Andrea Lynn Chasteen Will County Circuit Clerk Twelfth Judicial Circuit Court Electronically Filed 10MR165 IN THE CIRCUIT COURT OF THE TWELTH JUDICIAL CIRCUITFiled Date: 4/20/2018 5:54 PM WILL COUNTY, ILLINOIS Envelope: 924092 Clerk: KA MICHAEL MARCONI, et al., ) ) No. 10 MR 0165 Plaintiffs, ) ) v. ) ) CITY OF JOLIET, a municipal corporation, ) ) Defendants. ) PLAINTIFFS’ MOTION FOR ATTORNEY’S FEES AND INCENTIVE AWARDS Plaintiffs Michael Marconi and David Connor (“Plaintiffs”) respectfully move this Honorable Court for an order awarding attorney’s fees and incentive awards, stating in support as follows: Introduction After years of hard-fought litigation, Plaintiffs achieved an excellent settlement that ensures all class members will have affordable health insurance for the rest of their lives, while also providing for substantial refunds for alleged overpayments of past healthcare costs. In this case, Plaintiffs alleged that Joliet has long promised its employees certain benefits, including healthcare benefits that carry over into retirement, and that Joliet violated the Illinois Constitution and breached various collective bargaining agreements when it increased the costs of those benefits without the retirees’ permission in 2010. The settlement creates a common fund (“Settlement Fund”) of $702,139.99, which Class Counsel anticipates will result in each Class Member receiving more than $1,570. The settlement also provides injunctive relief, guaranteeing that the cost of Class Members’ healthcare deductibles and prescription drug copays will remain at their current levels and will never increase. Importantly, Class Members do not need to do anything to receive the settlement benefits. The settlement was the result of years of adversarial litigation, as well as arms-length negotiations, and provides class members with both a substantial cash payment and certainty with respect to future costs for deductibles and prescription drug copays. I. SUMMARY OF LITIGATION AND SETTLEMENT. A. The Litigation Plaintiffs filed this case in 2010, seeking redress for Joliet’s decision to reduce their retirement benefits without consent. Plaintiffs’ initial complaint alleged that Joliet’s unilateral reduction in their retirement benefits violated the Illinois Constitution, as well as the Collective Bargaining Agreements (“Contracts”) that governed the terms and conditions of their employment. This Court agreed with Plaintiffs, holding that Joliet violated the Illinois Constitution. The Court granted summary judgment for Plaintiffs and entered a Final Order on November 2, 2011. See Final Judgment entered on November 2, 2011. The Illinois Appellate Court, Third District, reversed and remanded for further fact finding. Specifically, the Appellate Court held: Before deciding this case under the pension protection clause of the Illinois Constitution, the circuit court should have first determined whether it could be decided on nonconstitutional grounds. The contractual issue discussed above must be considered before any constitutional issues may be decided. Thus, pursuant to the constitutional avoidance doctrine and Supreme Court Rule 366(a)(5), we reverse and remand so that the circuit court may take additional evidence and determine whether each plaintiff has a vested right to receive the specific health care benefits promised in the collective bargaining agreement under which he retired. After considering all of the evidence relevant to this question, the court shall apply a presumption in favor of vesting as described in the foregoing opinion unless: (1) the language of the collective bargaining agreements unambiguously shows that the parties did not intend the benefits to vest; or (2) if the contract language is ambiguous, extrinsic evidence suggests that the parties did not intend the benefits to vest. Only if the circuit court finds no vested contractual rights should it address whether the benefits at issue are protected under the pension protection clause. Marconi v. City of Joliet, 2013 IL App (3d) 110865, ¶ 45, 989 N.E.2d 722, 737 (3d Dist. 2013). After the Illinois Supreme Court denied Joliet’s request for leave to appeal, the mandate issued on November 10, 2014. On remand, Plaintiffs moved to certify this case as a class action, 2 and accordingly amended their complaint to include class allegations, ensuring the fact finding described by the Third District Appellate Court would apply equally to all Joliet retirees. The Court certified the case as a class action, and subsequently amended the class definition, so that the following two subclasses are certified: (a) one subclass covers individuals “who retired before January 1, 2010 as bargaining unit employees whose retiree health care benefits were subject to collective bargaining agreements and whose health care benefits were reduced in any way after their retirement”; and (b) one subclass covers “former City of Joliet employees who retired before January 1, 2010 and whose retiree health care benefits were reduced in any way after their retirement.” (Order on 5/18/2016 at 2.) The parties subsequently completed a substantial amount of discovery. See Affidavit of Scott Rauscher (“Rauscher Aff.”). In particular, the parties served and responded to eight separate sets of written discovery, produced more than 6,000 pages of documents, and conducted six depositions. Rauscher Aff. ¶ 35. Following discovery, the parties both filed motions for summary judgment, asking the Court to resolve all liability issues short of trial. Rauscher Aff. ¶ 35. While those motions were pending, the parties began discussing a possible resolution of the case. Rauscher Aff. ¶ 39. After extensive negotiations, including an in-person negotiation with client representatives present (including Mr. Conner and Mr. Marconi), as well as numerous written and telephonic discussions, the parties were able to reach a settlement that provides valuable relief to the Class Members. Rauscher Aff. ¶ 39-43. II. The Settlement Provides Valuable Benefits to the Class Joliet has agreed to create a Settlement Fund of $702,139.99, which represents a refund of approximately 48% of the alleged overcharges for healthcare premiums and prescription drug 3 copays. Rauscher Aff. at Ex. 2 (Settlement Agreement). Each Class Member will receive an equal share of the Settlement Fund and, as described in the motion for preliminary approval, all but three Class Members will receive their share of the Settlement Fund without taking any action on their part. Id.1 Class Counsel estimates that Class Members will receive more than $1,570 each through this settlement, with checks automatically mailed to them. Rauscher Aff. ¶ 45. In addition to the monetary payments described above, Joliet has agreed to injunctive relief. Namely, Joliet has agreed that it will never increase the healthcare deductible or prescription drug copay for any Class Member. Rauscher Aff. at Ex. 2 (Settlement Agreement). In addition, it has agreed to freeze the premium for retiree dependent care coverage at the current level through at least the end of 2030. Id. This is an additional benefit for Class Members beyond their allegations in the Complaint: unlike with the deductibles and prescription drug copays that Joliet increased in 2010, Joliet had not increased the dependent care premiums. Rauscher Aff. ¶ 43. The Settlement Agreement ensures that Joliet will not do so for at least another twelve years, and it reserves Class Members’ rights to challenge any dependent premium increase after 2030. Rauscher Aff. at Ex. 2 (Settlement Agreement). III. Class Counsel’s Fee Request Is Reasonable. Based on the settlement, Class Counsel requests $234,000 in fees and expenses, representing one-third of the common fund. As described below, given the excellent result 1 As noted in the Settlement Agreement, Joliet’s records indicate that three Class Members have not paid anything for healthcare coverage from Joliet since 2010. Therefore, those three Class Members have necessarily not overpaid for healthcare coverage from Joliet. Because they have not paid anything, they will not receive payment from the Settlement Fund, unless they provide proof within thirty days of the Class Notice being sent that they have paid for such benefits. Class Counsel will include a letter with those three Class Members’ notices informing them of these facts. 4 achieved in this case, Class Counsel’s request is reasonable. So too is the request for $10,000 incentive awards for both of the Named Plaintiffs. Mr. Conner and Mr. Marconi were actively involved throughout this litigation, including spending thousands of dollars out of pocket to pay previous counsel, before current Class Counsel agreed to take this case on a contingency basis. A. The Court should award Class Counsel a percentage of the common fund. Class Counsel created a common fund for Joliet retirees, and the law provides for fees and expenses to be reimbursed from that fund. Under the common fund doctrine, “a litigant or lawyer who recovers a common fund for the benefit of persons other than himself or his clients is entitled to a reasonable attorney’s fee from the fund as a whole.” Wendling v. S. Ill. Hosp. Servs., 242 Ill. 2d 261, 265 (2011) (internal quotations omitted). The common fund doctrine “is founded on the rationale that successful litigants would be unjustly enriched if their attorneys were not compensated from the common fund created for the litigants’ benefit.” Brundidge v. Glendale Fed. Bank F.S.B., 168 Ill. 2d 235, 238 (1995). “By