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Current Status of the Case Last updated January 12, 2009.Refund of the 5% reserve: On November 19, 2009, the District Court ordered that the 5% reserve, plus interest, is awarded to claimants and that the refund process should begin. The claims administrator is now working on the processing of the reserve and interest payments. The claims administrator is preparing check payments on a rolling basis at the rate of approximately 1,000 per week. It is estimated that it will take approximately two months for all checks to be mailed. Once checks are mailed, they must be cashed or deposited within 90 days. The amount of each claimant's 5% reserve refund is set forth on the Award that was mailed before initial payments were made. The claimant's interest payment is in the approximate amount of 2.064% (i.e., multiply by .02064), which represents each claimant's proportional share of the amount of interest earned on the Fund after payment of the Fund's administrative expenses. Please do not contact us to ask about the timing of your reserve check, as we have no information about the order in which the checks are being prepared or the specifics of each round's approval and payment process. The process for paying each Third Party Service Providers for the reserve amounts assigned to it in the TPSP settlements has not yet been determined. Each TPSP will be contacted as soon as the process is set in place. PLEASE NOTE THAT IF YOU ENTERED INTO A CONTRACT WITH A THIRD PARTY CLAIMS FILING SERVICE AND AGREED TO SETTLE THE AMOUNT YOU OWE THEM, YOU WILL NOT RECEIVE A RESERVE CHECK. IN THAT CIRCUMSTANCE, YOU HAVE ASSIGNED YOUR 5% RESERVE TO THE CLAIMS FILING SERVICE AND THE 5% RESERVE WILL BE PAID DIRECTLY TO THEM. YOU WILL RECEIVE A NOTICE AT THE TIME THE PAYMENTS ARE ACTUALLY MADE. Again, if you assigned your reserve to a third party claims filing service (e.g., Claims Compensation Bureau, National Equity Development Group, Class Action Recovery Service, Crippen & Cline, Lex Recovery Group, or Class Action Refund), you will not receive a reserve package and your 5% reserve will be sent directly to the assignee. It is critical that you advise the Claims Administrator, in a signed and notarized writing, of any changes in your address or telephone number. Reserve packages will be mailed to the official address on file with the Claims Administrator. It is your responsibility to keep this information current, and if you fail to do so, you may jeopardize your ability to receive your 5% reserve. You can print out and utilize the form attached here if you need to update your information. Be sure to fill in the claim number and to sign and notarize the form. Please do not direct address changes to Class Counsel, as we are not permitted to make address changes on your behalf.
Prior History: On June 23, 2009, the Special Master issued an Order regarding the 5% reserve. You can obtain a copy of the Order by clicking here. In this Order, the Special Master stated that his review of the Settlement Agreement between the Class and Exxon, and of the orders approving that settlement, raised a question as to whether the 2% nonrefundable amount that was withheld from each claim was required to be paid in its entirety to the States to be held for the benefit of class members who did not participate in the Claims Administration Process. If this had been the case, it would mean that there is likely not enough money to refund the 5% reserve in its entirety to the Class (although there would likely be sufficient funds to pay some portion of it). As a result of this concern, the Special Master ordered Class Counsel and States' Counsel to file position papers on this issue. Although the Special Master granted 30 days for position papers to be filed, Class Counsel did not want to wait to address this issue, and accordingly we filed our position paper on Thursday, July 2. You can obtain a copy of our filing by clicking here. Class Counsel's position paper sought to persuade the Special Master and the Court that the 5% reserve should be paid in its entirety to the Class at the earliest opportunity. On July 23, States' Counsel filed its paper. States' Counsel took the position that the 2% reserve should be paid to the States. The Special Master held a hearing on August 11, 2009 to consider this issue. Class Counsel and States Counsel argued the positions they presented in their briefs. Class Counsel strongly believes that the settlement was not intended to designate the 2% withhold to the States and that the documents cannot properly be interpreted to require this outcome.
On September 4, 2009, the Special Master issued a Report and Recommendation providing that the 5% reserve payments should be made in full, but that the interest on the 5% reserve should be delayed pending confirmation of fund availability at the end of the process. The Report and Recommendation then had to be considered by the District Court. On September 11, 2009, Class Counsel filed a motion requesting that the District Court expedite approval of the portion of the Report and Recommendation that recommends payment of the 5% reserve. In addition, Class Counsel filed a motion requesting that the District Court approve payment of the interest on the 5% reserve even though the Special Master recommended delaying the payment until the end of the process. Class Counsel also objected to other portions of the Report and Recommendation relating to interest on Class Counsel's fees. On September 22, the District Court issued an order requesting supplemental briefing on the question of whether all the issues should be considered on an expedited basis. In response, Class Counsel requested that the District Court consider and rule on the issue immediately and authorize full payment of the 5% reserve plus interest. States' Counsel's response was filed on October 30. States' Counsel continued to assert that the 2% reserve should be paid to the States (which would reduce but not eliminate the money available to refund the 5% reserve).
On November 19, 2009 the District Court held a hearing. The Court ruled that claimants will be awarded their full 5% reserve plus interest.
Forms 1099. The Claims Administrator has mailed Forms 1099 to claimants who were paid in 2008. A detailed letter explaining how the amount listed on the 1099 are calculated and describing the nature of the recovery is included in the mailing. Please do not contact the claims administrator or Class Counsel with any tax-related questions, as we are not able to provide any tax advice or further information beyond what is included in the letter. The Claims Administrator will mail Forms 1099 to claimants who were paid in 2009 by January 31, 2010. Claim payments: If you have questions about how to complete a payment instruction form or the procedure for payment of claims, please click here and read the Frequently Asked Questions and Answers that we have prepared. Please read this document in its entirety and call us for clarification only if your question is not answered. Thank you for your cooperation, as this will allow us to direct our efforts to advancing claims for payment as quickly as possible.We are excited to report that 12,130 out of 12,130 claims have been designated in a motion for adjudication (i.e., every single claim). Of these, 12,085 claims (approximately 99.6% of the total claims) worth $1.097.3 billion gross (approximately 99.6% of the total dollars) have been paid or permanently withdrawn or dismissed. Another 13 claims are eligible for payment upon such time as the claimants provide the required payment instructions and tax documentation and resolve any disputes with third parties over their payment. The status of each group of claims is as follows:
All affected claimants have been sent a letter advising them of their options and asking for their decision as to how they wish to proceed. All affected claimants must complete a claimant election form and return it to the Claims Administrator before they can be paid. In order to be paid, you must already have been issued an Award, you must already have returned payment instructions and a valid W9, and you must have returned your election form with a designation of Option One or Three. Any claimant who does not satisfy these requirements will be included in a later round of payment. The settlement represents what we believe to be a fair and reasonable compromise. While we believe there are grounds to object to the claims services’ agreements, the final outcome of these objections is uncertain, and there is the possibility that claimants would be found to owe the claims service the full amount set forth in the contract that the claimants signed. Additionally, an ongoing dispute with a claims service might significantly delay the claimants' payments, and no interest is accruing on the payments at this time. The amount of compensation claimants will have to pay the claims services under the settlement is significantly less than that provided for in their contracts, and they will not have to pay the claims services anything now. For all of these reasons, Class Counsel recommends that affected claimants elect to accept the settlement. Small estate claims: On January 31, 2008, the Special Master denied Class Counsel's and States' Counsel's joint motion to approve simplified procedures for certain claims filed by the heirs or beneficiaries of deceased dealers. We have communicated with each affected claimant about the steps they need to take in order to pursue their claim. Claims filing deadline: Pursuant to the settlement, any claim postmarked on or before December 19, 2005 will be allowed. Records: Class counsel has reviewed and scanned all of Exxon's dealer files to obtain records that may assist dealers in completing their claims. Beginning in June 2004, we began to review all claims and supplemented many of them with the information we obtained from Exxon. We will continue to supply documentation for the remaining claims as we work with claimants to file replies. Determination of attorneys' fees and named plaintiff awards: On July 6, 2006, the District Court issued an order awarding attorneys' fees and named plaintiff incentive awards. Click here for a copy of the order. It awards 31 1/3% to Class counsel as attorneys' fees and 1.5% to the named plaintiffs as incentive awards, and orders the Special Master to determine what costs will be reimbursed. These amounts will be deducted from each claimant's award before it is paid. On March 7, 2007, the Special Master issued a Report and Recommendation determining the amount of costs to be reimbursed to Class Counsel and to those dealers who contributed cost money to the litigation. A copy of the Report and Recommendation is available by clicking here. The District Court affirmed the Report and Recommendation on April 16. Click here to review the order. More information about when reimbursements will be made will be posted when it is available. On July 26, 2007, Class Counsel filed a Petition for an Intermediate Distribution of Attorneys' Fees, in which we request a portion of the fees that have been previously awarded but not yet paid. Click here to review the petition and click here to review the exhibits. The District Court granted the motion on August 21. Click here to read the Court's order. On February 26, 2008, Class Counsel filed a Petition for an Intermediate Distribution of Attorneys' Fees, in which we request a portion of the fees that have been previously awarded but not yet paid. The District Court granted the motion on March 25. Class Counsel's final fee payment was made in December, 2008 and interest on Class Counsel's fee was awarded in December, 2009.
Supreme Court ruling In a 5-4 decision, the United States Supreme Court ruled on Thursday, June 23, 2005 that all dealers, including those whose claims are worth less than $50,000, were properly included in the class. The majority opinion was written by Justice Anthony Kennedy, who adopted the arguments asserted by the lawyers for the Class. Justices Ginsburg and Stevens wrote dissenting opinions. This opinion ensures that all claimants will be able to proceed with their claims in the claims process that has already been established. It will still be necessary for the claims administrator to adjudicate each claim on an individual basis, which will take many months or even years, but we will do everything in our power to speed up the process as quickly as possible.
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