Case 2:19-cv-00463-RAJ-LRL Document 590 Filed 04/05/21 Page 1 of 9 PageID# 21115
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`Norfolk Division
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`D&M FARMS, MARK HASTY, DUSTIN
`LAND, ROCKY CREEK PEANUT FARMS,
`LLC, DANIEL HO WELL, and, LONNIE
`GILBERT, individually and on behalf
`of all others similarly situated;
`
`Plaintiffs,
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`FILED
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`APH - 5 2021
`
`CLERK, U.S. DISTRICT COURT
`NORFOLK, VA
`
`V.
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`CIVIL ACTION NO. 2:19-cv-463
`
`BIRDSONG CORPORATION, GOLDEN
`PEANUT COMPANY, LLC, and OLAM
`PEANUT SHELLING COMPANY, INC.
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`Defendants.
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`MEMORANDUM OPINION AND ORDER
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`Before the Court is Plaintiffs' Motion for Final Approval of Settlements. ECF No. 527. On
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`December 23, 2020, the Court granted Preliminary Settlement Approval for both the 01am and
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`Birdsong settlement classes in two separate orders. ECF Nos. 514 and 515. On Thursday, March
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`25,2020, the Court held a Settlement Fairness Hearing. ECF No. 586. For the reasons stated below,
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`Plaintiffs' Motion for Final Approval of Settlements is GRANTED.
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`I. FACTUAL AND PROCEDURAL HISTORY
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`Plaintiffs D&M FARMS, MARK HASTY, DUSTIN LAND, ROCKY CREEK PEANUT
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`FARMS, LLC, DANIEL HO WELL, and LONNIE GILBERT, individually and on behalf of all
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`others similarly situated (collectively "Plaintiffs") filed their initial complaint on September 5,
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`2019 against Defendants BIRDSONG CORPORATION, GOLDEN PEANUT COMPANY, LLC,
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`and OLAM PEANUT SHELLING COMPANY, INC.'s (collectively "Defendants"). ECF No. 1.
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`Plaintiffs filed a Second Amended Class Action Complaint (the "Complaint") on May 27, 2020.
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`1
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`Case 2:19-cv-00463-RAJ-LRL Document 590 Filed 04/05/21 Page 2 of 9 PageID# 21116
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`ECF No. 148. Plaintiffs are a group of peanut farmers who sell raw, harvested runner peanuts to
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`the Defendants (also known as "shelters") to be processed and sold to food companies or other
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`manufacturers. Id. at 1. From approximately 2011 to 2013, "the Peanut industry experienced
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`drastic weather-related price changes that made it difficult for Defendants [...] to manage risk and
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`plan for production." Id. at 2. Since in or around January 2014, "the prices paid by shelters to
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`Peanut farmers for Runner[] [peanuts] have remained remarkably flat and unchanged, despite
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`significant supply disruptions" such as hurricanes. Id. Because of this significant difference in
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`pricing norms within the industry. Plaintiffs accuse Defendants of "conspir[ing] and collud[ing]
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`with one another to stabilize and depress Runner [peanut] prices." Id.
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`According to the Complaint, Defendants used their 80-90% market share in the peanut
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`selling industry to facilitate a price fixing conspiracy to depress the price of runner peanuts. Id. at
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`1. Plaintiffs seek a single claim for relief, on behalf of a nationwide class, under Section 1 of the
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`Sherman Antitrust Act. Id. at 36. The purported class included "[a]ll farmers who sold Runner
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`Peanuts to Defendants or their co-conspirators in the United States from at least as early as Januaiy
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`1, 2014 until the present." Id. at 33.
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`On December 2, 2020, the Court certified the following class:
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`"All persons or entities in the United States who sold raw, harvested runner peanuts to
`any of the Defendants, their subsidiaries or joint-ventures, from January 1, 2014
`through December 31,2019 (the "Class Period"). Specifically excluded from this Class
`are the Defendants; the officers, directors or employees of any Defendant; any entity
`in which any Defendant has a controlling interest; and any affiliate, legal
`representative, heir or assign of any Defendant."
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`ECF No. 496.
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`Prior to class certification, Plaintiffs filed a Motion for Settlement with Defendant 01am
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`Peanut Shelling Company, Inc. ("01am") on October 23, 2020. ECF No. 300. 01am filed a
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`Response in Support of Plaintiffs' Motion for Settlement on October 26,2020. ECF No. 305. Soon
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`after, Plaintiffs filed a Motion for Settlement with Defendant Birdsong Corporation ("Birdsong")
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`on November 2, 2020. ECF No. 368. Defendant Birdsong did not file a response.
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`The Court held a preliminary hearing on Plaintiffs' settlement motions on Wednesday,
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`December 16,2020. ECF No. 507. The Court ultimately entered separate orders for both settlement
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`classes on December 23, 2020. ECF Nos. 514 and 515. Plaintiffs issued notice of the settlement to
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`9,369 prospective class members beginning January 12, 2021. ECF No. 582 at 2.
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`On January 13, 2021, Plaintiffs filed a Motion for Final Approval of Settlements with
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`Defendants 01am and Birdsong. ECF No. 527. Defendants did not file responses. On March 25,
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`2021, the Court held a Fairness Hearing, during which the parties reported no objections to the
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`settlement from any prospective class members. ECF No. 586. Plaintiffs did report that of the
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`9,369 potential class members, three individuals and/or entities elected to opt out of the class
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`action. ECF No. 582 at 1. Having notified the prospective class and with no outstanding objections.
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`Plaintiffs' Motion for Final Approval of Settlements is ripe for judicial determination.
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`A. The Legal Standardfor Class Action Settlements
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`II. LEGAL STANDARD
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`Rule 23(e) of the Federal Rules of Civil Procedure provides that no class action "shall...
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`be dismissed or compromised without the approval of the court." To that end, "[t]he approval of a
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`proposed settlement agreement is in the sound discretion of the Court." Strong v. JHM Mortgage
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`Sec. Ltd. P'ship, 890 F. Supp. 499, 501 (E.D. Va. 1995) (citations omitted). Furthermore, for the
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`Court to approve a class action settlement, that proposed settlement must be "fair, adequate and
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`reasonable to Class Members." FED. R. CIV. P. 23(e)(2); see also In re: Lumber Liquidators
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`Chinese-Manufactured Flooring Prods. Mktg., Sales Practices and Prods. Liab. Litig., 952 F.3d
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`471, 484 (4th Cir. 2020) ("considerable deference" given to trial court in determining whether "to
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`approve a class-action settlement as fair, reasonable, and adequate") (internal citation omitted).
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`"[TJhere is a strong initial presumption that the compromise is fair and reasonable." In re
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`Microstrategy, Inc. Sec. Litig., 148 F.Supp.2d 654, 663 (E.D. Va. 200\){^'MicroStrategy 7").
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`Courts are to "appraise the reasonableness of particular class-action settlements on a case-by-case
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`basis, in light of the relevant circumstances." Evans v. JeffD., 475 U.S. 717, 742 (1986).
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`Furthermore, Rule 23(e)(2) lists various factors to consider when determining the fairness,
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`reasonableness, and adequacy of parties' settlements. These factors include whether:
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`(A) the class representatives and class counsel have adequately represented the class;
`(B) the proposal was negotiated at arm's length;
`(C) the relief provided for the class is adequate, taking into account:
`(i) the costs, risks, and delay of trial and appeal;
`(ii) the effectiveness of any proposed method of distributing relief to the class,
`including the method of processing class-member claims;
`(iii) the terms of any proposed award of attorney's fees, including timing of
`payment; and
`(iv) any agreement required to be identified under Rule 23(e)(3); and
`(D) the proposal treats class members equitably relative to each other.
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`Fed. R. Civ. P. Rule 23(e)(2).
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`Additionally, the United States Court of Appeals for the Fourth Circuit (the "Fourth
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`Circuit") provides district courts with a two-level analysis when evaluating a settlement's fairness
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`and adequacy. In re Jiffy Lube Securities Litigation, 927 F.2d 155, 158-59 (4th Cir. 1991). First,
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`the relevant factors in assessing a settlement's fairness are:
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`"(1) the posture of the case at the time settlement was proposed; (2) the extent of
`discovery that had been conducted; (3) the circumstances surrounding the
`negotiations; and (4) the experience of counsel in the area of [that] class action
`litigation."
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`Jiffy Lube, 927 F.2d at 159. Next, a settlement's adequacy is determined by:
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`"(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 expenses of additional
`litigation; (4) the solvency of the defendants and the likelihood of recovery on a
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`litigated judgment; and (5) the degree of opposition to the settlement."
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`Id. at 159. After the Fourth Circuit created its fairness and adequacy factors, the Rule 23(e)(2)
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`factors listed above were added to the Federal Rules of Civil Procedure on December 1, 2018. See
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`Cantu-Guerrero v. Lumber Liquidators, Inc., 952 F.3d 471, n. 8 (4th Cir. 2020). The Fourth Circuit
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`acknowledges in Cantu-Guerrero v. Lumber Liquidators, Inc. that "because our factors for
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`assessing class-action settlements almost completely overlap with the new Rule 23(e)(2) factors,
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`the outcome[s] [are] the same under both our factors and the Rule's factors." Id. Taking this
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`substantial overlap into consideration, the Court will examine Plaintiffs' Motion for Settlement
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`based upon the Rule 23(e)(2) factors.
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`III. DISCUSSION
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`In assessing the parties' proposed settlements, the Court notes that Defendants did not
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`object to Plaintiffs' Motion for Final Approval of the 01am and Birdsong class settlements.
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`Nonetheless, the Court will apply the Rule 23(e)(2) factors to the parties proposed settlements to
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`ensure "protection of class members whose rights may not have been given adequate consideration
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`during the settlement negotiations."
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`927 F.2d at 158. The following analyzes each factor
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`within Rule 23(e)(2).
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`A. The class representatives and class counsel have adequately represented the class.
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`Upon review, the Court finds that Plaintiffs' class representatives - D&M FARMS, MARK
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`HASTY, DUSTIN LAND, ROCKY CREEK PEANUT FARMS, LLC, DANIEL HO WELL, and
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`LONNIE GILBERT - adequately represent the class. As is standard in all class action litigation, it
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`is imperative that the named plaintiffs and the class "share common objectives and the same factual
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`and legal positions," ensuring that there are no "fundamental" conflicts that go to the "heart of the
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`litigation." Gunnells v. Healthplan Sers., Inc., 348 F.3d 417, 430-31 (4th Cir. 2003).
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`Here, the named Plaintiffs are a group of peanut farmers who sell raw, harvested runner
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`peanuts to the Defendants. As persons and entities who fall squarely within the certified class, the
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`Court finds no evidence to suggest that the interests of the named Plaintiffs in any way contradicts
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`that of the certified class.
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`Additionally, counsel for Plaintiffs have appeared before the Court in this matter for over
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`a year and half. In that time, the Court has found counsel to be adequate and capable of competently
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`adjudicating the class claim. Accordingly, the requirements for subsection (A) of Rule 23(e)(2) are
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`met.
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`B. The proposal was negotiated at arm's length.
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`The parties were at all times represented by counsel in this action. Additionally, "the parties
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`had nearly completed fact and expert discovery and, thus, were acutely aware of strengths and
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`weaknesses of their respective cases" at the time of settlement negotiations. ECF No. 528 at 10.
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`Accordingly, the requirements for subsection (B) of Rule 23(e)(2) are also satisfied.
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`C. The reliefprovided for the class is adequate.
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`To date. Plaintiffs, Defendant 01am, and Defendant Birdsong have agreed to a total
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`settlement fund of $57,750,000. Pursuant to Rule 23(e)(2), when considering the adequacy of
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`relief, the Court will examine factors such as: (i) the costs, risks, and delay of trial and appeal; (ii)
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`the effectiveness of any proposed method of distributing relief to the class, (iii) the terms of any
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`proposed award of attorney's fees; and (iv) any agreement required to be identified under Rule
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`23(e)(3).
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`With regard to factors (iii) and (iv), there are no additional agreements pursuant to Rule
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`23(e)(3) for the Court to address and the parties did not negotiate attorneys' fees in either the 01am
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`or Birdsong settlement proposals. See ECF No. 528 at 15. Additionally, Plaintiffs' counsel has yet
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`to file any motion for attorneys' fees. Instead, Plaintiffs' counsel intends to file a "motion seeking
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`an award of attorneys' fees and service awards [] after Plaintiffs' claims against Golden Peanut
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`have been resolved." Id.
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`Tuming to the costs, risks, and any potential delay of trial and appeal, adjudication of
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`Plaintiffs' claims has already proven costly. Plaintiffs submitted an affidavit to the Court detailing
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`their costs accrued thus far in litigation. EOF No. 530. These costs include, but are not limited to,
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`costs of nearly $1.4 million for experts and over $125,000 for jury consultation and trial graphics.
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`Id. Additionally, inherent in all litigation is risk which certainly impacts that settlement total.
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`Moreover, future appeals of any jury outcome are not only possible, but likely given the amount
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`of money at stake. In sum, any further litigation of this case would be lengthy, complex, and
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`expensive, making settlement favorable to the Court. See MicroStrategy 7, 148 F. Supp. 2d at 667
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`(where the court granted plaintiffs' motion for settlement, in part, because "additional litigation of
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`plaintiffs' claims... would likely have been protracted and costly, requiring extensive expert
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`testimony.... [Additionally,] there is little doubt that a jury verdict for either side would only have
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`ushered in a new round of litigation in the Fourth Circuit and beyond, thus extending the duration
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`of the case and significantly delaying any relief for plaintiffs.").
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`Lastly, Plaintiffs proposed method of distribution is "that the Settlement Fund, plus accrued
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`interest, will be allocated among approved claimants according to the amount of their recognized
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`sales of Runner Peanuts to Defendants during the Class Period, after payment of attorneys' fees,
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`litigation and administration costs and expenses, and service awards for Class Representatives."
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`ECF No. 528 at 20. This type of distribution plan is commonly referred to as a pro-rata distribution
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`plan which has been previously approved by the Court in similar class action litigation. See
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`MicroStrategy /, 148 F. Supp. 2d at 668 (where the court approved plaintiffs' pro rata distribution
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`noting that such distribution plans "generally treat[] all class members' losses in the same way.").
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`Moreover, the plan does not award additional funds to any one type of plaintiff and ensures fair
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`treatment of each member of the class. Accordingly, Plaintiffs' pro rata distribution method is fair
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`and reasonable.
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`In sum, the terms of the parties' settlements appear to adequately provide relief to the class.
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`D. The proposal treats class members equitably relative to each other.
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`The Court, having previously certified the class in Plaintiffs' cause of action, now turns to
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`whether the settlement proposals will treat class members equitably. The class will be issued an
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`award based upon the amount of their individually recognized sales of runner peanuts. This type
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`of distribution is fair and equitable as to ensure that class members are not over- or under
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`compensated for any alleged harm.
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`Importantly, however. Plaintiffs' counsel notes that counsel may seek a service award for
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`the class representatives. EOF No. 528 at 16. "Service awards are 'intended to compensate class
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`representatives for work done on behalf of the class, to make up for financial or reputational risk
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`undertaken in bringing the action, and sometimes, to recognize their willingness to act as a private
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`attomey general." Galloway v. Williams, No. 3:19-cv-470, 2020 WL 7482191, at *6 (E.D. Va.
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`Dec. 18, 2020) {quoting Berry v. Schulman, 807 F.3d 600, 613 (4th Cir. 2015)). Generally,
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`"[c]ourts recognize the purpose and appropriateness of service awards to Class Representatives."
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`See Brown v. Transurban USA, Inc., 318 F.R.D. 560, 578 (E.D. Va. 2016). Should the Court grant
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`a service award to the class representatives, the reward will be fair and reasonable in accordance
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`with the requirements under Rule 23(e)(2). Therefore, the proposed 01am and Birdsong class
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`settlements treat class members equitably relative to one another.
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`III. CONCLUSION
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`For the reasons stated above, Plaintiffs' Motion for Final Approval of Settlements for
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`Defendants 01am and Birdsong is GRANTED.
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`The Clerk is DIRECTED to provide a copy of this Memorandum Opinion and Order to
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`counsel of record.
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`IT IS SO ORDERED.
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`Norfolk, Virginia
`April
`2021
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`ED ST A
`
`CT JUDGE
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`