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DAHINGO v. ROYAL CARIBBEAN CRUISES

March 1, 2004.

CEASAR DAHINGO, On Behalf of Himself and All Others Similarly Situated, Plaintiffs, -against- ROYAL CARIBBEAN CRUISES, LTD., et al., Defendants


The opinion of the court was delivered by: JAMES FRANCIS, Magistrate Judge

MEMORANDUM OPINION AND ORDER

The plaintiffs in this class action are some 29,700 claimants who were employed on cruise ships operated by Royal Caribbean Cruise, Ltd. ("Royal Caribbean") and its affiliates, including Celebrity Cruise Lines ("Celebrity"). The plaintiffs alleged that they were denied overtime pay to which they were entitled under collective bargaining agreements entered into between the companies and two international labor unions. During the course of litigation, the parties entered into negotiations that ultimately led to a settlement agreement that was approved by the Court. As will be described in detail below, the agreement established a procedure by which class members would file claims in order to receive payment in specified amounts out of funds provided by the defendants. Counsel for the plaintiff class now seek an order requiring payment of claims that either were filed after the deadline set forth in the settlement agreement or were not signed by the claimant. This motion presents important issues concerning Page 2 the role of a court in implementing the settlement of a class action.

Background

  On October 22, 2002, the parties entered into the Settlement Agreement designed to conclude this litigation. (Pl. Exh. 2 (the "Settlement Agreement")).*fn1 On November 5, 2002, the Honorable Kimba M. Wood, U.S.D.J., issued an order preliminarily approving the settlement. (Pl. Exh. 1 (the "Preliminary Approval Order")). In that order, she certified a settlement class consisting of workers employed in the bar, restaurant, galley, and housekeeping departments of the defendants' vessels. For persons employed on Royal Caribbean cruise ships, the class period ran from December 1, 1996 to August 31, 2002. For workers on vessels operated by Celebrity, which had been acquired by Royal Caribbean, the class period was September 1, 1999 to August 31, 2002. (Preliminary Approval Order, ¶ 2; Pl. Exh. 3, Affirmation of Paul T. Hofmann dated Dec. 5, 2003 ("Hofmann Aff."), ¶ 3). Pursuant to the Preliminary Approval Order, notice of the proposed settlement was sent to all class members on November 25, 2002, together with Proof of Claim and Release forms that claimants were required to complete and return in order to receive payment under the settlement. (Preliminary Approval Order ¶ 8; Hofmann Aff., ¶ 4; Notice of Pendency and Proposed Settlement of Class Action, attached to Settlement Agreement). On February 28, 2003, following Page 3 a settlement hearing, Judge Wood issued a Final Order and Judgment Approving Class Action Settlement and Dismissing Claims. (Pl. Exh. 11 (the "Final Order")).

  Pursuant to the terms of the Settlement Agreement, the defendants created a settlement fund of $18.4 million. This was the maximum amount that the defendants agreed to pay to satisfy all of their obligations arising out of the litigation. (Settlement Agreement, ¶ 1.22). From this fund, Judge Wood approved an award to class counsel of attorneys' fees of $6,133,333.00 and expenses of $144, 210.18. (Final Order, ¶ 13). She also authorized an incentive award of $3,000.00 to the named plaintiff, Caesar Dahingo. (Final Order, ¶ 14). After deduction of these amounts as well as expenses incurred in administering the class claims, the residual was designated the Net Settlement Fund from which the unnamed class members were to be paid. (Settlement Agreement ¶ 2.05).

  The class members were entitled to a payment based on a formula that took into account when and on which vessels they had worked, the length of their employment, and whether they held positions in which they received tips. Employees who worked on Royal Caribbean vessels from December 1, 1996 to December 31, 1999, or on Celebrity vessels from September 1, 1999 to December 31, 1999 would be entitled to $40 per month worked in tipping positions or $50 per month in non-tipping positions. Persons employed on either line from January 1, 2000 to August 31, 2002 would receive $15 per month in tipping jobs or $20 per month in non-tipping jobs. Awards Page 4 were to be pro-rated whenever the employee worked part of a month. (Settlement Agreement, ¶ 2.08(a), (b)).

  To the extent that the total of the claims exceeded the Net Settlement Fund, the amounts paid to class members would be reduced proportionally. (Settlement Agreement, ¶ 2.05(a)). On the other hand, if the Net Settlement Fund were larger than necessary to pay the claims, any excess would revert to the defendants. (Settlement Agreement, ¶ 2.05(a)).

  The firm of Gilardi & Co., LLC ("Gilardi" or the "Claims Administrator") was retained by Royal Caribbean's counsel to act as Claims Administrator pursuant to the Settlement Agreement. (Preliminary Approval Order, ¶ 7; Settlement Agreement, ¶ 1.01). The claims procedure provided that "[t]he Proof of Claim and Release shall be submitted such that the Claims Administrator shall receive it within 120 days of the date on which the Class Notice is mailed to the Settlement Class." (Settlement Agreement, ¶ 2.06(a)). Based on the date that class notice was sent out, the bar date was March 27, 2003. (Proof of Claim and Release ("Proof of Claim"), Pl. Exh. 10). The Settlement Agreement stated that "[a]ny Class Member who fails to submit his or her Proof of Claim and Release [by the bar date] shall be forever barred from receiving any payments pursuant to this Agreement." (Settlement Agreement, ¶ 2.06(b)). Similarly, the Proof of Claim and Release warned that "THIS FORM MUST BE RECEIVED BY THE CLAIMS ADMINISTRATOR ON OR BEFORE MARCH 27, 2003. IF THIS FORM IS NOT RECEIVED ON OR BEFORE THAT DATE, THEN YOU WILL NOT RECEIVE A DISTRIBUTION." Page 5 (Proof of Claim, Section III). The procedures further provided that "[t]he Claims Administrator shall reject each Proof of Claim and Release that is from someone who is not a member of the Class, is unsigned, or is untimely." (Settlement Agreement, ¶ 2.06(c)). Again, the Proof of Claim alerted claimants that they must submit their "completed and signed" forms by the bar date. (Proof of Claim, Section I).

  Once the deadline had passed, Gilardi was to make its determinations and provide a report of the results to counsel for the parties within 30 days. (Settlement Agreement, ¶ 2.06(d)). Counsel, as well as the individual class members, were provided the opportunity to object to Gilardi's decisions. (Settlement Agreement, ¶ 2.06(d), (f), (g)). The parties agreed that I would be the arbiter of any such objections and that my determinations would be final and conclusive. (Settlement Agreement ¶ 2.06(f), (g), (h)).*fn2 Page 6

  As it turned out, Gilardi approved some 5,166 claims for employees of Royal Caribbean, and paid out an average of $1,022.00 to these workers. It also approved 1,320 claims from Celebrity employees, with the mean award being $279.00. The total amount paid to claimants was $5,652,640.21, and the average award for all claimants was $871.00. (Pl. Exhs. 4, 12 at ¶ 2). Payment was made on approved claims on November 4, 2003. (Pl. Exh. 7). Gilardi rejected claims filed by claimants who either did not work during the class period or did not work in a position covered by the settlement. More important for present purposes, Gilardi also rejected any claims filed after March 27, 2003, and any claims that were not signed. (Pl. Exhs. 5, 9, 12 at ¶ 3).

  Approximately 343 claimants filed their claims late. (Hofmann Aff., ¶ 6; Pl. Exh. 6). Most of these were received by Gilardi within a week or so after the bar date, and virtually all were received by July 31, 2003. (Pl. Exhs. 6, 8). Indeed, 162 of these claims were postmarked on or before March 27, 2003, but received thereafter. (Pl. Exh. 19). For example Mircea Hie and Laura Bogdan, who are married, each signed their claim forms on March 21, 2003. The forms were postmarked in Miami on March 24, but not date stamped in Gilardi's offices until March 28. (Affirmation of Mircea Hie dated Dec. 3, 2003, Pl. Exh. 25; Affirmation of Laura Bogdan dated Dec. 3, 2003, Pl. Exh. 26). Daniel Singh received notice of the requirement to file a proof of claim on March 20, Page 7 2003, while he was working aboard a Royal Caribbean vessel. He completed the form on March 26 and posted it March 28. It was received by Gilardi on April 3. (Pl. Exhs. 17, 18). Gilardi rejected each of these claims as untimely.

  Some 351 claimants submitted timely proof of claim forms but failed to sign them. (Pl. Exhs. 5, 13). Gilardi did not notify these claimants that their claims were incomplete, nor did it advise class counsel of the identity of these claimants until after the deadline had passed. (Hofmann Aff. ¶¶ 11, 14). Several claimants have explained their failure to sign the form. Raymond Franklyn indicated that it was an oversight on his part, and he noted that Gilardi had never contacted him to correct it. (Certification of Raymond Franklyn dated Nov. 26, 2003, Pl. Exh. 9). John V. Welton, Bernardo Wilson, Winston Anthony Jones, and Abdurrezzak Eren all pointed out that the front of the proof of claim form does not direct the claimant to turn the form over and sign it on the reverse side where the signature line appears. They also indicated that although they had included their addresses and telephone numbers on the form, Gilardi never contacted them to correct the deficiency. (Certification of John V. Welton dated Dec. 3, 2003, Pl. Exh. 21; Certification of Bernardo Wilson dated Dec. 3, 2003, Pl. Exh. 22; Certification of Winston Anthony Jones dated Dec. 3, 2003, Pl. Exh. 23; Certification of Abdurrezzak Eren dated Dec. 2, 2003, Pl. Exh. 24). In addition, Gilardi rejected 17 claims because they were signed not by the claimants but by an attorney who avers that he had power of attorney to execute the Page 8 forms on behalf of his clients. (Affirmation of Elias B. Rudnikas (undated), Pl. Exh. 15).

  Class counsel now move for an order permitting the claimants who filed untimely claims to participate in the settlement, requiring Gilardi to give the claimants who failed to sign their proof of claim forms an opportunity to do so, and to deem as properly signed those forms signed by the ...


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