New York ex rel. Vacco v. Reebok International Ltd.

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OPINION AND ORDER

KOELTL, District Judge.

Fifty States, the District of Columbia, the Commonwealth of Puerto Rico, and The Virgin Islands (the “States”) have brought this action on their own behalf and as parens patriae on behalf of their residents to obtain *533monetary and equitable relief under federal and state antitrust laws. The defendants in this action are Reebok International LTD. (“Reebok”), a Massachusetts corporation, and its wholly-owned subsidiary, The Rock-port Company (“Rockport”). These companies manufacture and distribute Reebok and Rockport brand footwear to dealers located throughout the United States, Puerto Rico, and the Virgin Islands.

The States have entered into a settlement with the defendants pursuant to a Settlement Agreement which is subject to court approval under 15 U.S.C. § 15c(c). The Court preliminarily approved the Settlement on June 5, 1995.

Following preliminary approval, notice of the Settlement was given to affected consumers by nationwide publication during the period from July 9-14,1995. Consumers were advised of the existence and terms of the proposed Settlement and were given the opportunity to request further detailed information relating to the terms and disposition of the Settlement. Affected consumers were apprised of their right to either exclude their claims (“opt out” provision) or to object to the terms of the Settlement by September 8, 1995.1 Presently before the Court is the joint motion of all parties for final approval of the Settlement.

The States’ Complaint alleges that the Reebok and Rockport companies participated in a conspiracy to fix, raise, maintain, or stabilize the retail prices at which certain Reebok and Rockport brand products were sold to the public.

The Complaint alleges that beginning in 1990, the defendants solicited agreements with dealers to set the minimum sale price for certain Reebok and Rockport products. In alleged furtherance of that conspiracy, defendant Reebok implemented its “Centennial Pricing Policy” in January 1993, which set forth minimum retail prices on certain of its Reebok brand footwear, including the highly promoted “Prestige” products. In July 1993, defendant Rockport instituted a similar pricing policy, entitled the “Marathon Program,” which set forth minimum retail prices for certain Rockport brand footwear models. The Complaint further alleges that to effectuate these pricing policies, the defendants met with certain of their large retail accounts to discuss the terms and conditions of the policies and solicited and obtained agreements from these dealers not to advertise or sell below the minimum retail prices set forth in those policies. The Complaint alleges that Reebok and Rockport sales representatives monitored the retail prices at which Reebok and Rockport dealers advertised and sold certain products. When Reebok and Rockport representatives discovered that certain dealers were selling certain products at prices lower than the minimum retail prices set by the policies, these sales representatives solicited and obtained agreements from dealers to raise the selling prices to conform to the minimum prices Reebok and Rockport established.

The States assert that as a result of the resale price maintenance conspiracy, the purchase prices of certain Reebok and Rockport footwear products were fixed, raised, maintained, or stabilized at artificial, noncompetitive levels and that price competition among authorized dealers for the sale of Reebok and Rockport products to the public was thereby *534restrained. The States maintain that as a result of this conspiracy, purchasers of certain Reebok and Rockport products paid more for these products than they would have paid in a competitive market.

The plaintiffs have submitted the affidavit of Dr. Gary J. Dorman, an expert economist, in support of the Settlement. Dr. Dorman estimates that approximately 1,343,978 pairs of Reebok shoes were most affected by the Centennial Policy during the Reebok class damage period, January 1, 1993 thorough December 31, 1993, resulting in an average overcharge of $8.89 per pair, for a total of $5.2 million. (Dorman Aff. ¶¶ 15-17.) The Marathon policy during the Rockport class damage period of July 1, 1993 through December 31, 1993 most affected approximately 321,800 pairs of Rockport shoes at an average overcharge of $3.77 per pair for damages of $1,213,186. {Id. at ¶ 19.) The total damages asserted in the evidence by the plaintiffs is $6.44 million. {Id. at ¶21.)

The defendants vigorously contest liability and assert that if this case went to trial, the plaintiffs would be unable to establish violations of the antitrust laws. Moreover, the defendants contend that the plaintiffs would be unable to establish that the policies in question had an actual market impact. The defendants point to factors such as the fact that when the disputed Reebok policies went into effect the average price for Reebok products covered by the disputed policy fell while the prices of certain non-Reebok products rose. While the same data is not available for Rockport, the defendants’ expert economist Dr. Jerry A. Hausman concluded in his affidavit that “any impact resulting from the Rockport pricing policy was also likely to be negligible.” (Hausman Aff. at ¶ 8.)

The Settlement Agreement requires the defendants to pay the plaintiffs $9.5 million, of which $8 million will be used for distribution in lieu of direct consumer restitution and $1.5 million will be used to cover costs of administration and attorneys’ fees, including the cost of the published notice to the class of the proposed settlement.

The Settlement Agreement requires Reebok to pay $8 million into a Settlement Account which will be used to fund a distribution in lieu of consumer restitution. The States participate in the Settlement Account on a pro rata basis based on the percentage of the United States population located in each State. Each State may elect to receive its pro rata share of this sum as a monetary payment or in Reebok products. Arizona and Puerto Rico have elected to receive their share of the Settlement distribution in Reebok products and, according to the Settlement Agreement, will receive products with a suggested retail price twice the amount they would have received in a monetary distribution. The remaining States will receive a monetary distribution for public and nonprofit and/or charitable organizations with express conditions ensuring that the funds will be used for various athletic facilities, equipment, or services.

In connection with the approval of the Settlement, each of the States has submitted to the Court a detañed plan for distribution of its share of the Settlement fund. For example, the $560,857.00 that the State of New York will receive will be divided among 58 separate organizations including the Association for Chüdren with Down Syndrome, the New York State Special Olympics, and numerous Boys and Girls Clubs and Police Athletic Leagues throughout the State. The organizations must in turn submit quarterly reports outlining how the funds have been spent in accordance with the limitations on use in the Settlement Agreement.

The State of California, for another example, proposes distributing approximately $360,000 to refurbish or renovate fields, basketball courts, tracks, and tennis courts operated by various public and non-profit, charitable entities, including municipal tennis courts; $100,000 to be used by the Governor’s Coundl on Physical Fitness, a nonprofit, voluntary agency organized under state law that is responsible for administering sports programs for high schools throughout California; and approximately $440,000 to be used by the California Interscholastic Federation (“CIF”), a non-profit voluntary agency organized under state law that administers sports programs throughout the state. In compliance with the terms of *535the Settlement Agreement and subject to approval of the California Attorney General, CIF would distribute the funds to schools, city parks and recreation departments, and other community youth groups.

The Settlement also provides for substantial equitable relief. Reebok agrees to an injunction providing that for five years it will not violate specified provisions of the antitrust laws and it will notify its dealers that they are free to advertise and price Reebok products independently at whatever level they choose.

15 U.S.C. § 15c(c) requires court approval of the settlement of a 'parens patriae antitrust suit, but it does not specify the standards required for approval. Courts generally look to the standards used in approving class action settlements under Rule 23(e) of the Federal Rules of Civil Procedure. A settlement will be approved it if is fair, reasonable, and adequate. See State of New York ex rel. Koppell v. Keds Corp., No. 93-6708, 1994 WL 97201 (S.D.N.Y. Mar. 21, 1994) (standards for approving parens patriae antitrust settlements); States of New York and Maryland, et al. v. Nintendo of America, Inc., 775 F.Supp. 676, 680 (S.D.N.Y.1991) (same); In re Panasonic Consumer Electronics Antitrust Litig., No. 89-0368, 1989 WL 63240, at *2 (S.D.N.Y. June 5, 1989) (same); Maywalt v. Parker & Parsley Petroleum Co., 67 F.3d 1072, (2d Cir.1995) (standards for approving class action settlements); Weinberger v. Kendrick, 698 F.2d 61, 73 (2d Cir.1982), cert. denied sub nom. Lewy v. Weinberger, 464 U.S. 818, 104 S.Ct. 77, 78 L.Ed.2d 89 (1983) (same).

In assessing the fairness of a settlement, courts consider whether the settlement was the result of good-faith bargaining at arms-length by experienced counsel, and whether there is any evidence of collusion. See Maywalt v. Parker & Parsley Petroleum Co., 864 F.Supp. 1422 at 1427, (S.D.N.Y.1994) aff'd, 67 F.3d 1072, (2d Cir.1995); Keds, 1994 WL 97201, at *2; In re Panasonic, 1989 WL 63240, at *2; Nintendo, 775 F.Supp. at 680-81; City of Detroit v. Grinnell Corp., 495 F.2d 448, 463-66 (2d Cir.1974).

Here, both the States and the defendants are represented by vigorous, competent, and experienced counsel. While the parties have settled this lawsuit at the outset, this settlement was the result of a thorough investigation. The States advised the Court in their papers and at oral argument that the Settlement Agreement dated April 25, 1995 was reached only after an intense two-year investigation that began in February 1993. This investigation included reviewing documents produced pursuant to subpoenas to the defendants and dealers throughout the country, as well as interviews and statements under oath. There is in fact no hint of collusion in this case. In addition, all counsel believe that the Settlement is fair and reasonable. The Court finds that the Settlement Agreement was reached as a result of good faith, arms-length bargaining, without collusion. Such findings support a presumption that the settlement is fair. See Weinberger, 698 F.2d at 74 (lack of evidence of collusion, experience of counsel, and extensive discovery preceding settlement “are important indicia of the propriety of settlement negotiations”); Maywalt, 864 F.Supp. at 1427 (finding settlement is fair given experience of counsel, substantial discovery, and no evidence of bad faith); Keds, 1994 WL 97201, at *2 (upholding settlement given good-faith bargaining between experienced counsel and “intense and extended” negotiations); Nintendo, 775 F.Supp. at 680-81 (deeming settlement fair because it was reached “only after spirited arms-length negotiations by the parties”); In re Panasonic, 1989 WL 63240, at *2 (settlement agreements can be presumed fair if they are the result of good faith arms-length negotiations and the Court sees no indications of collusion).

To determine whether a settlement is reasonable and adequate, a court must consider the following factors:

(1) the relative strength of the plaintiffs’ case on the merits; (2) the existence of any difficulties of proof or strong defenses the plaintiffs are likely to encounter if the case goes to trial; (3) the anticipated duration and expense of additional litigation; (4) the solvency of the defendants and the likeli*536hood of recovery on a litigated judgement; and (5) the degree of opposition to the settlement.

Keds, 1994 WL 97201, at *2; Nintendo, 775 F.Supp. at 681. As in Keds, each of these factors, with the exception of the fourth, argues strongly for approval of the settlement. Id.

If this case did not settle, it would drag on for years as the parties conducted discovery throughout the country. Attorneys’ fees would escalate exponentially and could potentially reduce the amounts that the defendants would pay in settlement. The trial would be lengthy and complex because of the nationwide scope of the alleged activities.

While the plaintiffs assert they have a strong case, the defendants deny that the facts and the law would permit recovery. In particular, the defendants contend that there was no coercion in this case and that, in any event, the pricing policies at issue did not have an effect on prices. The defendants rely on the permissible scope of conduct under cases such as United States v. Colgate & Co., 250 U.S. 300, 39 S.Ct. 465, 63 L.Ed. 992 (1919), and Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984). “Under Colgate, the manufacturer can announce its resale prices in advance and refuse to deal with those who fail to comply. And a distributor is free to acquiesce in the manufacturer’s demand in order to avoid termination.” Monsanto, 465 U.S. at 761, 104 S.Ct. at 1469. The fact that the retailer conformed to the manufacturer’s suggested price is not proof that the manufacturer unlawfully “agreed” with a retailer on the prices the retailer would charge. See id. at 764 n. 9, 104 S.Ct. at 1471 n. 9 (“The concept of a ‘meeting of the minds’ or ‘a common scheme’ in a distributor-termination case includes more than a showing that the distributor conformed to the suggested price.”); The Jeanery, Inc. v. James Jeans, Inc., 849 F.2d 1148, 1154 (9th Cir.1988); Isaksen v. Vermont Castings, Inc., 825 F.2d 1158, 1164 (7th Cir.1987), cert. denied, 486 U.S. 1005, 108 S.Ct. 1728, 100 L.Ed.2d 193 (1988). As Judge Posner has explained:

[T]he mere fact of adherence to suggested retail prices does not establish agreement to adhere to them. If adherence alone could prove an agreement to adhere, the Colgate privilege — which allows a supplier to “coerce” the dealers’ adherence by threatening to cut him off if he doesn’t adhere, and which was strongly reaffirmed in Monsanto ... would be nugatory_ If a manufacturer distributes a price list, together with an announcement that he will cut off dealers who sell below the list prices, and dealers adhere to those prices because they don’t want to be cut off, there is a realistic sense in which the threat of termination has induced the dealers to agree not to cut prices — to agree, in other words, to fix prices. That is the argument against Colgate. Monsanto rejects it.

Isaksen, 825 F.2d at 1164.

The States’ case, therefore, would necessarily be risky, and, in any event, would require lengthy and expensive discovery and trial. As Judge Haight explained in approving the settlement in the Keds case, in words which are equally applicable here:

In the case at bar, [the defendant] has contended from its inception that its suggested retail pricing policy, with only the most limited exceptions, constituted unilateral and consequently lawful conduct under Colgate and its progeny. Plaintiffs would have to show otherwise. They would have to prove illicit agreements on a state-by-state and retailer-by-retailer basis. The hydra-headed litigation would be complex and costly and its outcome (or outcomes) by no means certain. There are also difficult questions in respect of the quantification of damages.

1994 WL 97201, at *3.

Balanced against these difficulties is the substantial amount of the Settlement here. Even subtracting the substantial costs of administration, the $8.0 million settlement fund is in excess of the actual damages estimates by the plaintiffs’ expert economist.

Finally, as Judge Haight commented in Keds, the method of distribution in this case is “pragmatic and sensible in the circumstances.” 1994 WL 97201, at *3; see also State of New York v. Dairylea Cooperative, Inc., No. 81-1891, 1985 WL 1825, at *2 *537(S.D.N.Y. June 26, 1985) (determining that an “appropriate and realistic distribution” of settlement sum involving alleged overcharging for milk is the dispersion of funds to schools for nutritional purposes). Indeed, the method of settlement is utterly fair. Unlike cases where there are warranty cards returned by consumer class or other similar documentation, it would be difficult in this case to locate individual purchasers. See, e.g., Keds, 1994 WL 97201, at *3 (noting that it would be “difficult if not impossible to trace individual consumers” given the absence of warranty cards). The class covered by the settlement consists of purchasers of Reebok and Rockport footwear for the period January 1, 1990 to December 31, 1994, although the States maintain that they have only found evidence of sporadic instances with little or no effect on prices except for the two pricing policies and class damage periods described above, and even in those damage periods, only a fraction of the shoes actually sold, according to the plaintiffs’ economist, were sold at artificially inflated prices. Thus, the number of potential consumers would be in the millions, although those who were actually affected would be a smaller number but still, as explained above, very substantial.

The amount of the potential overcharge is so small as to undercut the incentive of individual consumers to attempt to obtain a refund and would dramatically increase the costs of administering any settlement. See Dairylea, 1985 WL 1825, at *1 (finding that it would be disproportionately expensive to return monies through devices like sworn claim forms). Indeed, the actual administrative cost of processing claims and mailing out refund checks is estimated to be about $2.47 per claim. (MacGregor Aff. ¶ 16.) Moreover, the potential for fraudulent claims is enormous because there are no warranty cards and no other reasonable methods of assuring that the products for which a refund is sought were actually purchased during the damage period. The distribution method here serves the general public interest, the interests of the plaintiffs and the consumers, and the public interests of disgorgement and deterrence. The distribution procedure included in the Settlement Agreement is thus fair, reasonable, and adequate.2

The lack of opposition to the settlement also supports its approval. See Keds, 1994 WL 97201, at *3 (“paucity of objections ... militates in favor of the settlements”). The number of oppositions could best be described as minuscule. Out of the millions of potential consumers, only 611 class members opted out of the settlement, 209 class members registered informal objections, and only 13 others filed formal objections. These objections, which primarily seek personal refunds, do not raise any grounds that lead the Court to conclude that the settlement is not fair, reasonable, and adequate.

Attorneys representing plaintiffs in class actions in Florida, which raise similar claims to those in this case, appeared at the settlement hearing. Although the notice in this case required any objections to be filed by September 8, 1995, and neither the attorneys nor their clients raised such objections by that time, the Court heard the objections in order to determine whether there were valid objections to the settlement. Similarly, the Court received an objection dated October 12, 1995 from counsel representing plaintiffs *538in actions filed in Alabama, Georgia, and New York. Each of the actions appear to have been filed after the Settlement Agreement in this case was entered into. These objections, like those individual objections mentioned above, object to the adequacy of the Settlement and in particular urge that the Court should establish a method of individual refunds. The Court has in fact considered these objections and, for the reasons already explained, finds that individual refunds would be impractical, that the method of distribution in the Settlement Agreement is fair, reasonable, and adequate, and that it will accomplish the purposes of the antitrust laws in a way which any effort at individual refunds — which would not only be impractical but would be consumed in the costs of its own administration — would not.3

Therefore, the Settlement is approved. Separate orders are being entered approving the Settlement Agreement and entering the Final Judgment and Consent Decree.

SO ORDERED.

ORDER

The Court having considered the Settlement Agreement between the Plaintiff States and Defendants Reebok International Ltd., and The Rockport Company, Inc., the Joint Motion for Approval of the Settlement Agreement, the Plaintiffs’ and Defendants’ Memoranda in Support of the Joint Motion for Final Approval and the attachments thereto, the other pleadings previously filed in this action, and the Court having held a hearing on said motion on October 18, 1995, and having duly considered the objections to the Settlement Agreement, and having excluded from the Settlement those individuals, whose names are listed in Attachment A hereto, who have expressly opted-out of the Settlement Agreement, the Court finds that the Settlement Agreement is fair, reasonable and adequate and it is therefore this 20th day of October 1995,

ORDERED that the Settlement Agreement is approved by the Court, and it is further

ORDERED that the parties are authorized to direct that payments be made from the Settlement Account in accordance with the Settlement Agreement.

ATTACHMENT A

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FINAL JUDGMENT AND CONSENT DECREE

The States of New York, Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, the District of Columbia, the Commonwealth of Puerto Rico and the United States Virgin Islands (“Plaintiff States” or “Plaintiffs” or “States”) have filed a Complaint for damages and injunctive relief on their own behalf and as parens patriae on behalf of natural person citizens residing in the Plaintiff States who purchased Reebok Products, as defined in the Complaint herein, during the period of the alleged conspiracy, against the Defendant Reebok International Ltd. and The Rockport Company (collectively “Defendant”) alleging violations of federal and state antitrust laws. Defendant denies the allegations stated therein.

Plaintiffs and Defendant desire to resolve any and all disputes arising from the Complaint. These parties have entered into a Settlement Agreement which has been filed with the Court and is incorporated by reference herein. In full and final settlement of the claims set forth in the Complaint, Defendant has agreed to pay compensatory damages and administration costs as set forth in the Settlement Agreement executed on April 25, 1995 (the “Settlement Agreement”). Defendant has also agreed to entry of this Final Judgment and Consent Decree. Plaintiffs have agreed to execute Releases of their *548claims against Defendant and to release the claims of natural persons residing in the States who have not excluded their claims, in accordance with the terms of the Settlement Agreement.

Notice of the Settlement was given pursuant to Court order in accordance with 15 U.S.C. § 15c and the requirements of due process. The Notice was the best notice practicable under the circumstances.

An opportunity to be heard was given to all persons requesting to be heard in accordance with this Court’s orders. The Court reviewed the terms of the Settlement, the submissions of the parties in support of it, and the comments received in response to the notice. After a hearing held on October 13, 1995, the Court approved the Settlement Agreement on 10/20/95, and determined it to be in all respects fair, reasonable and adequate. Said Order, which expressly excludes from the Settlement those natural person citizens who elected to opt-out of the Settlement, was entered on 10/20/95.

NOW, THEREFORE, without trial or adjudication of any issue of law or fact, before the taking of any testimony at trial, without the admission of liability or wrongdoing by Defendant and upon the consent of the parties hereto,

IT IS HEREBY ORDERED, ADJUDGED AND DECREED:

I

JURISDICTION

The Court has jurisdiction over the subject matter of this action and the parties hereto. The Complaint raises claims against Defendant under Section 1 of the Sherman Act (15 U.S.C. § 1), Section 4 of the Clayton Act (15 U.S.C. § 15), Section 4C of the Clayton Act (15 U.S.C. § 15c), and Section 16 of the Clayton Act (15 U.S.C. § 26). Jurisdiction lies in this Court pursuant to 28 U.S.C. § 15. The Complaint also raises pendent state claims for equitable and other relief.

II

DEFINITIONS

As used in this Final Judgment and Consent Decree:

a. “Dealer” means any person, corporation or firm not owned by Reebok that in the course of its business sells Reebok Products in or into the United States of America;

b. “Defendant” or “Reebok” means Reebok International Ltd. and its affiliates, parents, subsidiaries, divisions and other organizational units of any kind, including The Rockport Company, that sold Reebok and Rockport Products as defined herein, their successors and assigns and their present and former officers, directors, employees, agents, representatives and other persons acting on their behalf;

c. “Reebok Products” means all Reebok and Rockport brand footwear products offered for sale to consumers located in the Plaintiff States or to Dealers.

e. “Plaintiffs” or “Plaintiff States” means the State of New York and any other State, the District of Columbia, Puerto Rico and the United States Virgin Islands which opt to enter into the Settlement Agreement as provided in Section IX thereof, in their sovereign capacity and as parens patriae on behalf of all natural person citizens of such Plaintiff States who have purchased Reebok Products during the period of the alleged conspiracy (January 1, 1990 to and including December 31, 1994);

f. “Resale Price” means any price, price floor, price ceiling, price range, or any markup formula, or margin of profit used by any Dealer for pricing any Reebok Products. Such term includes, but is not limited to, any suggested, established or customary resale price, as well as the retail price advertised, promoted or offered for sale by any Dealer.

Ill

APPLICABILITY

This Final Judgment and Consent Decree shall apply to the parties to this lawsuit.

TV

INJUNCTION

A. For a period of five (5) years from the date this Final Judgment and Consent De*549cree is entered, Reebok will not enter into any contract, combination, conspiracy, agreement or arrangement with any Dealer to fix, lower, raise, peg, maintain or stabilize the Retail Prices at which Reebok Products are advertised and sold to end-user consumers.

B. For a period of five (5) years from the date this Final Judgment and Consent Decree is entered, Reebok will not terminate, suspend or fail to fill orders of any Dealer of Reebok Products or reduce the supply of or discriminate in delivery, credit or other terms provided to any Dealer of Reebok Products in order to secure or attempt to secure any commitment or assurance from any Dealer, or to coerce said Dealer, to adhere to any of Reebok’s suggested retail pricing policies for Reebok Products. Notwithstanding the foregoing, Reebok retains the right to terminate unilaterally any Dealer for lawful business reasons that are not inconsistent with this or any other paragraph of this Final Judgment and Consent Decree.

C. Within thirty (30) days after the date the Final Judgment and Consent Decree is entered, Reebok will send the letter affixed as Attachment B to the Settlement Agreement to all of its then current Dealers of Reebok Products.

D. For a period of five (5) years from the date this Judgment is entered, Reebok shall notify its Dealers of Reebok Products that it is their right to determine independently the prices at which they will advertise and sell Reebok Products to end-user consumers. Reebok shall provide this notice by affixing a notice of disclosure (the “Disclosure”) to every list of suggested retail prices and minimum advertised prices for any Reebok Products printed subsequent to the date of entry of this Judgment and provided to Dealers. The Disclosure shall clearly and conspicuously state the following on any list, advertising, book catalogue or promotional material for Reebok Products where Defendant has suggested any Resale Price to any Dealer:

ALTHOUGH [REEBOK INTERNATIONAL LTD.] or [THE ROCKPORT COMPANY] MAY SUGGEST RESALE PRICES FOR PRODUCTS, RETAILERS ARE FREE TO DETERMINE ON THEIR OWN THE PRICES AT WHICH THEY WILL ADVERTISE AND SELL [REEBOK] OR [ROCKPORT] PRODUCTS.

E. This Final Judgment and Consent Decree shall not be construed in any way to limit the right of Reebok to preannounce or suggest to its Dealers or distributors retail prices for Reebok Products and to unilaterally refuse to deal with those who fail to comply or to engage in any other behavior that is otherwise permitted by federal and state antitrust laws. Accordingly, if a cooperative advertising program established and maintained by Reebok does not violate federal or state antitrust laws, it will not constitute a violation of the injunctive provisions herein.

F. The Plaintiff States, and all natural person citizens residing in those States who purchased Reebok Products during the period January 1, 1990 — December 31, 1994 (except citizens who have timely and properly requested exclusion) are permanently barred and enjoined from prosecuting against Reebok, Rockport, their affiliates, parents, subsidiaries, divisions and other organizational units of any kind, and their present and former directors, officers, employees, agents, representatives and other persons acting on their behalf, successors and assigns, and against the John Doe defendants or any other Dealer not named as a defendant, any of the claims foreclosed or released in accordance with the Settlement Agreement, including any claim regarding the conduct alleged in the complaint. '

V

COMPLIANCE

For purposes of determining and securing compliance with this Final Judgment and Consent Decree, duly authorized representatives of the Plaintiff States shall be permitted upon thirty (30) days prior written notice:

a. Reasonable access during normal office hours to any and all relevant and non-privileged records and documents in the possession, custody, or control of Defendant which relate to any of the matters contained herein or in the Settlement Agreement.

*550b. Subject to the reasonable convenience of Defendant to conduct interviews of any of the directors, officers, employees, agents, and any other persons acting on their behalf, each of whom may have counsel present, relating to any non-privileged matter contained herein or in the Settlement Agreement.

c. Defendant retains the right to object to any request under paragraphs (a) or (b) above within ten (10) days after its receipt on the grounds that the request is not reasonable, or not relevant to the matters contained herein or in the Settlement Agreement, or otherwise is not in accordance with law. Any such objection shall be directed to this Court for a ruling, with service by mail of the objection upon the State of New York.

d. The violation of any of the terms of Paragraph IV(A) of this Final Judgment and Consent Decree shall constitute a violation of federal and state antitrust laws for which civil remedies may be sought by the New York State Attorney General or the Attorney General of the State in which the violation occurred pursuant to 15 U.S.C. §§ 1, 15, 15e and 26 and relevant state antitrust law upon application to this Court.

e. If the Attorney General of any Plaintiff State determines that Defendant has violated the terms of Section IV of this Final Judgment and Consent Decree, he shall give Defendant written notice of the violation and Defendant shall have fifteen (15) working days to respond in writing. If the State is not satisfied with Defendant’s response, it shall notify Defendant in writing and Defendant shall have fifteen (15) working days to cure such non-compliance. If after such time Defendant has not cured the violation to the State’s satisfaction, the State may seek penalties for contempt for violation of any paragraph of this Final Judgment and Consent Decree and with respect to alleged violations of Section IV(A) may seek the civil remedies referred to in Section V(d).

VI

JURISDICTION RETAINED

Without affecting the finality of this Final Judgment, jurisdiction shall be retained by this Court for the purpose of enabling any party hereto to apply for such further orders and directions as may be necessary or appropriate for the construction or enforcement of this Final Judgment and Consent Decree, the ruling upon any objection made pursuant to Section V, the modification of any of the provisions hereto to the extent such modification is permitted, and the remedy of a violation of any of the provisions contained herein. This Court shall have the authority to specifically enforce the provisions of this Final Judgment and Consent Decree.

VII

On the fifth anniversary date of this Final Judgment and Consent Decree, said Final Judgment and Consent Decree shall automatically terminate without any action by either party or the Court.

So ordered.

. In this case, the Court approved publication notice to the class, as the parens patriae statute permits. See 15 U.S.C. § 15c(b)(l) (providing that notice by publication is appropriate in par-ens patriae actions); see also State of New York and Maryland et al. v. Nintendo of America, Inc., No. 91-2498, 1991 WL 148830, at *3-*4 (S.D.N.Y. July 31, 1991) and cases cited therein. This was plainly the best notice practicable under the circumstances given the enormous number of potential class numbers who had purchased products, the lack of warranty cards to identify customers, and the high costs of individual notice. Even the costs of newspaper notice were veiy high. Notice by publication commenced on July 9, 1995. The published notice was reasonable notice to the class consistent with due process. Notice of the Settlement Agreement was published in newspapers circulated in each Plaintiff State. The size of the newspaper notices was 3 columns by 8 inches of display advertising, appearing once in the Sunday edition of each newspaper agreed upon by the parties, or if there was no Sunday edition, once during the week of July 9, 1995. Notices appeared in a total of 808 newspapers at a total cost of $875,571.35. The notices instructed consumers that they could write to the Settlement Trustee for more information regarding the terms of the Settlement.

. 15 U.S.C. § 15e provides:

Monetary relief recovered in an action under 15c(a)(l) of this title shall—
(1) be distributed in such manner as the district court in its discretion may authorize; or
(2) be deemed a civil penalty by the court and deposited with the State as general revenues;
subject in either case to the requirement that any distribution procedure adopted afford each person a reasonable opportunity to secure his appropriate portion of the net monetary relief.

The distribution procedure in this case satisfies the requirements of § 15e. In the very similar circumstances of the Dairylea distribution, the court found that the distribution procedure satisfied the statute because any distribution procedure per person or per household would be so small that it would be consumed by administrative costs. There was thus no realistic distribution procedure that afforded anyone a reasonable opportunily to secure an appropriate portion. The procedure here, which provides a public benefit directed at those most likely to use the affected products, is the most reasonable distribution procedure to provide a realistic benefit for the class.

. The attorneys for the plaintiffs in the Alabama, New York, and Georgia actions also complain about the adequacy of the notice to the class to advise consumers about the possibility of opt-outs and the date of the settlement hearing. As explained above in note 1, the notice was in fact fair and adequate and was the best notice practicable in the circumstances of this case.