UNITED STATES DISTRICT COURT FOR THE … PRODUCTS...UNITED STATES DISTRICT COURT . FOR THE EASTERN DISTRICT OF LOUISIANA : ... Case 2:12-md-02328-SSV Document 655 Filed 06/10/15 Page

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF LOUISIANA

: IN RE: POOL PRODUCTS DISTRIBUTION : MARKET ANTITRUST LITIGATION : MDL DOCKET NO. 2328 :

: SECTION: R(2) This document relates to: : : CHIEF JUDGE VANCE ALL INDIRECT PURCHASER CASES : MAG. JUDGE WILKINSON

:

SUPPLEMENTAL MEMORANDUM REGARDING FINAL APPROVAL AND

ADDRESSING ANTICIPATED SETTLEMENT DISTRIBUTIONS

I. INTRODUCTION

MAY IT PLEASE THE COURT:

The Indirect Purchaser Plaintiffs (IPPs) have sought final approval of settlements jointly

with defendants Hayward and Zodiac. The IPPs have also settled in principle with defendant

Pentair and continue to litigate this matter against defendant Pool Corporation. A fairness hearing

was held before Your Honor on May 14, 2015, following which claims data requested by the Court

was provided in a supplemental memorandum. R. Doc. 652. This memorandum addresses

additional questions posed by the Court regarding the potential for cy pres treatment of a portion

of the settlement funds.

At the time the IPPs, Hayward and Zodiac filed their preliminary approval papers in

support of the Zodiac and Hayward settlements, there was no information available regarding the

number and amount of claims that would be asserted by class members. Even now, prior to the

claims deadline for the Zodiac and Hayward settlement funds which is on December 11, 2015, and

Case 2:12-md-02328-SSV Document 655 Filed 06/10/15 Page 1 of 7

prior to resolution of the remaining litigation against Pentair and Pool Corporation, no exact figures

for residual funds can be determined. However, given the potential for remaining funds after

claimants have been fully compensated, the IPPs will address the propriety of cy pres distributions

in a class action context and provide the court with several examples of entities they believe are

worthy recipients of cy pres distributions. The IPPs, however, would request that the Special

Master be called upon to make a report and recommendations regarding any eventual cy pres

allocation and distribution.

A. Cy Pres Distributions are Appropriate.

The Cy Pres Doctrine takes its name from the Norman French expression “cy pres comm

possible,” which means as near as possible. The doctrine originated to save testamentary

charitable gifts that would otherwise fail. Under cy pres, if the testator had a general charitable

intent, the court will look for an alternate recipient that would best serve the gifts original purpose.

In the class action context, it may be appropriate for a court to use cy pres principles to distribute

unclaimed funds. In such a case, the unclaimed funds should be distributed for a purpose as near

as possible to the legitimate objectives underlying the lawsuit, the interest of class members, and

the interests of those similarly situated. In Re: Airline Ticket Comm’n Antitrust Litigation, 307 F.

3d 679, 682 (8th Cir. 2002).

In the class action context, a cy pres distribution is designed to be a way for a court to put

any unclaimed settlement funds to their next best compensation or use, e.g., for the aggregate,

indirect, prospective benefit of the class. Masters v. Wilhelmina Model Agency, Inc., 473 F.3d

423, 426 (2d Cir. 2007).

Because the settlement funds are the property of the class, a cy pres distribution to a third

party of unclaimed settlement funds is permissible only when it is not feasible to make further

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distributions to class members. 3 William B. Rubenstein et. al. Newberg on Class Action Section

10.17 (4th Ed. 2002). Where it is still logically feasible and economically viable to make additional

pro rata distributions to class members, the district court should do so. ALI Principles Section 3.07

Cmt. A and B; see also 3 William B. Rubenstein et. al. Newberg on Class Action Section 10.17 (4th

Ed. 2002, Westlaw updated through June 2011).

Numerous Courts of Appeal across the country have held that a district court does not abuse

its discretion by approving a class action settlement agreement that includes a cy pres component

directing the distribution of excess settlement funds to a third party to be used for a purpose related

to the class injury. Lane v. Facebook, Inc. 696 F.3d 811, 819 (9th Cir. 2012); see also In Re:

Pharm. Indus. Average Wholesale Price Litigation, 588 F.3d 24, 33-36 (1st Cir. 2009); 4 Herbert

D. Newberg et. al. Newberg on Class Actions Section 11:20 (4th Ed. 2012); In Re: Lupron

Marketing and Sales Practices Litigation, 677 F. 3d 21, 34, 35 (1st Cir. 2012).

In a recent decision from this District, Judge Fallon overruled objections to the use of cy

pres distributions and noted as follows:

In class action suits filed in federal court, the district court’s ability to determine the use of unclaimed funds derives from the court’s inherent power to manage its own docket and its power under Rule 23(d) of the Federal Rules of Civil Procedure to make such orders as necessary to manage the class action. When a class action settlement agreement is silent as to the distribution of excess funds, or when there isn’t an adjudicated aggregate class recovery that results in unclaimed funds, the district judge must make the determination about the appropriate distribution of the surplus.

Turner v. Murphy Oil USA 2009 W.L. 1507414 (E.D. La. 2009); see also In Re: Heartland

Payment Systems, Inc. Customer Data Security Breach Litig., 851 F.Supp.2d 1040 (S.D. Tx.

2012); In Re: Lease Oil Antitrust Litigation (No. II), 2007 W.L. 4377835, *16 (S.D. Tx. 2007);

Wilson v. Southwest Airlines, Inc. 880 F.2d 807, 811 (5th Cir. 1989).

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More recently in Klier v. Elf Atochem M. Am. Inc., 658 F.3d 468, 474 – 5 (5th Cir. 2011),

the Fifth Circuit confirmed that cy pres awards in class actions might be appropriate under two

circumstances: first, it must be infeasible to distribute further proceeds from the settlement fund

directly to class members; and, second, the unclaimed funds should be distributed for a purpose as

near as possible to the legitimate objectives underlying lawsuit, the interests of the class members

and the interests of those similarly situated.

Cy pres distributions have been applied specifically to indirect purchaser cases such as the

present matter. See Anderson Contracting v. DSM Copolymer, Inc., Case No. CL95959 (In the

Iowa District Court in and for Polk County, Iowa, December 24, 2012) (attached as Exhibit A);

see also Judy Benson v. Avery Denison Corporation, Case No. 29, 379 – III (in the Circuit Court

for Cocke County, Tennessee at Newport, dated March 12, 2010)(attached as Exhibit B).

B. Appropriate Cy Pres Entities.

As noted above, as long as cy pres distributions are distributed for a purpose as near as

possible to the legitimate objectives underlying the lawsuit, the interests of class members and the

interests of those similarly situated, they may be approved. This case involves violations of

consumer protection laws dealing with the sale of pool products to both commercial and residential

pool owners in the states of California, Arizona, Missouri and Florida. Plaintiffs have thoroughly

researched various trade association and non-profit entities that have relationships to commercial

and residential pools and the swimming pool industry in these states and believe that the following

entities would be appropriate recipients of cy pres distributions in this matter. A short explanation

of each entity is provided for the Court’s convenience.

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1) National Swimming Pool Foundation - A 501(c)(3) not for profit organization which

was founded in 1963 and is dedicated to scientific and educational purposes influencing

the design, construction and operation of swimming pools. See www.nspf.org.

2) USA Swimming - As the National Governing Board for the sport of swimming in the

United States, USA Swimming is a 400,000 member service organization that

promotes the culture of swimming by creating opportunities for swimmers and coaches

of all backgrounds to participate and advance in the sport through clubs, events, and

education. See www.usaswimming.org.

3) YMCA - For 160 years YMCAs have been offering community programs which

include swimming lessons. YMCAs are located in 10,000 neighborhoods across the

USA. The YMCA believes that swimming is a life skill as well as great exercise and a

challenging sport. Ys offer swim lessons (for all ages), family swim, competitive

swimming and diving teams, and many kinds of adaptive swim programs for kids with

special needs, so that all can safely enjoy the pleasures of an aquatic environment. See

www.ymca.net/swim-sports-play.

4) The ZAC Foundation - The organization was founded in 2008 to promote education of

children and families about swimming pool safety. The ZAC Foundation “works to

strengthen pool safety legislation and funds advocacy, education and effective

programming surrounding water safety.” See www.thezacfoundation.com.

These organizations are examples of non-profit organizations that focus on objectives and

interests that likely are shared by, and provide aggregate, indirect and/or prospective benefits to,

the class.

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http://www.nspf.org/

http://www.usaswimming.org/

http://www.ymca.net/swim-sports-play

http://www.thezacfoundation.com/

The plaintiffs provide this list only for the Court’s convenience and defer to the Special

Master’s recommendation, and ultimately to the Court’s discretion, to determine the final recipients

of any cy pres distributions that may be required at the conclusion of this class settlement.

Respectfully submitted,

By: /s/ Thomas J. H. Brill Thomas J.H. Brill (MO 36874) Law Office of Thomas H. Brill 8012 State Line Road, Suite 102 Leawood, Kansas 66208 Telephone: 913/ 677-2004 E-Mail: [email protected] Indirect Purchaser Plaintiffs' Liaison Counsel /s/ Gerald E. Meunier

Gerald E. Meunier, #9471 Palmer Lambert

Gainsburgh, Benjamin, David, Meunier & Warshauer, L.L.C. 2800 Energy Center, 1100 Poydras Street New Orleans, Louisiana 70163 Telephone: 504/522-2304 Facsimile: 504/528-9973 E-Mail: [email protected] John F. Edgar (MO 47128) Edgar Law Firm LLC 1032 Pennsylvania Avenue Kansas City, Missouri 64105 Telephone: 816/531-0033 E-Mail: [email protected] Isaac L. Diel (MO 39503) Sharp McQueen PA 6900 College Blvd. Suite 285 Overland Park, Kansas 22211-1547 Telephone: 913/661-9931 E-Mail: [email protected]

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mailto:[email protected]




Michael Brady (KS 18630) Brady & Associates 10901 Lowell, Suite 280 Overland Park, Kansas 66210 Telephone: 913/696-0925 E-mail: [email protected]

CERTIFICATE OF SERVICE

I hereby certify that on June 10, 2015 I electronically filed the foregoing with the Clerk

of Court by using the CM/ECF system which will send a notice of electronic filing to all counsel

of record.

/s/ Gerald E. Meunier Gerald E. Meunier, #9471

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UNITED STATES DISTRICT COURT FOR THE … PRODUCTS...UNITED STATES DISTRICT COURT . FOR THE EASTERN DISTRICT OF LOUISIANA : ... Case 2:12-md-02328-SSV Document 655 Filed 06/10/15 Page