UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK
IN RE
AIR CARGO SHIPPING SERVICES ANTITRUST LITIGATION
MDL No. 1775
06-MD-1775 (JG) (VVP)
THIS DOCUMENT RELATES TO: All Actions
MEMORANDUM IN SUPPORT OF PLAINTIFFS’ MOTION FOR APPROVAL OF PLAN OF ALLOCATION OF SETTLEMENT FUNDS
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Plaintiffs respectfully submit this memorandum in support of their motion for final approval of the Plan of Allocation of settlement funds established by recent settlements in the above-captioned litigation. The Plan of Allocation is the same as the one approved by the Court in connection with earlier settlements in this case.
I. FACTUAL BACKGROUND1
Currently pending before the Court is a motion for final approval of settlements with the following Defendants: Lan Airlines, S.A., Lan Cargo, S.A., and Aerolinhas Brasileiras, S.A. British Airways plc; South African Airways Ltd; Malaysia Airlines; Saudi Arabian Airlines, Ltd; Emirates; El Al Israel Airlines Ltd.; Air Canada and AC Cargo LP; and Salvatore Sanfilippo. In anticipation of distribution to class members of the settlement funds established by each of the above-enumerated settlement agreements, Plaintiffs now seek final approval of a Plan of Allocation. The Plan of Allocation was described in the settlement Notice approved by the Court on March 14, 2012 (ECF No. 1661), which was mailed directly to class members, published in industry publications and posted on the settlement website,
www.aircargosettlement3.com. Under the Plan of Allocation, the settlement funds, following
1 A more detailed discussion of the factual and procedural background is set forth in the Joint Declaration of Robert N. Kaplan, Michael D. Hausfeld, Howard J. Sedran, and Hollis L. Salzman in Support of (1) Final Approval of the Settlement Agreements Between Plaintiffs and All Nippon Airways Co., Ltd., Cargolux Airlines International S.A., Qantas Airways Limited, Thai Airways International Public Company Limited; (2) Plaintiffs’ Joint Application For Interim Attorneys’ Fees And Reimbursement Of Expenses; and (3) the Plan of Allocation, dated May 10, 2011 [ECF No. 1474], and the Joint Declaration of Co-Lead Counsel in Support of (1) Final Approval of the Settlements with Defendants Lan Airlines, S.A., Lan Cargo, S.A., and Aerolinhas Brasileiras, S.A., British Airways, South African Airways Ltd., Malaysia Airlines, Saudi Arabian Airlines, Ltd., Emirates, El Al Israel Airlines Ltd., Air Canada, AC Cargo LP, and Salvatore Sanfilippo; (2) Plaintiffs’ Counsel’s Joint Application for Interim Attorneys’ Fees and Reimbursement of Interim Expenses; and (3) the Plan of Allocation, dated June 22, 2012, submitted herewith.
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any reductions for class members that exclude themselves and after deductions for attorneys’ fees and expenses approved by the Court, shall be distributed to class members that submit valid claim forms in proportion to their relevant purchases from defendants of Airfreight Shipping Services.2 Purchases of Airfreight Shipping Services for shipments into the United States will be valued at 1.625 times the dollar amount of such purchases; purchases of Airfreight Shipping Services for shipments out of the United States will be valued at the dollar amount of such purchases.
II. THE PLAN OF ALLOCATION FOR THE SETTLEMENT FUNDS IS FAIR AND REASONABLE
The purpose of developing a plan of allocation is to devise a method that permits the equitable distribution of limited settlement proceeds to eligible class members. In re Luxottica Group S.p.A. Sec. Litig., 233 F.R.D. 306, 316-17 (E.D.N.Y. 2006), citing Beecher v. Able, 75 F.2d 1010, 1016 (2d Cir. 1978). “As a general rule, the adequacy of an allocation plan turns on … whether the proposed apportionment is fair and reasonable” under the specific facts of the case. In re PaineWebber Ltd. P’ship Litig., 171 F.R.D. 104, 132-33 (S.D.N.Y. 1997), aff’d, 117 F.3d 721 (2d Cir. 1997). “As numerous courts have held, a plan of allocation need not be perfect.” In re EVCI Career Colleges Holding Corp. Sec. Litig., 2007 WL 2230177, at *11 (S.D.N.Y. 2007). Rather, “[a]n allocation formula need only have a reasonable, rational basis, particularly if recommended by experienced and competent class counsel.” In re Am. Bank Note Holographics, Inc. Sec. Litig., 127 F. Supp.2d 418, 429-30 (S.D.N.Y.2001); see also In re
2 For purposes of this calculation, purchase amounts in currencies other than dollars will be converted by the claims administrator to equivalent dollar amounts using currency exchange rates applicable on September 11, 2006, which is the last day of the class period.
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Global Crossing Sec. & ERISA Litig., 225 F.R.D. 436, 462 (S.D.N.Y. 2004); Maley v. Del Global Techs. Corp., 186 F. Supp.2d 358, 361 (S.D.N.Y. 2002).
Whether an allocation plan is fair and reasonable is “squarely within the discretion of the court.” PaineWebber, 171 F.R.D. at 132. In making this determination, courts give substantial weight to the opinions of experienced counsel. Id.at 133. Co-Lead Counsel believe that the proposed apportionment is fair and reasonable. The Court has previously found that Co-Lead Counsel are highly capable and have the requisite qualifications and experience to handle this litigation. See Lufthansa Prel. App. R&R, at 8-9 (Dkt. No. 625); see also In re Air Cargo Shipping Servs. Antitrust Litig., 240 F.R.D. 56, 57 (E.D.N.Y. 2006); In re Air Cargo Shipping Servs. Antitrust Litig., 2009 WL 3077396, at *7. Class counsel’s opinion should therefore be afforded great weight. PaineWebber, 171 F.R.D. at133.
The Plan of Allocation is the same as the allocation plan approved by the Court in connection with the settlements with Defendants Société Air France, Koninklijke Luchtvaart Maatschappij N.V., and Martinair Holland N.V.; Scandinavian Airlines System and SAS Cargo Group A/S; Japan Airlines International Co., Ltd.; AMR Corp. and American Airlines, Inc.; Cargolux Airlines International S.A.; Qantas Airways Limited; All Nippon Airways Co., Ltd.; and Thai Airways International Public Company Limited (collectively, “Air Cargo 2
Settlements”). (ECF No. 1524).
Moreover, the inbound and outbound multipliers, upon which the Plan of Allocation is based, were determined by a neutral arbitrator and have also been approved by the Court. In re Air Cargo Shipping Servs., 2009 WL 3077396 at *9-10; see also In re Holocaust Victim Assets Litig., 2000 WL 33241660, at *1 (E.D.N.Y. Nov. 22, 2000), aff’d, 413 F.2d 183 (2d Cir. 2005) (approving plan of allocation by Special Master following “equitable procedures to ensure fair
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consideration of all proposals for allocation and distribution.”); EVCI, 2007 WL 2230177, at *11 (S.D.N.Y. 2007) (approving plan of allocation developed by lead counsel with damages expert following extensive investigation).
“Courts also consider the reaction of a class to a plan of allocation” following notice, including whether objections have been submitted. EVCI, 2007 WL 2230177, at *11 (citing Maley, 186 F. Supp.2d at 367). The Notice advised class members that they have until July 6, 2012 to object to the Plan of Allocation, and to date, no class member has submitted an objection. Likewise, no class member objected to the plan of allocation for the Air Cargo 2 Settlements which was approved by the Court on July 15, 2011. (ECF No. 1524). A lack of objections is indicative of the reasonableness of the Plan of Allocation. Id. (approving plan of allocation after noting that no objections had been received); In re Lucent Techs., Inc., Sec. Litig., 307 F. Supp.2d 633, 649 (D.N.J. 2004) (noting reasonableness of allocation plan reflected in lack of objections following notice to class members).
Accordingly, the Plan of Allocation is fair, reasonable and adequate to the class. III. CONCLUSION
For all of the foregoing reasons, the Court should grant final approval of the Plan of Allocation.
Dated: June 22, 2012 Respectfully submitted,
Robert N. Kaplan (RK-3100) Gregory K. Arenson (GA-2426) KAPLAN FOX & KILSHEIMER LLP 850 Third Avenue, 14th Floor
New York, NY 10022 (212) 687-1980
Gary L. Specks (GS-8767)
KAPLAN FOX & KILSHEIMER LLP
Howard J. Sedran Austin B. Cohen
LEVIN, FISHBEIN, SEDRAN & BERMAN
510 Walnut Street Philadelphia, PA 19106 (215) 592-1500
5 423 Sumac Road
Highland Park, IL 60035 (847) 831-1585
By: /s/ Robert N. Kaplan Hollis L. Salzman (HS-5994) Jay L. Himes (JH-7714)
Gregory S. Asciolla (GA-2222) LABATON SUCHAROW LLP 140 Broadway
New York, NY 10005 (212) 907-0700
By: /s/ Hollis L. Salzman
Michael D. Hausfeld Brent W. Landau Hilary K. Scherrer HAUSFELD LLP 1700 K Street, N.W., Suite 650 Washington, DC 20006 (202) 540-7200
By: /s/ Michael D. Hausfeld
Class Counsel
