United States District Court, E.D. New York
MEMORANDUM ON FINAL APPROVAL OF CLASS ACTION SETTLEMENT
PAMELA K. CHEN, District Judge.
On December 27, 2013, the Court finally approved the class (and collective) action settlement (the "Settlement") in this case. (Dkt. No. 202 ("Final Approval Order").) The Settlement resolves the full range of Plaintiffs' gender discrimination claims under federal law and the state laws of New York, Florida, Missouri, and New Jersey,  alleging that female financial advisors ("brokers") at Banc of America Investment Services, Inc. and Merrill Lynch, Pierce, Fenner & Smith, Inc. ("MLPF&S") were subject to policies that affected them less favorably than their male counterparts, mainly, with respect to account distribution, the sharing of accounts among brokers through teams (also known as "teaming"), and, as a result, overall compensation (the "Class and Subclass Claims"). (Dkt. No. 201 ("Settlement Agreement"), at 2-3); see Calibuso I, 893 F.Supp.2d at 376, 379-81 (detailing the allegations in the operative third amended complaint, dated October 5, 2011). The Settlement also resolves the individual claims of Named Plaintiffs Julie Moss, Dianne Goedtel, Jean Evans, and Mary DeSalvatore, alleging sexual harassment and retaliation (the "Individual Claims"). (Settlement Agreement, at 2 n.5, 24-26.)
The active participation of Class Counsel,  Lieff, Cabraser, Heimann & Bernstein, LLP and Outten & Golden LLP; Defense Counsel, Proskauer Rose LLP; and Objector Counsel, Stowell & Friedman, Ltd., throughout the settlement approval process, assured that this process would fulfill its purpose of achieving a fair, reasonable, and adequate result for all Settlement Class Members. Objector Counsel objected to the Settlement, on behalf of Named Plaintiff Judy Calibuso and other Settlement Class Members. (Dkt. Nos. 165 ("Calibuso Objections"); 189 ("Settlement Class Members' Objections").) Class Counsel and Defense Counsel responded, in detail, to these objections in their papers. (Dkt. Nos. 182 ("Pls.' Br."); 190 ("Defs.' Monetary Relief Br."); 194 ("Defs.' Programmatic Relief Br."); 196 ("Pls.' Reply").) And, all of the parties discussed these objections during lengthy preliminary and final approval hearings before the Court. (Transcript of Hearing, dated Oct. 9, 2013 ("Prelim. Approval Hr'g Tr."); Transcript of Hearing, dated Dec. 20, 2013 ("Final Approval Hr'g Tr.").) The Court considered these objections and any responses and discussions thereto, and "overrule[d] all such objections on the bases that: (i) for settlement purposes, FRCP 23(a)(2)-(4) are satisfied; (ii) the programmatic relief is fair, reasonable, and adequate; and (iii) the monetary relief and the plan of allocation are fair, reasonable, and adequate." (Final Approval Order, at 4.)
In this Memorandum, the Court explains the reasons for its certification of the Settlement Class and Subclasses and final approval of the Settlement as fair, reasonable, and adequate, notwithstanding the objections advanced by Objector Counsel.
I. Relevant Background
The Court presumes the parties' familiarity with the procedural background in this case before they commenced their negotiations over the Settlement. See Calibuso I, 893 F.Supp.2d at 381-82. Further details concerning this background, including the broad, class-certification discovery conducted by the parties, are contained in the parties' other papers. ( See, e.g., Dkt. No. 185 ¶¶ 11-17.)
In December 2012, the parties retained experienced mediator, David Rotman, to oversee their negotiations. (Dkt. No. 162-2 ("Rotman Decl.") ¶¶ 2-3.) Thereafter, the parties exchanged, and Rotman reviewed, mediation statements and supporting documents discussing their respective positions. ( Id. ¶ 3.) Between February 11, 2013 and June 27, 2013, the parties' negotiations took place, consisting of four full-day mediation sessions and follow-up conversations with Rotman. ( Id. ¶¶ 1, 4-6.) At least one Named Plaintiff, including Calibuso, attended each session. ( Id. ¶ 4; see Prelim. Approval Hr'g Tr., at 124:19 ("Ms. Calibuso was present at the mediation.").) With Rotman's assistance, the parties were able to negotiate a preliminary agreement regarding the Settlement, which provided for monetary relief of approximately $39 million and various forms of non-monetary, programmatic relief. ( See Rotman Decl. ¶ 5.)
On September 6, 2013, Class Counsel submitted their motion for the Court's preliminary approval of the Settlement. (Dkt. No. 153.) Accompanying the preliminary approval motion was a draft Settlement Agreement detailing the original terms of the Settlement, which, among other things, provided that (i) the Settlement Class and Subclasses would be certified pursuant to FRCP 23(b)(3); (ii) Defendants would "track usage and adherence to [the Account Distribution Policy (ADP')], as it may be updated and modified from time to time"; and (iii) Kathleen Lundquist, as the Independent Consultant, would conduct a study on teaming. ( See Dkt. No. 155-1, at 14, 30, 36.)
In response to the above motion, the Court scheduled the preliminary approval hearing for September 19, 2013. (Scheduling Order, dated Sept. 9, 2013.) Two days before the hearing, however, Calibuso retained Objector Counsel as new counsel to raise objections, on her behalf, "to be heard prior to preliminary approval of [the] proposed settlement." (Dkt. No. 161, at 1.) The Court converted the hearing into a status conference, at which time, "in recognition of [Calibuso's] special status as a Named Plaintiff, " it agreed to entertain Calibuso's pre preliminary approval objections, as an "exception" to the normal course, at the hearing rescheduled for October 9, 2013. Calibuso v. Bank of Am. Corp. (" Calibuso II "), No. 10-CV-1413, 2013 WL 5532631, at *1 n.2 (E.D.N.Y. Oct. 4, 2013) (Chen, J.); (Order, dated Sept. 19, 2013). Objector Counsel filed these objections about a week later. (Calibuso Objections.)
On September 30, 2013, Objector Counsel proposed that two named plaintiffs from a separate, but related, class action by male and female African-American brokers against MLPF&S -one of whom was already a Settlement Class Member in this case and one of whom, a male broker, was not-be allowed to intervene, so that they too could object to the Settlement. (Dkt. No. 167, at 2.) The Court, however, denied Objector Counsel's proposal: (i) for the intervenor who was already a Settlement Class Member, because she could object "vis-àvis the settlement process, " or opt out of the Settlement altogether; and (ii) for the proposed male intervenor who was not, because "it would be cumbersome to permit class members-in separate actions against the same financial institutions-to come in and out of other actions as intervenors with indirect interests, solely because the actions involve the same category of violations." Calibuso II, 2013 WL 5532631, at *2-3.
Therefore, at the October 9, 2013 hearing, the Court only addressed Calibuso's prepreliminary approval objections:
I did review and consider those objections very carefully, and although I'm not prepared to adopt any of the objections or require any changes on the basis of those objections, they obviously informed some of the issues that I raised for today's proceeding. ...
[W]hile the objections may well be ones that have to be addressed again in the final approval hearing, all I have now [are] [sic] the objections of one particular class member, and to give it undue weight would turn this preliminary hearing into a final hearing.
[T]he question remains whether or not there will be other individuals who feel similarly at the final approval stage, and it may well be that these objections represent the objections of others in the class. But that remains to be seen.
(Prelim. Approval Hr'g Tr., at 3:12-4:17 (emphasis added).)
Significantly though, the parties resolved, on their own, the objection to certifying the Settlement Class and Subclasses under FRCP 23(b)(3) only, as provided by the original terms of the Settlement (Calibuso Objections, at 3). The agreed-upon resolution was to certify the Settlement Class and Subclasses under both FRCP 23(b)(2) and 23(b)(3), i.e., a "hybrid certification, " such that Settlement Class Members could not opt of, and could therefore object to, the programmatic relief, whether or not they opted out of the monetary relief. (Prelim. Approval Hr'g Tr., at 19:11-21:20; see id. at 5:6-8, 11:19-24, 17:11-20.)
On October 15, 2013, the Court issued its preliminary approval order, which also authorized the parties to notify Settlement Class Members about, among other things, "how to challenge or opt-out of" the Settlement. (Prelim. Approval Order, at 7-9.) Among the 4, 928 Settlement Class Members to whom such notices were sent, 99 individuals opted out of the monetary relief, but 42 of them, including Calibuso, continued to object to the programmatic relief; and only one individual, Linda Davila, objected to both the monetary and programmatic relief, because she did not opt out. (Dkt. No. 198-1 ¶¶ 9, 15; Settlement Class Members' Objections, at 1-2.)
On December 20, 2013, the Court held the final approval hearing. (Final Approval Hr'g Tr., at 1, 4:18-20.) When the hearing began, Defense Counsel and Objector Counsel reported that they had reached a "confidential agreement, " whereby "Ms. Calibuso is opting back in [and] withdrawing her objections." ( Id. at 7:4, 9:17-18.) Later, during the hearing, Objector Counsel also represented that, in light of confidential discussions between the parties and with the Court, they had a "list of people who will opt back in, " based on an "anticipated change in the language [in the Settlement] regarding the Account Distribution Policy." ( Id. at 40:12-13, 47:11-12.) The list, submitted six days after the hearing, rescinded 55 of the original 99 opt-outs, leaving only 45 individuals opting out of the monetary relief. ( See Dkt. Nos. 199, Ex. A; 204, at 1-2.)
On December 27, 2013, the Court issued its final approval order. The final terms of the Settlement, which the Court approved, were contained in the actual Settlement Agreement and outlined in the parties' other papers ( e.g., Pls.' Br., at 2-9). Among other things, the Settlement provided that:
For the purpose of resolving the Individual Claims, the Individual Named Plaintiffs' Settlement Fund shall contain $775, 000 to be allocated to Moss, Goedtel, Evans, and DeSalvatore (Settlement Agreement, at 9-10 ¶ 18, 24-25, 43);
For the purpose of resolving the Class and Subclass Claims, the Settlement Fund shall contain approximately $25, 412, 981.36- i.e., the $38, 225, 000 Settlement Sum, minus the court-approved attorneys' fees and costs ($12, 629, 518.64) and service awards ($7, 500 for Named Plaintiff Kathleen Wing and $35, 000 for the remaining Named Plaintiffs)-to be allocated to Settlement Class Members who submit claim forms ( see id. at 13 ¶¶ 30-31, 43, 45-46, 52, 54; Final Approval Order, at 9 ¶¶ 17-18);
The plan of allocation, with respect to money awarded from the Settlement Fund, will account for Settlement Class Members' (i) "length of tenure (e.g., weeks worked) during the [Settlement] Class Period" and (ii), if applicable, "actual or constructive termination" relating to allegations of discrimination (Settlement Agreement, at 47-48);
Settlement Class Members include:
(i) nationwide Legacy Bank of America brokers employed between March 16, 2006 and September 15, 2013, and other nationwide MLPF&S (including Legacy Merrill Lynch) brokers employed between August 2, 2007 and September 15, 2013, who constitute the Settlement Class for the Title VII claim, 
(ii) New York-based Legacy Bank of America brokers employed between November 10, 2004 and September 15, 2013, who constitute the Settlement Subclass for the New York claims,
(iii) Florida-based Legacy Bank of America brokers employed between January 10, 2006 and September 15, 2013, who constitute the Settlement Subclass for the Florida claim,
(iv) Missouri-based MLPF&S (including Legacy Merrill Lynch) brokers employed between January 1, 2007 and September 15, 2013, who constitute the Settlement Subclass for the Missouri claim, and
(v) New Jersey-based MLPF&S (including Legacy Merrill Lynch) brokers employed between January 1, 2007 and September 15, 2013, who constitute the Settlement Subclass for the New Jersey claim ( id. at 2-3, 11-12 ¶¶ 28-29);
The Settlement Class Period begins on March 16, 2006 for Legacy Bank of America brokers, and August 2, 2007 for other MLPF&S (including Legacy Merrill Lynch) brokers, but the period begins sooner for certain Legacy Bank of America and other MLPF&S (including Legacy Merrill Lynch) brokers located in New York, Florida, Missouri, and New ...