SETTLEMENT AGREEMENT
WHEREAS, plaintiff Michael Delaney ("Delaney") filed a class action against
defendants Enterprise Rent-A-Car Company ("ERACC") and ELRAC, Inc. ("ELRAC")
(collectively "Defendants") in the Superior Court of New Jersey, Ocean County, Law Division
on April 5, 2001 on behalf of himself and all others similarly situated; and
WHEREAS, Delaney's complaint alleged six causes of action (Counts I through
VI) against Defendants, alleging that between April 1, 1988 and December 19, 2000 Defendants
sold Supplemental Liability Protection ("SLP") and Personal Accident Insurance ("PAI")
without proper licensure (i.e., registration) in violation of the Insurance Producer Licensing Act,
N.J.S.A. 17:22A-1, et seq. ("IPLA") and alleging that from April 1, 1988, Defendants' rental
agreement forms and related sales practices mislead customers into buying SLP, PAI, and
Collision Damage Waiver ("CDW"); and
WHEREAS, on or about August 13, 2001, Defendant ELRAC filed a motion to
dismiss the complaint for failure to state a claim upon which relief could be granted, and
Defendant ERACC filed a separate motion to dismiss the complaint due to lack of personal
jurisdiction over ERACC; and
WHEREAS, Delaney opposed those motions, and the Court denied both motions,
with the ERACC motion being denied orally at the close of oral argument on October 19, 2001
and the ELRAC motion being denied in a written opinion dated October 23, 2001; and
WHEREAS, Defendants served answers and affirmative defenses to that
complaint on November 6, 2001; and
WHEREAS, on June 26, 2002 Delaney filed a motion for class certification
seeking to represent a class of all persons who purchased CDW, SLP, and/or PAI from
Defendants in New Jersey from April 1,1988 to the present; and
WHEREAS, Defendants opposed the motion, and on August 30, 2002 filed a
motion to dismiss claims prior to April 5, 1995 on statute of limitations grounds; and
WHEREAS, in a February 28, 2003 letter opinion, the Court found that all claims
arising from or relating to the purchase of SLP and/or PAI from Defendants between July
31,1993 and November 1, 1999 were barred by res judicata; and
WHEREAS, by order dated March 12, 2003, the Court found that all claims
brought under Counts IV, V, and VI arising prior to April 5, 1995 were barred by the statute of
limitations, but denied Defendants' statute of limitations motion as to Counts I, II and III; and
WHEREAS, by order dated March 12, 2003 and modified on July 11, 2003, the
Court certified a class of all persons and entities (a) who/which purchased SLP and/or PAI in the
State of New Jersey from or through Defendants at any time from April 1, 1988, except for the
period July 31, 1993 through October 31, 1999, and/or (b) who/which purchased CDW in the
State of New Jersey from Defendants at any time from April 1, 1988 ("ELRAC Class"). The
precise definition of the certified ELRAC Class is contained in the Court's Orders of March 12,
2003 and July 11, 2003 which are incorporated herein by reference; and
WHEREAS, on July 17, 2003, the Court ordered that mailed notice of the
pendency of this action be given to class members who purchased SLP, PAI, and/or CDW from
Defendants from July 1998 through March 11, 2003 and that publication notice be given to the
rest of the class and found that these notices were the best practicable form of notice and
satisfied the requirements of due process; and
WHEREAS, beginning on September 4, 2003 and ending on September 5, 2003,
Class Counsel caused notice to be mailed, in a form approved by the Court, to 544,968
individual class members and on September 2, 2003 caused a summary of notice to be published,
in a form approved by the Court, in the following newspapers: Today's Sunbeam, The Record of
Hackensack, The Trenton Times, The Atlantic City Press, The Camden Courier-Post, The
Asbury Park Press, The Star-Ledger of Newark, and USA Today; and
WHEREAS, by the October 25, 2003 opt out deadline approved by the Court,
approximately 5350 persons or entities excluded themselves from the class.
WHEREAS, on August 13, 2003, Delaney and the members of the newly certified
class who did not subsequently opt out (collectively "Plaintiffs") filed a motion for partial
summary judgment contending that Defendants needed to be but were not licensed or registered
as limited insurance representatives under the IPLA to sell SLP and PAI in New Jersey between
April 1, 1988 and March 1, 2000 and that Defendants' sale of SLP and PAI without proper
registration resulted in illegal contracts subject to rescission (Count I) and violated New Jersey's
Consumer Fraud Act (Count II); and
WHEREAS on September 26, 2003, Defendants filed a cross-motion for partial
summary judgment on grounds that Defendants did not need to register as limited insurance
representatives at any time prior to March 1, 2000; that Plaintiffs are not entitled to rescind a
fully executed contract (Count I); and that Plaintiffs do not have a valid and supportable CFA
claim for non-licensure or non-registration (Count II); and
WHEREAS, in a December 1, 2003 letter opinion, the Court determined that
Defendants were required to be registered under the IPLA after April 1, 1988 but granted
Defendants' cross-motion for summary judgment on the illegal contract cause of action (Count I)
and denied both Defendants' and Plaintiffs' motions on the CFA cause of action (Count II),
finding that while Plaintiffs are entitled to bring a CFA claim, there are questions of fact as to
whether the Defendants' lack of registration constitutes a cognizable CFA violation; and
WHEREAS, on January 28, 2004, Defendants filed a motion for leave to appeal
with the Appellate Division contending, among other things, that the Court erred in determining
that Defendants were required to register under the IPLA prior to March 1, 2000 and erred in
finding that the Plaintiffs had a valid CFA claim based on Defendants lack of registration, and,
on April 29, 2004, the Appellate Division dismissed that appeal without prejudice to renewal in
the event this Settlement is not formalized by September 1, 2004; and
WHEREAS, on January 29, 2004, in Henderson v. Hertz Corp., Case No. ESX-L-
6937-03, the Superior Court of New Jersey, Essex County, Law Division, filed an order, now
pending on appeal, dismissing a complaint that alleged a similar CFA claim on the ground that
private plaintiffs cannot enforce the registration provisions of the IPLA through the CFA or other
private rights of action, absent a claim that the vehicle rental company engaged in fraudulent
rental practices as well; and
WHEREAS, on December 16, 2003, Defendants filed a motion for summary
judgment on the misleading sale claims, asserting that they owed no duty to disclose to their
customers the terms of the agreements between customers and third parties, and Defendants have
advised the Court that they intend to file other motions for summary judgment on the misleading
sale claims as well; and
WHEREAS, on May 18, 2004, Plaintiffs filed an Amended Class Action
Complaint to add Enterprise Leasing Company of Philadelphia ("ELC") as a defendant on their
remaining Claims arising from and relating to the purchase of SLP and/or PAI; and
WHEREAS, Plaintiffs and their counsel have determined that continued litigation
of their claims will be lengthy, complex, and expensive and that there is appreciable risk that
Plaintiffs will not prevail particularly as to the misleading sale claims which, unlike the licensure
claims where the Court denied Plaintiffs' motion for summary judgment, the misleading sale
claims have not yet been addressed by the Court but will be in Defendants' pending and
anticipated motions for summary judgment; and
WHEREAS, ERACC, ELRAC, and ELC have denied any wrongdoing
whatsoever, and denied any liability to Plaintiffs; and
WHEREAS, ERACC, ELRAC, and ELC agree to compromise and settle this
action solely to avoid the expense, inconvenience, burden, and risk that further litigation of
Plaintiffs' remaining Claims would involve; and
WHEREAS, as a result of the parties' investigation and consideration of the facts
underlying this Action, which include the review of thousands of pages of documents supplied
by ERACC and ELRAC, more than 20 individual and/or corporate representative depositions of
the Defendants and of a third party insurer and consultant, numerous interrogatory and request
for admission answers from the Defendants, numerous meetings between counsel, and two
sessions of mediation before retired Superior Court Judge L. Anthony Gibson, the parties
determined that a settlement of this Action is appropriate in order to avoid the expense,
inconvenience, and burden of further litigation particularly in light of the benefits that the class
members and potential class members will receive as a result of the Settlement; and
WHEREAS, based upon their investigation, review and analysis Plaintiffs and
their counsel agree to compromise the claims of the class members and potential members of the
class upon the terms and provisions set forth below after considering the risks of further
litigation and the benefits that settlement will confer;
NOW, THEREFORE IT IS HEREBY STIPULATED AND AGREED, by and
amongst the Plaintiffs, ERACC, ELRAC, and ELC, by and through their respective undersigned
attorneys, that this action be and the same hereby is conditionally settled and compromised, and
that the same shall be dismissed subject to the terms of this agreement and subject to approval of
the Court pursuant to New Jersey Court Rule 4:32-4, on the following terms and conditions:
1. Definitions.
(a) "Action" shall mean the original complaint filed in this lawsuit;
(b) "Class Counsel" shall mean Joseph N. Kravec, Jr., of Specter Specter
Evans & Manogue, P.C., Bruce D. Greenberg of Lite DePalma Greenberg & Rivas, LLC,
and Peter R. Kohn of Berger & Montague, P.C.;
(c) "Claims" shall mean any and all claims, defenses, and offsets and
causes of action which are asserted by Delaney in the Action and the Amended Action (as
defined in Paragraph 2, below) including but not limited to claims that the Named Enterprise
Entities were selling insurance without proper registration or authority and claims that the
Named Enterprise Entities' rental agreement forms and related sales practices misled
Plaintiffs into purchasing SLP, PAI, and/or CDW;
(d) "ELC Class" shall mean all persons and entities:
(i) who/which purchased SLP and/or PAI in the State of New Jersey
from or through ELC or any of its employees, agents and/or representatives at any time from
April 1, 1988 through July 30, 1993;
(ii) who/which purchased SLP and/or PAI in the State of New Jersey
from or through ELC or any of its employees, agents and/or representatives at any time from
November 1, 1999 through February 29, 2000;
(iii) who/which have not submitted a claim under SLP and/or PAI
purchased from or through ELC or any of its employees, agents and/or representatives that was
paid in whole or in part; and
(iv) who/which is not a parent, subsidiary, affiliate, representative,
agent, officer, director, or employee of ELC or any of the insurance companies for which ELC
sold SLP and/or PAI in the State of New Jersey;
(e) "ELC Class Member" shall mean any person or entity in the ELC
Class who/which does not exclude themselves in accordance with the Notice given by Order
of the Court;
(f) "Named Enterprise Entities" shall mean ERACC, ELRAC, and ELC;
(g) "Plaintiffs" shall mean the named plaintiff Michael Delaney and all
members of the ELRAC Class certified by the Court who have not opted out in accordance
with the Court's Orders;
(h) "Settlement" shall mean the terms and conditions of this Settlement
Agreement (the "Settlement Agreement"); and
(i) "Settling Class" shall mean all ELC Class Members and all Plaintiffs
with claims from April 1, 1988 through July 30, 1993 and from November 1, 1999 through
February 29, 2000 arising from or relating to the purchase of SLP and/or PAI in New Jersey
from the Defendants.
2. ELC Consents to Jurisdiction. ELC, solely for the purposes of this Settlement and
not for any other purpose, agrees that prior to preliminary approval of the Court of this
Settlement, Plaintiffs shall file an amended complaint in this Action to include ELC as a co-
defendant for Plaintiffs' Claims arising from or relating to the purchase of SLP and/or PAI and
the potential ELC Class as plaintiffs. The amended complaint shall be referred to as the
"Amended Action." Upon said preliminary approval and amendment, ELC will be deemed to
conditionally consent to jurisdiction as a party to the Action and Amended Action solely for the
purposes of the Settlement and not for any other purpose.
3. Dismissal of Appeal. As part of this Settlement, the Defendants agree as of the
Effective Date to abandon and not renew their motion for leave to appeal subject to the Appellate
Division's April 29, 2004 Order dismissing that motion without prejudice to renewal in the event
this Settlement is not formalized by September 1, 2004. If that motion or appeal is renewed prior
to the Effective Date, Defendants agree to abandon, dismiss, and withdraw it within 5 days of
the Effective Date (as defined in Paragraph 17, below). The parties further agree that should the
motion or appeal subject to the Appellate Division's April 29, 2004 Order be renewed prior to
the Effective Date or termination of this Settlement they will take all steps necessary to stay all
proceedings related thereto.
4. Certification of ELC Class. The Plaintiffs and the Named Enterprise Entities
agree, solely for the purpose of the Settlement and not for any other purpose that (a) Michael
Delaney should be designated as class representative of the ELC Class in this Action, and that
Delaney will fairly and adequately represent the interests of the ELC Class because he has no
interests in conflict with the ELC Class with respect to the Settlement; (b) the claims brought on
behalf of the ELC Class in the Amended Action should be certified for purposes of New Jersey
Court Rule 4:32-1(b)(c) because, for the purposes of this Settlement, the ELC Class meets the
numerosity, commonality, typicality and representative adequacy requirements; and because
common issues predominate among the claims brought on behalf of the ELC Class and
proceeding as a class action is superior to other available methods for adjudicating such claims;
(c) Joseph N. Kravec, Jr., of Specter Specter Evans & Manogue, P.C., Bruce D. Greenberg of
Lite DePalma Greenberg & Rivas, LLC, and Peter R. Kohn of Berger & Montague, P.C should
be designated as Class Counsel; (d) the Named Enterprise Entities reserve the right to challenge
class certification and the ELC Class established hereby and by Order of the Court shall dissolve
automatically and the litigation shall continue in the event that the Settlement is not approved by
the Court.
5. Basis for Settlement. The parties have determined that settlement of this action is
appropriate for the reasons stated in the following paragraphs:
(a) Since filing of the Action, Plaintiffs have propounded substantial
discovery requests. In response, ERACC and ELRAC have provided Class Counsel with
substantial information to enable Class Counsel to evaluate the issues that would be involved
in litigating and/or settling Plaintiffs' Claims. As part of their settlement due diligence, Class
Counsel have reviewed sufficient material to evaluate those issues.
(b) Plaintiffs face uncertainty as to the continued validity of their Claims
and their ability to prove liability and damages at trial. The Court has already rejected one of
Plaintiffs' theories for recovery. In a letter opinion dated December 1, 2003, the Court
granted summary judgment in favor of Defendants on Count I of the Action, dismissing
Plaintiffs' claim that Defendants' alleged lack of registration under the IPLA rendered
Plaintiffs' contracts with Defendants for the purchase of SLP and/or PAI illegal and subject
to rescission. While the Court did not foreclose the possibility that Plaintiffs may recover for
Defendants' alleged registration lapse under the CFA, refusing to grant summary judgment
for either party on that issue, there is also uncertainty as to whether Plaintiffs' CFA theory
remains valid. A recent decision by the Superior Court of New Jersey, Essex County held
that private parties cannot enforce the registration provisions of the IPLA through the CFA or
other private causes of action at least absent claims that the vehicle rental company engaged
in fraudulent rental practices as well. Defendants' motion for leave to appeal on this issue is
subject to renewal in the Appellate Division should this Settlement not become effective.
But, even if the Appellate Division does not grant Defendants leave to appeal or Plaintiffs
prevail on appeal, Plaintiffs face a lengthy, complex, and expensive trial on the issues of
liability and damages. In order to prevail under their CFA theory at trial, Plaintiffs will need
to prove that Defendants' conduct constitutes an affirmative misrepresentation of material
fact, a knowing omission of material fact, or an unconscionable practice. Defendants
contend that, in order to recover damages, Plaintiffs must prove that each class member
suffered an ascertainable loss as a result of the CFA violation or damage under any of
Plaintiffs' other theories. Though Plaintiffs dispute that, and contend that they need not
prove ascertainable loss or damage class member by class member, there is a potentially
substantial issue as to the proof required. The Defendants assert that their alleged failure to
register is not cognizable as a CFA violation and that, even if Plaintiffs prove a CFA
violation, no class members suffered loss as a result because Defendants offered the same
products at the same price both before and after the effective date of ELRAC's registration.
(c) Class Counsel have determined that Plaintiffs with Claims arising
from or relating to the purchase of CDW and all Claims arising from or relating to the
purchase of SLP and/or PAI on or after March 1, 2000 are not prejudiced by the dismissal of
those Claims under this Settlement because that dismissal will be without prejudice, those
Claims will be tolled as specified in Paragraph 8, and documents produced in this Action that
concern those Claims will be maintained as specified in Paragraph 15. For these Claims,
Plaintiffs face great uncertainty as to their ability to prove liability and damages at trial and,
if successful at trial, face a certain appeal as to those issues and the continued viability of the
class certification. Most of these Claims require Plaintiffs to establish the existence of and
prove that Defendants breached a duty to disclose that Defendants contend has not heretofore
been recognized by New Jersey law. Additionally, Defendants contend that most of these
claims involve issues of causation and/or reliance that require inquiry into the varied and
individual purchasing decisions of each class member. Also, assuming Plaintiffs can prove a
violation of the law, there are numerous complex issues concerning the damages Plaintiffs
would be entitled to. For example, Defendants contend that Plaintiffs are not entitled to a
refund of the contract price of CDW after having received the full benefits of that product.
Class Counsel have determined and agree that these Claims, which would be unduly
expensive and time-consuming to resolve, should be dismissed without prejudice.
(d) Class Counsel consider this Settlement to be fair, reasonable and
adequate and in the best interest of the Settling Class. These conclusions are based in
material part upon the realization that the loss, if any, suffered by each class member would
be relatively small, that the value of the discount offered to eligible members of the Settling
Class will likely exceed the amount paid by the class members for SLP and/or PAI, and that
there is no prejudice to any Plaintiffs' Claims which are not resolved and put to rest as a
result of the Settlement as they are being dismissed without prejudice as specified in
Paragraph 8.
(e) Defendants consider the Settlement advantageous despite the fact that
they continue to deny any wrongdoing. Through the Settlement, Defendants obtain a
resolution and release of Plaintiffs' claims arising from or relating to the purchase of SLP
and/or PAI before March 1, 2000, and a dismissal without prejudice of all claims arising
from or relating to the purchase of CDW and the purchase of SLP and/or PAI on or after
March 1, 2000. In each instance Defendants avoid the immediate risk of expensive,
inconvenient, and burdensome litigation.
(f) The Discount Certificates (as defined in Paragraph 6(c)(1), below) to
be given to the Settling Class pursuant to the Settlement are reasonable, in light of the factors
discussed above, including the uncertainty regarding liability, damages, and continued class
certification.
6. Terms and Conditions of Settlement.
(a) Immediately upon execution of the Settlement Agreement, the parties
shall cease all litigation activity in the Action and Amended Action (other than activity
necessary to implement the Settlement), until each of the conditions precedent to the parties'
obligation to proceed to consummate the Settlement has been satisfied or waived or until the
Settlement is disapproved by the Court or an appellate court.
(b) The parties and their counsel shall not issue any press release to the
media or conduct any press conference concerning this Settlement Agreement. After the
Effective Date (as defined in Paragraph 17, below), the responses to members of the press or
other media shall be limited to stating that the parties have reached an amicable settlement as
reflected in the documents filed with the Court and in the rulings of the Court and that the
parties have agreed to make no further comment.
(c) In full, complete and final compromise and settlement of any and all
Claims in favor of the Settling Class arising from or relating to the purchase of SLP and/or
PAI from the Named Enterprise Entities in New Jersey from April 1, 1988 through July 30,
1993 and from November 1, 1999 through February 29, 2000 and any damage as a result of
any of the foregoing to any member of the Settling Class, and subject only to the terms and
conditions of this Settlement upon final approval by the Court, each member of the Settling
Class will be entitled to receive only the following benefits and compensation and no other
from the Named Enterprise Entities. Each member of the Settling Class is entitled to receive
one "Discount Certificate" for a future rental for every rental transaction in which he or she
purchased PAI and/or SLP during the applicable time period. Each Discount Certificate will
be issued by the company (either ELRAC or ELC) from which the member of the Settling
Class rented and shall be usable at any of the issuing company's branches.
(i) The Discount Certificate shall provide the following relief:
(A) If the future rental is of a standard vehicle or less, a
discount equal to 50% of the undiscounted daily retail rate for the class of vehicle rented, plus a
one-class upgrade if desired;
(B) If the future rental is of a vehicle that is one class above
standard, a discount equal to 50% of the undiscounted daily retail rate for the standard class of
vehicle;
(C) If the future rental is of a vehicle that is two or more classes
above standard, a discount equal to 50% of the undiscounted daily retail rate for the vehicle that
is one class above standard; and
(ii) The Discount Certificate shall be transferable;
(iii) The person who redeems the Discount Certificate must be a
qualified renter;
(iv) The Discount Certificate can be redeemed on a rental up to 30 days
in length;
(v) The Discount Certificate shall be redeemable for a rental beginning
within one year from the date of issue;
(vi) The Discount Certificates will be mailed to the members of the
Settling Class who purchased SLP and/or PAI from November 1, 1999 through February 29,
2000 without any need for those class members to submit claims. The Named Enterprise Entities
no longer have reliable records of current names or addresses of persons or entities who rented
vehicles or purchased SLP and/or PAI on or before July 30, 1993. Members of the Settling Class
who purchased SLP and/or PAI from April 1, 1988 through July 30, 1993 must submit a claim
requesting a certificate 30 days prior to the Hearing (as defined by Paragraph 13(e), below), and
shall be entitled to a Discount Certificate if in their claim they verify under oath: (i) that they
rented during the applicable time period; (ii) the number of times they rented; and (iii) that they
are submitting copies of all documents that they currently have in their possession evidencing the
claimed rentals;
(vii) The Discount Certificates will be mailed within 30 days of the
Effective Date.
7. Release. Each member of the Settling Class shall be deemed to fully release and
forever discharge the Named Enterprise Entities, their past and present shareholders, parent
companies, affiliates, subsidiaries, successors, predecessors, assigns, officers, directors,
employees, attorneys, and agents (collectively "Released Parties") and shall be enjoined from
proceeding against Released Parties with respect to all claims, controversies, causes of action,
demands, torts, damages, liabilities of any kind whatsoever in law or equity, known or unknown,
related to or arising out of the purchase of SLP and/or PAI from the Named Enterprise Entities in
New Jersey from April 1, 1988 through July 30, 1993 and from November 1, 1999 through
February 29, 2000. This Release does not apply to, prevent, or preclude Class Counsel's right to
petition the Court for and obtain an award of reasonable attorney's fees and costs as discussed in
paragraph 10 below. Notwithstanding anything in the Settlement Agreement to the contrary,
nothing herein is meant to release any party hereto from its obligation to comply with or enforce
the terms of this Settlement Agreement.
8. All Remaining Class Members; Claims. Claims of Plaintiffs not discharged and
released by Paragraphs 6(c) and 7, above, shall be dismissed without prejudice. The Joint
Proposed Final Order shall include a preservation of tolling of all such claims during the
pendency of the Delaney action to the full extent provided for by New Jersey law. Tolling shall
apply to any type of action any Plaintiff who has a claim not included in the Settling Class
wishes to bring. Such Plaintiffs may use any procedural device available under New Jersey law
to bring said Claims.
9. Administration and Cost of Settlement. The Named Enterprise Entities will bear
the responsibility for administering and paying the reasonable costs of administering the
Settlement once it is preliminarily approved by the Court. This includes, without limitation, the
reasonable expenses of identifying the members of the Settling Class, mailing and publishing
notice, and maintaining the toll-free telephone number for Plaintiffs and members of the Settling
Class to seek additional information about the Settlement. The Named Enterprise Entities may,
at their option, undertake these tasks themselves, provided that the text of any communication
about the Settlement or conveyed through the toll-free number shall be limited to text that has
been approved by Class Counsel or the Court. Class Counsel have the right to reasonable review
and monitoring of the administration of the Settlement. The Named Enterprise Entities agree to
instruct their employees to not discuss details of the Settlement with Plaintiffs or Settling Class
members and to refer questions from them about the Settlement to Class Counsel and/or the toll-
free number without comment. Defendants shall provide Class Counsel with the text of the
instruction to the Named Enterprise Entities' employees.
10. Counsel Fees and Costs. The parties attempted to negotiate an agreed amount of
attorneys' fees and expense, but could not reach agreement. Accordingly, the parties agree to
submit the award of reasonable attorneys' fees and costs to the Hon. Edward M. Oles, of the
Superior Court of New Jersey, Ocean County, for his determination. Defendants agree that any
payment of attorneys' fees and costs will not reduce the benefits to class members provided by
this Settlement.
(a) If the Court grants preliminary approval of this Settlement, Plaintiffs
will submit their fee and expense petition as directed by the Court. Defendants intend to
contest the fees and expenses sought by Plaintiffs and will submit responsive papers as
directed by the Court.
(b) The parties further agree to continue to explore a mediated solution to
attorneys' fees and cost dispute through the services of retired Superior Court Judge L.
Anthony Gibson, the management of which effort will be subject to the direction of the
mediator.
(c) The continuation of the mediation process is not intended to delay the
submission and resolution by the Court of the Settlement, including the approval of
attorneys' fees and costs.
11. Form and Method of Dissemination of Notices. The parties agree that if the Court
authorizes notice to be disseminated to the Plaintiffs and the ELC Class as provided for in this
Settlement Agreement, then notice will be disseminated as follows:
(a) Plaintiffs who purchased SLP, PAI, and/or CDW from ELRAC from
July 1998 through March 11, 2003 will receive individual notice as follows: within 60 days
after the Court issues the Order (as defined in Paragraph 13, below), the Named Enterprise
Entities shall mail a Notice of Settlement of Class Action ("Notice I"), which will conform
substantially to Exhibit A, by United States Presort Standard Class mail, to all Plaintiffs
shown in the Named Enterprise Entities' records as purchasing SLP, PAI, and/or CDW from
and/or through ELRAC in the State of New Jersey from July 1998 through March 11, 2003,
at their last known address.
(b) Potential ELC Class members who purchased SLP and/or PAI from
November 1, 1999 to March 1, 2000 will receive individual notice as follows: within 60 days
after the Court issues the Order, the Named Enterprise Entities shall mail a Notice of
Pendency and Settlement of Class Action ("Notice II"), which will conform substantially to
Exhibit B, by United States Presort Standard Class mail, to all persons and entities shown in
the Named Enterprise Entities' records as purchasing SLP and/or PAI from and/or through
ELC in the State of New Jersey from November 1, 1999 to March 1, 2000, at their last
known address.
(c) All other Plaintiffs and potential ELC Class members will receive
publication notice as follows: within 60 days after the Court issues the Order, the Named
Enterprise Entities shall cause a Summary Notice of Pendency and Settlement of Class
Action ("Summary Notice"), which will conform substantially to Exhibit C, to be published
once in the national edition of USA Today and once in each of the following New Jersey
newspapers: Today's Sunbeam, The Record of Hackensack, The Trenton Times, The
Atlantic City Press, The Camden Courier-Post, The Asbury Park Press, The Star-Ledger of
Newark.
(d) Within 30 days after the completion of the mailing of the notice
provided for by Paragraphs 11(a) and (b), above, and the publication of Summary Notice as
provided by Paragraph 11(c), above, the Named Enterprise Entities shall file with the Court
and serve upon Class Counsel a certification or affidavit stating the publication and dates on
which the Summary Notice was published and the dates(s) on which mailing Notice I and
Notice II was completed, listing the names and addresses of all persons and entities to whom
Notice I and/or Notice II was mailed and itemizing the cost of same.
12. Receipt of Objections, Claims and Requests for Exclusion. The Named
Enterprise Entities shall be responsible for obtaining a United States Post Office Box, for the
purpose of receiving requests for exclusion from members of the ELC Class and receiving claims
required under Paragraph 6 (C)(vi) from members of the Settling Class that are submitted in
accordance with Exhibits A and B of this Agreement. The Named Enterprise Entities shall also
be responsible for promptly giving notice of the receipt of any such requests for exclusion,
claims or any other communication received at the P.O. Box from Plaintiffs or Settling Class
members by providing complete copies to Class Counsel within one week of receipt. Objections
shall be mailed to both Class Counsel and Defendants' Counsel identified in Paragraph 22 who
shall provide a complete copy of all objections they receive to designated opposing counsel
within two business days of receipt by them.
13. Scheduling Order. As soon as practicable after the execution of this Settlement
Agreement the parties to this Settlement Agreement shall apply to the Court for an Order
substantially in the form attached hereto as Exhibit D and incorporated herein by this reference
(the "Order"):
(a) Certifying the ELC Class for settlement purposes only provided,
however, that the Named Enterprise Entities' right to challenge class certification de novo
under certain circumstances is expressly reserved; designating Michael Delaney as
representative of the ELC Class; and designating Joseph N. Kravec, Jr., of Specter Specter
Evans & Manogue, P.C., Bruce D. Greenberg of Lite DePalma Greenberg & Rivas, LLC,
and Peter R. Kohn of Berger & Montague, P.C as Class Counsel;
(b) Preliminarily finding that the terms of the Settlement Agreement are
fair and adequate as to all Plaintiffs and ELC Class Members;
(c) Directing the opening of a post office box in the name of "Enterprise
New Jersey Optional Product Litigation" to facilitate delivery of communications pertaining
to the Action and Amended Action as specified in Paragraph 12 above;
(d) Approving the form, timing and methods of dissemination of the
notice provided for in Paragraph 11, above, and directing the Named Enterprise Entities to
provide such notice;
(e) Scheduling a hearing to be held 30 days after the expiration of the time
period for filing objections or submitting requests for exclusion as specified in the notice
provided for by Paragraph 11, above, or as soon thereafter as practicable, to finally determine
the reasonableness, adequacy and fairness of the Settlement (the "Hearing");
(f) Requiring any person who seeks exclusion from the ELC Class to mail
an exclusion request as described Notice II, within 120 days of the date of the Order;
(g) Requiring any person who objects to the approval of the Settlement,
within 120 days of the date of the Order, to serve upon both Class Counsel and Defendants'
Counsel identified in Paragraph 22 and file, in the manner specified in the notice provided for
by Paragraph 11, above, the notice of his/her intention to appear and object, the grounds for
such objection, and copies of all papers that he/she intends to present to the Court in
opposition to the Settlement;
(h) Requiring any person who seeks to make a claim for benefits as
required by Paragraph 6 (C)(vi) to mail a claim as described in the Notice I and Notice II
within 120 days of the date of the Order; and
(i) Determining, pursuant to applicable due process standards, that the
notice provided for by Paragraph 11, above, constitutes due, sufficient and the best
practicable notice of the Hearing and of the rights of Plaintiffs and ELC Class Members with
respect thereto, to all persons entitled to such notice.
14. Judgment. As soon as practicable after the approval by the Court of this
Settlement following the Hearing, a Judgment shall be entered substantially as follows:
(a) Approving the Settlement and adjudging its terms to be fair,
reasonable and adequate under the circumstances for the reason stated above, among others,
directing consummation of the Settlement pursuant to the terms and provisions of this
Settlement Agreement, and retaining jurisdiction to effectuate the same;
(b) Dismissing the Amended Action on the merits with prejudice for
members of the Settling Class and without prejudice for all other Plaintiffs;
(c) Permanently barring and enjoining all members of the Settling Class
from the institution, maintenance, prosecution or enforcement of, either directly or indirectly,
and any all Claims which are released and discharged by reason of Paragraphs 6(c) and 7 of
this Settlement Agreement;
(d) Discharging and releasing the Named Enterprise Entities and their
predecessor, successor, past and present officers, directors, trustees, partners, principals,
employees, agents, attorneys, heirs, parent corporation, affiliates and assigns from any and all
claims in favor of the Settling Class based upon any of the Claims which are released and
discharged by reason of Paragraphs 6(c) and 7 of this Settlement Agreement.
15. Return of Produced Documents. Within 30 days of the Effective Date, Plaintiff
shall (a) return to counsel for Defendants all Confidential Information (as defined in the
Protective Order signed by the Court on February 28, 2002) and all copies thereof or (b) provide
a certification that all Confidential Information and all copies thereof have been fully destroyed,
along with the date of destruction. Notwithstanding the foregoing, counsel for Plaintiff may
maintain as a record of the proceeding, correspondence or work product, all pleadings, court
filings, trial transcripts, and trial exhibits admitted into evidence, and deposition transcripts and
exhibits thereto, as provided in Paragraph 13 of the Protective Order.
16. Continuing Jurisdiction. The Court shall have continuing jurisdiction to supervise
and effectuate the implementation of the Settlement, provided that the Court's jurisdiction over
ELC is conditioned upon approval of the Settlement.
17. Effective Date of Settlement. The Settlement shall become effective upon the
date following either (a) the expiration, without appeal, of the time within which to file an appeal
from the Court's Judgment, or (b) the day when an appellate affirmance of the Court's Judgment
becomes final, whichever is applicable. The date upon which the Settlement becomes effective
is the "Effective Date".
18. Agreement Is Not an Admission. This Settlement Agreement, its constituent
provision and exhibits, and any and all drafts, communications and discussions relating thereto,
shall not be offered or received in evidence or requested in discovery in this Action or any other
action or proceeding as evidence of any admission or concession.
19. Settlement Not Approved. This Settlement Agreement shall be withdrawn and
terminated and shall be deemed null and void if (a) the Court does not approve the Settlement
Agreement substantially in haec verba as set forth in Paragraph 21 or (b) the settlement does not
become effective, as defined in Paragraph 17.
20. Entire Agreement; Amendment. This Settlement Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof, and supercedes any
other oral or written agreements or understanding among or between any of the parties hereto
relating to the subject matter hereof. This Settlement Agreement cannot be changed or modified
except in a writing signed by all parties.
21. Parties' Right to Set Aside Settlement or to Mutually Agree to Implement
Modified Settlement. It is stipulated and agreed that the Named Enterprise Entities and Class
Counsel have the right, in the good faith exercise of their discretion, to independently decide to
set aside or rescind this Settlement Agreement if any modifications to the Settlement Agreement
or its exhibits that materially alter the economic terms of this Settlement are required by the
Court or by any appellate court, or to mutually agree in writing to implement the Settlement as
modified by the Court or appellate court.
22. Notice. Whenever written notice is required or permitted by the term of the
Settlement Agreement it shall be deemed effective on the day after it is sent by overnight courier
service (such as Federal Express) addressed as follows:
To the Named Enterprise Entities:
Gregory D. Call
Folger Levin & Kahn LLP
275 Battery Street, 23rd Floor
San Francisco, CA 94111
To the Plaintiffs and ELC Class:
Joseph N. Kravec, Jr.
Specter Specter Evans & Manogue, P.C.
The 26th Floor
Koppers Building
Pittsburgh, PA 15219
23. Mutual Interpretation. The parties agree and stipulate that this Settlement was
negotiated at arm's-length between parties of equal bargaining power. Also, the Settlement
Agreement has been drafted jointly by Class Counsel and counsel for the Named Enterprise
Entities. Accordingly, this Settlement Agreement shall be mutually interpreted and not
construed in favor or against any of the parties. It is the intent of all parties that this Settlement
have full res judicata and collateral estoppel effect with respect to all claims and associated
issues referenced in Paragraph 6(c) and 7, above.
24. Severability. In the event any one or more of the provisions contained in this
Settlement Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not affect any other provisions if the
Named Enterprise Entities and the Plaintiffs and the Class Counsel, on behalf of the parties,
mutually elect in writing to proceed as if such invalid, illegal or unenforceable provision had
never been included in this Settlement Agreement.
25. Controlling Law. This Settlement Agreement shall be interpreted in accordance
with and governed in all respect by the laws of the State of New Jersey, without regard to
principles of conflicts of law thereof.
26. Counterpart Execution. This Settlement Agreement may be executed in any
number of counterparts and will be binding when it has been executed by the final signatory
party hereto to execute a counterpart. A facsimile signature shall be deemed to constitute an
original signature for purposes of this Agreement. After execution of counterparts by each
designated signatory party, the Named Enterprise Entities agree to furnish each party with a
composite conformed copy of this Agreement reflecting all counterpart signatures.
COUNSEL FOR PLAINTIFFS
Dated: May _____, 2004 _________________________
Bruce D. Greenberg
Lite DePalma Greenberg & Rivas, LLC
Two Gateway Center, 12th Floor
Newark, NJ 070102-5003
Dated: May _____, 2004 _________________________
Joseph N. Kravec, Jr.
Specter Specter Evans &
Manogue, P.C.
The 26th Floor
Koppers Building
Pittsburgh, PA 15219
Dated: May _____, 2004 _________________________
Peter Russell Kohn
Berger & Montague, P.C.
1622 Locust Street
Philadelphia, PA 19103
COUNSEL FOR DEFENDANTS
Dated: May _____, 2004 _________________________
Gregory D. Call
Folger Levin & Kahn LLP
275 Battery Street, 23rd Floor
San Francisco, CA 94111
Dated: May _____, 2004 _________________________
Vincent E. Gentile
Drinker Biddle & Reath LLP
105 College Road East, Suite 300
Princeton, NJ 08542-00627
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