The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge
Currently pending before the Court are cross motions brought in each of the above-captioned matters by Class Plaintiff, Diamond Chemical Company, Inc. ("Class Plaintiff"), and Defendants*fn1 regarding the disposition of undistributed funds derived from the settlement of these actions. Class Plaintiff seeks an order authorizing the distribution of settlement proceeds to a final group of class claimants (the "Supplemental Claimants") and the payment of certain unpaid fees and expenses to the Claims Administrator, Heffleer, Radetich & Saitta L.L.P. (the "Claims Administrator") and further authorizing a cy pres distribution of the settlement funds remaining thereafter (the "Remaining Settlement Fund") to a newly created endowment fund at The George Washington University Law School (the "Endowment Fund"). Defendants oppose Class Plaintiff's motion insofar as it seeks cy pres distribution of the entire Remaining Settlement Fund, and have cross-moved for an order authorizing a refund to Defendants of half of the Remaining Settlement Fund, as well as a cy pres distribution of the other half of the Remaining Settlement Fund.
Upon searching consideration of Class Plaintiff's Motion to Distribute, Defendants' Opposition and Cross-Motion for Partial Refund, Class Plaintiff's Opposition to Defendants' Cross-Motion, Defendants' Reply in support of their Cross-Motion, the relevant case law, and the entire record herein, the Court concludes that the equities at issue favor a cy pres distribution of the entire Remaining Settlement Fund, and shall therefore deny Defendants' Cross-Motion for Partial Refund. The Court shall grant-in-part Class Plaintiff's Motion to Distribute, to the extent that it seeks authorization to distribute settlement funds to the Supplemental Claimants and to pay the Claims Administrator's additional fees and expenses. However, the Court shall hold in abeyance that portion of Class Plaintiff's Motion to Distribute that seeks an order authorizing a cy pres distribution to the Endowment Fund, and shall order Class Plaintiff to submit additional briefing as to the appropriateness of its proposed cy pres recipient.
The complaints in these actions were brought on behalf of a class of direct purchasers of sodium monochloroacetate and monochloroacetic acid ("MCAA"), alleging that Defendants conspired to fix, raise, maintain, or stabilize the prices and allocate markets for the sale of MCAA in the United States and elsewhere, in violation of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. See Cl. Pl.'s Mem. of Law in Support of Mot. to Distribute (hereinafter "Cl. Pl.'s Mem.") at 6-7. The Court previously approved three settlement agreements in these actions, reached by Class Plaintiff with each of three separate defendant groups.*fn2 Together, these settlements yielded approximately $12.9 million for distribution to eligible class members (exclusive of deductions for attorneys fees and other expense), which were was combined into a single fund because of Defendants' joint and several liability (the "Settlement Fund"). See Cl. Pl.'s Mem. at 2, n.1; Defs'Joint Mem. of P&A in Opp'n to Cl. Pl.'s Mot. (hereinafter "Defs' Opp'n Mem.") at 2-3.
After entering into the settlement agreements, Defendants provided Class Plaintiff with the identities and last-known addresses for all purchasers eligible to recover from the Settlement Fund. Subsequently, the Claims Administrator, who was retained by Class Counsel, mailed claim forms to class members on February 9, 2004, and again on July 9, 2004. Cl. Pl.'s Mem. at 2. On February 21, 2005, the Court approved Class Plaintiff's unopposed motion for partial distribution of the Settlement Fund, which requested that certain approved claimants receive trebled damages based on an estimated overcharge of 15 percent. Id. The Claims Administrator then distributed approximately $3,034.484.88 of the $12.9 million Settlement Fund. Cl. Pl.'s Mem. at 2 (citing Order, Akzo (D.D.C. Feb. 22, 2005), Dkt # 58; Order, Atofina, (D.D.C. Feb. 22, 2005), Dkt #97). On April 12, 2006, the Court approved Class Plaintiff's unopposed motion to distribute proceeds from the Settlement Fund to a group of final claimants, who had not previously been mailed the class notice, and awarded portions of the Settlement Fund to pay the fees and expenses of the Claims Administrator and Class Counsel. Cl. Pl.'s Mem. at 3 (citing Order, Akzo (D.D.C. Apr. 12, 2006), Dkt # 62; Order, Atofina (D.D.C. Apr. 12, 2006), Dkt # 101).
According to Class Plaintiff, there is currently $6,720,407.93 remaining in the Settlement Fund. Cl. Pl.'s Mem. at 3; Defs' Opp'n Mem. at 2. On February 12, 2007, Class Plaintiff moved to distribute $1,650,000 of these proceeds to a total of four Supplemental Claimants, discussed in greater detail below. Cl. Pl.'s Mem. at 3-5. In addition, Class Plaintiff's motion requests approval to distribute $4,448.87 from the Settlement Fund to the Claims Administrator for fees and expenses incurred in connection with the final administration and audit of claims.Id. at 5. According to Class Plaintiff, after these distributions, the Remaining Settlement Fundwill total approximately $5,113,285.10. Id. at 6. As the settlement agreements are silent as to the disposition of any excess funds, Class Plaintiff recommends that the Court make a cy pres distribution of the Remaining Settlement Funds to a newly created endowment fund at The George Washington University Law School. Id. at 6-8. Class Plaintiff asserts that the Endowment Fund will "provide financial support for the academic and clinical programs at The George Washington University Law School that are designed to ensure the effective private enforcement of antitrust and competition laws within the United States and around the world."
On February 26, 2007, Defendants filed a partial Opposition to Class Plaintiff's motion to distribute, as well as a Cross-Motion for Partial Refund. Defendants do not object to Class Plaintiff's proposed distributions to the Supplemental Claimants or the Claims Administrator. Defs' Opp'n Mem. at 2. Defendants do, however, oppose Class Plaintiff's motion insofar as it recommends a cy pres distribution of the entire Remaining Settlement Fund. Id. Asserting that they have a compelling equitable claim to the Remaining Settlement Fund and that the policies of the Sherman Act have been served by the distributions to the class claimants, Defendants cross-move the Court for a refund of one-half of the Remaining Settlement Fund, and a distribution of the other half of the Remaining Settlement Fund to a cy pres recipient. See generally Defs' Opp'n Mem. In their Opposition Memorandum, Defendants "take no position on Class Plaintiff's proposed cy pres recipient," id. at 2; however, in their subsequent Reply in support of their Cross-Motion, Defendants question how any non-claiming class members would benefit from Class Plaintiff's proposed cy pres gift to the Endowment Fund. Defs' Reply at 7-9. Class Plaintiff filed an Opposition to Defendants' Cross-Motion on March 21, 2007, and Defendants filed a Reply in further support of their Cross-Motionon March 30, 2007.
A. The Court Grants Class Plaintiff's Motion to Distribute Settlement Proceeds to the Supplemental Claimants and the Claims Administrator
In July and August of 2006, four Supplemental Claimants -- each of whom had previously been sent a Class Notice -- filed claims with the Claims Administrator. Cl. Pl.'s Mem. at 3 (citing 2/1/07 Aff. of Michael E. Hamer, Sections B and C). The Claims Administrator reviewed each Claim Form for completeness, calculated the claimed, rejected, and allowed purchases for each Claimant, and sent each Claimant a letter requesting that they explain in detail the reasons for the tardy filing of their claims. Id. at 3-4 (citing Hamer Aff. Sec. C). After reviewing the Supplemental Claimants' proffered explanations, the Claims Administrator and Class Counsel determined that the tardiness of three of the Supplemental Claimants was not excusable. Id. at 4 (citing Hamer Aff. Sec. C). As a result, the Claims Administrator sent "compromise" letters to these three Supplemental Claimants, each of whom accepted the reduced recovery amount that they were offered. Id. (citing Hamer Aff. Sec. C). In addition, the Claims Administrator and Class Counsel deemed the fourth Supplemental Claimant's tardiness excusable and therefore recommend that the fourth Claimant recover the full amount of its allowable claims. Id. at 4-5 (citing Hamer Aff. Sec. C). The compromise recoveries for three of the Supplemental Claimants and the Allowed Purchases for the fourth Supplemental Claimant total $1,650,000, and Class Plaintiff requests authorization to make these distributions from the Settlement Fund. Id. at 5.
In addition, Class Plaintiff requests authorization to distribute $4,448.87 from the Settlement Fund to the Claims Administrator for fees charged and expenses incurred since March 29, 2006 in connection with the final administration and audit of claims. Cl. Pl.'s Mem. at 5.*fn3 As noted above, Defendants do not oppose either the distribution to the Supplemental Claimants or to the Claims Administrator, and the procedures undertaken by the Claims Administrator in connection with the Supplemental Claimants appear to have been proper and complete. The Court shall ...