PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL OF ... · for final approval of settlement agreement & certification of class (2:14-cv-01720-jcc) - i law offices of keller rohrb

PLAINTIFFS’ UNOPPOSED MOTION

FOR FINAL APPROVAL OF

SETTLEMENT AGREEMENT &

CERTIFICATION OF CLASS

(2:14-cv-01720-JCC)

LAW OFFICES OF

K E L L E R R O H R B A C K L . L . P . 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 T E L E P H O N E : ( 2 0 6 ) 6 2 3 - 1 9 0 0 F A C S I M I L E : ( 2 0 6 ) 6 2 3 - 3 3 8 4

LAW OFFICES OF C O H E N M I L S T E I N S E L L E R S & T O L L , P L L C .

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The Honorable John C. Coughenour

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON AT SEATTLE

LINDA GRIFFITH and JEANETTE WENZL,

on behalf of themselves, individually, and on

behalf of the Providence Health & Services

Cash Balance Retirement Plan,

Plaintiffs,

v.

PROVIDENCE HEALTH & SERVICES;

RETIREMENT PLANS COMMITTEE;

ELLEN WOLF; JOHN and JANE DOES 1-20,

inclusive, MEMBERS OF THE RETIREMENT

PLANS COMMITTEE; JOHN or JANE DOE

21, PLAN DIRECTOR; HUMAN

RESOURCES COMMITTEE OF THE BOARD

OF DIRECTORS; JOHN and JANE DOES 22-

40, inclusive, MEMBERS OF THE HUMAN


OF DIRECTORS; ROD HOCHMAN; BOARD

OF DIRECTORS OF PROVIDENCE HEALTH

& SERVICES; MICHAEL HOLCOMB;

CHAUNCEY BOYLE; ISIAAH CRAWFORD;

MARTHA DIAZ ASZKENAZY; PHYLLIS

HUGHES; SALLYE LINER; KIRBY

McDONALD; DAVE OLSEN; AL PARRISH;

CAROLINA REYES; PETER J. SNOW;

MICHAEL A. STEIN; CHARLES WATTS;

BOB WILSON; JOHN and JANE DOES 41-50,

inclusive,

Defendants.

No. 2:14-cv-01720-JCC



SETTLEMENT AGREEMENT AND

CERTIFICATION OF SETTLEMENT

CLASS

NOTE ON MOTION CALENDAR:

MARCH 21, 2017

TIME: 9:00 A.M.

COURTROOM: 16206

Case 2:14-cv-01720-JCC Document 54 Filed 02/03/17 Page 1 of 31





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TABLE OF CONTENTS

Page

I. INTRODUCTION ............................................................................................................ 1

II. FACTUAL AND PROCEDURAL BACKGROUND...................................................... 2

A. Procedural History ................................................................................................ 2

B. Settlement Negotiations ........................................................................................ 4

1. Monetary Consideration............................................................................ 5

2. Non-Monetary Equitable Consideration ................................................... 6

3. Other Equitable Consideration .................................................................. 6

4. Class .......................................................................................................... 7

5. Released Claims ........................................................................................ 7

6. Notice ........................................................................................................ 7

7. Attorneys’ Fees ......................................................................................... 7

D. Reasons for the Settlement.................................................................................... 8

E. Preliminary Approval............................................................................................ 9

F. Notice to the Class and the Lack of Objections to Date ....................................... 9

III. THE COURT SHOULD GRANT FINAL APPROVAL OF THE

SETTLEMENT ............................................................................................................... 10

A. The Settlement Meets the Judicial Standards for Final Approval ...................... 10

1. The Strength of Plaintiffs’ Case Supports Settlement ............................ 11

2. The Settlement is Preferable to the Risk, Expense,

Complexity, and Likely Duration of Further Litigation ......................... 11

3. The Risk of Maintaining Class Action Status Throughout

the Trial Supports Final Approval .......................................................... 12

4. The Amount Offered in Settlement Is Substantial and

Weighs in Favor of Approval ................................................................. 12






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5. The Fact that Extensive Investigation and Informal

Discovery Were Completed Before Settlement Favors Final

Approval ................................................................................................. 14

6. The Opinions of Experienced Counsel Weigh in Favor of

Approval ................................................................................................. 15

7. The Presence of a Government Participant Supports

Approval ................................................................................................. 16

8. The Reaction of Absent Members of the Settlement Class .................... 16

9. The Settlement is the Product of Non-Collusive, Arm’s-

Length Negotiations ................................................................................ 17

B. The Form and Methods of Notice Employed Satisfy Rule 23 and

Due Process ......................................................................................................... 18

C. Certification of the Settlement Class Is Appropriate .......................................... 19

1. The Requirements of Rule 23(a) Are Easily Satisfied ............................ 20

2. The Class Satisfies the Requirements of Rule 23(b)(1) and

(b)(2) ....................................................................................................... 21

a. Individual Actions Would Create Inconsistent

Adjudications or be Dispositive of the Interests of

Absent Members ......................................................................... 21

b. Defendants Have Acted on Grounds Generally

Applicable to the Class and Relief for the Class as a

Whole is Appropriate .................................................................. 22

3. The Requirements of Rule 23(g) Are Met .............................................. 22

IV. CONCLUSION ............................................................................................................... 23






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TABLE OF AUTHORITIES

Page(s)

Federal Cases

Amchem Prods., Inc. v. Windsor,

521 U.S. 591 (1997) .................................................................................................................19

Berger v. Xerox Corp. Ret. Income Guarantee Plan,

338 F.3d 755 (7th Cir. 2003) ...................................................................................................22

Churchill Vill. L.L.C. v. Gen. Elec.,

361 F.3d 566 (9th Cir. 2004) ...................................................................................................15

Class Plaintiffs v. City of Seattle,

955 F.2d 1268 (9th Cir. 1992) ...........................................................................................10, 15

Dennings v. Clearwire Corp.,

No. 10-1859, 2013 WL 1858797 (W.D. Wash. May 3, 2013) ................................................17

Dignity Health v. Rollins,

No. 16-258, 2016 WL 4548037 (U.S. Aug. 29, 2016) ..............................................................3

Foe v. Cuomo,

700 F. Supp. 107 (E.D.N.Y. 1988), aff’d, 892 F.2d 196 (2d Cir. 1989), cert.

denied, 498 U.S. 972 (1990) ....................................................................................................19

G.F. v. Contra Costa Cty.,

No. 13-03667, 2015 WL 7571789 (N.D. Cal. Nov. 25, 2015) ................................................17

In re Glob. Crossing Sec. & ERISA Litig.,

225 F.R.D. 436 (S.D.N.Y. 2004) .......................................................................................18, 22

K.M. v. Regence BlueShield,

No. 13-1214, 2014 WL 801204 (W.D. Wash. Feb. 27, 2014) .................................................20

Kaplan v. Saint Peter’s Healthcare Sys.,

810 F.3d 175 (3d Cir. 2015), petition for cert. filed, No. 16-86 (U.S. July 18,

2016) ................................................................................................................................4, 8, 11

Linney v. Cellular Alaska P’ship,

151 F.3d 1234 (9th Cir. 1998) .................................................................................................14

McCluskey v. Trs. of Red Dot Corp. Emp. Stock Ownership Plan & Tr.,

268 F.R.D. 670 (W.D. Wash. 2010) ............................................................................19, 21, 22






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In re Mego Fin. Corp. Sec. Litig.,

213 F.3d 454 (9th Cir. 2000) .............................................................................................14, 15

Mullane v. Cent. Hanover Bank & Trust Co.,

339 U.S. 306 (1950) .................................................................................................................18

In re Mut. Funds Inv. Litig.,

MDL No. 1586, 2010 WL 2307568 (D. Md. May 19, 2010) ..................................................22

MWS Wire Indus., Inc. v. Cal. Fine Wire Co.,

797 F.2d 799 (9th Cir. 1986) ...................................................................................................10

Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc.,

221 F.R.D. 523 (C.D. Cal. 2004) .................................................................................11, 14, 15

Officers for Justice v. Civil Serv. Comm’n,

688 F.2d 615 (9th Cir. 1982) ...................................................................................................10

Pelletz v. Weyerhaeuser,

255 F.R.D. 537 (W.D. Wash. 2009) ......................................................................12, 13, 15, 16

Rollins v. Dignity Health,

59 F. Supp. 3d 965 (N.D. Cal. 2014) .........................................................................................3


830 F.3d 900 (9th Cir. 2016) ...............................................................................................3, 11


No. 13-1450 (N.D. Cal. Apr. 1, 2013) ...............................................................................3, 4, 8

Stapleton v. Advocate Health Care Network,

817 F.3d 517 (7th Cir. 2016), petition for cert. filed, No. 16-74 (U.S. July 15,

2016) ....................................................................................................................................4, 11

Thorkelson v. Publ’g House of the Evangelical Lutheran Church in Am.,

No. 10-1712 (D. Minn. Apr. 21, 2010) ....................................................................................15

Villegas v. United States,

963 F.Supp.2d 1145 (E.D. Wash. 2013) ..................................................................................18

Wilson v. Venture Fin. Grp., Inc.,

No. 09-5678, 2011 WL 219692 (W.D. Wash. Jan. 24, 2011) ...........................................19, 20

Federal Statutes

28 U.S.C. § 1715 ..............................................................................................................................2

29 U.S.C. § 1002(33) .......................................................................................................................2






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29 U.S.C. § 1132(a) .......................................................................................................................22

Rules

Fed. R. Civ. P. 23 ...............................................................................................................20, 21, 22

Other Authorities

Pension and Employee Benefit Law 187-88 (6th ed. 2015) ...........................................................13






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I. INTRODUCTION

Plaintiffs Linda Griffith and Jeanette Wenzl, by and through their attorneys, respectfully

move the Court for an Order: (1) granting final approval of the Class Action Settlement

Agreement1 (“Settlement” or “Settlement Agreement”) described herein and preliminarily

approved by the Court on December 6, 2016 (Dkt. # 52); and (2) granting final certification of

the Class pursuant to Federal Rules of Civil Procedure 23(b)(1) and/or 23(b)(2).2 Defendants do

not oppose the relief sought herein but do not endorse all averments stated in this pleading.

The Settlement is an excellent result for the proposed Settlement Class, participants and

beneficiaries of the Providence Health & Services Cash Balance Retirement Plan (“Plan”): it

provides for $351.9 million in monetary relief, including a $350 million contribution to the Plan

and a cash payment of $500 to each of the 3,7993 former participants who terminated with

insufficient years of service to vest under the current Plan terms, but who would have been

entitled to vested benefits under the Employee Retirement Income Security Act of 1974, as

amended (“ERISA”). In addition to these payments, Providence will continue to make minimum

contributions to the Plan with the present intent to fully fund the Plan by December 31, 2029,

and will guarantee that there are sufficient assets in the Plan’s trust to pay participants’ accrued

benefits for as long as the Plan is in existence. The Settlement also includes significant

provisions that will enhance the retirement security of the members of the Settlement Class.

These protections are comparable to some of ERISA’s key provisions and will enable Plan

1 Capitalized terms not otherwise defined in this memorandum have the same meaning as ascribed to them in the

Settlement Agreement, attached hereto as Exhibit 1 (“Ex. 1”). 2 Plaintiffs file the instant Motion contemporaneously with their Motion for Awards of Attorneys’ Fees and

Expenses, and Incentive Fees to the Named Plaintiffs. 3 In connection with the Class Notice process, the Parties identified three participants who had been listed on

Schedule A to the Settlement Agreement, Ex. 1 hereto, but upon further inspection of relevant information, the

Parties determined these individuals were not properly included in Group II, which consists of former participants

who terminated service at Providence with more than three, but less than five, years of service under the terms of the

Plan. Accordingly, Class Notice was mailed to 3,799 people in Group II, rather than the 3,802 individuals originally

identified in Schedule A to the Settlement Agreement, Ex. 1. See Joint Declaration of Lynn Lincoln Sarko and

Michelle C. Yau in Support of (1) Plaintiffs’ Unopposed Motion for Final Approval of Settlement Agreement and

Certification of Settlement Class; and (2) Plaintiffs’ Motion for Awards of Attorneys’ Fees and Expenses, and

Incentive Fees to the Named Plaintiffs (“Joint Decl.”) ¶ 4 n.2, filed contemporaneously herewith. See also Affidavit

of Abigail Schwartz for Rust Consulting, Inc. (“Rust Aff.” or “Rust Affidavit”), filed contemporaneously herewith.






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participants and beneficiaries to receive important notices and disclosures concerning the Plan

and their benefits.

The Settlement was reached only after vigorous arm’s-length negotiations by experienced

counsel with the assistance of a third-party mediator who has had significant experience

mediating ERISA and church plan cases.

The Parties have fully complied with the terms of the Order Preliminarily Approving

Class Action Settlement Agreement (“Preliminary Approval Order”), Dkt. # 52, including

providing notice of the Settlement to the Settlement Class4 and mailing the Class Action Fairness

Act (“CAFA”) notices to the requisite officials pursuant to the CAFA statute.5 28 U.S.C. § 1715.

Under the governing standards for evaluating class action settlements in this Circuit, this

Settlement is fair, reasonable, and adequate, and therefore Plaintiffs respectfully ask that the

Court approve it.

II. FACTUAL AND PROCEDURAL BACKGROUND

A. Procedural History

On November 7, 2014, Plaintiffs Griffith and Wenzl filed a putative class action

Complaint in this Court against Providence—a large, non-profit healthcare provider—and

various other defendants (collectively, the “Defendants”) alleging violations of ERISA. See

Complaint, Dkt. # 1. The Complaint alleges that Defendants denied ERISA protections to the

participants and beneficiaries of the Plan, a defined benefit pension plan sponsored by

Providence, by incorrectly claiming that the Plan qualifies as an ERISA-exempt “church plan.”

See id. ¶¶ 1-9; 29 U.S.C. § 1002(33). It further alleges that, by improperly claiming this

exemption, Defendants deny Plan participants the protections of ERISA, including minimum

funding, vesting, notices, and disclosures.

On January 26, 2015, Defendants filed a motion to dismiss the Complaint. Dkt. # 32.

That motion focused mainly on the issue of whether, in order to claim the church plan

4 See Rust Aff. ¶ 10 and Exs. 1 and 2 thereto. 5 See Declaration of Benjamin Saper (“Saper Decl.”), submitted contemporaneously herewith.






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exemption, the plan must be established by a church; however, it also raised other factual and

legal disputes, such as constitutional arguments and issues concerning whether Providence is

“controlled by” or “associated with” a church under ERISA. See Dkt. ## 32, 37. Class Counsel

responded in detail to that motion and the arguments raised by Defendants. See Dkt. # 35; see

also Joint Decl. ¶ 15.

While the motion to dismiss briefing was in progress, the Parties engaged in informal

discovery. Plaintiffs propounded detailed discovery requests on Defendants, and Defendants

produced approximately 2,100 pages of documents in response to those requests, including Plan

documents, trust agreements, and communications with the Internal Revenue Service and

Department of Labor. See id. ¶ 16.

During this time period, another case concerning the church plan exemption, Rollins v.

Dignity Health (“Dignity”), No. 13-1450 (N.D. Cal. filed Apr. 1, 2013), was appealed to the

Ninth Circuit after the District Court ruled in favor of the plaintiff and held, on summary

judgment, that only a church could establish an ERISA-exempt church plan. See Rollins v.

Dignity Health, 59 F. Supp. 3d 965, 971 (N.D. Cal. 2014). Recognizing that a Ninth Circuit

ruling would have a substantial influence on the course of this litigation, the Parties stipulated to

a stay of this case until the Ninth Circuit ruled in the Dignity matter. See Dkt. # 38. A few days

after briefing on the motion to dismiss was complete, this Court granted the stay and ordered the

Parties to submit a joint status report within 21 days after the Ninth Circuit’s ruling in Dignity.

Dkt. # 39.

The Parties attended their first formal mediation on July 22, 2016. Joint Decl. ¶ 19.

Shortly thereafter, the Ninth Circuit issued its ruling in the Dignity case and held that: (1) a

church plan must be established by a church, and (2) a church plan must be maintained either by

a church or by a principal-purpose organization. Rollins v. Dignity Health, 830 F.3d 900, 905

(9th Cir. 2016). The Dignity defendants then petitioned for review of the Ninth Circuit’s

decision in the Supreme Court. See Dignity Health v. Rollins, No. 16-258, 2016 WL 4548037






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(U.S. Aug. 29, 2016). Around the same time, two other appellate court decisions relating to the

church plan exemption were likewise appealed to the Supreme Court—one from the Third

Circuit and one from the Seventh Circuit—both of which similarly held that a “church plan”

must be established by a church. Kaplan v. Saint Peter’s Healthcare Sys. (“St. Peter’s”), 810

F.3d 175 (3d Cir. 2015), petition for cert. filed, No. 16-86 (U.S. July 18, 2016); Stapleton v.

Advocate Health Care Network (“Advocate”), 817 F.3d 517 (7th Cir. 2016), petition for cert.

filed, No. 16-74 (U.S. July 15, 2016). (As discussed in more detail below, certiorari has now

been granted in all of these cases.)

The Parties continued mediating after the Dignity decision was issued by the Ninth

Circuit. On August 16, 2016, the Parties filed a Joint Status Report with the Court and stipulated

to continue the stay of this matter so that they could continue to engage in extensive settlement

negotiations. Dkt. # 43.

B. Settlement Negotiations

The settlement negotiations in this matter took place over the course of several months

and were overseen by a third-party JAMS mediator, Robert Meyer, Esq., who has substantial

experience mediating cases concerning ERISA and retirement plan issues, including cases

involving the church plan exemption in ERISA. Ex. 1 at § 2.7; Joint Decl. ¶ 22. These

negotiations included an in-person mediation session in Seattle, Washington, as well as

numerous calls and meetings. Joint Decl. ¶ 23. Both sides provided the mediator with their

respective mediation statements and also exchanged multiple proposals and counter-proposals

with each other concerning potential settlement terms. Id.

Prior to and during the course of these negotiations, Class Counsel investigated the facts,

circumstances, and legal issues associated with the allegations and defenses in the action. The

investigation included, inter alia: (a) inspecting, reviewing, and analyzing documents produced

by or otherwise relating to the Defendants, the Plan, and the administration and funding of the

Plan, including documents that Defendants produced for settlement purposes; (b) researching the






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applicable law with respect to the claims asserted in the case and the possible defenses thereto;

(c) consulting with experts; and (d) researching and analyzing governmental and other publicly-

available sources concerning Defendants, the Plan, and the industry. Ex. 1 at § 2.10; Joint Decl.

¶ 24. Class Counsel reviewed information from Providence’s actuary to confirm and verify the

schedule of former participants who accrued more than three, but less than five, years of vesting

service under the Plan and who were thus entitled to the Vesting Payment set forth in the

Settlement Agreement (“Group II”). See Ex. 1 at § 8.1.3; Joint Decl. ¶¶ 4 n.2, 25.6

After intensive negotiations, the Parties finally reached an agreement in principle to settle

the case. Joint Decl. ¶ 27. On September 29, 2016, the Parties filed a status report informing the

Court they had signed a Term Sheet containing the preliminary terms resolving this matter. Dkt.

# 48. They requested that the Court lift the stay in order to carry out settlement approval

proceedings, which the Court granted on September 29, 2016. Dkt. # 49.

Thereafter, the Parties drafted and finalized a comprehensive Settlement Agreement

based on the Term Sheet, which was executed by all Parties on October 20, 2016. See Ex. 1.

The Settlement is the result of lengthy and contentious arm’s-length negotiations between the

Parties. Joint Decl. ¶ 30. The process was thorough, adversarial, and professional. Id.

C. Terms of the Settlement Agreement.

The following summarizes the principal terms of the Settlement:7

1. Monetary Consideration

The monetary consideration provided under this Settlement is substantial, totaling $351.9

million. Providence will contribute $350 million to the Plan. Ex. 1 at § 8.1.2. This payment

will be made by annual contributions to the Plan for seven years. Id. Providence will also pay

$1.9 million in the aggregate (or $500/person) to the 3,799 individuals who left covered service

6 As discussed in n.3, supra, the Settlement Agreement originally identified 3,802 former participants who were in

Group II and entitled to the Vesting Payment. See Ex. 1 at Schedule A. However, upon further investigation, the

Parties determined that three individuals were improperly included in this Group II. Accordingly, Class Notice was

mailed to 3,799 Group II members. See Rust Aff. ¶ 10; Joint Decl. ¶ 4 n.2. 7 See Ex. 1.






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under the Plan after completing at least three, but less than five, years of vesting service but who

are not fully vested under the Plan’s terms. Id. at § 8.1.3. In addition to these payments,

beginning eight years after the Effective Date, Providence will make minimum contributions to

the Plan, as recommended by the Plan’s actuary, with the present intent to fully fund the Plan by

December 31, 2029. Id. at § 8.1.4.

2. Non-Monetary Equitable Consideration

In addition to contributing hundreds of millions of dollars into the Plan over the next

seven years, Providence also guarantees—for the duration of the Plan’s existence—that the

Plan’s trust will have sufficient funds to pay participants’ accrued benefits as they come due.

Ex. 1 § 9.1. Under the Settlement, Plan participants’ accrued benefits cannot be reduced if this

Plan is ever amended or terminated. Id. § 9.2. Additionally, if the Plan is ever merged with or

into another Plan, participants will be entitled to the same or greater benefits as they enjoyed

before the event. Id. § 9.3. As explained in more detail in section III(A)(4), these commitments

are crucial because, as it stands now, the Plan’s promise to pay is “fund-specific,” meaning that

the Plan’s financial responsibility for benefits is limited solely to the amount of assets held in the

Plan’s trust fund. Because of this Settlement, if the assets in the Plan’s trust are ever insufficient

to pay accrued benefits, Providence must make sufficient contributions to the trust to ensure all

accrued benefits are paid. Id. § 9.1.

3. Other Equitable Consideration

Plan participants also receive many other protections under this Settlement that are

comparable to key ERISA provisions. For example, Plan participants will be entitled to

summary plan descriptions describing the Plan, summaries of any material modifications to the

Plan, pension benefit statements, and claims procedures. Id. § 9.5. Plan participants and

beneficiaries may also request annual reports containing financial information about the Plan.

Id. § 9.5.2.






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4. Class

The Settlement contemplates that the Court will certify a non-opt-out class under Federal

Rule of Civil Procedure 23(b)(1) or (b)(2). Ex. 1 § 3.2.2(a). The Settlement Class is defined as:

All persons who are or were participants, whether vested or non-vested, in the Plan, on or after

January 1, 2008, and their beneficiaries. Id. § 1.31.

5. Released Claims

Section 4.1 of the Settlement Agreement generally defines the Released Claims as claims

brought by Plaintiffs, or claims that could have been asserted by Plaintiffs, arising out of the

allegations in the instant action. However, there is a significant carve out from the Released

Claims. Namely, the Settlement Agreement provides that Defendants will not be released

prospectively in the event of certain developments in the law, such as the Internal Revenue

Service issuing a written ruling that the Plan does not qualify as a church plan, or ERISA is

amended eliminating the church plan exception. See Ex. 1 § 4.1.4.

6. Notice

The Preliminary Approval Order provided for the following notices: (a) a mailed notice,

sent to the last known address of members of the Settlement Class, including an additional

enclosure with the Notice for each individual who terminated with more than three, but less than

five, years of “vesting service” in the Plan on or after January 1, 2008, and who was entitled to

the $500 payment (members of Group II); and (b) internet publication of the Settlement

Agreement and Class Notice on www.kellersettlements.com and

www.cohenmilstein.com/providence-settlement. Defendants paid the cost for notice, and the

notice was sent out on January 19, 2017. See Ex. 1 § 3.2.3; Rust Aff. ¶ 10.

7. Attorneys’ Fees

By separate application, Class Counsel seeks an award of attorneys’ fees, expenses, and a

class representative incentive award for the Named Plaintiffs (Linda Griffith and Jeanette

Wenzl),8 in an amount not to exceed $6.5 million. The Settlement Class was notified of these

8 As discussed in more detail in Plaintiffs’ Motion for Awards of Attorneys’ Fees and Expenses, and Incentive Fees






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details in the Class Notice. The attorneys’ fees are separate from the $350 million contribution

to the Plan and the $1.9 million pro rata payment to individuals who terminated with more than

three, but less than five, years of vesting service (Group II). Importantly, the attorneys’ fees,

expenses, and class representative Incentive Fees to the Named Plaintiffs will not reduce the

$351.9 million Class Settlement Amount. Ex. 1 § 8.1.5.

D. Reasons for the Settlement

Plaintiffs have entered into this proposed Settlement with an understanding of the risks

associated with continued litigation, which takes into account the strengths and weaknesses of

their claims. This understanding is based on: (1) the motion practice undertaken by the Parties in

the district court; (2) investigation and research; (3) the range of possible recovery; (4) the

substantial complexity, expense, and duration of litigation necessary to prosecute this action

through appeal, and if successful there, through trial, post-trial motions, and likely additional

appeals, and the significant uncertainties in predicting the outcome of this complex litigation;

(5) Defendants’ determination to fight and contest every aspect of the case; and (6) the pendency

of the proceedings in the United States Supreme Court concerning the scope and meaning of the

church plan exemption to ERISA. As noted in section II(A), since Plaintiffs’ Motion for

Preliminary Approval, Dkt. # 50, was filed, the Supreme Court has granted certiorari in all three

of the church plan cases cited above—Dignity, Advocate, and St. Peter’s. See Advocate Health

Care Network v. Stapleton, Saint Peter’s Healthcare Sys. v. Kaplan, Dignity Health v. Rollins,

Nos. 16-74, 16-86, 16-258 (cert. granted Dec. 2, 2016) (hereinafter, “Advocate, Saint Peter’s,

Dignity, Nos. 16-74, 16-86, 16-258”). The scope of the church plan exemption will now be

decided by the highest court in the country, and the uncertain outcome of those proceedings

raises risks for both sides in continuing this litigation. Having undertaken an analysis of all of

to the Named Plaintiffs, filed contemporaneously herewith, Plaintiffs seek an award of $10,000 for each of the two

Named Plaintiffs for their services in this litigation and on behalf of the Class. This amount will be paid out of the

$6.5 million being requested pursuant to section 8.1.5 of the Settlement Agreement, and will in no way reduce the

relief to the Settlement Class.






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these factors, Class Counsel have concluded that the Settlement is fair, reasonable, and adequate,

and that it should be approved. Moreover, to date Class Counsel have not received any

objections to the proposed Settlement.

E. Preliminary Approval

Class Counsel moved for preliminary approval of the Settlement Agreement on October

20, 2016, Dkt. # 50, and the Court entered the Preliminary Approval Order on December 6,

2016. In the Preliminary Approval Order, the Court found that the proposed Class met all the

requirements of Rules 23(a) and (b), and preliminarily certified the Class defined above pursuant

to Rules 23(b)(1) and/or (2) and 23(e). Id. at 3. The Court further appointed Linda Griffith and

Jeanette Wenzl, the Named Plaintiffs, as the Class representatives for the Settlement Class, and

appointed Keller Rohrback L.L.P. and Cohen Milstein Sellers & Toll, PLLC, as Class Counsel

for the Settlement Class. Id.

F. Notice to the Class and the Lack of Objections to Date

In paragraph 5 of the Preliminary Approval Order, the Court approved the form of the

proposed Notice and set deadlines for mailing and publishing the Notice and for posting the

Notice on the settlement websites created and maintained for this litigation. Id. at 4–5. In

accordance with the Court’s Order, Defendants issued the Court-approved Notice on January 19,

2017. The Rust Affidavit, submitted contemporaneously herewith, demonstrates compliance

with this Court’s Order for Class Notice. The Rust Affidavit attests to the mailing of 75,505

individual Notices to the Settlement Class (71,706 notices to Group I and 3,799 notices to Group

II), wherein February 21, 2017 was established as the deadline for objecting to the proposed

Settlement and Plaintiffs’ motion for attorneys’ fees and other relief. Rust Aff. ¶ 10. Further,

Rust created a dedicated telephone line for the Settlement Class. Id. ¶ 14. As of January 31,

2017, Rust had received approximately 207 phone inquiries. Id. ¶ 14.

By January 20, 2017, as required by the Preliminary Approval Order, Class Counsel also

posted and linked the Complaint, the Settlement Agreement, the Class Notice, the Preliminary






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Approval Motion, and the Preliminary Approval Order on www.kellersettlements.com and

www.cohenmilstein.com/providence-settlement, the dedicated Settlement websites through

which the Settlement Class could access Settlement-related information and materials. See Joint

Decl. ¶¶ 34-35. As of February 1, 2017, these sites had recorded 573 visitor sessions and Class

Counsel have responded to 110 email and phone inquiries. Id. ¶ 36.

III. THE COURT SHOULD GRANT FINAL APPROVAL OF THE SETTLEMENT

A. The Settlement Meets the Judicial Standards for Final Approval

Courts consistently favor the settlement of disputed claims, see MWS Wire Indus., Inc. v.

Cal. Fine Wire Co., 797 F.2d 799, 802 (9th Cir. 1986), particularly in class actions and other

complex matters, where the inherent costs, delays, and risks of continued litigation might

otherwise overwhelm any potential benefit the class could hope to obtain. See Class Plaintiffs v.

City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992). Now that the Court has preliminarily

approved the settlement and caused notice to issue to Settlement Class members consistent with

Federal Rule of Civil Procedure 23(e)(1) (see also section III(B), infra), the Court must decide

whether final approval is warranted. Ultimately, the Court should finally approve the settlement

if it determines that the settlement is “fundamentally fair, adequate, and reasonable.” Officers

for Justice v. Civil Serv. Comm’n, 688 F.2d 615, 625 (9th Cir. 1982). The Ninth Circuit has

articulated eight factors for courts to consider in this analysis, which are:

the strength of plaintiffs’ case; the risk, expense, complexity, and likely duration

of further litigation; the risk of maintaining class action status throughout the trial;

the amount offered in settlement; the extent of discovery completed, and the stage

of the proceedings; the experience and views of counsel; the presence of a

governmental participant; and the reaction of the class members to the proposed

settlement.

Id.

When examined under the applicable criteria, each and every factor supports final

judicial approval of the Settlement, which is an excellent result for the Class.






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1. The Strength of Plaintiffs’ Case Supports Settlement

Plaintiffs’ case is strong and they have pursued it vigorously, but the litigation is not

without risk or uncertainty. To date, Plaintiffs’ arguments that only churches may establish

ERISA-exempt church plans have been upheld by the Third, Seventh, and Ninth Circuit Courts

of Appeals. See Dignity, 830 F.3d at 905; St. Peter’s, 810 F.3d at 183; Advocate, 817 F.3d at

523. However, the United States Supreme Court has recently granted certiorari in all three of

those cases, and will be deciding whether, as Plaintiffs contend, church plans must be established

by churches; or whether, as Defendants contend, organizations “controlled by” or “associated

with” churches may establish their own church plans. See Advocate, Saint Peter’s, Dignity, Nos.

16-74, 16-86, 16-258 (certiorari granted Dec. 2, 2016). The pendency of proceedings in the

Supreme Court on the fundamental issues in this case—the meaning and scope of the “church

plan” exemption in ERISA—poses risks for both sides in continuing with this litigation.

First, the pendency of such proceedings means that this case could potentially be delayed

for months. Second, a decision from the Supreme Court will not necessarily resolve all the

issues in the litigation. The parties will still need to litigate how the Supreme Court’s ruling

applies to the facts of this case, as well as continue with fact and expert discovery, class

certification, preparation of witnesses and exhibits for trial, pre-trial memoranda and procedures,

presentation of witnesses and evidence at trial, and a near-certain appeal of any judgment.

Plaintiffs believe they would be successful, but are nevertheless conscious that continued

litigation comes with substantial risk and could result in non-recovery for the Class.

Given the potential risks and delays, a Class Settlement of $351.9 million, along with

significant other administrative and equitable protections, should be regarded as a highly

favorable recovery that warrants final approval. See Ex. 1 §§ 8.1–9.5.4.

2. The Settlement is Preferable to the Risk, Expense, Complexity, and Likely

Duration of Further Litigation

“[U]nless the settlement is clearly inadequate, its acceptance and approval are preferable

to lengthy and expensive litigation with uncertain results.” Nat’l Rural Telecomms. Coop. v.






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DIRECTV, Inc., 221 F.R.D. 523, 526–27 (C.D. Cal. 2004). Class Counsel believe strongly in

their claims and have vigorously pursued them, but there is risk in any litigation, and especially

here, where the area of the law—ERISA church plan litigation—is one of the most nuanced,

unpredictable, and rapidly developing in ERISA jurisprudence, as evidenced by the proceedings

in the Supreme Court. Moreover, presenting an ERISA case of this type on the merits is a

massive undertaking, with substantial risks, expense, and delay. Defendants have forcefully

defended their actions with respect to the Plan to date, and there is no reason to believe they

would not continue to do so through trial and on appeal if necessary. The monetary and non-

monetary consideration to the Plan is far better for the Class than the possibility of a more

significant recovery, if any, after an expensive and protracted trial and appeal.

3. The Risk of Maintaining Class Action Status Throughout the Trial Supports

Final Approval

Although the risk of maintaining class action status through trial is likely minimal in this

case, the balance of the factors still weighs in favor of final approval of the Settlement. See

Pelletz v. Weyerhaeuser, 255 F.R.D. 537, 542 (W.D. Wash. 2009) (“The Court finds that the risk

of maintaining the class action throughout the trial was probably minimal; however, the balance

of these factors favors approval, and the Court is not persuaded that this factor alone militates a

different result.”).

4. The Amount Offered in Settlement Is Substantial and Weighs in Favor of

Approval

The Settlement provides substantial monetary and equitable relief to the Plan and the

Class. As noted above, Providence will make a $350 million contribution to the Plan and

guarantee that the Plan’s trust will have sufficient assets to pay benefits as they come due. Ex. 1

at §§ 8.1.1, 8.1.4, 9.1. Providence also guarantees that participants’ accrued benefits cannot be

reduced in the event of a Plan amendment or termination, and that if this Plan is merged with or

into another Plan, participants and beneficiaries will be entitled to the same or greater benefits

after the merger. See Ex. 1 at §§ 9.2-9.3.






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These commitments are significant, as the liabilities of the Providence Plan are “fund-

specific.” Prior to the enactment of ERISA, the sponsor of a defined benefit plan could limit its

responsibility for benefit levels to whatever assets were contained in the trust fund, i.e., a “fund-

specific plan.” John H. Langbein et al., Pension and Employee Benefit Law 187-88 (6th ed.

2015). As explained in the Complaint, among the factors that led to the enactment of ERISA

were the widely-publicized failures of certain defined benefit pension plans, especially the plan

for employees of Studebaker Corporation, an automobile manufacturing company which

defaulted on its pension obligations in 1965. Complaint ¶ 49, citing Langbein, supra, at 78-83.

The Studebaker plan was fund-specific. Langbein, supra, at 244. ERISA prohibits this sort of

fund-specific defined benefit promise which failed the Studebaker employees. Id. Plaintiffs

allege that in claiming the church plan exemption, the Plan is, in essence, a Studebaker-esque

pre-ERISA plan. Of course, Defendants dispute this. In any event, the Settlement’s equitable

consideration provides the Plan’s participants and beneficiaries with several important

protections comparable to ERISA that they would otherwise lack.

In addition to the payments to the Plan, Providence will also make a pro rata payment of

$500 to each of the former participants who terminated with more than three, but less than five,

years of vesting service under the Plan, and who therefore allegedly forfeited a benefit under

ERISA.

The Settlement also includes other equitable provisions comparable to ERISA’s

protections, including requiring that Plan participants be provided with summary plan

descriptions, summaries of material modifications to the Plan, and administrative notices and

procedures (annual reports, pension benefit statements, and claims procedures). Ex. 1 at

§§ 9.5.1-9.5.4.

In light of the considerable monetary and equitable relief provided under this Settlement

versus the risks of long and protracted litigation, this Settlement Agreement should be approved.

See Pelletz, 255 F.R.D. at 542 (approving of settlement because “pursuing trial would have






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delayed the distribution of any benefits to the Class and would likely have incurred far more

expenses[]”); see also Linney v. Cellular Alaska P’ship, 151 F.3d 1234, 1242 (9th Cir. 1998)

(citation omitted) (settlement should not be judged against a “speculative measure” of what

could have been attained in negotiations).

5. The Fact that Extensive Investigation and Informal Discovery Were

Completed Before Settlement Favors Final Approval

Prior to, and during, settlement negotiations, Plaintiffs and Defendants completed a

careful investigation of the facts and law of this case, allowing the Parties to carefully evaluate

all of the “legal and factual issues surrounding this case.” Nat’l Rural, 221 F.R.D. at 527

(citation omitted). The Ninth Circuit has stated that “[i]n the context of class action settlements,

‘formal discovery is not a necessary ticket to the bargaining table’ where the parties have

sufficient information to make an informed decision about settlement.” In re Mego Fin. Corp.

Sec. Litig., 213 F.3d 454, 459 (9th Cir. 2000) (citation omitted).

Before filing the Complaint in this case, Plaintiffs engaged in extensive factual and legal

research in order to develop their claims and legal theories, which ultimately resulted in a

seventy-page Complaint. Joint Decl. ¶¶ 8-14. Such investigation included, among other things,

a review and analysis of: the statute at issue in this case, the legislative history behind it, and

agency and court opinions interpreting it; Plan documents; Providence’s public disclosures;

publicly-available financial statements; governmental filings; and information provided by the

Plaintiffs themselves. Id. The Parties honed the legal issues in this case during the motion to

dismiss briefing, and such issues became even more nuanced after decisions concerning the

church plan exemption from the Ninth, Third, and Seventh Circuit Courts of Appeals. Id. ¶¶ 15,

24. These appellate court decisions informed the Settlement negotiations in this case, as did the

risk that they would be appealed to the Supreme Court—a risk that has since come to fruition,

with the Supreme Court’s grant of certiorari in all three of these cases. Id.; see also section

II(A), supra.

The Parties’ settlement negotiations also benefited from all the informal discovery and






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research that was undertaken in this matter, including Defendants’ production of approximately

2,100 pages of documents concerning the Plan and its administration, the exchange of additional

documents during mediation, and the preparation of mediation statements. Joint Decl. ¶¶ 16, 23-

25.

In light of the above, the Parties possessed sufficient information to properly evaluate the

value and benefit of this Settlement Agreement, and this factor weighs in favor of final approval.

See Pelletz, 255 F.R.D. at 543 (approving settlement even though formal discovery was not

completed); In re Mego, 213 F.3d at 459.

6. The Opinions of Experienced Counsel Weigh in Favor of Approval

“‘Great weight’ is accorded to the recommendation of counsel, who are most closely

acquainted with the facts of the underlying litigation.” Nat’l Rural, 221 F.R.D. at 528 (citation

omitted); City of Seattle, 955 F.2d at 1291; Churchill Vill. L.L.C. v. Gen. Elec., 361 F.3d 566,

576-77 (9th Cir. 2004). “This is because ‘[p]arties represented by competent counsel are better

positioned than courts to produce a settlement that fairly reflects each party’s expected outcome

in the litigation.” Nat’l Rural, 221 F.R.D. at 528 (citing In re Pac. Enters. Sec. Litig., 47 F.3d

373, 378 (9th Cir. 1995)).

As evidenced by their firm resumes attached to the Joint Declaration (Exs. A and B

thereto), and as detailed in the Joint Decl. ¶¶ 39-48, Class Counsel have extensive experience in

handling ERISA church plan litigation and other class action ERISA cases. Keller Rohrback has

been litigating church plan cases since 2010 in the case of Thorkelson v. Publ’g House of the

Evangelical Lutheran Church in Am., No. 10-1712 (D. Minn. filed Apr. 21, 2010). Joint Decl. ¶

40. Keller Rohrback and Cohen Milstein serve as co-counsel in all three of the appellate court

cases mentioned above that are now pending in the Supreme Court concerning the applicability

of the church plan exemption to hospital pension plans. See section II(A), supra, and Joint Decl.

¶ 42. In addition, Keller Rohrback and Cohen Milstein serve, or have served, as co-counsel in

roughly 20 cases pending across the country involving claims by hospital systems that their plans






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qualify as “church plans.” Id. ¶ 41.

Based on their own experience and the facts of this case, Class Counsel believes that the

Settlement is fair, reasonable and is in the best interests of the Plan and the Class. This opinion

supports final approval of the Settlement. See Pelletz, 255 F.R.D. at 543.

7. The Presence of a Government Participant Supports Approval

The United States Department of Justice was given notice of this action because, as an

alternative cause of action, Plaintiffs allege that if the Plan is found to be an exempt church plan,

then to that extent and as applied to the Plan, the church plan exemption violates the

Establishment Clause of the United States Constitution. See Complaint ¶¶ 284-92; see also Pls.’

Notice of Constitutional Question, Dkt. # 18. This alternative, as-applied challenge to the

constitutionality of the exemption has not become “live” in this case; the government has not

submitted formal briefing on this issue; and the government has not yet formally intervened. See

Dkt. ## 29, 44.

In addition to the United States Department of Justice being on notice of this lawsuit and

the proposed Settlement, the state Attorneys General have also been given notice of the

Settlement, as required by the CAFA, 28 U.S.C. § 1715. See Saper Decl. ¶¶ 3-5, 8. Although it

has been several months since the CAFA notice was first issued, none of the state Attorneys

General has raised an objection to this Settlement. These factors all weigh in support of final

approval.

8. The Reaction of Absent Members of the Settlement Class

Both Plaintiffs fully support the proposed Settlement, but full consideration of this factor

cannot occur until after the deadline to file objections, which is February 21, 2017. Dkt. # 52 at

¶ 6. Class Counsel will address objections, if any, in their Reply in Support of Final Approval

(the “Reply”), due on March 14, 2017. Class Counsel have already spoken with 110 Class

members about the Settlement, and to date have not received any objections. Joint Decl. ¶¶ 36,

37. If objections are later received, Class Counsel will respond to them in the Reply.






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9. The Settlement is the Product of Non-Collusive, Arm’s-Length Negotiations

In addition to the eight factors above, when settlements are agreed upon prior to class

certification, district courts should also “consider whether the settlement is the product of

collusion among the negotiating parties.” G.F. v. Contra Costa Cty., No. 13-03667, 2015 WL

7571789, at *10 (N.D. Cal. Nov. 25, 2015) (citing In re Bluetooth Headset Prods. Liab. Litig.,

654 F.3d 935, 947 (9th Cir. 2011)). The Settlement in this instance is clearly non-collusive.

First, an experienced, neutral, third-party mediator oversaw all of the Settlement negotiations and

came up with a mediator’s proposal for the amount of attorneys’ fees, expenses, and Incentive

Fees for the Named Plaintiffs, to which the Parties ultimately agreed (subject to Court approval).

See Ex. 1 at § 8.1.5; see also Joint Decl. ¶¶ 5, 26. Second, the attorneys’ fees being sought in

this case (Ex. 1 at § 8.1.5) were not negotiated until after agreement was reached on the key

provisions for the Settlement Class. Joint Decl. ¶ 26. The requested amount does not in any way

reduce: the hundreds of millions of dollars in relief to the Settlement Class; Providence’s

commitments to continue making contributions to this Plan with the present intent to fully fund it

by December 31, 2029; Providence’s guarantee that the Plan’s trust will have sufficient assets to

pay vested benefits as they come due; or the equitable relief that Plan participants will receive,

such as important notices and disclosures about the Plan and their benefits. Ex. 1 at §§ 8.1.1–

8.1.5, 9.1–9.5.4. Moreover, even when examined as a percentage of the fund, the amount

requested is a very tiny fraction (1.8%) of the readily-ascertainable value of the Class Settlement

Amount of $351.9 million. Ex. 1 at §§ 8.1.1, 8.1.5; see also Plaintiffs’ Motion for Awards of

Attorneys’ Fees and Expenses, and Incentive Fees for the Named Plaintiffs, submitted

contemporaneously herewith. In the hotly-contested settlement negotiations, overseen by the

mediator, there was simply no trade-off of lesser benefits for the Settlement Class in exchange

for greater fees. See Dennings v. Clearwire Corp., No. 10-1859, 2013 WL 1858797, at *8-9

(W.D. Wash. May 3, 2013) (finding no collusion where the parties’ negotiations were arm’s-

length, guided by a mediator, discussed after the key settlement terms were negotiated, based

upon a mediator’s proposal, and there was no hint of a trade-off of lesser class benefits for






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greater fees).

B. The Form and Methods of Notice Employed Satisfy Rule 23 and Due Process

In accordance with the Preliminary Approval Order, the Settlement Class has been

provided with ample and sufficient notice of this Settlement, including an appropriate

opportunity to voice objections. The notice plan fully informed Settlement Class members of the

lawsuit and the proposed Settlement, and enabled them to make informed decisions about their

rights. Joint Decl. ¶ 34.

Due process requires that notice to class members be “reasonably calculated, under all the

circumstances, to apprise interested parties of the pendency of the action and afford them an

opportunity to present their objections.” Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S.

306, 314 (1950) (citation omitted). For the due process standard to be met, “[a]ctual notice need

not be provided to absent members of a class action settlement to bind them, assuming the notice

provided was the ‘best practicable notice.’” Villegas v. United States, 963 F.Supp.2d 1145, 1159

(E.D. Wash. 2013) (quoting Silber v. Mabon, 18 F.3d 1449, 1453-54) (9th Cir. 1994)). To

satisfy Rule 23, “[f]or non-opt out cases, such as the ERISA Actions, [all that is required is] such

unspecified ‘appropriate notice’ as ‘the court may direct[.]’” In re Glob. Crossing Sec. & ERISA

Litig., 225 F.R.D. 436, 448 (S.D.N.Y. 2004) (quoting Fed. R. Civ. P. 23(c)(2)(A)). Here, the

form and methods of notice of proposed Settlement provided pursuant to the Preliminary

Approval Order satisfy all due process considerations and Rules 23(c)(2) and (e)(1).

The mailed class notice provided detailed information about the Settlement to

approximately 75,505 individual members of the Settlement, including: (1) a comprehensive

summary of the Settlement’s terms; (2) notice of Class Counsel’s intent to request attorneys’

fees, reimbursement of expenses, and class representative Incentive Fees for the services

performed by Named Plaintiffs; and (3) detailed information about the Released Claims. Rust

Aff. ¶ 10, Joint Decl. ¶¶ 33-34. In addition, the notice provided information about the Fairness

Hearing date, rights of members of the Settlement Class to object (and deadlines and procedures






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for objecting), and the procedure to receive additional information. Joint Decl. ¶¶ 33-34; Rust

Aff. Exs. 1 and 2. The mailed class notice provided members of the Settlement Class with

contact information for Class Counsel, information on the toll-free phone number for inquiries,

and website addresses for further information. Id.

The notice form and methods employed here are substantially similar to those

successfully used in many other ERISA class settlements and “fairly, accurately, and neutrally

describe the claims and parties in the litigation[,] . . . the terms of the proposed settlement and the

identity of persons entitled to participate in it.” Foe v. Cuomo, 700 F. Supp. 107, 113 (E.D.N.Y.

1988), aff’d, 892 F.2d 196 (2d Cir. 1989), cert. denied, 498 U.S. 972 (1990) (citation omitted).

Accordingly, the notice provided to the Settlement Class satisfies the requirements of due

process and Rule 23.

C. Certification of the Settlement Class Is Appropriate

To proceed with the settlement approval process, it is necessary for the Court to certify a

class for Settlement. Federal Rule of Civil Procedure 23 provides that an action may be

maintained as a class action if each of the four prerequisites of Rule 23(a) is met and, in addition,

the action qualifies under one of the subdivisions of Rule 23(b). Courts in this jurisdiction have

consistently found that class certification is appropriate in ERISA cases. See McCluskey v. Trs.

of Red Dot Corp. Emp. Stock Ownership Plan & Tr., 268 F.R.D. 670, 678 (W.D. Wash. 2010)

(“‘Class actions are generally well-suited to litigation brought pursuant to ERISA.’”) (quoting

Banyai v. Mazur, 205 F.R.D. 160, 164 (S.D.N.Y. 2002)); Wilson v. Venture Fin. Grp., Inc.,

No. 09-5678, 2011 WL 219692, at *3 (W.D. Wash. Jan. 24, 2011). Furthermore, the Supreme

Court has acknowledged the propriety of certifying a class solely for settlement purposes.

See, e.g., Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 618 (1997). As set forth below, the

Class easily satisfies the requirements of Rule 23(a), (b)(1) and (b)(2) requirements and thus

certification of the Settlement Class is appropriate.






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1. The Requirements of Rule 23(a) Are Easily Satisfied

Rule 23(a)(1) requires that the class be “so numerous that joinder of all members is

impracticable.” Fed. R. Civ. P. 23(a)(1). Defendants have identified, and the Class Notice has

been sent to, approximately 75,505 members of the Settlement Class. See Rust Aff. ¶ 10. Thus,

the element of numerosity is met.

Rule 23(a)(2) requires that a class action raise “questions of law or fact common to the

class.” Fed. R. Civ. P. 23(a)(2). There need be only a single issue common to all members of

the class. K.M. v. Regence BlueShield, No. 13-1214, 2014 WL 801204, at *13 (W.D. Wash. Feb.

27, 2014) (“Commonality only requires a single significant question of law or fact.”). In the

instant case, members of the Settlement Class share multiple issues of law and fact, such as

whether the Plan is exempt from ERISA as a church plan, and, if not, whether the fiduciaries of

the Plan have failed to administer and fund the Plan in accordance with ERISA. Thus,

commonality is satisfied.

Rule 23(a)(3) requires that the claims or defenses of the representative parties be typical

of the claims or defenses of the class. When evaluating typicality, a court must analyze

“‘whether other members have the same or similar injury, whether the action is based on conduct

which is not unique to the named plaintiffs, and whether other class members have been injured

by the same course of conduct.’” K.M., 2014 WL 801204, at *14 (quoting Hanon v.

Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992)). Here, Plaintiffs’ claims arise from the

same course of events as the claims of the Settlement Class—Defendants’ alleged failure to

maintain the Plan in accordance with ERISA. Moreover, each member of the Settlement Class

asserts the same claims arising from the same conduct by Defendants and seeking the same relief

on behalf of the Plan—compliance with ERISA. Accordingly, typicality is met.

Rule 23(a)(4) requires that class representatives fairly and adequately protect the interests

of the class they seek to represent. This test looks to whether the Plaintiffs’ “attorneys are well

qualified to handle this type of litigation” and demands that Plaintiffs’ interests not be

“antagonistic to the remainder of the class.” Wilson, 2011 WL 219692, at *2. The “adequacy”






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test is easily met in this case, particularly in the context of the Settlement Class. The claims and

interests of the Named Plaintiffs were congruent with those of the other members of the

Settlement Class: all seek to enhance their retirement security under this Plan, whether through

monetary or non-monetary relief. There can be no question that the Named Plaintiffs’ interests

are aligned with those of the Settlement Class and that they have retained qualified counsel with

extensive experience representing plaintiffs in class litigation, including ERISA cases and church

plan cases specifically. Accordingly, this class action satisfies all the requirements of Rule

23(a).

2. The Class Satisfies the Requirements of Rule 23(b)(1) and (b)(2)

a. Individual Actions Would Create Inconsistent Adjudications or be

Dispositive of the Interests of Absent Members

A class may be certified under Federal Rule of Civil Procedure 23(b)(1) if, in addition to

meeting the requirements of Federal Rule of Civil Procedure 23(a), the prosecution of separate

actions by individual class members would create the risk of inconsistent adjudications, which

would create incompatible standards of conduct for the defendant, or would as a practical matter

be dispositive of the interests of absent members. Fed. R. Civ. P. 23(b)(1)(A) & (B). Here, the

risk of inconsistent adjudications and incompatible standards is obvious: in the absence of

certification, two participants could bring identical actions and achieve different results, with one

court holding that the Plan is an ERISA-regulated plan and the other holding that it is not.

Courts have certified classes under Rule 23(b)(1) in ERISA cases for those very reasons. See

McCluskey, 268 F.R.D. at 677 (“Where, as here, the primary relief is to the Plan as a whole, then

adjudications with respect to any individual member of the class would, as a practical matter,

alter the interests of other members of the class. . . . Thus, the proposed class clearly falls within

Rule 23(b)(1)(B)[.]”).

Moreover, the Advisory Committee on Rule 23 specifically notes that actions that

“charge[] a breach of trust by an indenture trustee or other fiduciary similarly affecting the

members of a large class of . . . beneficiaries”—i.e., an action like the present action—“should






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ordinarily be conducted as class actions” under Rule 23(b)(1)(B). See Fed. R. Civ. P.

23(b)(1)(B) Advisory Committee’s Note to 1966 Amendment; see also McCluskey, 268 F.R.D.

at 678 (“Certification is appropriate under Rule 23(b)(1) where plaintiff claims defendants

breached their fiduciary duties under ERISA, and any decision on that issue would necessarily

affect the interests of other participants.”) (citation omitted). As a result, certification of the

proposed class under Rule 23(b)(1) is appropriate in this ERISA Action.

b. Defendants Have Acted on Grounds Generally Applicable to the Class

and Relief for the Class as a Whole is Appropriate

A class may be certified under Federal Rule of Civil Procedure 23(b)(2) if “the party

opposing the class has acted or refused to act on grounds that apply generally to the class, so that

final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a

whole.” Fed. R. Civ. P. 23(b)(2). Here, Plaintiffs allege that Defendants failed to comply with

ERISA on a Plan-wide basis and seek declaratory relief that the Plan is not a church plan as well

as injunctive relief requiring that the Plan comply with ERISA. The available remedies include

monetary relief and remedial equitable relief to the Plan as a whole. ERISA §§ 502(a)(2) & (3),

29 U.S.C. §§ 1132(a)(2) & (3).

Remedies under ERISA section 502(a)(2), 29 U.S.C. § 1132(a)(2), are by definition plan-

wide, a classic example of equitable relief. See Mass. Mut. Life Ins. Co., 473 U.S. 134, 140-41

(1985). While the Settlement includes monetary consideration to the Plan, that consideration

goes to the Plan as a whole and flows directly from Plaintiffs’ prayer for injunctive and

declaratory relief. Berger v. Xerox Corp. Ret. Income Guarantee Plan, 338 F.3d 755, 763-64

(7th Cir. 2003) (certifying Fed. R. Civ. P. 23(b)(2) class where ERISA plaintiffs sought

declaratory relief); see also In re Mut. Funds Inv. Litig., MDL No. 1586, 2010 WL 2307568, at

*4 (D. Md. May 19, 2010) (same); In re Glob. Crossing, 225 F.R.D. at 453 (same).

Accordingly, Plaintiffs’ claims are also properly certified under Rule 23(b)(2).

3. The Requirements of Rule 23(g) Are Met

Federal Rule of Civil Procedure 23(g) requires the Court to examine the capabilities and






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resources of Class Counsel. Class Counsel have detailed the claims brought in this action, and

the time and effort already expended in connection with this litigation. See Section II, supra; see

also Joint Decl. ¶¶ 7-38. Moreover, Class Counsel are among the leading ERISA plaintiffs’

firms, and possess unparalleled expertise in the specific types of ERISA claims brought in this

lawsuit. Joint Decl. ¶¶ 39-48. Class Counsel thus satisfy the requirements of Rule 23(g).

IV. CONCLUSION

For the reasons discussed herein, Named Plaintiffs respectfully submit that the Settlement

should be granted final approval because it is a fair and reasonable result when viewed against

the governing standard. Moreover, the Settlement Class meets all the requirements of Rule 23

and should be finally certified.

DATED this 3rd day of February, 2017.

KELLER ROHRBACK L.L.P.

By: s/ Lynn Lincoln Sarko

s/ Erin M. Riley

s/ Laura Gerber

s/ Gretchen S. Obrist

s/ Havila C. Unrein

Lynn Lincoln Sarko, WSBA #16569

Erin M. Riley, WSBA #30401

Laura Gerber, WSBA #34981

Gretchen S. Obrist, WSBA #37071

Havila C. Unrein, WSBA #40881

1201 Third Avenue, Suite 3200

Seattle, WA 98101

Tel: (206) 623-1900

Fax: (206) 623-3384

Email: [email protected]











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By: s/ Ron Kilgard Ron Kilgard, Pro Hac Vice 3101 North Central Avenue, Suite 1400 Phoenix, AZ 85012 Tel: (602) 248-0088 Fax: (602) 248- 2822 Email: [email protected]

COHEN MILSTEIN SELLERS & TOLL,

PLLC

By: s/ Karen L. Handorf

s/ Michelle Yau Karen Handorf, Pro Hac Vice Michelle Yau, Pro Hac Vice 1100 New York Avenue, N.W. Suite 500, West Tower Washington, D.C. 20005 Tel: (202) 408-4600 Fax: (202) 408-4699 Email: [email protected] Email: [email protected] Attorneys for Plaintiffs






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CERTIFICATE OF SERVICE

I certify that on February 3, 2017, I electronically filed the foregoing with the Clerk of

the Court using the CM/ECF system which will send notification of such filing to all counsel of

record.

s/ Lynn Lincoln Sarko

Lynn Lincoln Sarko


EXHIBIT 1

Case 2:14-cv-01720-JCC Document 54-1 Filed 02/03/17 Page 1 of 61

Griffith, et al. v. Providence Health & Services, et al.

Settlement Agreement, October 20, 2016

CLASS ACTION SETTLEMENT AGREEMENT

This CLASS ACTION SETTLEMENT AGREEMENT is entered into by and between Plaintiffs,

as defined in § 1.21 below, on the one hand, and Defendants, as defined in § 1.8 below, on the

other. Capitalized terms and phrases have the meanings provided in § 1 below or as specified

elsewhere in this Settlement Agreement.

1. DEFINITIONS

1.1. “Action” shall mean: Griffith, et al. v. Providence Health & Services, et al., No. 14-

1720, an action pending in the United States District Court for the Western District of

Washington.

1.2. “Church Plan” shall mean: a plan which meets the definition of a “church plan” under

ERISA § 3(33), 29 U.S.C. § 1002(33) and Section 414(e) of the Internal Revenue Code of 1986,

as amended.

1.3. “Class Counsel” shall mean: Keller Rohrback L.L.P. and Cohen Milstein Sellers & Toll,

PLLC.

1.4. “Class Notice” shall have the meaning provided in § 3.2.1.

1.5. “Class Settlement Amount” shall have the meaning set forth in § 8.1.1.

1.6. “Complaint” shall mean: the Class Action Complaint filed in the Action on November 7,

2014.

1.7. “Court” shall mean: The United States District Court for the Western District of

Washington.

1.8. “Defendants” shall mean: Providence & Health Services; Retirement Plans Committee;

Ellen Wolf; John and Jane Does 1-20, inclusive, Members of the Retirement Plans Committee;

John or Jane Doe 21, Plan Director; Human Resources Committee of the Board of Directors;

John and Jane Does 22-40, inclusive, Members of the Human Resources Committee of the Board

of Directors; Rod Hochman; Board of Directors of Providence Health & Services; Michael

Holcomb; Chauncey Boyle; Isiaah Crawford; Martha Diaz Aszkenazy; Phyllis Hughes; Sallye

Liner; Kirby McDonald; Dave Olsen; Al Parrish; Carolina Reyes; Peter J. Snow; Michael A.

Stein; Charles Watts; Bob Wilson; John and Jane Does 41-50, inclusive.

1.9. “Effective Date” or “Effective Date of Settlement” shall mean: the date on which all of

the conditions to settlement set forth in § 3 of this Settlement Agreement have been fully

satisfied or waived and the Settlement shall have become Final.

1.10. “ERISA” shall mean: the Employee Retirement Income Security Act of 1974, as

amended, including all regulations promulgated thereunder.

Case 2:14-cv-01720-JCC Document 50-1 Filed 10/20/16 Page 2 of 61Case 2:14-cv-01720-JCC Document 54-1 Filed 02/03/17 Page 2 of 61



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1.11. “Fairness Hearing” shall have the meaning provided in § 3.2.5(a).

1.12. “Final” shall mean: with respect to any judicial ruling or order in the Action, that the

period for any appeals, petitions, motions for reconsideration, rehearing or certiorari or any other

proceedings for review (“Review Proceeding”) has expired without the initiation of a Review

Proceeding, or, if a Review Proceeding has been timely initiated, that there has occurred a full

and completed disposition of any such Review Proceeding, including the exhaustion of

proceedings in any remand and/or subsequent appeal on remand.

1.13. “Final Approval Motion” shall have the meaning provided in § 3.2.6.

1.14. “Final Approval Order” shall have the meaning provided in § 3.2.5(a).

1.15. “Incentive Fees to Plaintiffs” shall mean: any monetary amounts awarded by the Court

in recognition of the Named Plaintiffs’ assistance in the prosecution of the Action and payable

pursuant to § 8.1.5 below.

1.16. “Judgment” shall have the meaning provided in § 3.2.5(a).

1.17. “Nonvested Former Participants” shall mean the former 3,802 Plan participants who had

a break in covered service under the Plan on or after January 1, 2008 and who as of the break in

service were credited with at least three (3) Years of Vesting Service but less than five (5) Years

of Vesting Service and forfeited a benefit accrued under a cash balance formula.

1.18. “Party” or “Parties” shall mean the Plaintiffs and Defendants, either individually or

collectively.

1.19. “Payroll Year” shall mean the period for which pay was received by the Plan participant

from an employer participating in the Plan is reported on the Plan participant’s Wage and Tax

Statement (Form W-2) for a calendar year.

1.20. “Person” shall mean: an individual, partnership, corporation or any other form of

organization.

1.21. “Plaintiffs” and “Named Plaintiffs” shall mean: Linda Griffith and Jeanette Wenzl.

1.22. “Plan” shall mean: the Providence Health & Services Cash Balance Retirement Plan,

which is also commonly referred to as the “Core Plan.”

1.23. “Plan Payment” shall have the meaning set forth in § 8.1.2.

1.24. “Plan Sponsor” shall have the meaning provided in ERISA § 3(16)(B), 29 U.S.C. §

1002(16)(B).

1.25. “Preliminary Approval Motion” shall have the meaning provided in § 3.2.1.

1.26. “Preliminary Approval Order” shall have the meaning provided in § 3.2.1.




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1.27. “Providence” shall mean Providence Health & Services, a nonprofit corporation

organized in Washington.

1.28. “Released Claims” shall have the meaning provided in § 4.1.

1.29. “Releasees” shall mean: Providence, all entities that are considered to be a single

employer with Providence under Internal Revenue Code 414, 26 U.S.C. § 414, their employees,

agents, and directors, including the individual defendants.

1.30. “Representatives” shall mean: representatives, attorneys, agents, directors, officers,

employees, insurers and reinsurers.

1.31. “Settlement” shall mean: the settlement to be consummated under this Settlement

Agreement pursuant to the Final Approval Order.

1.32. “Settlement Agreement” shall mean this Class Action Settlement Agreement entered into

by and between Plaintiffs and Defendants.

1.33. “Settlement Class” shall mean: All Persons who are or were participants, whether vested

or non-vested, in the Plan on or after January 1, 2008, and their beneficiaries.

1.34. “Successor-In-Interest” shall mean: a Person’s estate, legal representatives, heirs,

successors or assigns, and any other Person who can make a legal claim by or through such

Person.

1.35. “Term Sheet” shall mean: the document entitled “Griffith, et al. v. Providence Health &

Services, et al. Settlement Term Sheet” dated September 26, 2016.

1.36. “Vesting Payment” shall have the meaning provided in § 8.1.3.

1.37. “Year of Vesting Service” means each Payroll Year in which a Plan participant was

credited with at least 800 hours of service.

2. RECITALS

2.1. In the Complaint, Plaintiffs allege and seek declaratory relief against Defendants that the

Plan is not a Church Plan within the meaning of ERISA § 3(33) and thus is subject to the

provisions of Title I and Title IV of ERISA. Plaintiffs allege that Defendants (a) violated

ERISA’s reporting and disclosure provisions; (b) failed to adhere to ERISA’s required minimum

funding standards for the Plan; (c) failed to establish the Plan pursuant to a written instrument

meeting the requirements of ERISA § 402; and (d) failed to establish a trust meeting the

requirements of ERISA § 403. Plaintiffs allege that Defendants breached fiduciary duties owed

to the Plan’s participants and beneficiaries, including Plaintiffs. Plaintiffs also allege that the

Church Plan exemption, as claimed by Defendants, violates the Establishment Clause of the First

Amendment of the United States Constitution. Defendants deny each and every allegation of the

Complaint and believe substantial and meritorious defenses exist for every claim alleged by

Plaintiffs.




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2.2. On January 26, 2015, Defendants filed a motion to dismiss the Complaint (Dkt. No. 32).

That motion was fully briefed (Dkt. Nos. 35, 37).

2.3. While the motion to dismiss briefing was in progress, the Parties engaged in informal

discovery. Plaintiffs propounded discovery requests on Defendants and Defendants produced

roughly 2,100 pages of documents in response to those requests, which included Plan documents,

trust agreements, and communications with the IRS and DOL. In addition, Class Counsel

engaged in substantial discovery and conducted both a legal and factual investigation of publicly

available sources during the course of this litigation.

2.4. During that same period, another case concerning the Church Plan exemption, Rollins v.

Dignity Health, No. 13-01450 (“Dignity”), was appealed to the Ninth Circuit after the District

Court ruled in favor of the plaintiffs and found, on summary judgment, that only a church could

establish a church plan. See Rollins v. Dignity Health, 59 F. Supp. 3d 965 (N.D. Cal. July 22,

2014).

2.5. Recognizing that a Ninth Circuit ruling would have a major bearing on the course of this

litigation, the Parties stipulated to a stay of this case until the Ninth Circuit ruled in the Dignity

matter. (See Dkt. No. 38.) The Court granted the stay on April 20, 2015, and ordered the Parties

to submit a joint status report within 21 days after the Ninth Circuit’s ruling in Dignity. (Dkt.

No. 39.)

2.6. On July 26, 2016, the Ninth Circuit issued its ruling in the Dignity case and held that (1) a

church plan must be established by a church, and (2) a church plan must be maintained either by

a church or by a principal-purpose organization. Rollins v. Dignity Health, 830 F.3d 900, 905

(9th Cir. 2016). Later, on September 21, 2016, the Supreme Court of the United States stayed

the Ninth Circuit’s mandate. Rollins v. Dignity Health, 579 U.S. __ (No. 16-258, Sept. 21,

2016).

2.7. Pursuant to the United State District Court’s Order (Dkt. No. 39), on August 16, 2016,

the Parties filed a joint status report with the Court. The Parties stipulated to stay the case while

the Parties engaged in extensive settlement discussions, including utilizing the assistance of a

third party mediator (Robert Meyer, Esq.) who has substantial experience mediating cases

involving ERISA and retirement plan issues, including cases involving the applicability of the

ERISA church plan exception.

2.8. On September 29, 2016, the Parties filed another status report in which they informed the

Court that they had signed the Term Sheet containing the preliminary terms resolving this matter.

(Dkt. No. 48). The Parties requested that the Court lift the stay of this Action in order to carry

out settlement approval proceedings. (Id.) The Court granted the request and lifted the stay on

September 29, 2016. (Dkt. No. 49.)

2.9. Defendants desire to resolve fully and settle with finality the Action and all of Plaintiffs’

Released Claims for themselves, the Settlement Class, and the Plan, thereby avoiding the risk,

expense, inconvenience, burden, distraction and diversion of their personnel and resources, and

uncertainty of outcome that is inherent in any litigation, associated with the Action.




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2.10. Class Counsel has conducted an extensive investigation into the facts, circumstances and

legal issues associated with the allegations made in the Action. This investigation has included,

inter alia: (a) inspecting, reviewing and analyzing documents produced by or otherwise relating

to Defendants and the Plan; (b) researching the applicable law with respect to the claims asserted

in the Action and the defenses and potential defenses thereto; (c) inspecting, reviewing and

analyzing documents concerning the Plan and administration of the Plan; (d) research and

analysis of governmental and other publicly-available information concerning the Defendants,

the Plan, and the relevant industry; and (e) participating in lengthy settlement negotiations with

Defendants’ counsel, presided over by mediator Robert Meyer, Esq.

2.11. Class Counsel’s investigation also included reviewing information provided by

Providence’s actuary in order to confirm that the individuals listed in Schedule A to this

Settlement Agreement are the appropriate population of individuals who are entitled to the

Vesting Payment set forth in § 8.1.3 of this Settlement Agreement. The data provided by

Providence’s actuary and reviewed by Class Counsel included (1) a list of Nonvested Former

Participants, and (2) a schedule of each Nonvested Former Participants’ hours of service per

Payroll Year.

2.12. Class Counsel believes that the Settlement will provide a substantial benefit to the

Settlement Class, and that, when that benefit is weighed against the attendant risks of continuing

the prosecution of the Action, the Settlement represents a reasonable, fair, and adequate

resolution of the claims of the Settlement Class. In reaching this conclusion, Class Counsel has

considered, among other things, the risks of litigation; the time necessary to achieve a complete

resolution through litigation; the complexity of the claims set forth in the Complaint; the ability

of Defendants to withstand judgment; and the benefit accruing to the Plan’s participants under

the Settlement.

2.13. Class Counsel believes that the Settlement will provide the Settlement Class with a

substantial number of the protections they would have received if the Action had been litigated

to a conclusion and Plaintiffs had prevailed.

2.14. Plaintiffs and Defendants have thus reached this Settlement by and through their

respective counsel on the terms and conditions set forth here, which they have had a full and

meaningful opportunity to consider with the advice of their respective counsel.

2.15. Defendants contend that nothing in the Term Sheet and/or this Settlement Agreement

should be construed as an agreement that the Plan is not properly treated as a Church Plan or that

the Plan is subject to ERISA. Plaintiffs contend that nothing in the Term Sheet and/or this

Settlement Agreement should be construed as an agreement that the Plan is properly treated as a

Church Plan or that the Plan is not subject to ERISA. Notwithstanding these differences between

the Parties, they agree jointly to the conditions set forth in this Settlement Agreement.

3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THE SETTLEMENT

3.1. Effectiveness of This Settlement Agreement. This Settlement Agreement shall not become

binding unless and until each and every one of the following conditions in §§ 3.2 through 3.8

shall have been satisfied.




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3.2. Court Approval. The Settlement contemplated under this Settlement Agreement shall

have been approved by the Court, as provided for in this § 3.2. The Parties agree jointly to

recommend to the Court that it approve the terms of this Settlement Agreement and the

Settlement contemplated hereunder. The Parties agree to undertake their best efforts, including

all steps and efforts contemplated by this Settlement Agreement, and any other steps or efforts

which may become necessary by order of the Court (unless such order modifies the terms of this

Settlement Agreement) or otherwise, to carry out this Settlement Agreement, including the

following:

3.2.1 Motion for Preliminary Approval of Settlement and of Notices. The Court shall

have approved the preliminary approval motion (“Preliminary Approval Motion”) to be filed by

Plaintiffs on or before October 20, 2016, and the Court shall issue an order (the “Preliminary

Approval Order”), including a class notice to be drafted and agreed upon by the Parties (the

“Class Notice”):

(a) Preliminarily approving this Settlement Agreement;

(b) Directing the time and manner of the Class Notice; and

(c) Finding that: (i) the proposed form of Class Notice fairly and adequately:

(A) describes the terms and effect of this Settlement Agreement and of the

Settlement, (B) gives notice to the Settlement Class of the time and place

of the hearing of the motion for final approval of this Settlement

Agreement, and (C) describes how the recipients of the Class Notice may

object to approval of this Settlement Agreement; and (ii) the proposed

manner of communicating the Class Notice to the members of the

Settlement Class is the best notice practicable under the circumstances.

3.2.2 Class Certification.

(a) The Court shall have certified the Action as a non-opt out class action for

settlement purposes only, pursuant to Federal Rules of Civil Procedure

23(b)(1) and/or (b)(2), with Named Plaintiffs as the named Settlement

Class representatives, Keller Rohrback L.L.P. and Cohen Milstein Sellers

& Toll, PLLC, as Class Counsel, and with the Settlement Class as defined

above.

(b) The Parties agree to stipulate to certification of the consolidated action as

a non-opt out class action for settlement purposes only, pursuant to

Federal Rules of Civil Procedure 23(b)(1) and/or (b)(2), on the foregoing

terms. If the Settlement does not become Final, then no Settlement Class

will be deemed to have been certified by or as a result of this Settlement

Agreement, and the Action will for all purposes revert to its status as of

the day immediately prior to the date on which the Term Sheet was

executed.




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3.2.3 Issuance of Class Notice. On the date and in the manner set by the Court in its

Preliminary Approval Order, Providence will cause notice of the Preliminary Approval Order to

be delivered to the Settlement Class in the form and manner approved by the Court. The Parties

shall confer in good faith with regard to the form of the Class Notice in an effort to utilize cost

effective forms of notice. The Parties agree that the Preliminary Approval Order shall provide

that the last known addresses for members of the Settlement Class in the possession of the Plan’s

current record-keeper will suffice for all purposes in connection with this Settlement, including,

without limitation, the mailing of the Class Notice. Providence will pay the cost for notice to the

Settlement Class as part of the settlement administration.

3.2.4 Internet/Publication of Class Notice. Class Counsel also shall have given notice

by publication of the Settlement Agreement and Class Notice on www.kellersettlements.com and

www.cohenmilstein.com/providence-settlement.

3.2.5 The Fairness Hearing.

(a) On the date set by the Court in its Preliminary Approval Order, the Parties

shall participate in the hearing (the “Fairness Hearing”) during or after

which the Court will determine by order (the “Final Approval Order”)

whether: (i) this Settlement Agreement is fair, reasonable and adequate

and should be approved by the Court; (ii) final judgment approving this

Settlement Agreement should be entered (“Judgment”); (iii) the Settlement

Class should be certified as a mandatory non-opt-out class meeting the

applicable requirements for a settlement class imposed by Federal Rule of

Civil Procedure 23; (iv) the requirements of Federal Rule of Civil

Procedure 23 and due process have been satisfied in connection with the

distribution of the Class Notice to members of the Settlement Class; (v)

the requirements of the Class Action Fairness Act have been satisfied; (vi)

to award Plaintiffs Incentive Fees and if so, the amount; and (vii) to award

attorneys’ fees and further expenses to Class Counsel and if so, the

amounts.

(b) The Parties covenant and agree that they will reasonably cooperate with

one another in obtaining an acceptable Final Approval Order at the

Fairness Hearing and will not do anything inconsistent with obtaining such

a Final Approval Order.

3.2.6 Motion for Final Approval of Class Action Settlement. On the date set by the

Court in its Preliminary Approval Order, Plaintiffs shall have filed a motion (the “Final Approval

Motion”) for a Final Approval Order. The Final Approval Motion shall seek the Court’s finding

that the Final Approval Order is a final judgment disposing of all claims and all Parties.

3.3. Finality of Final Approval Order. Subject to § 8.1.5, the Final Approval Order shall have

become Final, as defined in § 1.12 of this Settlement Agreement.

3.4. Compliance with the Class Action Fairness Act. The Court shall have determined that

Defendants complied with the Class Action Fairness Act of 2005 (“CAFA”) and its notice




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requirements by providing appropriate federal and state officials with information about the

Settlement.

3.5. Dismissal of Action. The Action shall have been dismissed with prejudice as against

Defendants on the Effective Date of Settlement.

3.6. No Termination. The Settlement shall not have terminated pursuant to § 10 below.

3.7. Materiality of Settlement Agreement Conditions. The Parties expressly acknowledge that

the effectiveness of this Settlement Agreement is specifically conditioned upon the occurrence of

each and every one of the foregoing conditions precedent prior to the Effective Date of

Settlement, and that a failure of any condition set forth in §§ 3.1 through 3.8 at any time prior to

the Effective Date of Settlement shall make this Settlement Agreement, and any obligation to

pay the amounts specified in § 8.1, or any portion thereof, null, void, and of no force and effect.

3.8. Establishment of Effective Date of Settlement. If Plaintiffs and Defendants disagree as to

whether each and every condition set forth in § 3 has been satisfied, they shall promptly confer in

good faith and, if unable to resolve their differences within five (5) business days thereafter, shall

present their disputes for determination to Robert M. Meyer, the Parties’ mediator, who shall

retain jurisdiction for this purpose. No portion of the Class Settlement Amount shall be

disbursed in the event of such a dispute pending the Court’s ruling. Disbursement shall

thereafter be made pursuant to the Court’s order.

4. RELEASES AND COVENANT NOT TO SUE

4.1. Released Claims. Released Claims shall mean any and all actual or potential claims,

actions, causes of action, demands, obligations, liabilities, attorneys’ fees, expenses and costs

arising out of the allegations of the Complaint that were brought or could have been brought as

of the date of the Settlement Agreement by any member of the Settlement Class, including any

current or prospective challenge to the Church Plan status of the Plan. Plaintiffs, on behalf of

themselves and on behalf of the Settlement Class, hereby expressly waive and relinquish, to the

fullest extent permitted by law and equity, the provisions, rights and benefits of § 1542 of the

California Civil Code, which provides: “A general release does not extend to claims which the

creditor does not know or suspect to exist in his favor at the time of executing the release, which

if known by him or her must have materially affected his or her settlement with the debtor.”

Released Claims are not intended to include the release of any of the following:

4.1.1 Any rights or duties arising out of the Settlement Agreement, including the

express warranties and covenants in the Settlement Agreement;

4.1.2 Claims for relief under state law pursuant to the terms of the Plan’s documents,

including but not limited to individual claims for benefits;

4.1.3 Claims related to any other plan that is merged, adopted, or consolidated into the

Plan after the execution date of this Settlement Agreement and before the Effective Date; and




9

4.1.4 Any claim arising under ERISA with respect to any event occurring after the

Internal Revenue Service issues a written ruling that the Plan does not qualify as a Church Plan;

the Plan Sponsor elects to be governed by ERISA; a court of law issues a definitive ruling that

the Plan is not a Church Plan; or an amendment to ERISA is enacted and becomes effective as a

law of the United States eliminating the Church Plan exception.

4.2. Release by Named Plaintiffs and Settlement Class. Subject to § 10 below, upon the

Effective Date of Settlement, Named Plaintiffs on behalf of themselves and on behalf of the

Settlement Class absolutely and unconditionally release and forever discharge the Releasees

from any and all Released Claims that Plaintiffs or the Settlement Class have. The Settlement

Class covenants and agrees: (i) not to file against any of the Releasees any claim based on,

related to, or arising from any Released Claim; and (ii) that the forgoing covenants and

agreements shall be a complete defense to any such claim against any Releasee.

4.3. Defendants’ Releases of Named Plaintiffs, the Settlement Class, and Class Counsel.

Subject to § 10 below, upon the Effective Date of Settlement, Defendants absolutely and

unconditionally release and forever discharge the Named Plaintiffs, the Settlement Class and

Class Counsel from any and all claims relating to the institution or prosecution of the Action.

4.4. Releasees’ Release of Other Releasees. Subject to § 10 below, upon the Effective Date

of Settlement, each of the Releasees also releases each of the other Releasees from any and all

claims which were asserted in the Complaint or any pleading which would have been required to

be filed in the Action or that would be barred by principles of res judicata or collateral estoppel

had the claims asserted in the Complaint or any such other pleading in the Action been fully

litigated and resulted in a Final judgment or order.

5. COVENANTS

Named Plaintiffs, on their own behalf and on behalf of the members of the Settlement

Class, the Plan, and Defendants, hereby covenant as follows:

5.1. Taxation of Settlement Payments. The Parties will act in good faith to attempt to

minimize adverse tax consequences of the Class Settlement Amount to the recipients. However,

Named Plaintiffs acknowledge that Defendants, Releasees and any of their Representatives or

Successors-In-Interest shall not have any responsibility for any taxes that may be due on the

Class Settlement Amount, or on any funds that the Plan, members of the Settlement Class, or

Named Plaintiffs receive from the Settlement Payments. Nothing herein shall constitute an

admission or representation that any taxes will or will not be due on the Class Payments or any

allocation or disbursement therefrom.

5.2. Non-Disparagement. The Parties, their counsel, and their agents shall refrain from

making derogatory or disparaging comments as to the Settlement Agreement, Plaintiffs, Class

Counsel, any Released Party, Defendants, the Plan, and/or Defendants’ Counsel.

6. REPRESENTATIONS AND WARRANTIES

6.1. Parties’ Representations and Warranties.




10

6.1.1 Named Plaintiffs represent and warrant that they have not assigned or otherwise

transferred any interest in any Released Claims against any Releasee, and further covenant that

they will not assign or otherwise transfer any interest in any Released Claims.

6.1.2 Named Plaintiffs represent and warrant that they shall have no surviving claim or

cause of action against any of the Releasees for the Released Claims against them.

6.1.3 The Parties, and each of them, represent and warrant that they are voluntarily

entering into this Settlement Agreement as a result of arm’s-length negotiations among their

counsel; in executing this Settlement Agreement they are relying solely upon their own

judgment, belief and knowledge, and the advice and recommendations of their own

independently selected counsel, concerning the nature, extent and duration of their rights and

claims hereunder and regarding all matters which relate in any way to the subject matter hereof;

except as expressly stated herein, they have not been influenced to any extent whatsoever in

executing this Settlement Agreement by any representations, statements or omissions pertaining

to any of the foregoing matters by any other Party or its Representatives; and each Party assumes

the risk of and unconditionally waives any and all claims or defenses arising out of any alleged

mistake as to facts or law.

6.1.4 The Parties, and each of them, represent and warrant that they have carefully read

the contents of this Settlement Agreement; they have made such investigation of the facts and

law pertaining to this Settlement Agreement and all of the matters pertaining thereto as they

deem necessary; and this Settlement Agreement is executed freely by each Person executing it on

behalf of each of the Parties.

6.2. Signatories’ Representations and Warranties. Each individual executing this Settlement

Agreement on behalf of any other Person does hereby personally represent and warrant to the

other Parties that he or she has the authority to execute this Settlement Agreement on behalf of,

and fully bind, each principal which such individual represents or purports to represent.

7. NO ADMISSION OF LIABILITY

Defendants deny any and all allegations of wrongdoing made in the Complaint.

Defendants aver that the Plan has been and continues to be properly administered as a Church

Plan as defined in Internal Revenue Code section 414(e), 26 U.S.C. § 414(e), and ERISA section

3(33), 29 U.S.C. § 3(33). This Settlement is not evidence of any liability of any type.

8. SETTLEMENT PAYMENTS

8.1. The Class Settlement Amount.

8.1.1 The “Class Settlement Amount” shall be three hundred fifty-one million, nine

hundred and one thousand dollars ($351,901,000.00), which consists of the Plan Payment

defined in § 8.1.2 and the Vesting Payment defined in § 8.1.3.

8.1.2 Plan Payment. Providence will contribute three hundred and fifty million dollars

($350,000,000.00) to the Plan. This payment will be made by annual contributions to the Plan




11

for seven years. The payment schedule will be as follows: after January 1, 2017, and within

thirty days after the Effective Date, Providence will make an initial $50 million contribution to

the Plan. For each of the remaining six years, Providence will make an annual payment of $50

million to the Plan in each calendar year thereafter. The annual payments made in the remaining

six years will be made on a quarterly basis. Providence may pay an amount greater than the

annual amount required by this Settlement Agreement at any time, in which case the excess

contribution may be used to reduce subsequent contributions up to $350 million.

8.1.3 Vesting Payment to Nonvested Former Participants. In addition to the payment

made in § 8.1.2, after January 1, 2017, and within thirty (30) days after the Effective Date,

Defendants will pay up to one million, nine hundred and one thousand dollars ($1,901,000.00),

in the aggregate ($500 per person) to the total of 3,802 Nonvested Former Participants.

Nonvested Former Participants are identified on Schedule A of this Settlement Agreement.

Payment will be sent to those individuals’ last known addresses.

8.1.4 Minimum Funding. Beginning eight years after the Effective Date, and

continuing thereafter as long as the Plan has not been terminated, Providence will make annual

minimum contributions recommended by the Plan’s enrolled actuary to fully fund the Plan by

December 31, 2029, which shall not be interpreted to require that the Plan actually be fully

funded by such date.

8.1.5 Attorneys’ Fees, Expenses, and Incentive Fees for Plaintiffs. On the date set by

the Court in its Preliminary Approval Order, Plaintiffs shall petition the Court for an award of

attorneys’ fees and costs and Incentive Fees for Plaintiffs, as specified in this § 8.1.5.

Defendants expressly agree not to contest or take any position with respect to Plaintiffs’

application to the Court for an award of attorney fees, out of pocket expenses, and Incentive Fees

for Plaintiffs, the aggregate of which shall not exceed six million five hundred thousand dollars

($6,500,000.00). Defendants will cause this award to be paid in addition to the payments

described in §§ 8.1.1, 8.1.2, and 8.1.3, and 8.1.4 of this Settlement Agreement. Class Counsel’s

attorney fees, expenses, and Incentive Fees for Plaintiffs will be subject to the discretion and

approval of the District Court. Such attorneys’ fees and expenses, as are awarded by the Court in

its discretion, shall be paid to Plaintiffs’ Counsel two weeks after the Court’s entry of the Final

Approval Order and Judgment, notwithstanding the existence of any timely-filed objections

thereto, potential for appeal therefrom, or any collateral attack on the Settlement Agreement or

any part thereof, subject to the obligation of Class Counsel to make appropriate refunds or

repayments to Providence plus accrued interest (based on the one year Treasury constant

maturity rate) within ten calendar days, if and when, as a result of any appeal and/or further

proceedings on remand, or successful collateral attack, the fee or expense award is reduced or

reversed. The procedure for and the allowance or disallowance of any application for attorneys’

fees and expenses are matters separate and apart from the Settlement and shall be requested to be

considered by the Court separately from the Court’s consideration of the fairness,

reasonableness, and adequacy of the Settlement. Any order or proceeding relating solely to an

award of attorneys’ fees and expenses, or any appeal from any order relating thereto, or any

reversal or modification thereof, shall have no effect on the Settlement and shall not operate to,

or be grounds to, terminate or cancel the Settlement Agreement or to affect or delay the finality

of the Final Approval Order or Judgment.




12

8.2. Cost of Notice. Providence shall pay the cost for Class Notice in addition to the amounts

specified in § 8.1.

8.3. Sole Monetary Contributions. The payments provided for in § 8.1 and § 8.2 shall be the

full and sole consideration made by or on behalf of the Releasees in connection with the Action

and this Settlement Agreement. The amount specified in § 8.1.5 specifically satisfies any claims

for costs and attorneys’ fees by Class Counsel and claims for Incentive Fees to Plaintiffs. Except

as set forth above, the Parties shall bear their own costs and expenses (including attorneys’ fees).

9. AGREED UPON PLAN PROVISIONS.

9.1. Benefits Commitment. If the Plan’s trust is ever insufficient to pay benefits as they are

due, Providence, and any successor to Providence, will contribute sufficient funds to pay the

vested benefits payable to participants under the terms of the Plan as they are due.

9.2. Plan Mergers. Commencing sixty days after the Effective Date, if the Plan is merged

with or into another plan adopted by additional employers, or consolidated with another plan,

participants and beneficiaries in all affected plans will be entitled to the same (or greater)

accrued benefit post- merger, adoption, or consolidation event as they enjoyed before the event.

9.3. Plan Amendments. Providence retains the right to amend or terminate the Plan at any

time, provided that no amendment or termination would result in a reduction in a participant or

beneficiary’s accrued benefit.

9.4. Funding Restrictions. If the Plan is ever determined to be governed by ERISA, nothing

herein shall be interpreted to prevent the Plan from complying with the benefit restrictions of

Section 436 of the Internal Revenue Code of 1986, as amended, or any other applicable law,

including all restrictions on lump sum payments.

9.5. Plan Administrative Arrangements. Commencing sixty days after the Effective Date, the

Providence Retirement Plans Committee (“Plan Administrator”) will put in place certain

arrangements concerning Plan administration, notices, and procedures as set forth in detail in this

§ 9.5.

9.5.1 Summary Plan Descriptions (SPDs) & Summary of Material Modifications

(SMMs). The Plan Administrator’s designee shall prepare documents (referred to herein as

“SPDs”) written in a manner calculated to be understood by the average participant, that contain

the following information: the name and type of administration of the Plan, the name and address

of the person designated as agent for the service of legal process, if such person is not the

administrator; the name and address of the administrator; names, titles, and addresses of any

trustee or trustees (if they are persons different from the administrator); a description of the

relevant provisions of any applicable collective bargaining agreement; the Plan’s requirements

respecting eligibility for participation and benefits; a description of the provisions providing for

nonforfeitable pension benefits; circumstances which may result in disqualification, ineligibility,

or denial or loss of benefits; the source of financing of the Plan and the identity of any

organization through which benefits are provided; the date of the end of the Plan year and

whether the records of the Plan are kept on a calendar, policy, or fiscal year basis; the procedures




13

to be followed in presenting claims for benefits under the Plan, including procedures for

providing adequate notice in writing to any participant or beneficiary whose claim for benefits

has been denied, setting forth the specific reasons for such denial, written in a manner calculated

to be understood by the participant, as well as procedures to afford a reasonable opportunity to

any participant whose claim for benefits has been denied for a full and fair review by the

appropriate named fiduciary of the decision denying the claim; and the remedies available under

the Plan for the redress of claims which are denied in whole or in part. The SPDs shall be

distributed only to current participants via email or using Providence’s existing intranet systems.

The Plan Administrator’s designee shall also prepare documents that are similar in content to the

information listed in 29 C.F.R. § 2520.104b-3. Any such documents shall be furnished to current

participants via email or the use of Providence’s existing intranet systems. Current participants

and beneficiaries may send a written request for a written SPD or documents prepared after a

material modification, and Providence shall provide a hard copy of such SPD or document

prepared after a material modification to the participant within thirty days of receiving the

participant or beneficiary’s request.

9.5.2 Annual Report. The Plan Administrator shall prepare annual reports that include

information described in section 103(b) of ERISA, information described in section 103(c) of

ERISA, and an actuarial statement containing the information described in section 103(d) of

ERISA, excluding information relating to minimum funding and contributions under ERISA,

information required by the Pension Benefit Guaranty Corporation, and other information that

may be required by the Secretary of Labor for ERISA governed plans. The annual reports shall

be available to participants or beneficiaries on request.

9.5.3 Pension Benefit Statements. The Plan Administrator shall prepare pension benefit

statements containing the information described in ERISA section 105 for defined benefit plans.

The pension benefit statements shall be distributed to participants as such distributions are

described in ERISA section 105(a)(3), and to beneficiaries on request.

9.5.4 Plan Claim Review Procedure. The Plan’s claim review procedures, which shall

be included as part of the SPD, shall state: (a) the identity of the person or entity to whom a

claim should be addressed; (b) the time period for filing a claim; (c) the information that must be

provided in support of the claim; (d) if a claim is denied, in whole or in part, the person or entity

to whom an appeal should be sent; (e) the time period for filing a claim appeal; and (f) the

information the claimant may provide in support of an appeal.

10. TERMINATION OF THE SETTLEMENT AGREEMENT

10.1. Automatic Termination. This Settlement Agreement shall automatically terminate, and

thereupon become null and void, in the following circumstances:

10.1.1 If the Court declines to approve the Settlement, and if such order declining

approval has become Final, then this Settlement Agreement shall automatically terminate, and

thereupon become null and void, on the date that any such order becomes Final, provided,

however, that if the Court declines to approve the Settlement for any reason, the Parties shall

negotiate in good faith to cure any deficiency identified by the Court, and further provided that if




14

necessary to cure any such deficiency, Class Counsel shall re-submit within a reasonable time

the Preliminary or Final Approval Motion with an additional or substitute member of the

Settlement Class as a named Class Representative.

10.1.2 If the Ninth Circuit reverses the District Court’s order approving the Settlement,

and if within ninety-one (91) days after the date of any such ruling the Parties have not agreed in

writing to proceed with all or part of the Settlement Agreement as modified by the Ninth Circuit

or by the Parties, then, provided that no Review Proceeding is then pending from such ruling,

this Settlement Agreement shall automatically terminate, and thereupon become null and void,

on the ninety-first day after issuance of the Ninth Circuit order referenced in this § 10.1.2.

10.1.3 If the Supreme Court of the United States reverses or remands a Ninth Circuit

order approving the Settlement, and if within thirty-one (31) days after the date of any such

ruling the Parties have not agreed in writing to proceed with all or part of the Settlement

Agreement as modified by the Supreme Court or by the Parties, then this Settlement Agreement

shall automatically terminate, and thereupon become null and void, on the thirty-first day after

issuance of the Supreme Court order referenced in this § 10.1.3.

10.1.4 If a Review Proceeding is pending of an order declining to approve the Settlement

Agreement or modifying this Settlement Agreement, this Settlement Agreement shall not be

terminated until Final resolution or dismissal of any such Review Proceeding, except by written

agreement of the Parties.

10.2. Consequences of Termination of the Settlement Agreement. If the Settlement Agreement

is terminated and rendered null and void for any reason, the following shall occur:

10.2.1 The Action shall for all purposes with respect to the Parties revert to its status as

of the day immediately prior to the execution of the Term Sheet.

10.2.2 All Releases given or executed pursuant to the Settlement Agreement shall be null

and void; none of the terms of the Settlement Agreement shall be effective or enforceable;

neither the fact nor the terms of the Settlement Agreement shall be offered or received in

evidence in the Action or in any other action or proceeding for any purpose, except in an action

or proceeding arising under this Settlement Agreement.

10.2.3 If attorney’s fees have been paid to Class Counsel, within ten days of the

termination of the Settlement Agreement, Class Counsel will refund or repay Providence the paid

attorney’s fees, plus accrued interest (based on the one year Treasury constant maturity rate).

11. MISCELLANEOUS PROVISIONS

11.1. Jurisdiction. The Court shall retain jurisdiction over all Parties, the Action, and this

Settlement Agreement to resolve any dispute that may arise regarding this Settlement Agreement

or the orders and notice referenced in § 3 above, including any dispute regarding validity,

performance, interpretation, administration, enforcement, enforceability, or termination of the

Settlement Agreement and no Party shall oppose the reopening and reinstatement of the Action

on the Court’s active docket for the purposes of effecting this § 11.1.




15

11.1.1 Robert Meyer, mediator in the Action, will act as the final arbiter of any

disagreements as to language and confirmatory discovery regarding the Settlement Agreement.

11.2. No Limitation of Remedies. In the event that the Defendants breach this Settlement

Agreement, Plaintiffs will continue to have any and all remedies for such breach. In the event

that Plaintiffs breach this Settlement Agreement, Defendants will continue to have any and all

remedies for such breach.

11.3. Governing Law. This Settlement Agreement shall be governed by the laws of the United

States, including federal common law, except to the extent that, as a matter of federal law, state

law controls, in which case Washington law will apply without regard to conflict of law

principles.

11.4. Severability. The provisions of this Settlement Agreement are not severable.

11.5. Amendment. Before entry of a Final Approval Order, any common law to the contrary

notwithstanding, this Settlement Agreement may be modified or amended only by written

agreement signed by or on behalf of all Parties. Following entry of a Final Approval Order, any

common law to the contrary notwithstanding, the Settlement Agreement may be modified or

amended only by written agreement signed on behalf of all Parties, and approved by the Court.

11.6. Waiver. The provisions of this Settlement Agreement may be waived only by an

instrument in writing executed by the waiving Party. The waiver by any Party of any breach of

this Settlement Agreement shall not be deemed to be or construed as a waiver of any other

breach of this Settlement Agreement, whether prior, subsequent, or contemporaneous with this

Settlement Agreement.

11.7. Construction. None of the Parties hereto shall be considered to be the drafter of this

Settlement Agreement or any provision hereof for the purpose of any statute, case law or rule of

interpretation or construction that would or might cause any provision to be construed against a

drafter.

11.8. Principles of Interpretation. The following principles of interpretation apply to this

Settlement Agreement:

11.8.1 Headings. The headings of this Settlement Agreement are for reference purposes

only and do not affect in any way the meaning or interpretation of this Settlement Agreement.

11.8.2 Singular and Plural. Definitions apply to the singular and plural forms of each

term defined.

11.8.3 Gender. Definitions apply to the masculine, feminine, and neuter genders of each

term defined.

11.8.4 References to a Person. References to a Person are also to the Person’s permitted

successors and assigns.




16

11.8.5 Terms of Inclusion. Whenever the words “include,” “includes” or “including” are

used in this Settlement Agreement, they shall not be limiting but rather shall be deemed to be

followed by the words “without limitation.”

11.9. Further Assurances. Each of the Parties agrees, without further consideration, and as part

of finalizing the Settlement hereunder, that they will in good faith execute and deliver such other

documents and take such other actions as may be necessary to consummate and effectuate the

subject matter and purpose of this Settlement Agreement.

11.10. Survival. All representations, warranties and covenants set forth in this Settlement

Agreement shall be deemed continuing and shall survive the Effective Date of Settlement.

11.11. Notices. Any notice, demand or other communication under this Settlement Agreement

(other than notices to members of the Settlement Class) shall be in writing and shall be deemed

duly given if it is addressed to each of the intended recipients as set forth below and personally

delivered, sent by registered or certified mail (postage prepaid), sent by confirmed facsimile, or

delivered by reputable express overnight courier:

A. IF TO NAMED PLAINTIFFS:

Lynn Lincoln Sarko KELLER ROHRBACK L.L.P. 1201 Third Avenue, Suite 3200 Seattle, WA 98101-3052 Fax: (206) 623-3384

Ron Kilgard KELLER ROHRBACK L.L.P. 3101 North Central Ave., Suite 1400 Phoenix, AZ 85012 Fax: (206) 248-2822

Karen L. Handorf Michelle C. Yau COHEN MILSTEIN SELLERS & TOLL, PLLC 1100 New York Ave., NW, Suite 500 West Washington, DC 20005 Fax: (202) 408-4699

B. IF TO DEFENDANTS:




17

Howard Shapiro

Stacey C.S. Cerrone

PROSKAUER ROSE LLP

650 Poydras Street, Suite 1800

New Orleans, LA 70130

Fax: (504) 310-2022

Cindy Fein Strauss

Executive Vice President, Chief Legal Officer

Providence

1801 Lind Avenue SW

Renton, WA 98057

Fax: (206) 215-6262 Any Party may change the address at which it is to receive notice by written notice delivered to

the other Parties in the manner described above.

11.12. Entire Agreement. This Settlement Agreement contains the entire agreement among the

Parties relating to the settlement of the Action. It specifically supersedes any settlement terms or

settlement agreements relating to Defendants that were previously agreed upon orally or in

writing by any of the Parties, including the terms of the Term Sheet and any and all discussions,

representations, warranties or the like prior to the Effective Date of Settlement.

11.13. Counterparts. This Settlement Agreement may be executed by exchange of faxed or

emailed executed signature pages, and any signature transmitted by facsimile for the purpose of

executing this Settlement Agreement shall be deemed an original signature for purposes of this

Settlement Agreement. This Settlement Agreement may be executed in two or more

counterparts, each of which shall be deemed to be an original, but all of which, taken together,

shall constitute one and the same instrument.

11.14. Binding Effect. This Settlement Agreement binds and inures to the benefit of the parties

hereto, their assigns, heirs, administrators, executors and Successors-in-Interest.

IN WITNESS WHEREOF, the Parties have executed this Settlement Agreement on the dates set

forth below.



Griffith, et al. v. Providence Health & Services, et al. Settlement Agreement, October 20, 2016

19

FOR ALL DEFENDANTS

Dated this the 20th day of October 2016.

By: ____________________________________ Howard Shapiro Robert W. Rachal Stacey C.S. Cerrone PROSKAUER ROSE LLP 650 Poydras Street, Suite 1800 New Orleans, LA 70130 Michael Reiss John A. Goldmark DAVIS WRIGHT TREMAINE LLP 1201 Third Avenue, Suite 2200 Seattle, WA 98101-3045 Attorneys for Defendants




SCHEDULE A TO

CLASS ACTION SETTLEMENT AGREEMENT

REDACTED

Schedule A consists of sensitive information that the Court need not consider; accordingly, this

Schedule A has been redacted pursuant to Local Rules W.D. Wash. LCR 5(g)(1)(B).


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EXHIBIT 2


[PROPOSED] ORDER AND FINAL

JUDGMENT

(2:14-cv-01720-JCC)

LAW OFFICES OF




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The Honorable John C. Coughenour

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON AT SEATTLE

LINDA GRIFFITH and JEANETTE WENZL,

on behalf of themselves, individually, and on

behalf of the Providence Health & Services

Cash Balance Retirement Plan,

Plaintiffs,

v.

PROVIDENCE HEALTH & SERVICES;

RETIREMENT PLANS COMMITTEE;

ELLEN WOLF; JOHN and JANE DOES 1-20,

inclusive, MEMBERS OF THE RETIREMENT

PLANS COMMITTEE; JOHN or JANE DOE

21, PLAN DIRECTOR; HUMAN


OF DIRECTORS; JOHN and JANE DOES 22-

40, inclusive, MEMBERS OF THE HUMAN


OF DIRECTORS; ROD HOCHMAN; BOARD

OF DIRECTORS OF PROVIDENCE HEALTH

& SERVICES; MICHAEL HOLCOMB;

CHAUNCEY BOYLE; ISIAAH CRAWFORD;

MARTHA DIAZ ASZKENAZY; PHYLLIS

HUGHES; SALLYE LINER; KIRBY

McDONALD; DAVE OLSEN; AL PARRISH;

CAROLINA REYES; PETER J. SNOW;

MICHAEL A. STEIN; CHARLES WATTS;

BOB WILSON; JOHN and JANE DOES 41-50,

inclusive,

Defendants.

No. 2:14-cv-01720-JCC


JUDGMENT



JUDGMENT

(2:14-cv-01720-JCC) - 1

LAW OFFICES OF


LAW OFFICES OF C O H E N M I L S T E I N S E L L E R S & T O L L , P L L C . 1100 NEW YORK AVENUE, N.W. SUITE 500, WEST TOWER WASHINGTON, DC 20005 T E L E P H O N E : ( 2 0 2 ) 4 0 8 - 4 6 0 0

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This litigation involves the claims for alleged violations of the Employee Retirement

Income Security Act of 1974, as amended (“ERISA”), 29 U.S.C. §§ 1001, et seq., set forth in

Plaintiffs’ Class Action Complaint dated November 7, 2014, with respect to the Providence

Health & Services Cash Balance Retirement Plan (the “Plan”).1 The Parties entered into a Class

Action Settlement Agreement dated October 20, 2016, which was filed on October 20, 2016

(“Settlement” or “Settlement Agreement”).

The Court previously entered an Order Preliminarily Approving the Class Action

Settlement Agreement (“Preliminary Approval Order”), Dkt. #52, dated December 6, 2016,

preliminarily certifying the putative class in this action for settlement purposes, ordering a Class

Notice to be mailed and published on the internet, scheduling a Fairness Hearing for March 21,

2017, at 9:00 a.m., and providing those persons with an opportunity to object to the proposed

settlement.

This Court held a Fairness Hearing on March 21, 2017 at 9:00 a.m., to determine whether

to give final approval to the proposed settlement.

Due and adequate notice having been given to the Settlement Class as required in the

Order, and the Court having considered the Settlement Agreement, all papers filed and

proceedings held herein, and good cause appearing therefore, IT IS HEREBY ORDERED,

ADJUDGED AND DECREED as follows:

1. The Court has jurisdiction over the subject matter of this action and all Parties to

the action, including all members of the Settlement Class.

2. The Settlement Class this Court previously certified preliminarily in its

Preliminary Approval Order consists of:

All Persons who are or were participants, whether vested or non-vested, in the Plan on or

after January 1, 2008, and their beneficiaries.

1 This Judgment incorporates by reference the definitions in the Settlement Agreement, and all terms used herein

shall have the same meanings as set forth in the Settlement Agreement unless set forth differently herein. The terms

of the Settlement are fully incorporated in this Judgment as if set forth fully here.



JUDGMENT

(2:14-cv-01720-JCC) - 2

LAW OFFICES OF



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3. The Court finds that the Settlement Class meets all requirements of Federal Rules

of Civil Procedure 23(a) for certification of the class claims alleged in the Complaint, including:

(a) numerosity; (b) commonality; (c) typicality; and (d) adequacy of the class representatives and

Class Counsel.

4. Additionally, the prerequisites of Rule 23(b)(1) have been satisfied, since the

prosecution of separate actions by individual members of the Settlement Class would create a

risk of (i) inconsistent or varying adjudication which would establish incompatible standards of

conduct for Defendants; and (ii) adjudications with respect to individual Settlement Class

members, which would, as a practical matter, be dispositive of the interests of the other members

not parties to the adjudications or would substantially impair or impede their ability to protect

their interests.

5. Furthermore, the prerequisites of Rule 23(b)(2) have been satisfied, since

Defendants have acted or refused to act on grounds generally applicable to the Settlement Class,

thereby making appropriate final injunctive relief or corresponding declaratory relief with

respect to the Settlement Class as a whole.

6. The Settlement Class is hereby finally certified for settlement purposes under

Federal Rule of Civil Procedure 23(b)(1) and (b)(2).

7. Pursuant to Federal Rule of Civil Procedure 23(a), the Court finds that Plaintiffs

Linda Griffith and Jeanette Wenzl are members of the Settlement Class, their claims are typical

of those of the Settlement Class and they fairly and adequately protected the interests of the

Settlement Class throughout the proceedings in this Action. Accordingly, the Court hereby

appoints Linda Griffith and Jeanette Wenzl as Class Representatives.

8. Having considered the factors set forth in Federal Rule of Civil Procedure

23(g)(1), the Court finds that Class Counsel have fairly and adequately represented the

Settlement Class for purposes of entering into and implementing the Settlement, and thus, hereby

appoints Keller Rohrback L.L.P. and Cohen Milstein Sellers & Toll, PLLC as Class Counsel to

represent the members of the Settlement Class.



JUDGMENT

(2:14-cv-01720-JCC) - 3

LAW OFFICES OF



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9. The appointment of Class Counsel and the appointment of the Plaintiffs as Class

Representatives is fully and finally confirmed.

10. Class Counsel is hereby awarded attorneys’ fees pursuant to Federal Rule of Civil

Procedure 23(h), in the amount of $ , which the Court finds to be fair and reasonable,

and $ in reimbursement of Class Counsel’s reasonable expenses incurred in

prosecuting the Action. The attorneys’ fees and expenses so awarded shall be paid from the

$6,500,000.00 fund for Class Counsel pursuant to the terms of the Settlement Agreement. All

fees and expenses paid to Class Counsel shall be paid pursuant to the timing requirements

described in the Settlement Agreement.

11. Class Counsel has moved for a $10,000 Incentive Fee for each of the Plaintiffs,

Linda Griffith and Jeanette Wenzl. Defendants take no position on the award of an Incentive Fee

for each of the Plaintiffs. The Court hereby [grants in the amount of $_____] [denies] Class

Counsel’s motion for an award of an Incentive Fee for each of the Plaintiffs. The Incentive Fee

awards shall be paid from the $6,500,000.00 fund for Class Counsel pursuant to the Settlement

Agreement. This amount shall be paid pursuant to the timing requirements described in the

Settlement Agreement.

12. The Court directed that Class Notice be given pursuant to the notice program

proposed by the Parties and approved by the Court. In accordance with the Court’s Preliminary

Approval Order and the Court-appointed notice program: (1) on January 20, 2017, Class Counsel

posted the Settlement Agreement and Class Notice to the Settlement websites:

www.kellersettlements.com and www.cohenmilstein.com/providence-settlement; and (2) on

January 19, 2017, the Settlement Administrator, Rust Consulting, mailed approximately 75,505

copies the Notice of Class Action Settlement to members of the Settlement Class.

13. The Class Notice and Internet/Publication of Class Notice (collectively, the

“Class Notices”) advised members of the Settlement Class of the: terms of the Settlement;

Fairness Hearing and the right to appear at such Fairness Hearing; inability to opt out of the

Settlement Class; right to object to the Settlement, including the right to object to the Settlement



JUDGMENT

(2:14-cv-01720-JCC) - 4

LAW OFFICES OF



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or the application for an award of attorneys’ fees and reimbursement of expenses, or the

Incentive Fees to Linda Griffith and Jeanette Wenzl as Class Representatives; the procedures for

exercising such rights; and the binding effect of this Judgment, whether favorable or

unfavorable, to the Settlement Class, including the scope of the Released Claims described in §

4.1 of the Settlement Agreement.

14. The Class Notices met all applicable requirements of the Federal Rules of Civil

Procedure, the United States Code, the United States Constitution, 28 U.S.C. § 1715, and any

other applicable law. The Court further finds that Notice in the form approved by the Court

complied fully with the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1715, and that

it constituted the best practicable notice under the circumstances. The Court further finds that the

form of notice was concise, clear, and in plain, easily understood language, and was reasonably

calculated under the circumstances to apprise of the pendency of the Action, the claims, issues

and defenses of the Settlement Class, the definition of the Settlement Class certified, the right to

object to the proposed Settlement, the right to appear at the Final Fairness Hearing, through

counsel if desired, and the binding effect of a judgment on members of the Settlement Class,

including the scope of the Released Claims described in § 4.1 of the Settlement Agreement.

15. The Court finds after the Fairness Hearing, and based upon all submissions of the

Parties and interested persons, that the Parties’ proposed Settlement is fair, reasonable, and

adequate. The Court also finds that the proposed Settlement is consistent with and in compliance

with all applicable requirements of the Federal Rules of Civil Procedure, the United States Code,

and the United States Constitution, and other applicable law. In so finding, the Court has

considered and found that:

a) The Settlement provides for significant monetary contributions to the Plan

as well as Plan administrative provisions which will enhance the retirement security of

the members of the Settlement Class by providing features that are comparable to certain

key ERISA provisions.

b) The terms and provisions of the Settlement were entered into by



JUDGMENT

(2:14-cv-01720-JCC) - 5

LAW OFFICES OF



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experienced counsel and only after extensive, arm’s-length negotiations conducted in

good faith and with the assistance of an experienced third party mediator, Mr. Robert

Meyer, Esq. The Settlement is not the result of collusion.

c) The negotiations were preceded by robust motion practice at the motion to

dismiss stage; the production of thousands of pages of documents during informal

discovery and as part of the mediation process; and decisions on the statutory issues in

this case from three Circuit Courts of Appeals. The Parties prepared confidential

mediation statements and exchanged multiple proposals and counter-proposals

concerning the Settlement. The absence of formal discovery in this case in no way

undermines the integrity of the settlement given the extensive investigation that has

occurred as a result of proceedings thus far.

d) The documents gave counsel the opportunity to adequately assess this

case’s strengths and weaknesses—and thus to structure the Settlement in a way that

adequately accounts for those strengths and weaknesses. Class Counsel was cognizant

that there was no guarantee of success in this case.

e) Approval of the Settlement will result in substantial savings of time,

money and effort for the Court and the Parties, and will further the interests of justice.

Defendants denied and continue to deny Plaintiffs’ claims and allegations, and raised

various factual and legal arguments in support of their vigorous defense in this Action.

16. All members of the Settlement Class are bound by this Judgment and by the terms

of the Settlement, including the scope of the Released Claims described in § 4.1 of the

Settlement.

17. This Settlement, this Judgment, and/or the fact of Settlement do not constitute an

admission by any of the Parties of any liability, wrongdoing, or violation of law, damages or lack

thereof, or of the validity or invalidity of any claim or defense asserted in the Action. If the

Settlement Agreement is not upheld on appeal, or is otherwise terminated for any reason, the

Settlement and all negotiations, proceedings, and documents prepared, and statements made in



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connection therewith, shall be without prejudice to any Party and shall not be deemed or

construed to be an admission by an party of any fact, matter, or position of law; all Parties shall

stand in the same procedural position as if the Settlement Agreement had not been negotiated,

made, or filed with the Court.

18. The Court hereby dismisses with prejudice the action and all Released Claims

identified in § 4.1 of the Settlement against each and all Released Parties and without costs to

any of the Parties as against the others.

19. “Releasees” shall mean Providence, all entities that are considered to be a single

employer with Providence under Internal Revenue Code 414, 26 U.S.C. § 414, their employees,

agents, and directors, including the individual defendants.

20. “Released Claims” shall mean any and all actual or potential claims, actions,

causes of action, demands, obligations, liabilities, attorneys’ fees, expenses and costs arising out

of the allegations of the Complaint that were brought or could have been brought as of the date

of the Settlement Agreement by any member of the Settlement Class, including any current or

prospective challenge to the “church plan” status of the Plan. In connection with the Released

Claims, as of the Effective Date of the Settlement Agreement, Plaintiffs, on behalf of themselves

and on behalf of the Settlement Class, expressly waive and relinquish, to the fullest extent

permitted by law and equity, the provisions, rights and benefits of § 1542 of the California Civil

Code, which provides: “A general release does not extend to claims which the creditor does not

know or suspect to exist in his favor at the time of executing the release, which if known by him

or her must have materially affected his or her settlement with the debtor.”

21. Released Claims shall not include: (i) any rights or duties arising out of the

Settlement Agreement, including the express warranties and covenants in the Settlement

Agreement; (ii) claims for relief under state law under the Plan’s documents, including but not

limited to individual claims for benefits; (iii) claims related to any other plan that is merged,

adopted, or consolidated into the Providence Plan after the execution date of the Settlement

Agreement and before the Effective Date; and (iv) any claim arising under ERISA with respect



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to any event occurring after the Internal Revenue Service issues a written ruling that the Plan

does not qualify as a Church Plan; the Plan Sponsor elects to be governed by ERISA; a court of

law issues a definitive ruling that the Plan is not a Church Plan; or an amendment to ERISA is

enacted and becomes effective as a law of the United States eliminating the Church Plan

exception.

22. It is further ordered that as of the Effective Date of the Settlement Agreement

Plaintiffs on behalf of themselves and on behalf of the Settlement Class absolutely and

unconditionally release and forever discharge the Releasees from any and all Released Claims

that the Plaintiffs or the Settlement Class have. The Settlement Class covenants and agrees: (i)

not to file against any of the Releasees any claim based on, related to, or arising from any

Released Claim; and (ii) that the foregoing covenants and agreements shall be a complete

defense to any such claim against any Releasee.

23. It is further ordered that as of the Effective Date of the Settlement Agreement,

Defendants absolutely and unconditionally release and forever discharge the Plaintiffs, the

Settlement Class, and Class Counsel from any and all claims relating to the institution or

prosecution of the Action.

24. It is further ordered that as of the Effective Date of the Settlement Agreement,

each of the Releasees also releases each of the other Releasees from any and all Claims which

were asserted in the Complaint or any pleading which would have been required to be filed in the

Action or that would be barred by principles of res judicata or collateral estoppel had the claims

asserted in the Complaint or any such other pleading in the Action been fully litigated and

resulted in a Final judgment or order.

25. The Court retains jurisdiction over the implementation, administration and

enforcement of this Judgment and the Settlement, and all matters ancillary thereto.

26. The Court finds that no reason exists for delay in ordering final judgment, and the

Clerk is hereby directed to enter this Judgment forthwith.



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DATED this ____ day of ______________________, 201__.

____________________________________

John C. Coughenour

UNITED STATES DISTRICT JUDGE

Presented by:

By: s/ Lynn Lincoln Sarko

s/ Erin M. Riley

s/ Laura Gerber

s/ Gretchen S. Obrist

s/ Havila C. Unrein

Lynn Lincoln Sarko, WSBA #16569

Erin M. Riley, WSBA #30401

Laura Gerber, WSBA #34981

Gretchen S. Obrist, WSBA #37071

Havila C. Unrein, WSBA #40881

1201 Third Avenue, Suite 3200

Seattle, WA 98101

Tel: (206) 623-1900

Fax: (206) 623-3384







By: s/ Ron Kilgard

Ron Kilgard, Pro Hac Vice 3101 North Central Avenue, Suite 1400 Phoenix, AZ 85012 Tel: (602) 248-0088 Fax: (602) 248- 2822 Email: [email protected]

COHEN MILSTEIN SELLERS & TOLL, PLLC

By: s/ Karen L. Handorf

s/ Michelle Yau



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Karen Handorf, Pro Hac Vice Michelle Yau, Pro Hac Vice 1100 New York Avenue, N.W. Suite 500, West Tower Washington, D.C. 20005 Tel: (202) 408-4600 Fax: (202) 408-4699 Email: [email protected] Email: [email protected] Attorneys for Plaintiffs


Documents

PLAINTIFFS’ UNOPPOSED MOTION FOR FINAL APPROVAL OF ... · for final approval of settlement agreement & certification of class (2:14-cv-01720-jcc) - i law offices of keller rohrb