The opinion of the court was delivered by: JAMES FRANCIS, Magistrate Judge
The issues addressed in this opinion arise from the
administration of a settlement agreement in a class action for
unpaid wages by employees on cruise ships operated by the
defendants. Approximately nineteen months after their issuance,
958 of the checks issued by the Claims Administrator to pay
claims approved under the agreement have not been cashed. These
outstanding checks represent $466,664.78. The defendants seek an
order from this Court that this amount be returned to them. The
plaintiffs oppose this motion and seek an order that the Claims
Administrator, in consultation with plaintiffs' counsel, make
reasonable efforts to ensure that all eligible approved claims
The parties in this case entered into a settlement agreement
designed to conclude this litigation on October 22, 2002.
Dahingo v. Royal Caribbean Cruises, Ltd., 312 F. Supp. 2d 440, 442
(S.D.N.Y. 2004). (Letter of Paul T. Hofmann dated June 15, 2005
("Hofmann Letter"), Exh. 1). On November 5, 2002, the Honorable
Kimba M. Wood, U.S.D.J., certified a settlement class. Id.
Pursuant to the settlement agreement, the defendants were obliged
to create a fund of $18.4 million dollars, which after the
deduction of attorneys' fees and other agreed-to expenses, would
represent the source from which unnamed class members would be
paid. Id. at 442-43. The agreement provided for the appointment
of a claims administrator, Gilardi & Co., L.L.C. ("Gilardi"),
which was assigned the responsibility of administering payment
from the settlement fund, including determining, subject to the
terms of the agreement and the parties' objections, who should be
paid from the settlement fund and how much. (Hofmann Letter, Exh.
1, § 2.04). Under the agreement, any amount in excess of that
needed to pay the plaintiffs' claims would be returned to the
defendants. (Hofmann Letter, Exh. 1, §§ 2.05(a) & 2.08(d)). The
agreement also provided that I would be the final arbiter of all
disputes arising from the administration, processing, and
determination of claims to be paid from the settlement fund.
Id. at 443-44. (Hofmann Letter, Exh. 1, § 2.06(f), (g), (h)).
On November 4, 2003, Gilardi mailed checks for approved sums to
the eligible approved claimants. (Hofmann Letter at 2; Letter of
Sanford L. Bohrer dated June 16, 2005 ("6/16/05 Bohrer Letter"), at 2). The checks had a void date of February 2, 2004. (6/16/05
Bohrer Letter at 1). Approximately 17 months after the checks
were sent and 14 months after they had expired, the Claims
Administrator notified the parties that 958 approved claimants
had not yet cashed their checks. (Hofmann Letter, Exh. 3). To
date, there has apparently been no contact between these 958
claimants and the parties or Gilardi. (Hofmann Letter, Exh. 3).
The total value of the outstanding checks is $466,664.78.
(Hofmann Letter at 2 & Exh. 3). There is nothing in the record
definitively showing why these checks are uncashed, or even if
all of the checks were delivered. According to the plaintiffs,
the defendants have refused to allow Gilardi to release any
information regarding the identities of the owners of the
uncashed checks. (Hofmann Letter at 2).
As noted above, the parties disagree about how to proceed. The
defendants urge that pursuant to the settlement agreement, this
Court should return the outstanding funds to them. (Letter of
Sanford L. Bohrer dated May 2, 2005; 6/16/05 Bohrer Letter at
2-3; Letter of Sanford Bohrer dated June 24, 2005). Plaintiffs'
counsel request an order directing Gilardi to "make reasonable
efforts, in consultation with class counsel," to facilitate the
payment of those class members who still must be paid. (Hofmann
Letter at 3). Plaintiffs' counsel also seek more information
about the identities of the owners of the unpaid checks and the
efforts made by Gilardi to locate those individuals. (Hofmann
Letter at 3). Finally, they suggest that the unpaid class members be given several more years
within which to seek payment. (Letter of Paul T. Hofmann dated
May 10, 2005, at 1; Letter of Paul T. Hofmann dated June 23,
2005, at 3). In addition, Gilardi has made several
recommendations, proposing that:
1. All outstanding checks should be voided and one
replacement check for each outstanding check should
be printed and kept at its office. The replacement
checks should not have a void date in order to allow
class members the maximum amount of time to negotiate
2. All future class member correspondence should be
directed to plaintiffs' counsel, who should have
access to a database containing information regarding
class members who have filed claims and their claim
3. If a class member indicates that he or she did not
receive a check and is included among the 958 class
members who have not cashed their checks, plaintiffs'
counsel should ascertain the current address
information for that class member and forward the
information to Gilardi. Gilardi should then forward
the check one last time to the updated address.
4. A fixed date should be set by the Court by which
to conclude the final check negotiation process.
(Hofmann Letter, Exh. 3).
The facts just described present a number of practical
dilemmas. A large number of individuals who have submitted claims
which were approved have not been paid. The checks they were
issued are now void, and it does not appear that any of the
owners of the unpaid checks have been in touch with either the
parties or Gilardi. It is thus not known why these individuals
have not cashed checks entitling them on average to approximately eight hundred dollars
per person. Dahingo, 312 F. Supp. 2d at 444.
In the interest of accomplishing the goals of the settlement
agreement and compensating the maximum number of claimants, none
of whom live in the United States, I adopt a modified version of
1. Within 30 days from the date of this Order, a replacement
check for each outstanding check shall be issued and held by
Gilardi in its office. The replacement checks shall have a void
date of one year from the date of issuance. Some void date is
necessary to ensure that the litigation will achieve closure.
2. Within the same thirty day period, Gilardi shall provide to
plaintiffs' counsel information regarding class members who have
not yet been paid and its efforts to locate those individuals,
including: the identities of the unpaid approved class members,
their most recent addresses and telephone numbers, the details of
any efforts by Gilardi to date to locate those individuals, the
details of any communication since the checks were mailed, if
any, between those individuals and Gilardi, and a statement
regarding the status of the unpaid checks, if known.
3. After locating a class member who has not cashed his or her
check, plaintiffs' counsel shall ascertain the current address information for that class member and forward the information to
Gilardi, who shall forward the check to the address provided.
Replacement checks for those individuals located by plaintiffs'
counsel shall be mailed within six months of the date of this
For the reasons set forth above, the defendants' application is
denied. The plaintiffs' application is granted to the extent that
they request an order instructing Gilardi to make reasonable
efforts, in coordination with class counsel, to insure that the
maximum number of eligible approved claims are paid. ...