Dignity Health Settlement Agreement

The workers are trying to obtain provisional authorization for the new transaction. The settlement agreement contains separate provisions for two sub-groups of applicants. In his previous order, Tigar stated that “the fact that these subgroups receive payments in excess of the relief of their additional rights at the class level creates the potential for comparison, either to reduce those rights or to favor them disproportionately.” It considered the additional information provided by the applicants to support their argument that the subgroups do not have a fundamental conflict of interest with the rest of the class and that the recoveries of the subgroups are appropriate. A group of participants in the hospital system`s retirement plan on Thursday asked a California federal judge to approve the settlement agreement that would require Dignity Health to pay its plan $US 50 million in 2020 and at least $US 50 million in 2021. In his order on the plaintiffs` first request to provisionally allow U.S. District Judge Jon S. Tigar of the U.S. District Court for the Northern District of California stated that “many of the relevant factors support the finding that the transaction falls within the scope of authorization.” However, it rejected the application for three main reasons. The parties presented a revised settlement agreement that allayed the judge`s concerns about “clear veil and reversation clauses.” A clear veil clause is a compromise in which a class defendant agrees not to challenge the class counsel`s request for counsel. A repeat offence clause provides that the money remaining in a settlement fund is reimbursed to the defendant. The parties discussed these features in a revised settlement agreement that they submitted to the Tribunal for interim approval in November 2019.

Justice Tigar agreed to the revisions to the new settlement agreement, with one exception. It did not approve the provisions of the transaction concerning the “investment sub-group”, i.e. certain persons who had worked for Dignity for more than three years but less than five years. He again refused provisional permission, but again he did so “without prejudice.” The Court`s Opinion invites us to provide the Court with further information on the views of the members of the sub-group. Some members of the subgroup intervened in the case and this application is pending as of September 10, 2020. Following a second application for provisional approval of the settlement agreement in the Ecclesiastical Plan case, a federal judge again found a conflict between a subgroup of the class and the general class of applicants. . .

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