CANDIE NELSON v. HEALTHRIGHT, LLC

Case No. 8: 18-cv-02678-JSM-CPT in the United States District Court for the Middle District of Florida (Tampa Division)

NOTICE OF CLASS ACTION SETTLEMENT

TO:      All former fulltime employees of HEALTHRIGHT, LLC terminated and/or laid off as part of a mass layoff or plant closing[1] without cause on or about September 20, 2018, or within a reasonable period of time prior to or after September 20, 2018, and who did not receive 60 days’ advance written notice of termination (the “Class”).

INTRODUCTION

There is currently pending in the United States District Court for the Middle District of Florida, Tampa Division, the above-captioned proceeding (the “Class Action”) brought under the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101 et seq., (the “WARN Act”).

The Plaintiff, Candie Nelson, (the “Class Representative”) on the one hand, and the Defendant, Healthright, LLC (the “Defendant”), on the other hand, have reached a proposed settlement of the Class Action (the “Settlement”) under which the benefits described below will be provided to the members of the Class. The claims set forth in the Class Action were strongly disputed by the Defendant. After negotiations, the parties were able to agree to the proposed Settlement in good faith, which all parties, including Class Counsel (defined below), believe is fair and reasonable under the circumstances.

This Notice constitutes notice to the Class of (a) the certification of the Class; (b) the proposed Settlement of the Class Action; (c) a description of the proposed Settlement and instructions how to submit a valid Confirmation of Address Form to the Settlement Administrator; (d) the date of court hearing for final approval of the Settlement; (e) the right of each member of the Class to object to the Settlement, and to appear at the hearing at which the Court will consider the final approval of the Settlement; and (f) the right of Class Members to opt-out of the Class.

 

[1]              Mass Layoff or plant closing as defined by the Worker Adjustment and Retraining Notification Act.

  1. DESCRIPTION OF THE CLASS ACTION

    1. On November 1, 2018, Class Representative Candie Nelson filed with the United States District Court for the Middle District of Florida, Tampa Division, a class-action complaint commencing the Class Action against Defendant Healthright, LLC alleging that Defendant violated the federal WARN Act by ordering employment terminations in connection with plant closings and/or mass layoffs on or about September 20, 2018, and thereafter, without providing sixty (60) days of advance notice thereof, and that as a consequence of this failure, the affected employees have damages in the amount of sixty (60) days’ wages and benefits.  Following the terminations, Defendant wrapped up any existing businesses and ceased operations on or around December 2, 2018.    

      The Complaint was filed on behalf of Plaintiff and all other persons similarly situated.  Generally, the WARN Act requires an employer having more than one hundred (100) full-time employees to give its employees working at its facilities having at least fifty (50) full-time employees at least sixty (60) calendar days’ advance written notice before ordering a shutdown. An employer may give less than sixty (60) days’ written notice if it can prove that certain defenses, as enumerated in the WARN Act were applicable. However, to avail itself of these defenses, an employer must still give as much notice as reasonably practicable and include in the notice a brief statement of the basis for less than sixty (60) days’ notice. An employer who is found liable under the WARN Act can seek reduction of damages on the grounds that it believed in good faith that it was in compliance with the WARN Act and that it had reasonable grounds for that belief or that it paid wages and benefits in lieu of notice.

      On January 14, 2019, Defendants filed an Answer to the Complaint and asserted various defenses.  In sum, Defendant believes that all of the terminations made were in compliance with all applicable laws, including the WARN Act.  Defendant contends, among other things, that: (i) to the extent the WARN Act was implicated, it qualified as a “faltering company” pursuant to 29 U.S.C. § 2102(b); (ii) the terminations were the result of “unforeseeable business circumstances” pursuant to 29 U.S.C. § 2102(b)(2)(A) and related WARN Act regulations; and (iii) that it was legally obligated to maintain confidentiality and continuity of operations as a result of information that was filed under seal in the case of USA v. Roix, et. al., Case. No. 2:18-cr-00133-JRG-MCLC-1, in the United States District Court for the Eastern District of Tennessee.   

      On May 31, 2019, Class Counsel filed a Motion for Class Certification pursuant to Rule 23 of the Federal Rules of Civil Procedure.  Over Defendant’s objection, the Court certified the following class on July 18, 2019:

      Any former employee of Defendant HEALTHRIGHT, LLC, who was terminated and/or laid off without cause from their employment at HEALTHRIGHT, LLC, on or about September 20, 2018, or within a reasonable period of time prior to or after September 20, 2018, as part of a mass layoff (or plant closing) as defined in 20 C.F.R. § 639.3 and 29 U.S.C. § 2101 under the Worker Adjustment and Retraining Notification [WARN] Act of 1988, and who was not given a minimum of sixty days’ advance written notice of termination. The class does not include part-time employees as defined under 29 U.S.C. § 2101(a)(8).

      The Court also ordered that:

      • Plaintiff Candie Nelson be appointed as Class Representative (“Class Representative”); and
      • Florin Gray Bouzas Owens, LLC be appointed Class Counsel (“Class Counsel”).
         

      During the course of litigation, Class Counsel conducted informal and formal discovery, analyzed the applicable law, had numerous discussions with counsel for Defendant, took the deposition of Defendant’s top officer, Mr. Scott Roix, and weighed the likelihood of success.  On February 2, 2020, the parties participated in a mediation conference, which resulted in an impasse.     

      Subsequent to the mediation conference, the parties continued to litigate the case and engage in settlement negotiations.  On October 27, 2020, the parties filed a Notice of Settlement, notifying the Court that the parties have reached an agreement to settle this action, subject to preliminary approval by the Court.  You are receiving this notice because you have been identified as a member of the class who could receive compensation as a result of the proposed Settlement Agreement.     

  2. THE PROPOSED SETTLEMENT AGREEMENT

    1. The following description of the proposed Settlement Agreement is only a summary.  In the event of any discrepancy between this summary and the terms of the Settlement Agreement, the terms of the Settlement Agreement shall control. You may secure a copy of the complete Settlement Agreement from Class Counsel, Miguel Bouzas, of the law firm Florin Gray Bouzas Owens, LLC at the address shown for him below. The relevant terms of the Settlement may be summarized as follows:[2]

      1. In anticipation of this proposed settlement and to guarantee payment to class members if the settlement is approved, Defendant deposited the Gross Settlement Amount of $75,000.00 in a qualified settlement fund to be administered by the Settlement Administrator, in exchange for the release by Class Members as provided in the Settlement Agreement, to be distributed in accordance with the terms set forth below. 
      2. In addition to the Gross Settlement Amount, Defendant shall pay the costs of the Settlement Administrator, American Legal Claim Service LLC, to administer the settlement.

      The Settlement Administrator shall be responsible for issuing payment to Class Members and handling all other aspects of the administration of the WARN Settlement, including, but not limited to:

      (a) the formation of a Qualified Settlement Fund to accept, distribute, and otherwise administer the Settlement;

      (b) the determination of the appropriate payroll tax and withholding amounts for each of the individual payments to each Class Member;

      (c) the preparation and mailing of settlement checks to each Class Member;

      (d) the withholding, paying, and reporting, as appropriate, of all payroll taxes, and preparing and mailing of all W-2s and/or 1099s; and

      (e) the processing of returned settlement checks that include a forwarding address.

      Payments from the Settlement Fund to Class Members shall be made net of all applicable employment taxes to be withheld from such payments as determined to be due by the Settlement Administrator, including, without limitation, FICA tax, Medicare tax, and federal, state and local income tax withholding.

      Before any distribution to the Class Members from the qualified settlement fund, the Settlement Administrator will make the following payments from the Designated Settlement Fund:

      • The Class Representative shall seek approval of up to $2,000 (the “General Release Payment”) as payment for the General Release of all claims she executed and which other Class Members are not required to execute as a condition of the settlement;
      • Class Counsel shall be entitled to reimbursement of its reasonable expenses not to exceed $2,500.00;
      • Class Counsel shall receive 33.33% of the Gross Settlement Amount as its attorneys’ fees.

       

      After the General Release Payment and the payment of reasonable expenses and attorneys fees to Class Counsel, the Settlement Administrator will pay an equal share of the remaining Gross Settlement Amount to each class member that timely submits a valid Confirmation of Address Form to the Settlement Administrator.  The parties anticipate each Class Member will receive the gross amount of approximately $325.00, before applicable employment taxes and withholdings.     

      Upon Court approval of the Settlement Agreement, it shall be effective as to all Class Members who do not opt-out of the Class.

       

      [2] The descriptions of the Settlement Agreement contained herein are not intended to be a full recitation of the terms of the Settlement Agreement. To the extent that any description or summary of the terms of the Settlement Agreement contained herein conflict with the terms of the Settlement Agreement, the terms of the Settlement Agreement are controlling in all respects

  3. CLASS COUNSEL’S RECOMMENDATION

    1. Class Counsel recommends the Settlement.  Healthright ceased operations on or around December 2, 2018 and has certified that it has no remaining assets.  As part of its guilty plea, and in resolution of parallel civil proceedings brought by the United States Department of Justice, Healthright paid a substantial civil penalty and remains liable for substantial restitution.   

      The plea agreement recognized that “no precise determination of the guideline fine range is required because it is readily ascertainable that the defendant Healthright cannot and is not likely to become able to pay the minimum of the guideline fine range.”  In other words, Healthright’s assets have been or will be fully depleted to pay the fine imposed by the United States Government.  Mr. Scott Roix has provided an affidavit confirming, under penalty of perjury, that the assets of Healthright have been depleted.

      Due to the above, given the substantial restitution anticipated to be owed per the plea agreement, and the fact that Healthright is no longer operating, there is momentous risk that even if Plaintiff and the Class prevailed and obtained a judgment against Healthright, collection of any portion of the judgment is unlikely. 

      In addition, the results of a trial are uncertain and the litigation here is complex. The WARN action involves numerous legal issues regarding the application of the WARN Act and its statutory and other legal defenses to complex facts.  Combined with the financial insolvency of the Defendant, Class Counsel believes the Settlement is fair, reasonable, and adequate to the Class when all relevant factors are considered. 

  4. TAXES WILL BE WITHHELD FROM DISBURSEMENTS UNDER THIS SETTLEMENT

    1. All Class Members who receive a payment pursuant to this Settlement will receive an IRS Form W-2 with their payment.

  5. RELEASE OF ALL CLAIMS UNDER THE WARN ACT AND EFFECT OF APPROVAL OF SETTLEMENT AGREEMENT

    1. Upon final approval by the Court and payment by the Settlement Administrator of amounts described above, the Settlement Agreement will result in the dismissal of the Class Action on the merits and with prejudice to all Class Members who do not opt out of the Settlement Agreement, and shall constitute a full release and discharge by each such Class Member for and on behalf of themselves, and their respective successors and assigns (collectively, the “Releasing Parties”) of all claims against the Defendant and each of its respective estates, parent corporations, subsidiaries and affiliates, and each of their current and former shareholders, officers, directors, employees, accountants, attorneys, representatives and other agents, and all of their respective predecessors, successors and assigns (collectively, the “Released Parties”), of and from any and all claims, demands, debts, liabilities, obligations, liens, actions and causes of action, injunctive relief, restitution, costs, expenses, attorneys’ fees, penalties, interest and damages of whatever kind or nature, at law, in equity and otherwise, whether known or unknown, anticipated, suspected or disclosed, which the Releasing Parties may now have or hereafter may have against the Released Parties, which relate to or are based on the WARN Act.  In addition, each Releasing Party shall be deemed to have released the Plaintiffs from any and all claims whether liquidated or unliquidated, contingent or non-contingent, asserted or unasserted, fixed or not, matured or unmatured, disputed or undisputed, legal or equitable, known or unknown that he or she may have against the Plaintiff, any successors or assignees to their legal interests, or any of their present or former agents, attorneys or consultants, arising out of any Released Claims or the terms of this Settlement.

  6. HOW TO OBJECT OR OPT-OUT

    1. If you are satisfied with the proposed Settlement, you need to do nothing other than timely submit a Confirmation of Address Form to receive your share of the Settlement.

      OBJECTING: If, on the other hand, you believe that the proposed Settlement is unfair or inadequate, you may object to the Settlement and/or the attorneys’ fees by mailing, via certified mail return receipt requested, a written statement bearing the caption of this action (shown on the first page of this Notice) with the basis for your objection, to the Settlement Administrator, Benny W. Davis, Jr., American Legal Claim Services, LLC at the following address:

      Healthright, LLC WARN Settlement
      c/o American Legal Claim Services
      ATTN Objections
      PO Box 23678
      Jacksonville, FL  32241

      Objections must be mailed so as to be received no later than March 12, 2021 and must include your name, address, and telephone number, together with a statement of whether you intend to appear and comment or object at the final hearing at which the parties will be requesting binding Court approval of the Settlement, including attorneys’ fees, as described above. 

      Opting Out: Alternatively, if you choose not to be bound by this Settlement and do not wish to share in any of the benefits described herein, you may opt-out of the Class by filling out the attached “Opt-Out Form,” and sign and mail the form by certified mail, return receipt requested, to the Settlement Administrator: Benny W. Davis, Jr., American Legal Claim Services, LLC, at the following address:

      Healthright, LLC WARN Settlement
      c/o American Legal Claim Services
      ATTN Exclusions
      PO Box 23678
      Jacksonville, FL  32241

      The Opt-Out Form must be received no later than March 12, 2021. All requests for exclusion received after that date will not be effective, and any person who sends a late request will be a member of the Class.

  7. HOW TO SUBMIT CONFIRMATION OF ADDRESS FORM

    1. In order to receive your share of the Settlement you will need to fill out the attached “Confirmation of Address Form,” and sign and mail the form along with providing a copy of your driver’s license, other form of identification with your current address or a copy of a bill addressed to you at your current address, by certified mail, return receipt requested, to the Settlement Administrator:  American Legal Claim Services, LLC, at the following address:

      Healthright, LLC WARN Settlement
      c/o American Legal Claim Services
      ATTN Address Verifications
      PO Box 23678
      Jacksonville, FL  32241

      Your completed Confirmation of Address Form must be received by the Settlement Administrator on or before the date of the Final Hearing identified below, otherwise you will not receive any payment and you will have effectively waived your rights to such payment.  

  8. FINAL HEARING TO APPROVE SETTLEMENT AND ATTORNEYS’ FEES

    1. The hearing for final consideration and approval of the Settlement, including attorneys’ fees to Class Counsel, is scheduled to take place on November 1, 2021 at 9:00 AM in Courtroom 17 of the United States District Court for the Middle District of Florida, Tampa Division, 801 North Florida Avenue, Tampa, Florida 33602.  That hearing may be adjourned without further notice.  If you wish to determine if the hearing is adjourned, you may contact Miguel Bouzas, Esq. at the addresses shown below.

  9. OTHER INFORMATION

    1. Any questions from members of the Class concerning this Notice or the Class Action should be directed to Class Counsel, Miguel Bouzas, Esq. 16524 Pointe Village Dr., Suite 100, Lutz, FL 33558.

      All requests for more information, including a copy of the Settlement or the moving papers filed with the court in support of the Settlement, should be sent by first-class mail to Miguel Bouzas, Esq. to the address indicated above or via email at [email protected].  While the Court has approved the sending of this Notice the Court has not taken any position as to the respective claims or defenses asserted by the parties in the Class Action.
       

      PLEASE DO NOT WRITE TO OR CALL
      THE COURT CONCERNING THIS MATTER