United States District Court, D. Rhode Island
STEPHEN DEL SESTO, AS RECEIVER AND ADMINISTRATOR OF THE ST. JOSEPH HEALTH SERVICES OF RHODE ISLAND RETIREMENT PLAN, ET AL. Plaintiffs,
PROSPECT CHARTERCARE, LLC, ET AL., Defendants.
MEMORANDUM AND ORDER
WILLIAM E. SMITH, CHIEF JUDGE
the Court is a joint motion pursuant to Rule 23 of the
Federal Rules of Civil Procedure seeking preliminary
certification of a settlement class, appointment of class
counsel, and preliminary approval of a proposed settlement in
this action. The motion is brought by Plaintiffs and
Defendants CharterCARE Foundation (“CCF”),
CharterCARE Community Board (“CCCB”), St. Joseph
Health Services of Rhode Island (“SJHSRI”), and
Roger Williams Hospital (“RWH”) (collectively,
“Settling Parties”). Two other groups of parties
- the Diocesan Defendants and the Prospect Entities (collectively,
“Non-Settling Parties”) - have objected to
Court has carefully considered the parties' arguments.
For the reasons that follow, the Joint Motion for Settlement
Class Certification, Appointment of Class Counsel, and
Preliminary Settlement Approval by Plaintiffs and Defendants
CharterCARE Foundation, St. Joseph Health Services of Rhode
Island, Roger Williams Hospital, and CharterCARE Community
Board (ECF No. 77) (“Joint Motion”) is GRANTED.
Preliminary Approval Under Rule 23(e)
23(e)(2) permits the Court to approve a class action
settlement only if the proposed agreement is fair, adequate,
and reasonable. Fed.R.Civ.P. 23(e)(2); In re Pharma.
Indus. Average Wholesale Price Litig., 588 F.3d 24, 32
(1st Cir. 2009). At the preliminary approval stage, however,
a less rigorous standard applies: the Court need only
determine whether the settlement “appears to fall
within the range of possible final approval.”
Trombley v. Bank of Am. Corp., Civil No.
08-cv-456-jd, 2011 WL 3740488, at *4 (D.R.I. Aug. 24, 2011);
see also Armstrong v. Bd. of Sch. Dirs. of City of
Milwaukee, 616 F.2d 305, 314 (7th Cir. 1980), overruled
in part on other grounds by Felzen v. Andreas, 134
F.3d 873 (7th Cir. 1998). Preliminary approval should not be
confused for a final finding of reasonableness or fairness.
The first step is merely to “ascertain whether notice
of the proposed settlement should be sent to the class . . .
.” 4 William B. Rubenstein, Newberg on Class Actions
§ 13:13 (5th ed. 2018); see also Flynn v. N.Y. Dolls
Gentlemen's Club, No. 13 Civ. 6530(PKC)(RLE), 2014
WL 4980380, *1 (S.D.N.Y. Oct. 6, 2014) (“Preliminary
approval requires only an initial evaluation of the fairness
of the proposed settlement on the basis of written
submissions and an informal presentation by the settling
parties.”) (quoting Clark v. Ecolab, Inc., No.
07 Civ. 8623(PAC), 04 Civ. 4488(PAC), 06 Civ. 5672(PAC), 2009
WL 6615729, at *3 (S.D.N.Y. Nov. 27, 2009) (quotation marks
Court concludes that preliminary approval is warranted here.
The proposed terms of the settlement are set forth in the
Settling Parties' settlement agreement, ECF No. 77-2
(“Settlement Agreement”). The gravamen of this
proposal is that Plaintiff Stephen Del Sesto, as Receiver and
Administrator of the St. Joseph Health Services of Rhode
Island Retirement Plan (“Plan”), will be
transferred $4.5 million for deposit into the Plan assets.
See Id. at 13. These proceeds will be transferred by
CCF and its insurer. See Joint Mot. 8. In exchange, the
Plaintiffs and Defendants SJHSRI, CCCB, and RWH will release
CCF and the Rhode Island Foundation from liability. See
Settlement Agreement 13. In addition, the Receiver will
transfer to CCF any rights he holds in CCF. See Id.
On their face, these terms appear fair, reasonable, and
adequate with respect to the proposed class, subject to this
Order's other terms. See Fed.R.Civ.P. 23(e)(2). The
proposed settlement also appears to have been negotiated at
arm's length by highly experienced and informed counsel.
Accordingly, the Court concludes that the proposed settlement
“fall[s] within the range of possible final approval[,
]” Trombley, 2011 WL 3740488, at *4, and it therefore
qualifies for preliminary approval.
Settling Parties' Request for a Good Faith Finding Under
R.I. Gen. Laws § 23-17.14-35
2018, the Rhode Island General Assembly established certain
ground rules for settlements that are unique to this
litigation. Those rules are codified in R.I. Gen. Laws §
23-17.14-35, which states:
following provisions apply solely and exclusively to
judicially approved good-faith settlements of claims relating
to the St. Joseph Health Services of Rhode Island retirement
plan, also sometimes known as the St. Joseph Health Services
of Rhode Island pension plan:
(1) A release by a claimant of one joint tortfeasor, whether
before or after judgment, does not discharge the other joint
tortfeasors unless the release so provides, but the release
shall reduce the claim against the other joint tort-feasors
in the amount of the consideration paid for the release.
(2) A release by a claimant of one joint tortfeasor relieves
them from liability to make contribution to another joint
(3) For purposes of this section, a good-faith settlement is
one that does not exhibit collusion, fraud, dishonesty, or
other wrongful or tortious conduct intended to prejudice the
non-settling tortfeasor(s), irrespective of the settling or
non-settling tortfeasors' proportionate share of
Settling Parties have requested that the Court declare the
Settlement Agreement to be a “good faith
settlement” as defined in this statute. See Joint Mot.
13-14. Such a determination is not required for the Court to
grant preliminary approval under Rule 23 and the Court
declines to make such a ruling here. The Settling
Parties' request is, however, denied without prejudice
and may be renewed in connection with any final fairness
Certification of Class, Class Representatives, and Class
qualify for preliminary certification, a proposed settlement
class must satisfy the requirements of Federal Rule of Civil
Procedure Rule 23(a) and one of the three categories in Rule
23(b). See Amchem Prods., Inc. v. Windsor, 521 U.S.
591, 621 (1997). Rule 23(a) permits one or more members of a
class to represent all class members' interests if
(1) the class is so numerous that joinder of all members is
impracticable; (2) there are questions of law or fact common
to the class; (3) the claims or defenses of the
representative parties are typical of the claims or defenses
of the class; and (4) the representative parties will fairly
and adequately protect the interests of the class.
23(a). The Settling Parties also seek certification under
Rule 23(b)(1)(B), which requires a demonstration that
prosecuting separate actions would risk creating
“adjudications with respect to individual class members
that . . . would be dispositive of the interests of the other
members not parties to the individual adjudications or would
substantially impair or impede their ability to protect their
interests[.]” The Court concludes that these criteria
have been satisfied.
there are 2, 729 Plan participants, rendering joinder of all
members of the proposed settlement class impracticable. See