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
the role of a court in implementing the settlement of a class
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,
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 ¶
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
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."
(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,
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
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,
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
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 ...