In the United States Court of Federal Claims
No. 14-1062
Filed: May 11, 2017
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* Rule of the United States Court of Federal
ANDREW RUSSELL and RUTH * Claims (“RCFC”) 23(e) (Settlement,
GALLEGO, et al., * Voluntary Dismissal, or Compromise).
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Plaintiffs, *
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v. *
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THE UNITED STATES, *
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Defendant. *
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John G. Jacobs, Jacobs Kolton, Chtd., Chicago, Illinois, Counsel for Plaintiffs.
Michael Anthony Rodriguez, United States Department of Justice, Washington, D.C., Counsel
for the Government.
FINAL MEMORANDUM OPINION AND ORDER AUTHORIZING PAYMENT OF
SHIFT DIFFERENTIAL AND LUMP SUM PAY DUE TO CERTAIN ARMY AND AIR
FORCE EXCHANGE SERVICE EMPLOYEES
BRADEN, Chief Judge.
On May 10, 2017, the court convened a hearing, pursuant to Rule 23(e) of the Rules of the
United States Court of Federal Claims (“RCFC”), on Plaintiffs’ Consent Motion for Final
Approval of Class Action Settlement Agreement, (Docket Number “Dkt. No.” 21). The court has
reviewed the motion and supporting papers, including a Settlement Agreement dated as of
November 20, 2016 (See Dkt. No. 18-3) which, together with the Exhibit attached thereto, sets
forth the terms and conditions for the proposed settlement of this matter (the “Settlement
Agreement”), pursuant to which Plaintiffs offered to settle this case in exchange for payment by
the Government in the amount of $4,000,000, inclusive of all damages, attorneys’ fees, and
expenses. Based upon this review, arguments of counsel and the findings below, the court being
fully advised in the premises, the court finds good cause to grant the motion, and thus it is hereby
ordered as follows:
1. The court has jurisdiction over the subject matter of this Action, the Parties, and all
Settlement Class Members and all Persons who obtain releases as a result of this settlement.
2. As confirmed by the declarations filed with the court by RSM US LLP (“RSM”), the court-
appointed Settlement Administrator, and the Parties, the Notice Plan was implemented as directed
by the Preliminary Approval Order and Settlement Agreement: (a) RSM sent direct notice of the
settlement via First Class U.S. Mail to the last known postal addresses of all persons within the
Settlement Class, as provided by AAFES from its records and updated by the National Change Of
Address database; (b) RSM sent direct notice of the settlement to the email addresses of all persons
within the Settlement Class for whom AAFES had email addresses; (c) Internet notice was given
through a settlement website, www.AafesShiftDifferentialSettlement.com, established and
maintained by RSM and supported by Google AdWords, which website contained a copy of the
settlement notice and allowed for online claims filing; (d) AAFES put a link on its website,
www.shopmyexchange.com, linking its visitors to the official settlement website; and (e) at all
AAFES facilities, AAFES caused a poster-size settlement notice, no smaller than 24 inches by 24
inches, to be posted prominently and conspicuously near any time clock where AAFES employees
regularly punch in and out for their shift (or, in the event that there was no time clock where
employees punch in and out, in a place where employees were most likely to see it).
3. The notice of the settlement pursuant to the Preliminary Approval Order and the Settlement
Agreement was the best notice practicable under the circumstances and constituted due, sufficient
and reasonable notice to the Class and complied fully with the requirements of RCFC 23 and of
Due Process. The Notice apprised the class of the items required by RCFC 23(c)(2)(B), the key
terms of the Settlement, Class Counsel’s request for attorneys' fees and expenses and Class
Representative incentive award, and Class Members’ right to object to the Settlement, to Class
Counsel’s request for payment of attorneys' fees and/or to the request for a Class Representative
incentive award. The deadline for objections has passed and no class members have objected to
the Settlement or the request for payment of attorneys' fees or the request for a Class Representative
incentive award.
4. Under RCFC 23(e), a class action may be settled only with the court's approval. RCFC
23(e). The court may approve the settlement only after finding that the proposed settlement is fair,
reasonable, and adequate. RCFC 23(e)(2). In general, “[s]ettlement is always favored,” especially
in class actions where the avoidance of formal litigation can save valuable time and resources.
Sabo v. United States, 102 Fed. Cl. 619, 626 (2011). “Settlement proposals enjoy a presumption
of fairness afforded by a court's preliminary fairness determination.” Sabo, 102 Fed. Cl. at 626.
A court has discretion to accept or reject a proposed settlement, but it may not alter the proposed
settlement, nor may it decide the merits of the case or resolve unsettled legal
questions. Adams v. United States, 107 Fed. Cl. 74, 75–76 (2012)
The court previously found, subject to a final determination, that the Settlement was fair,
adequate, and reasonable. (See Dkt. No. 20). The court hereby gives final approval to the
Settlement Agreement and finds that the Settlement Agreement is, in all respects, fair, reasonable,
adequate and in the best interests of the Class pursuant to RCFC 23(e) and hereby directs that it
shall be effectuated in accordance with its terms. The Settlement Agreement and every term and
provision thereof shall be deemed incorporated herein as if explicitly set forth, and shall have the
full force of an Order of the court. The court finds that the settlement is the product of good faith
negotiations at arm’s length, and is not the product of fraud or collusion.
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Specifically, the court finds that final approval of the Settlement is warranted in light of
the following additional factors, i.e.: (1) the relative strengths of Plaintiffs’ case in comparison to
the proposed settlement; (2) the recommendation of the counsel for the class regarding the
proposed settlement, taking into account the adequacy of class counsels’ representation of the
class; (3) the reaction of the class members to the proposed settlement, taking into account the
adequacy of notice to the class members of the settlement terms; (4) the fairness of the settlement
to the entire class; (5) the fairness of the provision for attorney fees; and (6) the ability of the
defendant to withstand a greater judgment, taking into account whether the defendant is a
governmental actor or private entity. See Sabo, 102 Fed. Cl. at 627; see also Dauphin Island
Property Owners Ass’n v. United States, 90 Fed. Cl. 95, 102–03 (2009).
In considering these factors, the court has found that: (1) the Settlement will result in a
payment to the qualified claimants of up to 100% of the unpaid shift differential and lump sum
leave payments that they were calculated to have been underpaid between November 1, 2008 and
April 22, 2016; (2) the Settlement was reached after arm’s length negotiations; (3) no Class
Members objected to the Settlement, after receiving notification of its terms; (4) payments to the
Class Members will be calculated uniformly and proportionally distributed, by the Settlement
Administrator; (5) the contingency fee arrangement that Class Counsel disclosed to the Class
Members, and to which no Class Member objected, i.e., 38 percent of the Settlement Fund, is a
typical arrangement; and (6) the ability of the Government to withstand a greater judgment neither
favors nor disfavors approval of the Settlement.
5. The court approves Class Counsel's request, pursuant to RCFC 23(h) and 54(d)(2) for an
award of reasonable attorneys’ fees and expenses. Payment of attorneys' fees and expenses is
authorized by law and by the parties’ agreement. The Settlement Agreement provides that
attorneys’ fees and expenses shall be paid out of the common settlement fund and such payments
are authorized by law “on the equitable notion that lawyers are entitled to reasonable compensation
for their professional services from those who accept the fruits of their labors.” Moore v. United
States, 63 Fed. Cl. 781, 786 (2005). The Settlement Notice advised the Class that Counsel would
ask the court to award Class Counsel attorneys’ fees equal to 38 percent of the Settlement Fund to
compensate them for their efforts in investigating the facts, litigating the case, negotiating the
settlement, and implementing the settlement on behalf of the Settlement Class and for their risk in
undertaking this representation on a purely contingent basis and advised them of their right to
object to this request for attorneys’ fees and expenses. No Class Members have objected to the
requested attorneys’ fees or expense reimbursement. Defendant agreed that it would not object to
Class Counsel’s application for reasonable attorney fees and for reimbursement of expenses to be
paid from the common settlement fund, on the condition that the requested fees and expenses do
not exceed 40 percent of the fund.
The court finds and determines that the payment to Class Counsel in the amount of
$1,500,000 in attorneys’ fees is fair and reasonable. It represents 37.5% percent of the common
settlement fund, slightly less than the 38 percent the Class was told Counsel would seek for
attorneys’ fees (and to which none objected). Specifically, the court finds that the reasonableness
of the fees is supported by the following factors: (a) the quality of counsel; (b) the complexity and
duration of the litigation; (c) the risk of nonrecovery; (d) the fee that likely would have been
negotiated between private parties in similar cases; (e) lack of any class member objections to the
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fees requested by class counsel; (f) the percentage applied in other class actions; and (g) the size
of the award. See, e.g., Moore, 63 Fed. Cl. at 786 (recognizing that “40% is within the acceptable
range” with 50% being the upper limit and approving payment of attorneys’ fee of $1.6 million in
class action settlement, representing 34% of the gross recovery of approximately $4.7 million, not
including expenses, and approving Class Counsel’s request for reimbursement of expenses in the
amount of $356,745, resulting in the total payment of attorney’s fees and expenses of $1,956,745
out of a total gross settlement recovery of $5,065,820, representing roughly 38.6% of the total
recovery); Voth Oil Co., Inc. v. United States, 108 Fed. Cl. 98, 105 (2012) (finding a 40%
contingent fee reasonable). The court hereby gives final approval to and orders that payment of
such amount be made to Class Counsel out of the Settlement Fund in accordance with the terms
of the Settlement Agreement.
6. The court approves Class Counsel's request for reimbursement from the Settlement Fund
of reasonable expenses incurred by Class Counsel in connection with the litigation. Class Counsel
have expended $16,603.01 in reimbursable expenses, including filing fees, travel expenses, service
and courier fees, phone and fax charges, PACER charges, copying costs and fees of Plaintiffs’
expert consultant. The court finds and determines that the payment to Class Counsel in the amount
of $16,603.01 in expense reimbursement is fair and reasonable. The court hereby gives final
approval to and orders that payment of such amount be made to Class Counsel out of the Settlement
Fund in accordance with the terms of the Settlement Agreement.
7. The court approves Class Counsel’s request for the payment of Class Representative
incentive awards to the named Plaintiffs. The court finds and determines that an award of $5,000
each to Plaintiffs Andrew Russell and Ruth Gallego for their services as the Class Representatives,
in addition to any amounts that may be paid to them as Class Members, is fair and reasonable. The
court hereby gives final approval to and orders that payment of such amounts be made to Mr.
Russell and Ms. Gallego out of the Settlement Fund in accordance with the terms of the Settlement
Agreement. Such payment is appropriate compensation for their time and effort and risks incurred
in serving as the Class Representatives in this litigation and achieving the benefits for the class
(none of whom has objected to such an award).
8. The court approves the payment of notice and administration costs of the Settlement
Administrator. The court hereby finds and determines that payment to RSM in an amount not to
exceed $250,000 for costs of notice and settlement administration is fair and reasonable and gives
final approval to and orders that payment of RSM’s final bill, not to exceed $200,000 ($50,000
having already been paid to defray initial costs), be made to RSM out of the Settlement Fund in
accordance with the terms of the Settlement Agreement.
9. The Settlement Agreement constitutes a full and complete release of all shift differential
and lump sum claims arising out of or relating to the claims brought in this lawsuit, or that could
have been brought, against the United States, or any other agencies or instrumentalities of the
United States, including AAFES, or any agents, employees, or officers thereof, by Settlement
Class Members. Each Settlement Class Member employed or formerly employed by AAFES,
releases, waives and abandons any and all claims, causes of actions, and demands arising out of or
relating the shift differential and lump sum claims brought in this lawsuit, whether known or
unknown, whether arising in law or in equity, jointly or several, which they, their heirs, executors,
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administrators or assignees may have or hereafter acquire against the Defendant or any of its
agencies, departments, officers, agents or employees, including but not limited to any claims for
costs, expenses, attorney fees, and damages of any sort.
10. Without affecting the finality of this Final Approval Order, the court retains exclusive
and continuing jurisdiction as to all matters relating to the implementation, administration,
consummation, enforcement and interpretation of the Settlement and/or the Settlement Agreement,
including the Releases contained therein, and any other matters related or ancillary to the
foregoing; and over all Parties hereto, including Settlement Class Members and any person who is
released, for the purpose of enforcing and administering the Settlement Agreement and the Action
until each and every act agreed to be performed by the Parties has been performed pursuant to the
Settlement Agreement.
IT IS SO ORDERED.
s/ Susan G. Braden
SUSAN G. BRADEN
Chief Judge
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IN THE UNITED STATES COURT OF FEDERAL CLAIMS
ANDREW RUSSELL )
AND RUTH GALLEGO, )
individually and on behalf of all others )
similarly situated, )
Plaintiffs, ) No. 14-1062
v. ) Judge Susan G. Braden
)
THE UNITED STATES, )
)
Defendant. )
SETTLEMENT AGREEMENT
For the purpose of settling this action without any further judicial proceedings, and
without there being any trial or adjudication of any issue of fact or law regarding this action, and
without constituting an admission of liability upon the part of either party, the parties hereby
stipulate as follows:
1. This case arises out of the claims of plaintiffs Andrew Russell and Ruth Gallego
who allege that, while employed by the Army and Air Force Exchange Service (AAFES), they
were entitled to receive premium pay for working night shift hours but were denied these
benefits by AAFES. Specifically, plaintiffs allege that they worked regularly-scheduled non-
overtime shifts where the majority of the shift hours were between 3:00 p.m. and midnight
(second shift) or between 11:00 p.m. and 8:00 a.m. (third shift), and that they were therefore
entitled to premium pay, also known as shift differential pay. Plaintiffs assert that because of an
error in the payroll system used by AAFES, employees often failed to receive 7.5 percent
additional premium pay for working the second shift and 10 percent additional premium pay for
working the third shift. Additionally, plaintiffs allege that payments to employees upon
separation from AAFES for accrued leave, or lump sum payments, were not accurately paid to
employees as a result of the alleged failure to accurately pay the shift differential.
2. Plaintiffs filed a complaint in this Court in which they sought to represent other
present and former AAFES employees who were similarly situated, pursuant to Rule 23 of the
Rules of the United States Court of Federal Claims.
3. Following suit and an initial motion to dismiss, the parties entered into
negotiations designed to resolve amicably plaintiffs’ claims and the claims of potential class
members. The parties have engaged in extensive review of information and arms’ length
negotiations, and plaintiffs have offered to settle the case in exchange for payment by AAFES in
the amount of $4,000,000, inclusive of all damages, attorney fees, and expenses (the Settlement
Amount). The parties have further agreed to settle the case on the following terms, subject to the
approval by the Court:
a. Plaintiffs will file a consent motion seeking certification of a settlement
class (the Settlement Class). The Settlement Class will consist of employees who worked for
AAFES at any time between November 1, 2008 and April 22, 2016 (the Class Period) and who
were eligible for night shift differential pursuant to 5 U.S.C. § 5343(f), 5 C.F.R. § 532.505 et seq.
or various similar regulations promulgated by the Department of Defense (DoD) and AAFES,
and who: (i) worked or were scheduled to work non-overtime shifts where the majority of such
shift hours occurred either between the hours of 3:00 p.m. and midnight or between 11:00 p.m.
and 8:00 a.m. and who were not paid the shift differential to which they were entitled; or (ii)
were eligible for accumulated and current accrued annual or vacation leave payments upon
separation pursuant to 5 U.S.C. § 5551, 5 C.F.R. § 550 et seq. or various related regulations
promulgated by the DoD and AAFES, who separated from AAFES, and who, upon separation,
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were not paid the full amount of lump-sum payments to which they were entitled. Certification
of the Settlement Class shall be effected by entry of a preliminary approval order entered by the
Court. If for any reason the settlement should not receive the final approval of the Court, or the
Court’s approval of the settlement be overturned on appeal, then such certification shall become
null and void, and no party shall be affected in any way by such prior certification.
b. The parties have agreed that employees whose damages are less than $10
shall be excluded from the Settlement Class. Those employees with damages of $10 or greater
who choose to opt in to the settlement are the Settlement Class Members.
c. Plaintiffs will, subject to the approval of the Court and defendant, select a
qualified Settlement Administrator. The Settlement Administrator’s responsibilities include: (1)
providing notice to the Settlement Class; (2) accepting and processing claims; (3) paying
Settlement Class Members’ approved claims; (4) making appropriate withholding from
claimants’ settlement distributions and remitting amounts withheld or payable to appropriate
taxing authorities; and (5) providing the parties a final accounting of all payments made.
d. The Settlement Administrator will establish a Qualified Settlement Trust
pursuant to section 468B of the Internal Revenue Code to disburse the proceeds of the
settlement. The administration and maintenance of the Qualified Settlement Trust will be the
sole responsibility of the Settlement Administrator. Pursuant to and as specified in this executed
agreement, AAFES will provide the Settlement Administrator with the Settlement Amount to be
deposited into the Qualified Settlement Trust. The parties agree that, unless otherwise specified
herein, the United States’ obligations and duties to plaintiffs and to the Settlement Class under
this agreement will be fully satisfied upon AAFES’s payment of the Settlement Amount to the
Qualified Settlement Trust. The United States makes no warranties, representations, or
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guarantees concerning any disbursements the Qualified Settlement Trust makes, or fails to make,
to any potential claimants.
e. All attorney fees and expenses of plaintiffs’ counsel, incentive payments
to the representative plaintiffs, charges of the Settlement Administrator, and costs of providing
notice and processing claims will be paid from the Qualified Settlement Trust, and the remaining
amount will be the Net Settlement Fund. All approved claims to Settlement Class Members will
be paid from the Net Settlement Fund. The Settlement Administrator is solely responsible for
payment of any applicable taxes, including all Federal, state, and local taxes, owed as a result of
the disbursement of the settlement proceeds.
f. Settlement Class Members will be allowed to opt in to the class and file
claims with the Settlement Administrator during a 120-day filing period.
g. If there are sufficient funds in the Net Settlement Fund, Settlement Class
Members will be paid 100 percent of their calculated underpayments for shift differential
and lump sum amounts. Should the Net Settlement Fund be incapable of paying
100 percent of all approved claims, the approved claims shall be paid on a pro rata basis.
h. After paying all approved claims and all items listed in paragraph 3(e),
any amount that remains in the Qualified Settlement Trust shall be returned to AAFES.
i. All Settlement Class Members will provide a full and complete release of
all shift differential and lump sum claims arising out of or related to the claims brought in this
lawsuit, or that could have been brought, against the United States, or any other agencies or
instrumentalities of the United States, including AAFES, or any agents, employees, or officers
thereof, by Settlement Class Members.
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4. The offer referenced in paragraph 3 has been accepted on behalf of the Attorney
General.
5. As soon as practicable after the execution of this agreement, plaintiffs shall file
a consent motion, seeking entry of an order of preliminary approval, which order shall: (a)
certify the Settlement Class; (b) preliminarily approve the settlement, and find the settlement
sufficiently fair, reasonable, and adequate to allow notice to be disseminated; (c) appoint
plaintiffs Andrew Russell and Ruth Gallego as Class Representatives; (d) appoint plaintiffs’
counsel as Class Counsel; (e) approve the proposed selection of the Settlement
Administrator; (f) approve the parties’ proposed forms of notice and notice program, and
direct notice to be disseminated to the Settlement Class in accordance therewith; (g) approve
the parties’ proposed claim form; (h) direct the United States to furnish the Settlement
Administrator and Class Counsel with the information described in paragraph 6 pursuant to
the Privacy Act, 5 U.S.C. §552a(b)(11); and (i) schedule a final approval hearing.
6. Within 10 days of the Court’s entry of the order described in paragraph 5, the
United States will, subject to the issuance of a protective order, release to Class Counsel and the
Settlement Administrator the following information: (a) the names of potential Settlement Class
Members; (b) the last known postal addresses and electronic (email) addresses (if any) of
potential Settlement Class Members; (c) the phone numbers of potential Settlement Class
Members; (d) the employee ID numbers of potential Settlement Class Members; (5) the last
known work locations for each potential Settlement Class Member; (e) the last four digits of
potential Settlement Class Members’ Social Security numbers; and (f) the amounts due each
potential Settlement Class Member under the terms of this agreement, as calculated by
defendant’s expert and reviewed and confirmed by plaintiffs’ expert. Any information released
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by the United States to Class Counsel or the Settlement Administrator concerning potential
Settlement Class Members and any information provided by Settlement Class Members in
support of their claims is covered by the Privacy Act, 5 U.S.C. §552, and shall be used by the
Settlement Administrator and Class Counsel solely to carry out their duties under this
executed agreement.
7. Within 30 days of the Court’s entry of the order described in paragraph 5, the
AAFES will pay $50,000 of the Settlement Amount into the Qualified Settlement Trust
established by the Settlement Administrator to be used to offset the initial costs of the Settlement
Administrator for providing notices and other administrative costs.
8. In the event the Settlement Administrator receives a claim from any person whose
name is not contained in the list provided by the United States pursuant to paragraph 6 of this
agreement, and upon request of the Settlement Administrator, the United States will verify the
dates of employment, hours worked, compensation history and other information as may be
necessary to determine whether the person is a potential Settlement Class Member. AAFES will
provide the Settlement Administrator with a point of contact for this purpose.
9. Within 30 days after the United States provides the Settlement Administrator the
information described in paragraph 6, the Settlement Administrator will send to the postal and
available email addresses of each potential Settlement Class Member a copy of the notice and
claim form approved by the Court, as well as a Federal employee withholding allowance
certificate, also known as Form W-4. The date that the notice, claim form, and Form W-4 are
mailed to each potential Settlement Class Member shall be referred to as the Notice Date. The
notice will inform the recipients that they have 120 days from the Notice Date to submit any
claims.
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10. The notice provided by the Settlement Administrator to the potential Settlement
Class Members shall include the following general notice information: the definition of the
class; a general description of the litigation; material terms of the proposed settlement;
procedures for allocating and distributing funds from the Qualified Settlement Trust; Class
Counsel’s request for and amount of attorney fees, expenses, and costs; Class Representatives’
incentive awards; options available to Settlement Class Members, including manner, time limits,
forum, and form of any objections to the proposed settlement; the right of any Settlement Class
Member to enter an appearance pro se or through an attorney to object to the terms of the
proposed settlement; the mailing address, toll-free telephone number, and website of the
Settlement Administrator for class inquiries and clarifications regarding the proposed settlement;
and the binding effect of the proposed settlement on Settlement Class Members.
11. By no later than the Notice Date, the Settlement Administrator shall establish a
settlement website, supported by Google Adwords, containing a copy of the notice and claim
form approved by the Court and a Form W-4. The settlement website shall allow for the online
filing of claims and online submission of executed Form W-4s. Within 10 days of the
establishment of the settlement website, or as later agreed to by the parties, AAFES will publish
on its website a link to the settlement website, in a manner to be agreed upon by the parties,
which link shall remain on its website until the filing deadline for claims in this matter.
12. By no later than the Notice Date, at all AAFES facilities AAFES shall cause to be
posted prominently and conspicuously near any time clock where employees regularly punch in
and out for their shift, a notice, no smaller than 24 inches by 24 inches, in the form of Exhibit 1
hereto. Such notice shall remain posted for a period of 120 days after the Notice Date. In the
event that there is no time clock where employees punch in and out, then the aforesaid notice
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shall be posted in a place where employees are most likely to see it as is reasonably determined
by AAFES.
13. The Settlement Administrator will accept claims from potential Settlement Class
Members on the claim form approved by the Court, will determine eligibility for payment, and
will calculate and make payments to Settlement Class Members. All claims must be
accompanied by a fully-executed Form W-4.
14. Any Settlement Class Member may express to the Court his or her views in
support of, or in opposition to, the fairness, reasonableness, and adequacy of the proposed
settlement. If a Settlement Class Member objects to the settlement, such objection will be
considered only if received no later than 60 days following the Notice Date. The objection shall
be filed with the Court, with copies provided to Class Counsel and defendant’s counsel, and the
objection must include a signed, sworn statement that: (a) identifies the case name and number
(Russell et al. v. United States, No. 14-1062); (b) describes the basis for the objection, including
all citations to legal authority and evidence supporting the objection; (c) contains the objector’s
name, address, and telephone number, and, if represented by counsel, the name, address, email
address, and phone number of counsel; (d) indicates whether the objector has filed a claim form
and opted in to the settlement; and (e) indicates whether the objector intends to appear at the
fairness hearing.
15. Upon receipt of any statements or objections meeting the requirements of
paragraph 14, the Settlement Administrator shall organize the statements and objections in a
reasonable manner and deliver copies to counsel for the parties. The Settlement Administrator
also shall make such statements available to the Court in the manner the Court directs. Class
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Counsel and defendant’s counsel may respond to any objection within 14 days after receipt of
the objection.
16. Any Settlement Class Member who has submitted a timely objection to the
proposed settlement pursuant to paragraph 14 may appear in person or through counsel at the
fairness hearing and be heard to the extent allowed by the Court. Settlement Class Members
who submitted statements or objections to the Settlement Administrator need not appear at the
fairness hearing. Any Settlement Class Member who does not make and serve written objections
in the manner provided in paragraph 14 shall be deemed to have waived such objections and
shall forever be foreclosed from making any objections (by appeal or otherwise) to the proposed
settlement.
17. After the deadline for filing objections and the responses to objections has lapsed,
the Court will hold a final approval hearing at which it will consider any timely and properly
submitted objections made to the proposed settlement by Settlement Class Members, including
the payment of attorney fees and expenses or incentive payments. The Court will decide whether
to approve the settlement and an award of attorney fees and expenses, incentive payments, and
reasonable charges and expenses to be paid to the Settlement Administrator. Defendant agrees
that it will not object to Class Counsel’s application for reasonable attorney fees and for
reimbursement of expenses to be paid from the Qualified Settlement Trust, on the condition that
the requested fees and expenses do not exceed 40 percent of the Settlement Amount. Defendant
also agrees that it will not object to Class Counsel’s application for an incentive award of $5,000
to be paid from the Qualified Settlement Trust to each of the Representative Plaintiffs for their
time and effort and for the risks incurred in serving as the Class Representatives in this litigation.
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The parties shall request that the Court schedule a final approval hearing no later than 120 days
from the Notice Date.
18. If this settlement is not approved by the Court in its entirety, this settlement
agreement will be void and of no force and effect whatsoever.
19. AAFES will deposit the remainder of the Settlement Amount, $3,950,000, into
the Qualified Settlement Trust within 30 days of the Court’s order granting final approval of the
settlement. Within 15 days of receipt this amount, the Settlement Administrator will pay from
the Qualified Settlement Trust any of its reasonable remaining fees or costs, any attorney fees
and costs awarded to Class Counsel, any incentive fee awarded to the Representative Plaintiffs,
and any other reasonable settlement-related costs. As stated in paragraph 3(e), the funds
remaining after these payments comprise the Net Settlement Fund.
20. The Settlement Administrator shall calculate the amount due each Settlement
Class Member who opted in to the settlement and whose claim has been approved, and then will
determine, pursuant to paragraph 3(g), what amount shall be paid to each Settlement Class
Member from the Net Settlement Fund. In accordance with Federal, state and local tax laws, the
Settlement Administrator shall withhold such sums from each claimant’s individual settlement
payment as is required to comply with all applicable legal requirements. The Settlement
Administrator shall report the taxes withheld from the wages of each claimant to the Internal
Revenue Service as required by law via Form W-2, and shall timely remit such withheld funds,
plus any employer’s contributions for Social Security and Medicare, Federal and state
unemployment taxes, and other employer-side payroll taxes, to the appropriate Federal, state, and
local taxing authorities. The Settlement Administrator shall timely provide each Settlement
Class Member whose claim is approved with the appropriate documentation (e.g., a Form W-2)
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setting forth the amount paid to the claimant out of the Qualified Settlement Trust, any taxes
withheld, and any employer contributions that are made, in accordance with Federal, state, and
local tax requirements. Should Settlement Class Members have any disagreements or concerns
regarding the calculation and withholding of taxes, the Settlement Class Members shall resolve
these concerns with the Settlement Administrator. Except as otherwise specified in this
agreement, the United States will have no role or obligation in calculating, withholding, or
confirming the applicable taxes for each Settlement Class Member.
21. The Settlement Administrator will notify each claimant within the later of 60 days
after the granting of final approval of the settlement or the deadline for filing claims that either:
(a) the claim has been approved and the amount for which the claim has been approved; or (b)
the claim has been denied and the reason for the denial. The Settlement Administrator’s decision
shall be final, conclusive, and non-appealable.
22. Upon notifying Settlement Class Members that their claims have been approved
or denied, the Settlement Administrator will pay each approved claimant the amount due in the
form of a check from the Qualified Settlement Trust. The final day that settlement checks are
mailed to Settlement Class Members shall be referred to as the Payment Date.
23. If any settlement checks are returned as undeliverable, the Settlement
Administrator shall make a reasonable attempt to achieve payment to any such Settlement Class
Member at a valid address. In the event the Settlement Administrator is unable to locate a valid
address after making reasonable attempts, the amounts represented by such undeliverable checks
shall revert to the Net Settlement Fund. In the event a Settlement Class Member loses, destroys,
or is unable to take possession of a settlement check, the Settlement Administrator will void the
original check and then reissue a new check to the Settlement Class Member if such request is
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made by the Settlement Class Member within 90 days of the issuance of the original check. If
any settlement payment checks remain uncashed 90 days after issuance, such checks shall be
become void, and the amounts represented by such uncashed checks shall revert to the Net
Settlement Fund. In the event that claimants had theretofore been paid on a pro rata basis
pursuant to paragraph 3(g), the amounts of such uncashed and voided checks will, if it is deemed
economically feasible by the Settlement Administrator and Class Counsel, be redistributed to the
other approved claimants on a pro rata basis in a supplemental distribution. However, if
Settlement Class Members are paid 100 percent of their damages or if it is deemed impractical
and cost-prohibitive by the Settlement Administrator and Class Counsel to make a supplemental
distribution, then the amount of the uncashed and voided checks shall revert to AAFES.
24. Within 180 days of the Payment Date, the Settlement Administrator will provide
the parties with a full and final accounting of all payments made from the Qualified Settlement
Trust. Upon the Settlement Administrator providing the parties a full and final accounting of all
payments made from the Qualified Settlement Trust, and upon representation from the parties
that they are satisfied with the accounting, Class Counsel agrees to stipulate jointly with
defendant to the dismissal of this case with prejudice.
25. As part of the settlement negotiations, the parties examined the methodology used
by AAFES to calculate the shift differential pay owed to employees who work or are scheduled
to work second and third shifts. AAFES also examined and tested the payroll system used to
calculate the shift differential. The parties believe that implementations made to AAFES’s
payroll system as a result of this litigation had, by April 22, 2016, established a means of
accurately paying shift differential in accordance with the requirements of 5 U.S.C. § 5343(f), 5
C.F.R. § 532.505 et seq., and the various related regulations promulgated by DoD and AAFES.
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These changes also resulted in the AAFES payroll system accurately calculating lump sum
payments for accumulated leave upon separation, such that the parties believe that the
methodology of such calculations is now in full compliance with the requirements 5 U.S.C. §
5551, 5 C.F.R. § 550 et seq., and the various related regulations promulgated by the DoD and
AAFES. As part of this settlement agreement, AAFES agrees to maintain these procedures
hereafter and to monitor regularly its continued compliance with the requirement to pay its
employees shift differential and lump sum payments in accordance with applicable laws and
regulations.
26. This settlement agreement shall constitute a full and complete release of all shift
differential and lump sum claims arising out of or relating to the claims brought in this lawsuit,
or that could have been brought, against the United States, or any other agencies or
instrumentalities of the United States, including AAFES, or any agents, employees, or officers
thereof, by Settlement Class Members. Upon final approval of the settlement by the Court, each
Settlement Class Member employed or formerly employed by AAFES releases, waives, and
abandons any and all claims, causes of action, and demands arising out of or relating to the shift
differential and lump sum claims brought in this lawsuit, whether known or unknown, whether
arising in law or in equity, jointly or severally, which they, their heirs, executors, administrators
or assignees may have or hereafter acquire against the defendant or any of its agencies,
departments, officers, agents or employees, including but not limited to any claims for costs,
expenses, attorney fees, and damages of any sort.
27. This settlement agreement is for the purpose of settling this case, and for no other
purpose. Accordingly, this settlement agreement shall not bind the parties, nor shall it be cited or
otherwise referred to in any proceedings, whether judicial or administrative in nature, in which
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the parties or counsel for the parties have or may acquire an interest, except as is necessary to
effect the terms of this agreement.
28. This settlement agreement sets forth the entire agreement of the parties with
respect to the subject matter hereof as to all Settlement Class Members. No modification or
addition to this agreement or waiver of any right herein will be effective unless it is approved in
writing by counsel for the parties and by the Court. The parties agree that each fully participated
in the drafting of this settlement agreement.
29. In the event that a party believes that the other party has failed to perform an
obligation required by this settlement agreement or has violated the terms of the settlement
agreement, the non-breaching party must so notify the breaching party in writing and afford it
45 days to cure the breach prior to initiating any legal action to enforce this settlement agreement
or any of its provisions.
30. The parties agree to cooperate fully with each other and the Settlement
Administrator to effectuate this settlement and to resolve any matters that may arise with respect
to effectuation or interpretation of the settlement that are not expressly resolved by this
settlement agreement.
31. Plaintiffs’ counsel represents that they have been and are authorized to enter into
the agreement on behalf of plaintiffs.
32. This document constitutes a complete integration of the agreement between the
parties and supersedes any and all prior oral or written representations, understandings or
agreements among or between them.
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Russell v. United States
Court: United States Court of Federal Claims
Date filed: 2017-05-11
Citations: 132 Fed. Cl. 361
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