In re GSE Bonds Antitrust Litigation

Background

The plaintiffs were Joseph M. Torsella, in his official capacity as Treasurer of the Commonwealth of Pennsylvania and statutory custodian of all Commonwealth Funds; City of Birmingham Retirement and Relief System; Electrical Workers Pension Fund Local 103, I.B.E.W.; and Local 103, I.B.E.W. Health Benefit Plan. They brought the action on behalf of themselves and other members of the proposed settlement class.

The plaintiffs and defendants First Tennessee Bank, N.A., and FTN Financial Securities Corp., identified together in the judgment as FTN, agreed to settle all claims asserted against FTN and related entities, including First Horizon National Corp. The settlement was set out in a September 16, 2019, stipulation and agreement and required court approval.

Settlement Class and Notice

The court certified a class under Rule 23 of the Federal Rules of Civil Procedure, which governs class actions, for settlement purposes only. The class consisted of all people and entities that entered into a GSE Bond Transaction with one or more defendants, or with a defendant’s direct or indirect parent, subsidiary, affiliate, or division, during the Settlement Class Period. The opinion does not provide the dates of that period.

The class excluded the defendants and their related entities, federal government entities, the presiding judicial officer and specified related persons, and anyone who properly and timely opted out. The judgment also separately identified people and entities in Exhibit 1 who were excluded from the settlement class and were not bound by the settlement or judgment.

The court found that the class-action requirements were satisfied for settlement purposes. It found that the class was numerous, had common legal or factual questions, and that the plaintiffs’ claims were typical. It also found that the plaintiffs and class counsel would adequately protect the class, that common questions predominated over individual questions, and that a class action was superior to other methods for resolving the action.

The court found that the notice provided to class members was the best notice practicable under the circumstances, adequately informed them about the settlement and related requests for attorneys’ fees and expenses, and satisfied Rule 23, constitutional due-process requirements, and other applicable law.

Ruling

The court fully and finally approved the settlement in all respects, including its settlement amount, releases, and dismissal of the claims against FTN. It found the settlement fair, reasonable, and adequate after considering the factors identified in City of Detroit v. Grinnell Corp. and Rule 23(e)(2).

The court dismissed all claims asserted against FTN by the plaintiffs and other settlement-class members with prejudice. The judgment also provided that, when the settlement became effective, the plaintiffs and settlement-class members released the defined settled claims against FTN and the other settling defendants and could not pursue those claims. FTN likewise released the defined claims against the released plaintiff parties. The judgment stated that the settlement and judgment did not constitute admissions of liability, wrongdoing, or the merits of the claims or defenses.

The judgment bound FTN, the other settling defendants, the plaintiffs, and the settlement-class members, subject to the stated exclusions. The court retained continuing and exclusive jurisdiction over settlement administration, the settlement fund, distribution, attorneys’ fees and litigation expenses, and enforcement. Separate orders were to address the distribution plan and counsel’s fee and expense request. If the settlement were terminated or its effective date failed to occur, the judgment would be vacated as provided in the stipulation. The clerk was directed to enter the judgment immediately as a final judgment.