in the united states district court for the eastern ...chalawsuit.com/crittenden settlement...
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IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF ARKANSAS
JONESBORO DIVISION
YOLANDA GOODMAN on behalf of
herself and all similarly situated persons,
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Case No. 3:14-cv-00229-DPM-jtk
(Hon. Judge D.P. Marshall, Jr.)
v.
PLAINTIFF, )
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CRITTENDEN HOSPITAL
ASSOCIATION, INC ., EUGENE K.
CASHMAN, et al.
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DEFENDANTS.
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CLASS ACTION SETTLEMENT AGREEMENT
This Class Action Settlement Agreement (“Agreement”) is made this 2nd
day of
December, 2016 between Plaintiff Yolanda Goodman (hereinafter “Plaintiff”), on behalf of
herself and members of the certified class as defined herein, and the following defendants:
Eugene K. Cashman, III.; Jamie R. Carter, Jr.; David G. Baytos; David Raines, Jr; W. Brad
McCormick; Jason W. Collard; Herschel F. Owens; Andrew Luttrell; Keith M. Ingram; Randall
Catt; William Johnson; Lannie L. Lancaster; Julio P. Ruiz; Sherry L. London; Ness S. Sechrest;
Randy R. Sullivan; Leven Williams; Cigna Health and Life Insurance Company; and Crittenden
Hospital Association (hereinafter collectively referred to as the “Defendants”).
This Agreement is entered into to effect a full and final settlement and dismissal with
prejudice of all claims asserted against Defendants in the certified class action lawsuit captioned
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Yolanda Goodman, on behalf of herself and all similarly situated persons, Plaintiff, vs. Eugene
K. Cashman, III, et al., Defendants, No. 14-cv-00229-DPM (hereinafter referred to as the
“Goodman Action”) currently pending in the United States District Court for the Eastern District
of Arkansas on the terms set forth herein below, subject to approval by the Court.
I. Definitions
1. The term “Parties” means collectively plaintiff Goodman, the certified Class, and
all the Defendants.
2. The term “Goodman Action” means the litigation described immediately above
captioned Yolanda Goodman, on behalf of herself and all similarly situated persons, Plaintiff, vs.
Eugene K. Cashman, III, et al., Defendants, No. 14-cv-00229-DPM.
3. The term “Agreement” means this Class Action Settlement Agreement, including
all attachments and exhibits. The term shall include any amendments to this document or to the
attachments and exhibits, as long as such amendments are in writing, agreed to by Plaintiff and
Defendants and conform to the requirements of this Agreement.
4. The term “CHA” means Crittenden Hospital Association.
5. The term “CHLIC” means Cigna Health and Life Insurance Company.
6. The term “Plan” means the Crittenden Regional Hospital Health Plan.
7. The term “Medical Providers” means the medical professionals, healthcare
facilities, and ancillary services providers that provided any healthcare service or supplies to a
person covered by the Plan from January 1, 2012 to September 12, 2014.
8. The term “Class” or “Class Members” means the class that was certified by the
Court, as described herein in Section II, ¶ 3 of this Agreement.
9. The term “Class Counsel” means the attorneys identified in Section II, ¶ 4 of this
Agreement.
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10. The term “Class Period” means the period of time covered by the class definition,
January 1, 2012 to September 12, 2014.
11. The term “Plan Members” mean the participants and beneficiaries under the Plan
during the period January 1, 2012 to September 12, 2014.
12. The term “Settlement Fund” refers to the fund established to compensate Class
Members as described herein in Section IV, ¶1 of this Agreement.
13. The term “Settlement Administrator” means CMM Settlement Solutions, LLC of
Bartlett, Tennessee.
14. The term “Claim Deadline Date” or “Claim Deadline” means the date set by the
Court by which all Claim Forms must be delivered to the Settlement Administrator as set forth in
Section IV, B., ¶4of this Agreement.
15. The term “Claim Form” means the form provided to the Class identified in
Section IV, B., ¶ 6 of this Agreement; a copy of the proposed Claim Form is attached hereto as
Exhibit A.
16. The term “Class Notice” means any of the forms of direct mail, website or
publication notice of the Settlement provided to Class Members. The publication and mail
versions of the Class Notice are attached as Exhibits B and C to this Agreement.
17. The term “Class Notice Date” means the last publication date of the Class Notice
as set forth in Section V, D., ¶ 7 of this Agreement.
18. The term “Court” means the United States District Court for the Eastern District
of Arkansas.
19. The term “Effective Date” means the date on which all conditions of Section VIII,
¶4 of this Agreement have been met.
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20. The term “Final Approval Hearing” means the hearing set by the Court where,
among other things, the Court, in its discretion, will provide an opportunity for any Class
Member who wishes to object to the fairness, reasonableness or adequacy of the Settlement,
provided that the Class Member complies with the requirements for objecting to the Settlement
as set forth in Sections V, E., ¶17 of this Agreement. The date of the Final Approval Hearing
will be set by the Court and communicated to Class Members by the Class Notice.
21. The term “Final Order” or “Final Approval Order” means the order or orders of
the Court giving final approval of the terms of the Settlement as fair, reasonable, and adequate
and in the best interests of the Class in the Goodman Action. The proposed Final Approval Order
is attached as Exhibit E.
22. The term “Preliminary Approval Order” means the order or orders of the Court
approving the terms and conditions of this Agreement and the Settlement for purposes of
providing Class Notice as defined herein above. The proposed Preliminary Approval Order is
attached as Exhibit D.
23. The term “Qualified Class Member” means each Class Member who, through
compliance with the requirements for a Claim Form, establishes and provides his or her name,
current address, phone number and verification documentation as described herein in Section 23
of this Agreement to the Settlement Administrator.
24. The term “Release” means the release of claims set forth in Section VI, ¶ 6 of this
Agreement.
II. Factual & Procedural Background
1. On February 9, 2015, Plaintiff Goodman filed a First Amended Class Action
Complaint (D.E. 53) on behalf of herself and all similarly situated persons who were participants
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in the Plan, which was sponsored by CHA,. Plaintiff’s complaint alleged that she sought to
recover losses sustained by the Plan. Plaintiff alleged that CHA, and the Officers and Directors
of CHA, and CHLIC acted as fiduciaries to the Plan were responsible for a number of fiduciary
breaches that resulted in alleged damages to the Plan.
2. CHA and the Officers and Directors and CHLIC denied that any of them acted as
plan fiduciaries and further denied that any of them breached any duty owed to the Plan or
otherwise violated ERISA.
3. By Order dated December 10, 2015, the Honorable Judge D.P. Marshall Jr.,
granted Goodman’s motion for class certification and certified the following class under Fed. R.
Civ. P. 23(b)(1)(A) and (B):
From 1 January 2012 to 12 September 2014, Plaintiff and all similarly situated
participants and beneficiaries who were included in the Plan, and excluding the
defendants, their affiliates and families, and the judge in this case and his staff.
(Order Granting Motion for Class Certification, D.E, 103 at p. 12).
4. In the same Order, under Rule 23(g)(1)(A), the Court appointed as class counsel:
William Burns, Frank Watson III, Tim Edwards, Denny Sumpter, and Vince Chaddick (“Class
Counsel”).
III. Factual Recitals Acknowledged by the Parties Supporting Settlement
1. Goodman is the named plaintiff in the Action,1 which is a certified class action
pending in the United States District Court for the Eastern District of Arkansas and captioned
1 When litigation concerning the Plan was first initiated, persons other than Goodman were
named as plaintiffs. On September 12, 2014, Deloris and Roger Sumpter filed the first lawsuit
involving the Plan; that action was filed in the Circuit Court of Crittenden County, Arkansas. On
September 24, 2014, another plan member, Rhonda Goodfellow, filed a Plan-related lawsuit in
the U.S. District Court for the Eastern District of Arkansas. That action was assigned case
number 3:14-cv-00226-DPM/JTR. After the Sumpter action was removed to federal court, it was
assigned the current case number (3:14-cv-0229-DPM) and reassigned with the Goodfellow
action. Thereafter, Yolanda Goodman was substituted as the plaintiff and the Sumpters and
Goodfellow were dropped from the caption.
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Yolanda Goodman, on behalf of herself and all similarly situated persons, Plaintiff, vs. Eugene
K. Cashman, III, et al., Defendants, No. 14-cv-00229-DPM. Goodman’s first amended
complaint (D.E. 53) alleges various claims arising from the alleged failure of CHA to fully fund
the Plan, which was the self-insured benefit plan that CHA established in 2008 to provide
healthcare coverage to its employees and their dependents.
2. The individuals who are named as Defendants in the Action served as the officers
and/or directors of CHA. CHA, in turn, was a regional, non-profit hospital that sponsored the
Plan and was designated as the Plan’s administrator.
3. Effective January 1, 2014, CHLIC became the third-party administrator of the
Plan under an administrative services only (“ASO”) agreement that it entered into with CHA. In
2012 and 2013, the third-party administrator of the Plan was Simplifi Health Benefit
Management, LLC (“Simplifi”). Simplifi ceased doing business and is no longer a going concern
, has been defaulted and is not a party to, but is a third-party beneficiary of, this Agreement.
4. Goodman’s first amended complaint (D.E. 53) asserts claims against CHA, its
officers and directors, and CHLIC, arising from CHA’s alleged failure to provide sufficient
funding for the Plan to pay benefits on claims for services and supplies that Medical Providers
provided to Plan members. Goodman also asserted claims against Methodist Le Bonheur
Healthcare (“Methodist”), however, those claims were dismissed by the Court on November 12,
2015 (D.E. 101). The complaint contains counts arising under the Employee Retirement Income
Security Act of 1974, 29 U.S.C. § 1001, et seq. (“ERISA”), Arkansas common law, and the
Worker Adjustment and Retraining Notification Act (the “WARN Act”).
5. Goodman’s WARN Act claim is asserted solely against CHA.. Goodman’s
WARN Act claim was dismissed by the Court without prejudice on February 9, 2016. (D.E.
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111). Goodman voluntarily dismissed her Arkansas common law claims on March 11, 2016.
(D.E. 118).
6. Goodman alleges that Defendants breached their fiduciary duties and violated
various provisions of ERISA and the Plan because they allegedly failed to fund the Plan, they
allegedly misrepresented the financial status of the Plan to the Plan members, they allegedly
failed to disclose material facts about the Plan, and they allegedly misused or diverted Plan
assets.
7. Defendants deny all of Goodman’s allegations of liability, fault, wrongdoing, and
fiduciary breaches.
8. The Directors all served on CHA’s board as volunteers. None of them were paid
and none received any financial benefit from their service. The Directors and Officers allege
that they acted at all times in the best interests of CHA throughout their respective tenures.
9. The Directors and Officers assert that no Plan assets were ever misused or
diverted, or used for any purpose other than to provide benefits under the Plan. In every year
CHA sponsored the Plan, it paid claims well in excess of the premiums paid by employees. In
2012, participating employees paid a total of $718,593 in premiums. That same year, CHA paid
over $1.7 million in medical claims, $143,479 in pharmacy claims, and provided over $1 million
in medical services to participants. In 2013, participating employees paid a total of $628,625 in
premiums. That same year, CHA paid $1.99 million in medical claims, $222,863 in pharmacy
claims, and provided over $1.3 million in medical services to participants. In 2014, in the
months leading up to CHA’s bankruptcy filing, participating employees paid $285,123 in
premiums. CHA paid $567,569 in medical claims and $183,391 in pharmacy claims. No
employee premiums were ever diverted or applied toward other expenses of the Hospital, and
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CHA continued to make corporate contributions toward claims all the way up to its bankruptcy
filing.
10. The Directors and Officers also assert that none of them ever misrepresented the
financial condition of CHA or the impact it was having on CHA’s ability to promptly fund
provider claims submitted to the Plan. When employees or providers inquired about the status of
outstanding medical claims, CHA’s agents were transparent about where CHA stood in paying
claims and the anticipated date by which a particular claim would likely be paid.
11. The Directors and Officers additionally assert that, despite the substantial
financial challenges CHA was facing, they believed the approval of the sales tax in 2014, in
conjunction with other initiatives in the works including physician recruiting efforts, would shore
up the Hospital’s cash flow issues and put it on a solid footing going forward to address expenses
including outstanding medical claims. However, the two fires at the Hospital in 2014, which
shut down operations for extended periods reducing cash flow to zero, ultimately pushed CHA
into a bankruptcy it was otherwise on tract to avoid. It was those very unfortunate and
unforeseen circumstances, and not the improper handling of any Plan assets, that resulted in the
closure of the Hospital with medical claims outstanding.
12. Plaintiff disputes the Directors and Officers claims in paragraphs 10 and 11 and
contends that employees and Plan participants were not properly informed about the status of the
Plan nor CHA’s inability to promptly fund provider claims submitted to the Plan.
13. During 2012 and 2013 (the first two years of the Class Period), the Plan was
administered by Simplifi. As noted in paragraph 3, supra, Simplifi ceased all operations prior to
this litigation, and no records are available from Simplifi. CHA continued to pay medical claims
administered by Simplifi up to CHA’s bankruptcy. With respect to in-network Medical
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Providers for the Plan during 2012 and 2013, Simplifi entered into a Managed Care Alliance
Agreement with the HealthChoice (a physicians health organization) which the parties
understand barred Health Choice’s member Medical Providers from billing the Plan member
any amount for their services beyond patient cost shares such as deductibles and coinsurance.
The statute of limitations in Arkansas for collecting debts for medical services is two years from
the date of service, see A.C.A. § 16-56-106, meaning that provider claims (for nonparticipating
providers) subject to Arkansas law for services provided while Simplifi was the Plan’s third
party administrator are now time-barred. While the available financial records are sparse, the
parties believe that based on the foregoing, and the lack of any real collection efforts for medical
claims from 2012 and 2013, the exposure to the Class for medical claims from 2012 and 2013 is
de minimis and is more than addressed by the substantial cushion provided in the Settlement
Fund (as defined herein) above and beyond the out of pocket exposure calculated for the claims
administered by CHLIC.
14. CHLIC received a total of 5,243 claims for healthcare services that were rendered
in 2014 for persons covered by the Plan. During 2014, approximately $5,409,661.29 in billed
charges (i.e., non-discounted charges) were submitted by Medical Providers who, pursuant to
provider agreements with CHLIC, are barred from billing the Plan member any amount for their
services (beyond patient cost shares such as deductibles and coinsurance), even where the Plan
has not paid and/or has declared bankruptcy (hereinafter referred to as the “Immune from
Collection Group”).
15. During the Class Period, approximately $342,692.85 in billed charges were
submitted by Medical Providers that have provider contracts with CHLIC or its affiliates that do
allow these specific Medical Providers to bill patients when they have not received payment
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because a plan sponsor failed to provide funding for a self-funded (i.e., non-insured) health plan,
if the Medical Provider meets certain notice requirements. In this situation, the Medical Provider
is limited to billing for the discounted amount the Medical Provider agreed to accept in its
participating provider agreement with the CHLIC affiliate. The claims for these billed charges
will be referred to as the “Limited Balance Bill Group” claims. CHLIC estimates that had the
Plan been fully funded, the Plan would have been responsible for benefit payments of
approximately $102,541.85 on the Limited Balance Bill Group claims.
16. In addition, approximately $221,941.66 in billed charges were submitted by out-
of-network Medical Providers (i.e., those Medical Providers that have no provider contract with
CHLIC or its affiliates and have no obligation under an agreement with CHLIC to discount their
charges or otherwise refrain from collecting their charges from these specific Plan
participants)(hereinafter the “Out-of-Network Group.”) With respect to the Out-of-Network
Group, CHLIC has no provider contracts with these Medical Providers and, thus, these Medical
Providers are not required by any agreement with CHLIC to accept any discounts to their billed
charges. However, the Plan document states that the Plan will pay 50% of the “maximum
reimbursable charge” on out-of-network claims. Under this Agreement, 50% of the maximum
reimbursable charge will be estimated as the billed charge discounted by 35%, divided by
two. In other words, the Plan is only obligated to pay 50% of the charge after a 35% discount is
applied (though the out-of-network Medical Provider is not prohibited from collecting the full
gross charge from the patient if it desires to do so). Of the $221,941.66 in billed charges on out-
of-network claims, $34,007.45 has been waived in writing by Medical Providers, thus leaving
“net” billed charges of $187,934.11. When the formula described above is applied to this
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amount, the Plan would have paid an estimated $61,078.59 on the Out-of-Network Group
claims.
17. In summary, the Parties acknowledge and agree that, during the Class Period,
beyond the claims administered in 2012 and 2013 by Simplifi, the exposure to which the parties
believe is relatively minimal, the Plan was obligated to pay an estimated total of $163,620.44
($102,541.85 plus $61,078.59) on behalf of Class Members on Out-of-Network Group claims
and the Limited Balance Bill Group claims.
18. Beginning on June 16, 2016 at the offices of Glankler Brown in Memphis,
Tennessee, the parties mediated the case with mediator and former ERISA lawyer, Allen Blair,
Esq. The matter was not resolved that day but the Parties continued protracted negotiations with
the assistance of the mediator from June 16, 2016, until a settlement agreement in principle was
reached on July 21, 2016.
19. Defendants deny all of Goodman’s allegations of liability, fault, wrongdoing, and
fiduciary breaches as alleged in the Goodman Action and vigorously contest the claims against
them. Defendants reserve and do not waive any of their defenses to the claims asserted by
plaintiff Goodman. However, Defendants wish to enter into the Settlement Agreement to resolve
this dispute and to provide certainty and avoid the expense and distraction of protracted and
expensive litigation.
20. This Agreement and the settlement are conditional upon the receipt of both
preliminary and final approval by the United States District Court for the Eastern District of
Arkansas (the “Court”).
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IV. General Terms of Settlement
In consideration for the promises and mutual covenants set forth herein, and subject to
the final approval by the Court and entry of a final judgment, the Parties agree as follows:
A. Payment by Defendants.
1. Settlement Fund Available to the Class. Subject to Court approval and
determination, the Defendants agree to create and fund, subject to the allocation agreed to by and
between each of them, a $1,115,000 total settlement fund (“Total Settlement Amount”) to settle
all claims that were or that could have been asserted in this action. This amount will be used as
follows:
a. Settlement Fund for Class Members. A settlement fund of $500,000.00
will be created to compensate the Class Members (“Settlement Fund”) for any out-of-
pocket expenses they paid that should have been covered and paid by the Plan, and to
effectively put each Class Member back into the position he/she would have been in had
the Plan properly paid all medical claims pursuant to the Plan terms. The Settlement
Fund shall be distributed to Class Members as outlined in the Claims Procedure at
Section IV, B., ¶¶4-7 in this Agreement.
b. Attorney Fee and Expense Award. Class Counsel will petition the Court
for approval of an initial award for their reasonable attorneys’ fees, costs, and expenses
incurred in prosecuting the action and administering the Settlement and this Agreement,
in an amount up to but not exceeding Six Hundred and Fifty Thousand Dollars
($650,000.00) (“Attorney Fee and Expense Award”). Class Counsel shall apply to the
Court for approval for the proposed Attorney Fee and Expense Award and shall also
apply for Court approval of an incentive award to Plaintiff in an amount up to but not
exceeding Five Thousand Dollars ($5,000.00) (the “Incentive Award”). The Incentive
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Award shall be paid from the Settlement Fund. Class Counsel must file their petition for
the Attorney Fee and Expense Award with the Court 14 days before the Claim Deadline.
c. Additional Fee Award. In addition to the Attorney Fee and Expense
Award, Class Counsel will also petition the Court for an award (“Additional Fee Award”)
for fees and costs actually incurred (up to a maximum of $100,000). This Additional Fee
Award will be paid out of the Settlement Fund if and only if Class Members’ claims do
not exhaust the Settlement Fund, as described in greater detail in Section IV.B. 6 below.
d. Delivery and Holding of Funds. On the Effective Date, Defendants or
persons acting on their behalf will: (i) deliver to the Settlement Administrator, by means
of one or more checks or wire transfers, $500,000, minus the amount of the Incentive
Award to plaintiff, to establish the Settlement Fund; and (ii) deliver to the person, or
transfer to the bank account, specified in the Final Approval Order, by means or one or
more checks or wire transfers, funds equal to the Attorneys’ Fees and Expense Award
and funds equal to the Incentive Award to the plaintiff. If the Additional Fee Award is
due to Class Counsel under § IV.A.1(c) and § IV.B. 6, the Settlement Administrator will
remit the amount of such Additional Fee Award to the person specified by Class Counsel,
as provided for below in Section IV.B.6.b.
e. Aggregate Liability of Defendants. The Parties agree that Defendants’
aggregate liability under the Settlement Agreement shall be capped at $1,150,000. In no
event will Defendants have any obligation to contribute more than this amount or to
provide any further information to Plaintiff or the Settlement Administrator after the
Effective Date. This Agreement creates no contractual or other legal right against any of
Defendants arising from any dispute regarding a claim submitted to the Settlement
Administrator pursuant to the Claims Procedure described herein, and the Class Members
agree to hold Defendants harmless regarding same.
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2. No Minimum Fee Award. The Parties expressly agree that the terms of this
Agreement are not conditioned upon any minimum attorneys’ fees award or minimum incentive
award to the Plaintiff being approved by the Court. If the Court denies, in whole or in part, Class
Counsel’s fee and cost application and/or the Incentive Awards, the remainder of the terms of
this Agreement and of the Settlement shall remain in effect and any amounts not awarded as
attorneys fees and expenses, up to $1,150,000, shall be placed into the Settlement Fund for
distribution to the Class Members in accordance with this Agreement. Class Counsel intend to
seek Court approval for a total award of attorneys’ fees and expenses in an amount not to exceed
Six Hundred and Fifty Thousand Dollars ($650,000.00). This amount will cover both the fees
and costs associated with prosecuting the Action and the future fees and costs associated with
administering the proposed class settlement agreement. The Parties agree that Defendants’
aggregate liability under the Settlement Agreement shall be capped at $1,150,000.
3. Payment of Attorney Fee Award and Incentive Awards. The Attorney Fee and
Expense Award to Class Counsel and Incentive Award to Plaintiff shall be paid by Defendants
by wire to Class Counsel in the manner specified in § IV.A.1.b above. Upon preliminary
approval of the Settlement, the Attorney Fee Award will be pre-funded under § V.C.9 below
with an advance payment to Class Counsel of $50,000, which amount will be used to pay
administration expenses and will be a credit against any Attorney Fee and Expense Award.
B. Claims Procedure
4. Submission of Claim. In order to participate in the Settlement Fund, Class
Members must submit claims to the Settlement Administrator following preliminary approval
and class notice by using the Claim Form attached hereto as Exhibit A. In order to be eligible
for a payment from the Settlement Fund, a Class Member must submit a completed Claim Form
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to the Settlement Administrator by U.S. Mail, with a postmark date on or before the Claim
Deadline, which is defined as the date 60 days after the first mailing of the Class Notice. The
Settlement Administrator will make an initial determination as to whether a Class Member is
eligible for a payment from the Settlement Fund for a particular claim or particular claims. To
obtain a payout from the Settlement Fund, a Class member must submit timely a claim form
supported with proof of the total billed charge and the amount he or she paid each Medical
Provider for each date of service within the Class definition. Claims to compensation under this
fund will be submitted to and decided by the Settlement Administrator. Payments to Class
Members will be made by check from a trust account set up by and maintained by the Settlement
Administrator. If after distribution of Class notice, a Class Member pays billed charges on a
Medical Provider’s claim that is time-barred under the applicable statute of limitations, or the
Class Member pays billed charges that are subject to a contractual billing limitation or a waiver
by the Medical Provider, the claim based on that payment will not be eligible for compensation
under the Settlement Fund.
5. Claims Payment Calculation. Eligible Class members will receive from the
Settlement Fund an amount equal to (a) the amount paid by a Class member to a Medical
Provider for covered services rendered between January 1, 2012 and September 12, 2014, (b)
minus the Class member’s estimated patient responsibility under the Plan (for coinsurance and
deductibles) to that Medical Provider for that date of service. For dates of service on or after
January 1, 2014, estimated patient responsibility will be determined with the following formula:
(a) if the service was rendered by a Medical Provider within CHLIC’s network, the billed charge
will be discounted by 35%, and the patient’s estimated responsibility will be 20% of the
discounted amount; (b) if the service was rendered by an out-of-network Medical Provider, the
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billed charge will be discounted by 35%, and the patient’s estimated responsibility will be 50%
of the discounted amount. For dates of service between January 1, 2012 and December 31, 2013,
estimated patient responsibility will be 30% of the billed charge.
6. Distributions from Settlement Fund and Priority of Claim Payments. Payments
from the Settlement Fund shall be paid as follows:
a. Class Members shall receive payments in the following priority: (1) first,
reimbursement for any judgments taken against Class Members related to unpaid medical
expenses incurred during the Class Period; (2) second, reimbursement for any amounts
actually paid by the Class Members (up to the amount the Plan would have paid for the
particular claim, as estimated under the formula in ¶5); (3) third, payment of medical
expenses for Class Members during the Class Period for which the Class Member has
received or is receiving any collection or dunning letters (up to the amount the Plan
would have paid on the particular claim, again as estimated under the formula in ¶5).
Thirty days after the Effective Date, the Settlement Administrator will mail payments to
the Class Members who returned timely and valid Claim Forms. The payments will be by
checks that void 60 days after issuance.
b. If 30 days after the Effective Date, payments mailed by the Settlement
Administrator to Class Members under ¶6(a) have not exhausted the Settlement Fund, the
remainder shall be paid as follows:
i. If the payments under ¶6(a) are less than or equal to $400,000, the
difference between $400,000 and the payments under ¶6(a) will be refunded to
the Class Members on a pro rata basis as a refund of their contributions to the
Plan.
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ii. If the payments under ¶6(a) are less than or equal to $400,000,
Class Counsel shall be entitled, subject to Court approval, to an additional award
of $100,000 as their Additional Fee Award under ¶1(c) of this Section IV.
iii. If the payments under ¶6(a) exceed $400,000 but are less than
$500,000, the difference between the payments under ¶6(a) and $500,000 will be
will be distributed to Class Counsel as their Additional Fee Award under ¶1(c) of
this Section IV, subject to Court approval.
7. Dispute Resolution. The parties agree to meet and confer in good faith in regard
to any dispute relating to the Settlement. Any dispute which cannot be resolved shall be
submitted to the United States Magistrate judge assigned to this Action (“Referee”) for his or her
recommendation as to a resolution. Any party may seek de novo review of the Referee’s
recommendation by way of a motion filed in this Goodman Action.
V. Preliminary Court Approval of Settlement
A. Motion for Preliminary Approval
1. Content of Order. As soon as reasonably possible after the execution of this
Agreement, the Parties shall file a Joint Motion with the Court seeking an order preliminarily
approving the Settlement, that is not materially different from Exhibit D hereto, which:
(a) preliminarily approves the Settlement in this Agreement as sufficiently
fair, reasonable, and adequate to provide Class Notice to the Class;
(b) appoints CMM Settlement Solutions, LLC (“CMM”) as Settlement
Administrator in accordance with the provisions of Sections IV and V of this Agreement;
(c) approves the forms of Class Notice, the content of which is not materially
different from Exhibits B and C hereto;
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(d) directs that Class Notice be mailed and published as described in this
Section V;
(e) determines that the Class Notice and the notice methodology implemented
pursuant to this Agreement (i) constitute the best practicable notice, (ii) are reasonably
calculated, under the circumstances, to apprise Class Members of the pendency of the
Goodman Action, their rights to remain in the Class, to make a claim, and to object to the
proposed Settlement, (iii) are reasonable and constitute due, adequate, and sufficient
notice to all persons entitled to receive notice, and (iv) meet all applicable requirements
of Due Process;
(f) requires the Settlement Administrator to file proof of dissemination of
Class Notice at or before the Final Approval Hearing;
(g) approves the Claim Form, the content of which is not materially different
from Exhibit A hereto and sets a date after which Claim Forms shall be deemed untimely
(as provided in Section V, ¶12, 13 & 14 below);
(h) preliminarily enjoins all Class Members from: (i) filing, commencing,
prosecuting, intervening in, or participating as a plaintiff, claimant, or class member in
any other lawsuit or administrative, regulatory, arbitration, or other proceeding in any
jurisdiction based on, relating to, or arising out of the claims and causes of action, or the
facts and circumstances alleged in the Goodman Action and/or relating to the Released
Claims (as defined in Section VI, C. ¶6); (ii) filing, commencing, or prosecuting a lawsuit
or administrative, regulatory, arbitration, or other proceeding as a class action on behalf
of any Class Members (including by seeking to amend a pending complaint to include
class allegations or seeking class certification in a pending action), based on, relating to,
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or arising out of the claims and causes of action, or the facts and circumstances relating
thereto, asserted or that could have been asserted in the Goodman Action and/or the
Released Claims;
(i) rules that every Class Member be bound by all proceedings, orders, and
judgments in the Goodman Action;
(j) requires each Class Member who wishes to object to the fairness,
reasonableness, or adequacy of this Agreement or the proposed Settlement, or to the
Attorney Fee Award or the Incentive Award, to provide to the Settlement Administrator
(who shall forward it to Class Counsel and counsel for Defendants) and to file with the
Court no later than sixty (60) days after the first mailing of the Class Notice, a statement
of the objection, as well as the specific legal and factual reasons, if any, for each
objection, including any support the Class Member wishes to bring to the Court’s
attention and all evidence the Class Member wishes to introduce in support of his or her
objection, or be forever barred from raising an objection;
(k) requires each Class Member who files and serves a written objection and
who intends to make an appearance at the Final Approval Hearing, either in person or
through personal counsel hired at the Class Member’s expense, to provide to the
Settlement Administrator (who shall forward it to Class Counsel and counsel for
Defendants) and to file with the Court no later than twenty-one (21) days before the Final
Approval Hearing, or as the Court otherwise may direct, a notice of intention to appear;
(l) directs the Settlement Administrator to rent a post office box in the name
of the Settlement Administrator to be used for receiving objections, notices of intention to
appear, and any other settlement-related communications, and providing that only the
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Settlement Administrator, Class Counsel, Defendants’ counsel, and their designated
agents shall have access to this post office box, except as otherwise expressly provided in
this Agreement;
(m) directs the Settlement Administrator to promptly furnish Class Counsel
and Defendants’ counsel, with copies of any and all objections, notices of intention to
appear, or other communications that come into its possession (except as expressly
provided in this Agreement);
(n) schedules a hearing on final approval of the Settlement and this
Agreement (the “Final Approval Hearing”) to consider the fairness, reasonableness, and
adequacy of the proposed settlement and whether it should be finally approved by the
Court;
(o) contains any additional provisions, as agreed by the Parties that might be
necessary to implement the terms of this Agreement and the proposed settlement; and
(p) requires the Settlement Administrator to provide notice of the Settlement,
the Final Approval Hearing, and the preliminary approval order (containing the final
approval hearing date) to the appropriate state and federal authorities in compliance the
Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1715. Here, the appropriate state and
federal authorities are the United States Attorney General and the Attorneys General of
the States of Arkansas, Tennessee, and Mississippi.
B. Claim Administrator Duties
2. Settlement Administrator. Class Counsel proposes the appointment of CMM
Settlement Solutions, LLC (“CMM”) as Settlement Administrator to perform the services
described herein.
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3. Settlement Administrator Duties. The Settlement Administrator shall assist with
various administrative tasks, including, without limitation, (i) publication and/or mailing or
arranging for the publication and/or mailing of the Class Notice and creation and maintenance of
a website as further described herein containing all pertinent class action settlement forms and
information; (ii) handling returned mail not delivered and making any additional mailings
required under Section 8; (iii) responding, as necessary, to inquiries from Class Members and
potential Class Members or directing them to Class Counsel; (iv) providing to Class Counsel and
counsel for Defendants within five (5) business days of receipt copies of all objections and/or
notices of intention to appear, (v) preparing a list of all persons who submitted objections to the
settlement and submitting an affidavit attesting to the accuracy of that list; and (vii) providing
Defendants’ counsel and Class Counsel within seven (7) business days after the Claim Deadline
Date, as described in Section 24 herein, copies of all Claim Forms returned by Class Members.
Class Counsel will supply the Settlement Administrator with all information and data reasonably
available and necessary to implement its responsibilities under this Agreement. Defendants have
provided to Class Counsel, in discovery or otherwise, the available information and data
regarding medical claims.
4. Settlement Website. The Settlement Administrator shall create and maintain a
website that will include information for the Settlement, this Agreement, Class Notice, and the
Claim Form. The website and its contents may be amended during the course of the Settlement
as appropriate and agreed to by Class Counsel and counsel for Defendants or as ordered by the
Court.
C. Class Notice
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5. Form of Class Notice. The Parties agree that the Class Notice shall be in the form
attached as Exhibits B and C hereto. The Parties agree that they may change the form or
contents of the Class Notice to conform to any requirements of the Court.
6. Publication and Mailing of Class Notice. Within thirty (30) days of entry of the
Order granting Preliminary Approval, the Settlement Administrator shall mail by first class mail
to each Class Member a copy of the Class Notice (Exhibit B hereto) and the Claim Form
(Exhibit A hereto). Prior to such mailing, the Settlement Administrator shall update the
addresses through use of the National Change of Address database. The Settlement
Administrator shall promptly re-mail any notices returned by the Postal Service with forwarding
addresses that are obtained by the Settlement Administrator. Once the Settlement Administrator
has re-mailed a notice to a forwarded address, there shall be no further obligation to re-mail
notices. The Settlement Administrator shall also publish Class Notice on three (3) consecutive
weekdays in the appropriate section of the Crittenden County Times newspaper; the published
version of the notice shall occupy at least ¼ of a page in such publications. The date of the last
publication shall be deemed the “Class Notice Date” as that term is used herein
7. Class Notice Dates Govern. Unless the Court directs otherwise, the dates set forth
in the Class Notice shall govern the rights of the Class Members. However, these dates may be
changed by the Court without additional Notice to Class Members. If any changes are made by
the Court, the Settlement Administrator shall take all necessary steps to promptly modify the
settlement website identified in Section 9 below to reflect such changes and to communicate
such changes to any inquiring Class Member.
8. CAFA Notice. Within ten (10) days of the filing of the motion for entry of the
Preliminary Approval Order, the Settlement Administrator shall mail a notice of the Settlement
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to the Attorney General of the United States and to the Attorneys General of the States of
Arkansas, Tennessee, and Mississippi, as required by and in accordance with the Class Action
Fairness Act, including each of the required items identified in 28 U.S.C. § 1715(b). To the
extent the Settlement Administrator determines that a Class Member is a resident of a state other
than the foregoing states, notice shall be given to the Attorney General of each and every state in
which a Class Member resides.
9. Payment of Settlement Administration Costs. The costs related to settlement
administration, including the Class Notice, the settlement website, and all costs of the Settlement
Administrator shall be taken from total settlement amount described above in Section IV.A.1.
However, Defendants shall pre-fund, upon the Court's preliminary approval of this Class Action
Settlement, $50,000.00 to cover a portion of these projected expenses. In the event that this
Settlement is not finally approved for any reason, neither Plaintiff, Class Counsel, nor any Class
Member has any liability or obligation to reimburse Defendants for the settlement administration
or Class Notice cost or expenses incurred to date. However, any of pre-funded monies
remaining unused shall be returned to Defendants. This $50,000.00 advance payment will be a
credit against and reduce the amount of the Attorney Fee and Expense Award under Section
IV.A.1(b).
D. Claim Forms
10. Claim Form. The Claim Form shall not be materially different from Exhibit A
attached hereto.
11. Contents of Claim Form. Each Class Member shall be required to complete said
Claim Form and return it to the Settlement Administrator and postmark the Claim Form by the
Claims Deadline to eligible to receive a payment from the Settlement Fund. The Claim Form
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shall require, and each person submitting a Claim Form shall provide, the following information:
name, email address, current mailing address, phone number, and verification that Class Member
incurred medical expenses during the Class Period. Verification of expense can be accomplished
by providing: (a) a receipt or any other form of written verification of a medical expense or (b)
Failure of a Class Member to be able to provide acceptable verification that the Class Member
actually incurred a medical expense during the Class Period shall prevent that Class Member
from being able to obtain benefits under this Settlement.
12. Claim Deadline. To be eligible to receive a benefit as defined in Sections IV.A
and B of this Agreement, a Class Member must (a) truthfully, accurately, and completely fill out
the Claim Form; (b) include copies of the verification documentation required on the Claim
Form; (c) mail and postmark the Claim Form, with postage prepaid, to the Settlement
Administrator postmarked as having been mailed no later than 60 days after the first mailing of
the class notice by the Settlement Administrator
13. Failure to Meet Requirements of Claim Form. The failure by a Class Member to
provide the Settlement Administrator with his or her Claim Form and the accompanying
verification documentation required herein or to cure any deficiencies pursuant to Section___
will result in the Class Member forfeiting the right to receive benefits under this Settlement.
14. Class Member’s Right to Cure Deficiencies. In the event that a Claim Form or
the supporting verification documentation fails to meet the requirements of this Agreement, the
Settlement Administrator shall call the Class Member who submitted the Claim Form, or email
or mail a notice to the Class Member, indicating the deficiency and providing the Class Member
an opportunity to cure the deficiency within twenty (20) days.
E. Class Member Options
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15. Mandatory Nature of the Class. The Court has certified the Class under
Federal Rule 23(b)(1). Therefore, the Class Members may not opt out of the Class or pursue their
own individual claims in separate proceedings. This Agreement, if granted final approval by the
Court, will be binding on and enforceable against all Class members. Class Members, do,
however, have the right to object to the Agreement in accordance with the procedures under this
Agreement.
16. Agreement Not to Object. The Class Counsel agree that they shall not seek to
object to any term of the Settlement.
17. Class Objections. The Class Members shall have 60 days from the first mailing
of the Class Notice to object to the fairness, reasonableness, or adequacy of this Agreement or of
the proposed Settlement or to the Attorney Fee Award or Incentive Award. Any such objection
must be mailed to the Settlement Administrator (who shall forward it to Class Counsel and
counsel for Defendant) and filed with the Court no later than 60 days after the first mailing of the
Class Notice. The objection must include a statement of the objection or objections, as well as
the specific legal and factual reasons, if any, for each objection, including any support the Class
Member wishes to bring to the Court’s attention and all evidence the Class Member wishes to
introduce in support of his or her objection. Any Class Member who does not timely submit an
objection in accordance with this Agreement, the Class Notice, and as ordered by the Court, shall
be treated as having consented to the Settlement and agreeing to the terms of this Agreement.
Any objection that does not comply with this Section, the Class Notice, or as ordered by the
Court shall not be considered by the Court and shall be deemed waived.
VI. Final Court Approval of Settlement
A. Final Approval and Judgment
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1. Final Order. If the Court preliminarily approves the Settlement and enters the
Preliminary Approval Order, Plaintiff and Class Counsel shall request the Court to enter the
Final Order, not materially different from that attached hereto as Exhibit E that, among other
things:
(a) adopts and incorporates this Agreement, the terms defined herein, and all
exhibits hereto;
(b) authorizes the Parties, without further approval from the Court, to agree to
and to adopt such amendments, modifications, and expansions of this Agreement and all
Exhibits hereto as long as they (i) are consistent in all material respects with the Final
Order attached hereto as Exhibit E and (ii) do not reduce the rights of Class Members
under this Agreement or in the Final Order;
(c) finds that the Court has jurisdiction over the Class Members and that the
Court has subject matter jurisdiction to approve this Agreement and all Exhibits hereto;
(d) confirms the definition of the Class for purposes of this Settlement and the
Final Order;
(e) finds that the Class Notice and the notice methodology implemented
pursuant to this Agreement (i) constitute the best practicable notice; (ii) constitute notice
that is reasonably calculated, under the circumstances, to apprise Class Members of the
pendency of the Lawsuit, their right to object to or to exclude themselves from the
Settlement and to appear at the Final Approval Hearing, and their right to seek monetary
and other relief; (iii) are reasonable and constitute due, adequate, and sufficient notice to
all persons entitled to receive notice; and (iv) meet all applicable requirements of Due
Process;
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(f) finds that full opportunity has been afforded to all Class Members to file
objections to the Settlement, and to participate in the Final Approval Hearing, and that all
Class Members and other persons validly requesting to be heard have been heard;
(g) gives final approval to the Settlement and this Agreement as being fair,
reasonable, and adequate as to, and in the best interests of, each of the Plaintiffs and
Class Members, and is consistent and in compliance with all requirements of Due Process
and further directs the Parties and their counsel to implement and consummate this
Agreement in accordance with its terms and provisions;
(h) directs that the Settlement Administrator issue payments to Class
Members and Class Counsel in accordance with this Agreement and the Final Approval
Order;
(i) directs that Defendants shall issue payment to the Settlement
Administrator for the Settlement Fund within 5 days after the Effective Date under
Section VIII.4;
(j) adjudges that the Plaintiff and the Class Members have conclusively
compromised, settled, discharged, dismissed, and released any and all Released Claims
against Defendants, and incorporates the Release into the Final Approval Order;
(k) enters final judgment in accordance with the terms of the Final Order and
this Agreement, and further orders that the complaint is dismissed with prejudice as to
Defendants without fees or costs to any Party except as provided therein;
(l) declares this Agreement and the Final Order to be binding on and have res
judicata and preclusive effect in all pending and future lawsuits or other proceedings
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encompassed by the Release maintained by or on behalf of Plaintiff and all other Class
Members, as well as their heirs, executors and administrators, successors, and assigns;
(m) provides that, upon the Effective Date, Plaintiff and all Class Members
who have not been excluded from the Class, whether or not they return a Claim Form
within the time and in the manner provided for, shall be barred from asserting any
Released Claims against Defendants, and any such Class Members shall have released
any and all Released Claims as against Defendants;
(n) bars and permanently enjoins all Class Members who have not properly
and timely excluded themselves from the Settlement from filing, commencing,
prosecuting, intervening in, continuing or participating as a plaintiff, claimant, or class
member in any other lawsuit or administrative, regulatory, arbitration, or other
proceeding in any jurisdiction based on, relating to, or arising out of the Released Claims
or the claims, causes of action, facts, or circumstances alleged or that could have been
alleged in the Goodman Action;
(o) declares that Defendants and Defendants’ counsel shall have no liability
whatsoever for any acts or omissions of the Settlement Administrator or Class Counsel
other than to pay for the costs and expenses of the Settlement Administrator in
disseminating the Class Notice and administering the Settlement as set forth, and subject
to the limitations, herein;
(p) addresses Class Counsel’s and Plaintiff’s application for an award of
attorneys’ fees and costs to Class Counsel and an Incentive Award to Plaintiff and
provides that the payment for such awards shall be separate from and not affect the
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payments available to Class Members who submit timely and proper Claim Forms in
accordance with the requirements of this Agreement;
(q) determines that this Agreement and the Settlement provided for herein,
and any proceedings taken pursuant thereto, are not, and should not in any event be
offered or received as evidence of, a presumption, a concession, or an admission of
liability or of any allegation made against Defendants, provided, however, that reference
may be made to this Agreement and the Settlement provided for herein in such
proceedings as may be necessary to effectuate the provisions of this Agreement;
(r) designates a cy pres recipient to receive any funds remaining in Settlement
Fund after all payments are made under this Agreement; and
(s) without affecting the finality of the Final Order for purposes of appeal,
reserves jurisdiction over Defendants, the Plaintiff, and the Class as to all matters relating
to the administration, consummation, enforcement, and interpretation of the Final Order,
and for any other necessary purposes.
2. Appearance at Final Approval Hearing. Any Class Member who wishes to appear
at the Final Approval Hearing, whether in person or through counsel, must file a notice of
appearance with the Court and provide such notice to the Settlement Administrator (who shall
forward it to Class Counsel and counsel for Defendants) no later than twenty (20) days before the
Final Approval Hearing or as the Court may otherwise direct. Any Class Member who fails to
comply with this Section, the Agreement, the Class Notice, or as otherwise ordered by the Court
shall not be permitted to appear at the Final Approval Hearing.
B. Injunction and Prohibition of Further Litigation
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3. Preliminary Injunction. The Parties agree that a stipulated preliminary injunction
shall be entered by the Court as part of the Preliminary Approval Order that enjoins all Class
Members who have not timely excluded themselves from the Settlement from: (i) filing,
commencing, prosecuting, intervening in, or participating as a plaintiff, claimant, or class
member in any other lawsuit or administrative, regulatory, arbitration, or other proceeding in any
jurisdiction based on, relating to, or arising out of the claims and causes of action, or the facts
and circumstances alleged in the Goodman Action and/or relating to the Released Claims;
(ii) filing, commencing, or prosecuting a lawsuit or administrative, regulatory, arbitration, or
other proceeding as a class action on behalf of any Class Members (including by seeking to
amend a pending complaint to include class allegations or seeking class certification in a pending
action), based on, relating to, or arising out of the claims and causes of action, or the facts and
circumstances relating thereto, in the Goodman Action and/or the Released Claims; and
(iii) attempting to effect a mass opt-out of Class Members or a class of individuals for claims and
causes of action included within the Released Claims.
4. Permanent Injunction. The Parties agree that a stipulated permanent injunction
shall be entered by the Court as part of the Final Order that bars and permanently enjoins all
Class Members who have not properly and timely excluded themselves from the Settlement from
filing, commencing, prosecuting, intervening in, continuing, or participating as a plaintiff,
claimant, or class member in any other lawsuit or administrative, regulatory, arbitration, or other
proceeding in any jurisdiction based on, relating to, or arising out of the claims and causes of
action, or the facts and circumstances alleged in the Goodman Action and/or relating to the
Released Claims.
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5. Prohibition of Future Claims. Plaintiff, on behalf of herself and the Class, and
Class Counsel agree not to initiate or to prosecute any additional litigation against Defendants
relating to the Released Claims as defined in Sections 18 and 19 below.
C. Release of Claims by the Class and Dismissal of Actions
6. Release of Claims. As used in this Agreement, the term “Release” means the
agreements and obligations set forth in this Section of this Agreement. As of the Effective Date
of this Agreement (as defined in Section VIII., ¶4), Plaintiff, and all other Class Members hereby
expressly release and forever discharge the Released Parties, as defined below, of and from any
and all Released Claims (as defined below) and agree that they shall not now or hereafter initiate,
maintain, or assert against any of the Releasees any causes of action, claims, rights, demands, or
claims for equitable, legal, and/or administrative relief connected with, arising out of, or related
to the Released Claims in any court or before any administrative body (including any state
department, regulatory agency, or organization), tribunal, arbitration panel, or other adjudicating
body.
(a) With regard to Plaintiff Goodman, the term “Released Claims” means all
claims that were, or that could have been, asserted in the Goodman Action, including any
claim arising from or relating to:
i. any alleged representations or nondisclosures by any Defendant
relating to the Plan;
ii. any action or omission by any Defendant relating to the Plan;
iii. any medical services provided to Goodman or her family members
before September 12, 2014; and,
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iv. her employment with the Hospital and separation therefrom,
including but not limited to claims under all federal, state and local laws including
the WARN Act.
(b) With regard to Class Members, the term “Released Claims” means all
claims each Class Member has arising from or relating to the Plan, including, without
limitation, any claim relating to:
i. any alleged representations or nondisclosures by any Defendant
relating to the Plan;
ii. any action or omission by any Defendant relating to the Plan;
iii. any medical services provided to the Class Member before
September 1, 2014; and,
iv. their respective employment with CHA and separation therefrom
including but not limited to claims under all federal, state and local laws including the
WARN Act.
(c) Without in any way limiting the scope of the Release, the term “Released
Claims” includes, without limitation, any and all claims for attorneys’ fees, costs, or
disbursements incurred by Class Counsel or any other counsel representing Plaintiff or
any Class Members, or by Plaintiff or Class Members, or any of them, in connection with
or related in any manner to the Goodman Action, the settlement of the Goodman Action,
the administration of such settlement, and/or any claim arising from or relating to:
i. any alleged representations or nondisclosures by any Defendant relating to
the Plan;
ii. any action or omission by any Defendant relating to the Plan; and
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iii. any medical services provided to Goodman or her family members before
September 12, 2014.
(d) The Plaintiff and the Class expressly acknowledge that they are familiar
with principles of law such as Section 1542 of the Civil Code of the State of California,
which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. Plaintiff and Class Members knowingly and voluntarily waive and relinquish the
provisions, rights, and benefits of Section 1542 of the Civil Code of the State of
California and all similar applicable federal or State laws, rights, rules, or legal principles
to the fullest extent permitted by law. Plaintiff and Class Members acknowledge that
they are aware that they may later discover claims presently unknown or unsuspected or
facts in addition to or different from those which they now know or believe to be true
with respect to the Released Claims. Nevertheless, Plaintiff and Class Members
acknowledge that a portion of the consideration received herein is for a release of
unknown and unsuspected claims. Plaintiff and Class Members agree and acknowledge
that this is an essential term of this Release. It is the intention of the Plaintiff and Class
Members in executing this Release to settle and to release fully, finally, and forever all
matters, known or otherwise, and all claims relating thereto, which exist, hereafter may
exist, or might have existed (whether or not previously or currently asserted in any
action) constituting Released Claims.
(e) Nothing in this Release shall preclude any action to enforce the terms of
this Agreement, including participation in any of the processes detailed herein.
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(f) Subject to Court approval, all Class Members shall be bound by this
Agreement, and all of their claims, as provided under this Agreement, shall be dismissed
with prejudice and released, even if they never received actual notice of the Goodman
Action or the Settlement.
7. Released Parties. The term “Released Parties” means each person and entity
named as a Defendant in the Goodman Action, Methodist Le Bonheur Healthcare, Simplifi,
Donna Lanier, Carol McCormack, and A. Jan Thomas, along with the respective officers,
employees, directors, agents, attorneys, insurers, successors, predecessors, parent corporations,
subsidiaries, and affiliates of each of them, including but not limited to Cigna Corporation,
Connecticut General Life Insurance Company, Cigna Healthcare of Arkansas, Inc., Cigna
Healthcare of Tennessee, Inc., Federal Insurance Company, The Chubb Corporation (and its
subsidiaries and affiliates), ACE Limited (and its subsidiaries and affiliates), and Arch Insurance
Company (and its subsidiaries and affiliates).
8. Dismissal of Claims with Prejudice. On behalf of herself and Class Members,
Plaintiff stipulates and agrees to dismiss the Goodman Action with prejudice and the Parties will
include the dismissal of the Goodman Action with prejudice in the Final Order described in
Section VI. of this Agreement.
9. Memorialization of the Releases. The releases granted by Goodman and the Class
members will be set forth in the final approval order and the class settlement agreement.
VII. General Representations and Warranties
1. Plaintiff and Class Counsel warrant and represent that they shall take no action to
defeat the jurisdiction of the Court; shall take all appropriate action, at their own costs, to oppose
and to prevent the prosecution of any competing litigation in which a Class Member seeks to
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undermine, thwart, overturn, frustrate, or avoid the Settlement; use their best efforts to cause the
Court to grant the Preliminary Approval Order and Final Order as promptly as possible; shall use
their best efforts to respond to any and all non-meritorious objections to the Settlement ; and
shall take or join in such other reasonable steps as may be necessary to implement this
Agreement and to effectuate the Settlement. Without limiting the foregoing, Plaintiff and Class
Counsel represent and warrant that they shall: (a) seek preliminary and final approval of the
Settlement by the Court; (b) move for entry of the Preliminary Approval Order and Final Order;
and (c) join in the entry of such other orders or revisions of orders or notices necessary to
effectuate the Settlement.
2. Plaintiff and Class Counsel warrant and represent that Plaintiff owns her own
claims at issue in the Goodman Action and has authority on behalf of herself and on behalf of
Class Members to settle those claims on the terms set forth in this Agreement.
3. Plaintiff and Class Counsel warrant and represent that they shall not disparage
Defendants.
4. Plaintiff and Class Counsel warrant and represent that any motion and/or
application that they file requesting an award of attorneys’ fees and costs to Class Counsel and
for approval of the Incentive Award shall include within its scope all attorneys and law firms
with a financial interest in such award with respect to the Action.
5. Plaintiff and Class Counsel represent and warrant that they have not and will not:
(a) solicit, encourage, or assist, in any fashion, Class Members to object to the Settlement; or (b)
appeal from or seek review of any order that approves the Settlement. Nothing in this provision
shall prevent Class Counsel from advising a Class Member of his or her individual right to object
to the Settlement.
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6. Defendants warrant and represent that, for so long as this Agreement is valid and
no Defendant has withdrawn from the Agreement pursuant to Section VIII. Defendants shall take
no action to defeat the jurisdiction of the Court; shall take all appropriate action to oppose and
prevent the prosecution of competing litigation in which a Class Member seeks to undermine, to
overturn, or to avoid the Settlement; shall support and not oppose efforts to cause the Court to
grant the Preliminary Approval Order and Final Approval Order as promptly as possible; and
shall take or join in such other reasonable steps as may be necessary to implement this
Agreement and to effectuate the Settlement. Without limiting the foregoing, Defendants warrant
and represent that each of them shall: (a) not oppose entry of the Preliminary Approval Order
and Final Order; and (b) join in the entry of such other orders or revisions of orders or notices
necessary to effectuate the Settlement.
7. Plaintiff, Defendants, and Class Counsel acknowledge and agree that Defendants’
sole responsibility related to settlement administration is to cause the amounts described in this
Agreement to be paid into the Settlement Fund. Defendants shall not be liable to any Class
Member for any claim decision made by the Settlement Administrator or any claim that the
Settlement Fund was improperly administered.
8. Plaintiff, Defendants, and Class Counsel represent and warrant that they are fully
authorized to enter into this Agreement and to carry out the obligations provided for herein. All
persons executing this Agreement on behalf of a Party represent and warrant that they are and
have been fully authorized to do so by such Party.
VIII. Right to Withdraw From Agreement and Other Terms
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1. Failure to Obtain Court Approval. Within fifteen (15) days of the occurrence of
any of the following events, and upon written notice to counsel for all Parties, any Party shall
have the right to withdraw from the settlement:
(a) if the Court fails to approve this Agreement or if, on appeal, the Court’s
approval is reversed or materially modified; or
(b) if the Court materially alters any of the terms of this Agreement, including
but not limited to the Release, the definition of the Settlement Class, or the terms
governing benefits to be provided by Defendants to Class Members pursuant to this
Agreement; or
(c) if the Preliminary Approval Order, or the Final Order, is not entered by the
Court, or is reversed or materially modified on appeal, or otherwise fails for any reason.
In the event of a withdrawal pursuant to this Section, this Agreement will be vacated
without prejudice to any Party’s position on any of the issues in the Goodman Action as of and
the Parties shall be restored to their litigation positions existing on July 21, 2016, the facts and
terms of this Agreement shall not be used by the Parties in any way or admissible in any
subsequent proceedings in the Goodman Action or in any other action, and Defendants will
retain all rights to oppose, appeal, or otherwise challenge, legally or procedurally, class
certification or any other issue in this case.
2. Objections Sustained. If the Court sustains any objection to the Settlement or to
the Agreement, then the Parties may withdraw from this Agreement. In order to withdraw from
this Agreement, the withdrawing Party(ies) must provide notice to all counsel of their withdrawal
within ten (10) days of the Court sustaining an objection. In that event, this Agreement will be
vacated without prejudice to any Party’s position on any of the issues in the Goodman Action
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and the Parties shall be restored to their litigation positions existing on July 21, 2016, the facts
and terms of this Agreement shall not be used by the Parties in any way or admissible in any
subsequent proceedings in the Goodman Action or in any other action, and Defendants will
retain all rights to oppose, appeal, or otherwise challenge, legally or procedurally, class
certification or any other issue in this case.
3. No Binding Agreement Until Court Approval. The Parties agree that no binding
and enforceable agreement as to the subject matter of this memorandum will exist until the Court
grants final approval of the Class Settlement. Upon final approval, all litigation by Plaintiff
against Defendants in any court shall be dismissed with prejudice.
4. Effective Date. The “Effective Date” of this Agreement shall be the date when
the event described in ¶4(a) below has occurred and one of the events in ¶4(b) has occurred:
a. the Court’s entry of the Final Order in the form of Exhibit E:
(1) approving this Agreement as fair, reasonable, and adequate
to the Class Members;
(2) finding that this Agreement is fair and made in good faith;
(3) finding that the notice provided to the Settlement Class was
the best notice practicable under the circumstances, that it
was the only notice required, and that it satisfied the
requirements of due process and Fed. R. Civ. P.
23(c)(2)(B);
(4) finally certifying the Settlement Class; and
(5) dismissing the claims of Plaintiff and the Class Members
against Defendants with prejudice.
b. either:
(1) if no appeal of the final order has been sought, the
expiration of five (5) days from the time that the final order
becomes a final, non-appealable order under 28 U.S.C. §
1291; or
(2) if an appeal has been sought, the expiration of five (5) days
after the appeal is disposed of in an order that: (i) affirms
the final approval order and approves this Agreement as
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fair, reasonable, and adequate; (ii) orders the
consummation of the settlement in accordance with the
terms and provisions of this Agreement; and (iii) is not
subject to further appellate review and does not remand the
case to the trial court.
IX. Miscellaneous Provisions
1. Communications with Media Regarding Settlement. Plaintiff and Class Counsel
hereby agree not to engage in any communications with the media or press, on the Internet, or in
any public forum, orally or in writing, that relate to this Settlement or the Goodman Action, other
than statements that are the same or substantially similar to the statements in the Class Notice.
Specifically, Plaintiff and her counsel shall refrain from disparaging any Defendant or taking any
action designed to harm the public perception of any Defendant regarding any issue related to the
Settlement or the Goodman Action. All such counsel agree that all extra-judicial statements in
regard to the Settlement will comport with the Arkansas Rules of Professional Conduct.
Plaintiff’s counsel may respond to direct communications from any client or potential client.
Inquiries made to Plaintiff’s counsel, other than those from Settlement Class Members seeking
legal advice, may be responded to only by reference to information contained in the public
record and/or agreed upon by the Parties.
2. No Admission of Fault, Federal Rule of Evidence 408. The Parties enter into
this Class Action Settlement without prejudice to their claims, defenses, and positions in the
Action. Defendants expressly deny that they engaged in the wrongful actions and inactions that
Goodman attributes to them and further deny that they are liable to Goodman or the Class
Members for any form of relief or damages.
3. Headings and Captions. The headings and captions contained in this Agreement
are for reference purposes only and in no way define, extend, limit, describe, or affect the scope,
intent, meaning, or interpretation of this Agreement.
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4. Choice of Law. For purposes of the Settlement only, this Agreement shall be
construed, enforced, and administered in accordance with the laws of the State of Arkansas.
5. Retained Jurisdiction of the Court. The Court shall retain jurisdiction with respect
to implementation and enforcement of the terms of this Agreement, and the Parties hereto submit
to the jurisdiction of the Court for purposes of implementing and enforcing the Settlement
embodied in this Agreement.
6. Entire Agreement. Except as otherwise stated herein, this Agreement and its
Exhibits constitute the entire agreement between and among the Parties with respect to the
settlement of the Goodman Action. This Agreement shall not be construed more strictly against
one Party than another merely because of the fact that it may have been prepared by counsel for
one of the Parties, it being recognized that, because of the arm’s-length negotiations resulting in
the Agreement, all Parties hereto have contributed substantially and materially to the preparation
of this Agreement. This Agreement supersedes all prior negotiations and agreements (except as
otherwise stated herein) and may not be modified or amended except by a writing signed by the
Parties and their respective counsel. This Section does not apply to any agreement with the
Settlement Administrator.
7. Execution in Counterparts. This Agreement may be executed in counterparts each
of which shall be deemed to be an original, but all of which together shall constitute one and the
same instrument.
8. Integration of Exhibits. The Exhibits to this Agreement are an integral part of the
Settlement and are hereby incorporated and made part of this Agreement.
9. Execution of Additional Necessary Documents. The Parties hereto shall execute
all documents and perform all acts necessary and proper to effectuate the terms of this
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Agreement. The executing of documents must take place prior to the date scheduled for the
Final Approval Hearing.
10. Independent Judgment. Each Party to this Agreement warrants that he, she, or it
is acting upon his, her, or its independent judgment and upon the advice of his, her, or its counsel
and not in reliance upon any warranty or representation, express or implied, of any nature or kind
by any other party, other than the warranties and representations expressly made in this
Agreement.
CONSENTED AND AGREED TO AS OF
November ___, 2016:
CLASS COUNSEL
On behalf of Plaintiff and all Class Members:
WATSON BURNS, PLLC
____________________________________
Frank L. Watson, III (Tenn. Bar No. 15073)
William F. Burns (Tenn. Bar No. 17908)
253 Adams Avenue
Memphis, Tennessee 38103
BALLIN, BALLIN & FISHMAN, P.C.
_____________________________________
John Timothy Edwards, Esq.
Kevin McCormack, Esq.
200 Jefferson Avenue, Suite 1250
Memphis, TN 38103
901-525-6278
On Behalf of and as Counsel for Defendant CIGNA Health
and Life Insurance Company:
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HINSHAW & CULBERTSON, LLP
_____________________________________
Daniel K. Ryan, Esq. (admitted pro hac vice)
Peter E. Pederson, Esq. (admitted pro hac vice)
222 N. LaSalle Street, Suite 300
Chicago, Illinois 60601
(312) 704-3000 Phone
On Behalf of and as Counsel for Defendants Crittenden
Hospital Association, Inc.; W. Brad McCormick; Jamie R.
Carter,Jr.; David Raines, Jr.; Jason W. Collard; Herschel F.
Owens; Andrew Luttrell; Donna B. Lanier; Carol C.
McCormack; Keith M. Ingram; Randall Catt; William
Johnson; Lannie L. Lancaster; Julio P. Ruiz; Sherry L.
London; Ness S. Sechrest; Randy R. Sullivan; and Leven
Williams:
WALLER LANSDEN DORTCH & DAVIS, LLP
_____________________________________
Mark W. Peters, Esq.
John E. B. Gerth, Esq.
511 Union Street, Suite 2700
Nashville, TN 37219
615-244-6380
On Behalf of and as Counsel for Defendants Eugene K.
Cashman, III and David G. Baytos:
GLANKLER Brown, PLLC
_____________________________________
John I. Houseal, Jr., Esq.
Don L. Hearn, Esq.
6000 Poplar Avenue, Suite 400
Memphis, TN 38119
901-525-1322