`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`Norfolk Division
`
`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,
`
`FILED
`
`APH - 5 2021
`
`CLERK, U.S. DISTRICT COURT
`NORFOLK, VA
`
`V.
`
`CIVIL ACTION NO. 2:19-cv-463
`
`BIRDSONG CORPORATION, GOLDEN
`PEANUT COMPANY, LLC, and OLAM
`PEANUT SHELLING COMPANY, INC.
`
`Defendants.
`
`MEMORANDUM OPINION AND ORDER
`
`Before the Court is Plaintiffs' Motion for Final Approval of Settlements. ECF No. 527. On
`
`December 23, 2020, the Court granted Preliminary Settlement Approval for both the 01am and
`
`Birdsong settlement classes in two separate orders. ECF Nos. 514 and 515. On Thursday, March
`
`25,2020, the Court held a Settlement Fairness Hearing. ECF No. 586. For the reasons stated below,
`
`Plaintiffs' Motion for Final Approval of Settlements is GRANTED.
`
`I. FACTUAL AND PROCEDURAL HISTORY
`
`Plaintiffs 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 (collectively "Plaintiffs") filed their initial complaint on September 5,
`
`2019 against Defendants BIRDSONG CORPORATION, GOLDEN PEANUT COMPANY, LLC,
`
`and OLAM PEANUT SHELLING COMPANY, INC.'s (collectively "Defendants"). ECF No. 1.
`
`Plaintiffs filed a Second Amended Class Action Complaint (the "Complaint") on May 27, 2020.
`
`1
`
`
`
`Case 2:19-cv-00463-RAJ-LRL Document 590 Filed 04/05/21 Page 2 of 9 PageID# 21116
`
`ECF No. 148. Plaintiffs are a group of peanut farmers who sell raw, harvested runner peanuts to
`
`the Defendants (also known as "shelters") to be processed and sold to food companies or other
`
`manufacturers. Id. at 1. From approximately 2011 to 2013, "the Peanut industry experienced
`
`drastic weather-related price changes that made it difficult for Defendants [...] to manage risk and
`
`plan for production." Id. at 2. Since in or around January 2014, "the prices paid by shelters to
`
`Peanut farmers for Runner[] [peanuts] have remained remarkably flat and unchanged, despite
`
`significant supply disruptions" such as hurricanes. Id. Because of this significant difference in
`
`pricing norms within the industry. Plaintiffs accuse Defendants of "conspir[ing] and collud[ing]
`
`with one another to stabilize and depress Runner [peanut] prices." Id.
`
`According to the Complaint, Defendants used their 80-90% market share in the peanut
`
`selling industry to facilitate a price fixing conspiracy to depress the price of runner peanuts. Id. at
`
`1. Plaintiffs seek a single claim for relief, on behalf of a nationwide class, under Section 1 of the
`
`Sherman Antitrust Act. Id. at 36. The purported class included "[a]ll farmers who sold Runner
`
`Peanuts to Defendants or their co-conspirators in the United States from at least as early as Januaiy
`
`1, 2014 until the present." Id. at 33.
`
`On December 2, 2020, the Court certified the following class:
`
`"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."
`
`ECF No. 496.
`
`Prior to class certification, Plaintiffs filed a Motion for Settlement with Defendant 01am
`
`Peanut Shelling Company, Inc. ("01am") on October 23, 2020. ECF No. 300. 01am filed a
`
`Response in Support of Plaintiffs' Motion for Settlement on October 26,2020. ECF No. 305. Soon
`
`
`
`Case 2:19-cv-00463-RAJ-LRL Document 590 Filed 04/05/21 Page 3 of 9 PageID# 21117
`
`after, Plaintiffs filed a Motion for Settlement with Defendant Birdsong Corporation ("Birdsong")
`
`on November 2, 2020. ECF No. 368. Defendant Birdsong did not file a response.
`
`The Court held a preliminary hearing on Plaintiffs' settlement motions on Wednesday,
`
`December 16,2020. ECF No. 507. The Court ultimately entered separate orders for both settlement
`
`classes on December 23, 2020. ECF Nos. 514 and 515. Plaintiffs issued notice of the settlement to
`
`9,369 prospective class members beginning January 12, 2021. ECF No. 582 at 2.
`
`On January 13, 2021, Plaintiffs filed a Motion for Final Approval of Settlements with
`
`Defendants 01am and Birdsong. ECF No. 527. Defendants did not file responses. On March 25,
`
`2021, the Court held a Fairness Hearing, during which the parties reported no objections to the
`
`settlement from any prospective class members. ECF No. 586. Plaintiffs did report that of the
`
`9,369 potential class members, three individuals and/or entities elected to opt out of the class
`
`action. ECF No. 582 at 1. Having notified the prospective class and with no outstanding objections.
`
`Plaintiffs' Motion for Final Approval of Settlements is ripe for judicial determination.
`
`A. The Legal Standardfor Class Action Settlements
`
`II. LEGAL STANDARD
`
`Rule 23(e) of the Federal Rules of Civil Procedure provides that no class action "shall...
`
`be dismissed or compromised without the approval of the court." To that end, "[t]he approval of a
`
`proposed settlement agreement is in the sound discretion of the Court." Strong v. JHM Mortgage
`
`Sec. Ltd. P'ship, 890 F. Supp. 499, 501 (E.D. Va. 1995) (citations omitted). Furthermore, for the
`
`Court to approve a class action settlement, that proposed settlement must be "fair, adequate and
`
`reasonable to Class Members." FED. R. CIV. P. 23(e)(2); see also In re: Lumber Liquidators
`
`Chinese-Manufactured Flooring Prods. Mktg., Sales Practices and Prods. Liab. Litig., 952 F.3d
`
`471, 484 (4th Cir. 2020) ("considerable deference" given to trial court in determining whether "to
`
`
`
`Case 2:19-cv-00463-RAJ-LRL Document 590 Filed 04/05/21 Page 4 of 9 PageID# 21118
`
`approve a class-action settlement as fair, reasonable, and adequate") (internal citation omitted).
`
`"[TJhere is a strong initial presumption that the compromise is fair and reasonable." In re
`
`Microstrategy, Inc. Sec. Litig., 148 F.Supp.2d 654, 663 (E.D. Va. 200\){^'MicroStrategy 7").
`
`Courts are to "appraise the reasonableness of particular class-action settlements on a case-by-case
`
`basis, in light of the relevant circumstances." Evans v. JeffD., 475 U.S. 717, 742 (1986).
`
`Furthermore, Rule 23(e)(2) lists various factors to consider when determining the fairness,
`
`reasonableness, and adequacy of parties' settlements. These factors include whether:
`
`(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.
`
`Fed. R. Civ. P. Rule 23(e)(2).
`
`Additionally, the United States Court of Appeals for the Fourth Circuit (the "Fourth
`
`Circuit") provides district courts with a two-level analysis when evaluating a settlement's fairness
`
`and adequacy. In re Jiffy Lube Securities Litigation, 927 F.2d 155, 158-59 (4th Cir. 1991). First,
`
`the relevant factors in assessing a settlement's fairness are:
`
`"(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."
`
`Jiffy Lube, 927 F.2d at 159. Next, a settlement's adequacy is determined by:
`
`"(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
`
`
`
`Case 2:19-cv-00463-RAJ-LRL Document 590 Filed 04/05/21 Page 5 of 9 PageID# 21119
`
`litigated judgment; and (5) the degree of opposition to the settlement."
`
`Id. at 159. After the Fourth Circuit created its fairness and adequacy factors, the Rule 23(e)(2)
`
`factors listed above were added to the Federal Rules of Civil Procedure on December 1, 2018. See
`
`Cantu-Guerrero v. Lumber Liquidators, Inc., 952 F.3d 471, n. 8 (4th Cir. 2020). The Fourth Circuit
`
`acknowledges in Cantu-Guerrero v. Lumber Liquidators, Inc. that "because our factors for
`
`assessing class-action settlements almost completely overlap with the new Rule 23(e)(2) factors,
`
`the outcome[s] [are] the same under both our factors and the Rule's factors." Id. Taking this
`
`substantial overlap into consideration, the Court will examine Plaintiffs' Motion for Settlement
`
`based upon the Rule 23(e)(2) factors.
`
`III. DISCUSSION
`
`In assessing the parties' proposed settlements, the Court notes that Defendants did not
`
`object to Plaintiffs' Motion for Final Approval of the 01am and Birdsong class settlements.
`
`Nonetheless, the Court will apply the Rule 23(e)(2) factors to the parties proposed settlements to
`
`ensure "protection of class members whose rights may not have been given adequate consideration
`
`during the settlement negotiations."
`
`927 F.2d at 158. The following analyzes each factor
`
`within Rule 23(e)(2).
`
`A. The class representatives and class counsel have adequately represented the class.
`
`Upon review, the Court finds that Plaintiffs' class representatives - D&M FARMS, MARK
`
`HASTY, DUSTIN LAND, ROCKY CREEK PEANUT FARMS, LLC, DANIEL HO WELL, and
`
`LONNIE GILBERT - adequately represent the class. As is standard in all class action litigation, it
`
`is imperative that the named plaintiffs and the class "share common objectives and the same factual
`
`and legal positions," ensuring that there are no "fundamental" conflicts that go to the "heart of the
`
`litigation." Gunnells v. Healthplan Sers., Inc., 348 F.3d 417, 430-31 (4th Cir. 2003).
`
`
`
`Case 2:19-cv-00463-RAJ-LRL Document 590 Filed 04/05/21 Page 6 of 9 PageID# 21120
`
`Here, the named Plaintiffs are a group of peanut farmers who sell raw, harvested runner
`
`peanuts to the Defendants. As persons and entities who fall squarely within the certified class, the
`
`Court finds no evidence to suggest that the interests of the named Plaintiffs in any way contradicts
`
`that of the certified class.
`
`Additionally, counsel for Plaintiffs have appeared before the Court in this matter for over
`
`a year and half. In that time, the Court has found counsel to be adequate and capable of competently
`
`adjudicating the class claim. Accordingly, the requirements for subsection (A) of Rule 23(e)(2) are
`
`met.
`
`B. The proposal was negotiated at arm's length.
`
`The parties were at all times represented by counsel in this action. Additionally, "the parties
`
`had nearly completed fact and expert discovery and, thus, were acutely aware of strengths and
`
`weaknesses of their respective cases" at the time of settlement negotiations. ECF No. 528 at 10.
`
`Accordingly, the requirements for subsection (B) of Rule 23(e)(2) are also satisfied.
`
`C. The reliefprovided for the class is adequate.
`
`To date. Plaintiffs, Defendant 01am, and Defendant Birdsong have agreed to a total
`
`settlement fund of $57,750,000. Pursuant to Rule 23(e)(2), when considering the adequacy of
`
`relief, the Court will examine factors such as: (i) the costs, risks, and delay of trial and appeal; (ii)
`
`the effectiveness of any proposed method of distributing relief to the class, (iii) the terms of any
`
`proposed award of attorney's fees; and (iv) any agreement required to be identified under Rule
`
`23(e)(3).
`
`With regard to factors (iii) and (iv), there are no additional agreements pursuant to Rule
`
`23(e)(3) for the Court to address and the parties did not negotiate attorneys' fees in either the 01am
`
`or Birdsong settlement proposals. See ECF No. 528 at 15. Additionally, Plaintiffs' counsel has yet
`
`
`
`Case 2:19-cv-00463-RAJ-LRL Document 590 Filed 04/05/21 Page 7 of 9 PageID# 21121
`
`to file any motion for attorneys' fees. Instead, Plaintiffs' counsel intends to file a "motion seeking
`
`an award of attorneys' fees and service awards [] after Plaintiffs' claims against Golden Peanut
`
`have been resolved." Id.
`
`Tuming to the costs, risks, and any potential delay of trial and appeal, adjudication of
`
`Plaintiffs' claims has already proven costly. Plaintiffs submitted an affidavit to the Court detailing
`
`their costs accrued thus far in litigation. EOF No. 530. These costs include, but are not limited to,
`
`costs of nearly $1.4 million for experts and over $125,000 for jury consultation and trial graphics.
`
`Id. Additionally, inherent in all litigation is risk which certainly impacts that settlement total.
`
`Moreover, future appeals of any jury outcome are not only possible, but likely given the amount
`
`of money at stake. In sum, any further litigation of this case would be lengthy, complex, and
`
`expensive, making settlement favorable to the Court. See MicroStrategy 7, 148 F. Supp. 2d at 667
`
`(where the court granted plaintiffs' motion for settlement, in part, because "additional litigation of
`
`plaintiffs' claims... would likely have been protracted and costly, requiring extensive expert
`
`testimony.... [Additionally,] there is little doubt that a jury verdict for either side would only have
`
`ushered in a new round of litigation in the Fourth Circuit and beyond, thus extending the duration
`
`of the case and significantly delaying any relief for plaintiffs.").
`
`Lastly, Plaintiffs proposed method of distribution is "that the Settlement Fund, plus accrued
`
`interest, will be allocated among approved claimants according to the amount of their recognized
`
`sales of Runner Peanuts to Defendants during the Class Period, after payment of attorneys' fees,
`
`litigation and administration costs and expenses, and service awards for Class Representatives."
`
`ECF No. 528 at 20. This type of distribution plan is commonly referred to as a pro-rata distribution
`
`plan which has been previously approved by the Court in similar class action litigation. See
`
`MicroStrategy /, 148 F. Supp. 2d at 668 (where the court approved plaintiffs' pro rata distribution
`
`
`
`Case 2:19-cv-00463-RAJ-LRL Document 590 Filed 04/05/21 Page 8 of 9 PageID# 21122
`
`noting that such distribution plans "generally treat[] all class members' losses in the same way.").
`
`Moreover, the plan does not award additional funds to any one type of plaintiff and ensures fair
`
`treatment of each member of the class. Accordingly, Plaintiffs' pro rata distribution method is fair
`
`and reasonable.
`
`In sum, the terms of the parties' settlements appear to adequately provide relief to the class.
`
`D. The proposal treats class members equitably relative to each other.
`
`The Court, having previously certified the class in Plaintiffs' cause of action, now turns to
`
`whether the settlement proposals will treat class members equitably. The class will be issued an
`
`award based upon the amount of their individually recognized sales of runner peanuts. This type
`
`of distribution is fair and equitable as to ensure that class members are not over- or under
`
`compensated for any alleged harm.
`
`Importantly, however. Plaintiffs' counsel notes that counsel may seek a service award for
`
`the class representatives. EOF No. 528 at 16. "Service awards are 'intended to compensate class
`
`representatives for work done on behalf of the class, to make up for financial or reputational risk
`
`undertaken in bringing the action, and sometimes, to recognize their willingness to act as a private
`
`attomey general." Galloway v. Williams, No. 3:19-cv-470, 2020 WL 7482191, at *6 (E.D. Va.
`
`Dec. 18, 2020) {quoting Berry v. Schulman, 807 F.3d 600, 613 (4th Cir. 2015)). Generally,
`
`"[c]ourts recognize the purpose and appropriateness of service awards to Class Representatives."
`
`See Brown v. Transurban USA, Inc., 318 F.R.D. 560, 578 (E.D. Va. 2016). Should the Court grant
`
`a service award to the class representatives, the reward will be fair and reasonable in accordance
`
`with the requirements under Rule 23(e)(2). Therefore, the proposed 01am and Birdsong class
`
`settlements treat class members equitably relative to one another.
`
`
`
`Case 2:19-cv-00463-RAJ-LRL Document 590 Filed 04/05/21 Page 9 of 9 PageID# 21123
`
`III. CONCLUSION
`
`For the reasons stated above, Plaintiffs' Motion for Final Approval of Settlements for
`
`Defendants 01am and Birdsong is GRANTED.
`
`The Clerk is DIRECTED to provide a copy of this Memorandum Opinion and Order to
`
`counsel of record.
`
`IT IS SO ORDERED.
`
`Norfolk, Virginia
`April
`2021
`
`ED ST A
`
`CT JUDGE
`
`