 684, 699 (1884). Appellant may only appeal that aspect of the district

court’s order that affects him: the decision to strike or ignore his objections. Id., at

6. Conversely, no class representative may enforce Appellant ’s right once the

named parties reach a settlement that is approved over his objections. Devlin v.

Scardelletti, 536 U.S. 1, 9 (2002).

That non-named class members are parties to the proceedings in the sense of

being bound by the settlement is key to Appellant’s standing. In light of the

conflict between class counsel and class members once an agreement is signed,

the court’s independent evaluation of fundamental fairness is imperative. Bowen

13


v. SouthTrust Bank of Alabama, 760 F.Supp. 889 (M.D.Ala. 1991). An objector’s

ability to raise awareness of a settlement’s negative consequences is critical to

fulfilling the court’s mandate. Great Neck Capital Appreciation Inv. Partnership,

L.P. v. PricewaterhouseCoopers, 212 F.R.D. 400 (E.D.Wis.,2002). The court

explained why:

Class counsel and defendants’ counsel may reach a point where they are cooperating in an effort to consummate the settlement. Courts, too, are often inclined toward favoring the settlement, and the general atmosphere may become largely cooperative. In re Prudential Ins. Co. of Am. Sales Practice Litig. Agent Actions, 278 F.3d 175, 202 (3d Cir.2002) (Rosenn, J., concurring and dissenting). Thus, objectors serve as a highly useful vehicle for class members, for the court and for the public generally. From conflicting points of view come clearer thinking. Id. Therefore, a lawyer for an objector who raises pertinent questions about the terms or effects, intended or unintended, of a proposed settlement renders an important service.

Id. at 412-13. Against this backdrop, it is abuse of discretion to strike a class

member’s objection before the fairness hearing if the court “applies an incorrect

legal standard, applies the law in an unreasonable or incorrect manner, follows

improper procedures in making a determination, or makes findings of fact that are

clearly erroneous.” Brown v. Ala. Dept. of Transp., 597 F.3d 1160, 1173 (11th

Cir.2010) (quoting Citizens for Police Accountability Political Comm. V.

Browning, 572 F.3d 1213, 1216–17 (11th Cir.2009)). After all, the very objective of

the fairness hearing is for parties to object to a settlement’s terms, class, or process.

14


Henderson v. Eaton, No. Civ.A. 01–138, 2002 WL 31415728, at *2 (E.D.La. Oct.

25, 2002) (“[T]he Court held a final fairness hearing for the purpose of receiving

and ruling on any objections or opt-outs.”). It stands to reason that missing an

arbitrary deadline does not justify striking an objection without proof that the

parties were actually prejudiced. Accordingly, numerous courts have accepted

objections to a class action settlement agreement when filed before the judgment

becomes final. See, e.g., Hirshon v. Republic of Bolivia, 979 F.Supp. 908, 912–13

(D.D.C.1997) (denying a motion challenging the approved settlement which was

not presented to the court prior to approval, either in writing or at the final fairness

hearing).

In the present case, the circumstances surrounding the decision to strike

Appellant’s objections leave little doubt that the district court abused its discretion.

Because Appellant’s objections were filed on October 16, 2014, they were

docketed no later than other objections mailed by the postage deadline of October

14, 2014. More importantly, the parties’ own deficient class notice was directly

responsible for Appellant’s tardiness. First and foremost are the burdensome

requirements for registering a class member’s objections (including the unusual

requirement that Appellant bear his own signature on the objection). Another

widespread complaint was that the notice sent to class members did not accurately

15


summarize the actual terms of agreement. Neither did the notice warn that failure

to meet the objection deadline would operate as a waiver of a class member’s

rights. Once Appellant was made aware of these discrepancies, he was quick to

assert his opposition. Other objectors, citing Appellees’ failure to disclose the basis

for waiving significant class rights, went so far as to request an extension of the

objection and exclusion deadlines. In response, the Court decided to allow

supplemental briefing after evidentiary support for the settlement was presented at

the fairness hearing. Doc. No. 6203.

The naïve notion that a district court need not consider the circumstances

surrounding a tardy objection is hard to find and difficult to justify. In reality, the

case cited in support of Appellees’ original motion represents the most extreme

sanction for flagrant discovery abuse due to “bad faith, willful or intentional”

conduct. See National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S.

639, 641 (U.S.Pa.,1976). Since no such showing was made in the present case, this

Court should reverse the district court’s order striking Appellant’s objections and

affirm his standing to appeal the settlement’s approval.

II. The District Court Also Abused Its Discretion By Depriving Appellant of His Separate Right To Legal Representation at the Fairness Hearing Even Though It Was Expressly Guaranteed By The Notice of Class Settlement.

Even if Appellant filed his objections two days after the mailing deadline, the

16


notice of his intent to appear at the fairness hearing through counsel was served well

within the deadline established by the settlement notice. Specifically, the notice

represented that:

On or before November 3, 2014, you may ask the Court for permission to speak at the Fairness Hearing. The Court will determine whether to grant you permission to speak. To make such a request, you must send written notice to the Court stating your intention to speak at the In re National Football League Players’ Concussion Injury Litigation, No. 2:12-md-02323 Fairness Hearing. Be sure to include your name, address, telephone number, and your signature. Your request to speak must be sent to the Court at the address in Question 35. (emphasis original) Nonetheless, the sole grounds given by the district court for prohibiting

Appellant’s counsel appearance at the fairness hearing was his “late-filed” notice

of objections on October 16, 2014. As stated in its Order:

Co-Lead Class Counsel’s Motion to Strike the Late-Filed Objection of Curtis L. Anderson (ECF No. 6523) is GRANTED. Because he no longer has a recognized objection, George W. Cochran, Esq., will not be permitted to appear at the November 19 Fairness Hearing. A.4411. The district court’s banishment of Appellant’s counsel is variously

guilty of applying an incorrect legal standard, applying the law in an unreasonable

manner, following improper procedures in making a determination, and making a

finding of fact that is clearly erroneous. Any of the foregoing errors is sufficient

grounds for reversing Appellant’s expulsion from the fairness hearing. Brown v.

17


Ala. Dept. of Transp., 597 F.3d 1160, 1173 (11th Cir.2010). This error provides

independent grounds for affirming Appellant’s standing to appeal the settlement’s

fairness.

III. The District Court Also Abuse Its Discretion By Approving A Class Notice That Failed To Disclose The Impact Of Subrogation On Class Distributions.

Even if the current settlement were otherwise satisfactory, the impact of

the Medicare Secondary Payer Act [42 U.S.C. § 1395y(b)(2)] could indefinitely

block payments to class members. Similar provisions under Medicaid [42 U.S.C.

§ 1396a(a)(25)] pose the same problem. As explained below, the potentially

significant impact of those laws, and the NFL’s insistence on full compliance

with them before any money can be paid out to any class member, have not been

disclosed to the class in a way that could be readily comprehended. Because the

potential impact of such laws is so great—and the disclosure was woefully

inadequate—it was abuse of discretion to approve the settlement without

providing class members a full explanation of this critical topic and/or directing

the parties to arrive at a more reasonable solution.

A. The Class Notice’s Failure to Disclose The Impact Of Subrogation Offsets On Class Distributions Violated Members’ Due Process Right To Adequate Notice And Opportunity To Be Heard Prior To Releasing Their Claims.

Balanced against the overriding public interest in favor of class settlements

18


are strong countervailing public policies that dissuade automatic judicial

acceptance of such agreements. Moreland v. Rucker Pharmacal Co., 63 F.R.D.

611, 615 (W.D.La.1974). First and foremost is the fact that most of those whose

rights are affected are not involved in its negotiation or able to voice their views.

Hansberry v. Lee, 311 U.S. 32, 42-43, (1940); 3B Moore's Federal Practice, P

23.80(1) at 23-504 (3d ed. 1980). Instead, they must rely on the representation of

the class representatives and class counsel to protect their interests. While this

representation is no doubt vigorous in most cases, on occasion the negotiating

parties may find that their individual interests can best be served by a settlement

that is not in the best interests of the class.

Likewise, class counsel may be persuaded by the prospect of a substantial

fee to leave the class with less relief than could have been procured. See In re

General Motors Corp. Engine Interchange Litigation, 594 F.2d 1106, 1120 (7th

Cir. 1979), cert. denied, --- U.S. ----, 100 S.Ct. 146, 62 L.Ed.2d 95 (1979). A

settlement could also affect the class by imposing structural relief that members do

not agree with or, where the relief is both structural and compensatory, by

inflicting trade-offs at their expense. Armstrong v. Board of School Directors, 616

F.2d 305, 313 (7th Cir. 1980).

It follows that c l a s s notice must contain sufficient information to enable

19


class members to make informed decisions on whether they should take steps to

protect their rights. See Rodriguez v. West Publ’g Corp., 563 F.3d 948, 962–63

(9th Cir. 2009); Petrovic v. Amoco Oil Co., 200 F.3d 1140, 1153 (8th Cir. 1999);

In re Prudential Ins. Co. of Am. Sales Practices Litig., 148 F.3d 283, 326 (3d Cir.

1998); 3 Herbert B. Newberg et al., Newberg on Class Actions § 8:32 (4th ed.

2012). As a matter of constitutional due process, meaningful notice of the

settlement’s terms is necessary before an individual's claim can be extinguished.

Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 313-14, 70 S.Ct.

652, 656-57, 94 L.Ed. 865 (1950).

Accordingly, Rule 23(e)(1)(B) requires the court to ‘direct notice in a

reasonable manner to all class members who would be bound by a proposed

settlement, voluntary dismissal, or compromise’ regardless of whether the class

was certified under Rule 23(b)(1), (b)(2), or (b)(3).” Manual for Compl. Lit. at §

21.312. The best practicable notice is that which is “reasonably calculated, under

all the circumstances, to apprise interested parties of the pendency of the action

and afford them an opportunity to present their objections.” Mullane v. Cent.

Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950). Among other things, the

settlement notice must: (1) clearly describe the essential terms of the proposed

settlement; (2) explain the options open to class members; (3) explain the

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procedures for allocating and distributing settlement funds; and (4) provide

information that will enable class members to calculate or estimate their individual

recoveries. Manual for Compl. Lit. at § 21.312. Class members who are thus

properly notified are able to choose whether to accept the settlement, object to its

terms, or to opt out entirely. Requiring notice to putative class members also

insures that the putative class members' interests will be protected.

B. The Class Notice Failed To Apprise Class Members of Subrogation’s Significant Impact On Their Distributions.

Despite all the hoopla over the NFL’s “monumental” settlement of

players’ head trauma claims on a classwide basis, the vast majority of retired

NFL players who qualify for an award would be shocked to know that most—if

not all—of their money could be seized by the U.S. government. Under the well-

established principle known as “subrogation,” if a medical insurer paid the

medical bills of a party injured in an accident, the insurer is entitled to recoup its

costs if the injured party recovers from the person who caused the injury.

The same principle applies to the law governing Medicare. It requires

liability insurers and self-insured entities—here the NFL—to determine if a

claimant has or may receive Medicare benefits for injuries covered by a

settlement, report that amount to Medicare, and be responsible for repayment.

The application to future medical expenses is quite explicit. Pursuant to 42

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U.S.C. § 1395y(b)(2)(A)(i), a claimant may not receive third-party compensation

before satisfying Medicare’s lien where “payment has been made, or can

reasonably expected to be made”. The implications for class members are deeply

embedded in the Settlement Agreement: (1) section 11.3(f) expressly includes

“past, current, or future bills or costs”; (2) section 11.3(g) forbids any payments

from the settlement fund until a class member’s medical liens are satisfied.

Nonetheless, the Short-Form Notice of class settlement did not mention

Medicare or Medicaid subrogation rights whatsoever. Even the Long Form

Notice only vaguely mentioned possible reductions in members’ recovery based

on “any legally enforceable liens on the award.” A.1542. Conspicuously absent is

any explanation that would enable a class member—and most attorneys—to

understand what that phrase means, much less to evaluate its actual impact on

class distributions.

C. The Current Subrogation Scheme Is Incomprehensible To The Class and Unworkable In Practice.

To add insult to injury, the NFL concussion settlement is far more

complicated than calculating a simple Medicare subrogation lien because it

provides for compensation at the front end, as soon as a player is diagnosed

with a qualifying disease. As a result, the ratio of incurred to estimated future

medical costs is actually inverted. Moreover, if Medicare must give its approval

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on a case-by-case basis, there will be a substantial delay in payment even after

the player receives a qualifying diagnosis. Alternatively, the settlement

contemplates a global settlement with Medicare with its own set of problems.

No one can predict how many class members will develop a compensable

disease—much less which ones, at what age, and at what level of severity.

Diagnosis alone does not answer what kind of treatment is necessary over what

period, and when in the future those needs will arise. Attempting to calculate

20,000 potential claims is little more than simply rolling the dice.

Even if the parties could agree on a global figure, they would need the

Court’s approval because the settlement amounts promised to class members

would be reduced accordingly. In any event, the Court would lack sufficient

data to calculate how the Medicare payment should be allocated since the

settlement has no cap and payments must conform to a pre-determined grid.

Such uncertainties would make the Settlement Administrator’s task of

determining an amount applicable to each disease category virtually impossible.

Even with such a formula, the actual reduction for each class member would

depend on how many members contract a disease for which Medicare has a

claim. Bottom line: there is no way of answering these questions with even a

remote degree of certainty or fairness.

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Moreover, Section 11.1 of the settlement agreement creates the position

of Lien Resolution Administrator, whose duties appear to include negotiating

with Medicare to try to resolve these issues either on a case by case basis, or by

reaching a global settlement with Medicare (and any other lien holders) under

which lien holders would accept a fixed amount or perhaps a formula for all

class members. However, under section 11.1(a)(i), the lien administrator will

not be appointed until after the effective date, which is the date when all appeals

are concluded, Section 2.1(jj), and is likely to be several years in the future. Any

such resolution will necessarily be complex and take time, which means that the

promise of prompt payments upon final approval is illusory.

All things considered, the liens present so many open questions, which go

to the very heart of how much benefit class members will derive from the

settlement, that the Court cannot determine whether the proposed settlement is

fair, reasonable, and adequate until the lien questions are resolved. The

complexity of these questions underscores the total inadequacy of the notice’s

reference on the issue of how much each player will receive to whether “[t]here

are any legally enforceable liens on the award.” That phrase does not reasonably

inform a lawyer of these pitfalls, let alone a class member suffering from the

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after effects of concussions suffered while playing in the NFL. Because the

district court lacks authority to revise the settlement, it should have rejected the

settlement and directed the parties to re-negotiate a proposal that is not beset

with these flaws regarding subrogation offsets.

IV. The District Court Abused Its Discretion By Approving A Settlement That Treats Identically Situated Class Members Differently Based Upon An Arbitrary Cutoff Date.

Pursuant to F.R.A.P. 28(i) and this Court’s order consolidating all related

appeals, Appellant respectfully joins in and adopts by reference the following

opening briefs as they pertain to Appellant’s fourth assignment of error:

Appellant Scott Gilchrest (No. 15-2290)

Appellants Jimmie H. Jones, et al. (No. 15-2291)

Appellant Andrew Stewart (No. 15-2292)

Appellants Alan Faneca, et al. (No. 15-2304)

All other opening briefs filed by an objector-appellant subsequent to filing

Appellant’s opening brief on August 23, 2015.

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CONCLUSION

For the foregoing reasons, Appellant respectfully asks this Court to:

(1) Reverse the district court’s decision to strike Appellant’s objections;

(2) Affirm Appellant’s standing to appeal the district court’s approval of

the class settlement;

(3) Overturn the district court’s approval of the settlement for the reasons

stated herein.

Appellant Curtis L. Anderson By his attorney,

George W. Cochran George W. Cochran, Esq. 1385 Russell Drive Streetboro, Ohio 44241 T: 330.626.5600 F: 330.230.6136 [email protected]

CERTIFICATION

I, George W. Cochran, hereby certify the following:

(1) I am a member of the Bar of the Court of Appeals for the Third Judicial Circuit.

/s/ George W. Cochran George W. Cochran

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CERTIFICATE OF COMPLIANCE

Pursuant to FRAP 32(a)(7)(C), I hereby certify that this brief was

produced in Times New Roman 14-point type and contains no more than 6316

words.

I further certify that the electronic copy of this brief filed with the Court

is identical in all respects to the hard copy filed with the Court, and that the

electronic version is virus free as confirmed by the McAfee Security Scan

program.


CERTIFICATE OF SERVICE

I hereby certify that on August 23, 2015, I filed the foregoing Brief via

the ECF filing system for the United States Court of Appeals for the Third

Circuit, and that as a result each counsel of record received an electronic copy

of this Brief on August 23, 2015.


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curtis anderson's plea against nfl concussion settlement

Documents

notice of class settlement

class distributions18

united states district

proposed class settlement

class notices failure

district judge george

appellant curtis

united states court