John L. Soileau v. Churchill Downs Louisiana Horseracing Company, L.L.C.,. Churchill Downs Louisiana Video Poker Company, L.L.C.

CORRECTED OPINION

JOHN L. SOILEAU, ET AL. * NO. 2021-CA-0022

VERSUS *

COURT OF APPEAL

CHURCHILL DOWNS *

LOUISIANA HORSERACING FOURTH CIRCUIT

COMPANY, L.L.C., *

CHURCHILL DOWNS STATE OF LOUISIANA

LOUISIANA VIDEO POKER *******

COMPANY, L.L.C., ET AL.

CONSOLIDATED WITH: CONSOLIDATED WITH:

JOHN L. SOILEAU, ET AL. NO. 2021-CA-0049

VERSUS

CHURCHILL DOWNS

LOUISIANA HORSERACING

COMPANY, L.L.C., CHURCHILL

DOWNS LOUISIANA VIDEO

POKER COMPANY, L.L.C., ET

AL.

CONSOLIDATED WITH: CONSOLIDATED WITH:

JOHN SOILEAU, ET AL. NO. 2021-CA-0199

VERSUS

CHURCHILL DOWNS

LOUISIANA HORSERACING

COMPANY, L.L.C., CHURCHILL

DOWNS LOUISIANA VIDEO

POKER COMPANY, L.L.C., ET

AL.

APPEAL FROM

CIVIL DISTRICT COURT, ORLEANS PARISH

NO. 2014-03873, DIVISION “G-11”

Honorable Robin M. Giarrusso, Judge

******

Judge Dale N. Atkins

******

(Court composed of Judge Rosemary Ledet, Judge Tiffany Gautier Chase, Judge

Dale N. Atkins)

LEDET, J., CONCURS

CHASE, J., CONCURS

Michael David Singletary

SINGLETARY & ASSOCIATES, APLC

604 West 13th Street

Austin, TX 78701

Alan N. Magenheim, Pro Hac Vice

ATTORNEY AT LAW

3701 Kirby Drive

Suite 913

Houston, TX 77098

COUNSEL FOR PLAINTIFFS/APPELLANTS, BERNADINE SOILEAU

AS INDEPENDENT EXECUTRIX OF THE SUCCESSION OF JOHN

SOILEAU, SR., ALVIN BROSSETTE, JUSTIN DEHART, DONALD

WATSON, JOSEPH D. MANUCY AND LUCAS CONSTANTIN

Kyle Sherman

BRANDT & SHERMAN, LLP

111 Mercury Street

Lafayette, LA 70503

COUNSEL FOR PLAINTIFFS/APPELLANTS, JOHN HAMILTON AND

DANNY LAVERGNE

David F. Waguespack

Matthew J. Fantaci

CARVER, DARDEN, KORETZKY, TESSIER, FINN, BLOSSMAN &

AREAUX, LLC

1100 Poydras Street, Suite 3100

New Orleans, LA 70163

COUNSEL FOR DEFENDANTS/APPELLEES, CHURCHILL DOWNS

LOUISIANA HORSERACING COMPANY, L.L.C. AND CHURCHILL

DOWNS LOUISIANA VIDEO POKER COMPANY, L.L.C.

John L. Duvieilh

Jennifer A. David

JONES WALKER LLP

201 St. Charles Avenue, Suite 4700

New Orleans, LA 70170

COUNSEL FOR DEFENDANT/APPELLEE, LOUISIANA HORSEMEN’S

BENEVOLENT AND PROTECTIVE ASSOCIATION 1993, INC.

William L. Townsend, III

Keenan K. Kelly

KELLY & TOWNSEND, LLC

137 St. Denis Street

Post Office Box 756

Natchitoches, LA 71457

J. Chris Guillet

Ronald E. Corkern, Jr.

CORKERN, CREWS & GUILLET, L.L.C.

P.O. Box 1036

Natchitoches, LA 71458-1036

COUNSEL FOR DEFENDANTS/APPELLEES, CLASS

REPRESENTATIVES, JO BAIA FOREMAN AND KENNETH L.

ROBERTS

AFFIRMED

December 22, 2021

DNA

These three consolidated appeals arise from a class action dispute between

quarter-horse owners, trainers, and jockeys; Churchill Downs Louisiana

Horseracing Company, L.L.C, the owner of the Fair Grounds Race Courts & Slots

Facility in New Orleans, Louisiana; Churchill Downs Louisiana Video Poker

Company, L.L.C.; and the Horsemen’s Benevolent and Protective Association

1993, Inc. These appeals involve the distribution of supplemental purse monies

collected in quarter-horse racing at off-track facilities. Quarter-horse owners,

trainers, and jockeys bring this appeal. They can be divided into two groups but

will hereinafter be referred to collectively as “Appellants.” The first group of

Appellants, which is hereinafter referred to as “Soileau Plaintiffs,” is comprised of

Bernadine Soileau, as independent executrix of the Succession of John Soileau,

Sr.; Alvin Brossette; Justin Dehart; Donald Watson; Joseph Manucy; and Lucas

Constantin. The second group of Appellants, which is hereinafter referred to as

“Hamilton Plaintiffs,” is comprised of some of the class representatives, namely

Danny Lavergne and John Hamilton.

1

Appellees are Jo Baia Foreman1 and Kenneth L. Roberts; Churchill Downs

Louisiana Horseracing Company, L.L.C. (hereinafter referred to as “CDLHR”)

and Churchill Downs Louisiana Video Poker Company, L.L.C. (hereinafter

referred to as “CDLVPC”) (CDLHR and CDLVPC are hereinafter collectively

referred to as “Fair Grounds Defendants”); and the Louisiana Horsemen’s

Benevolent and Protective Association 1993, Inc. (hereinafter referred to as

“HBPA”).

Appellants appeal the trial court’s November 12, 2020 judgment, which

denied Soileau Plaintiffs’ and Hamilton Plaintiffs’ motions to vacate the trial

court’s February 18, 2020 order that preliminarily approved a proposed class

action settlement agreement (hereinafter referred to as “proposed settlement

agreement”), a class,2 class representatives,3 class counsel,4 and deadlines to opt-

out, object, and submit a claim form. They also appeal the trial court’s decision not

to reset those aforementioned class action deadlines in response to orders issued by

1

In the record before this Court, “Jo Baia Foreman” is also sometimes spelled “Jo

Baya Foreman.” For consistency, this opinion will only use the spelling “Jo Baia

Foreman.”

2

The February 18, 2020 order certified the class as:

All persons and/or entities who are quarter[-]horse owners, quarter[-]

horse trainers, and quarter[-]horse jockeys who have won or earned

purses at the Fair Grounds Race Course since January 1, 2008, and

who claim, claimed, and/or could claim that they are entitled under []

La. R.S. 27:438 to any portion of monies collected from video poker,

or which claim, claimed, and/or could claim damages against any

Defendant under any theory of recovery of any portion of the monies

collected from video poker pursuant to the La. R.S. 27:438.

3

The February 18, 2020 order appointed Mrs. Foreman, Mr. Roberts, Mr.

Hamilton, and Mr. Lavergne as class representatives.

4

The February 18, 2020 order appointed Kelly & Townsend, LLC, and Corkern,

Crews, Guillet & Johnson, L.L.C. as class counsel.

2

the Louisiana Governor and the Louisiana Supreme Court regarding the COVID-

19 pandemic. (2021-CA-0022). Further, Appellants appeal the trial court’s

February 18, 2020 order granting preliminary approval of the proposed settlement

agreement. (2021-CA-0049). Finally, Appellants appeal the trial court’s January

28, 2021 judgment granting final approval of the proposed settlement agreement.

(2021-CA-0199). For the following reasons, we affirm.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Because these three consolidated appeals involve multiple Appellants and

Appellees, we begin our summary of the factual background and procedural

history with a description of the parties.5

APPELLANTS

Appellants are Bernadine Soileau, as independent executrix of the

Succession of John Soileau, Sr.; Alvin Brossette; Justin Dehart; Donald Watson;

Joseph Manucy; Lucas Constantin; Danny Lavergne; and John Hamilton.

Appellants are divided into two groups. The first group known as Soileau Plaintiffs

is comprised of Bernadine Soileau, as independent executrix of the Succession of

John Soileau, Sr.; Mr. Brossette; Mr. Dehart; Mr. Watson; Mr. Manucy; and Mr.

Constantin. The second group known as Hamilton Plaintiffs is comprised of Mr.

Lavergne and Mr. Hamilton. In a February 18, 2020 order, the trial court, in

pertinent part, appointed Hamilton Plaintiffs as two of the four class

representatives. They signed the proposed settlement agreement but now oppose it.

5

Due to the complexity of this litigation and the numerous parties, we repeat some

of the descriptions of the parties and add more details about the parties in this

subsequent section.

3

PLAINTIFFS

In the “Petition for Declaratory Judgment, Permanent Injunction, and

Damages – Class Action” (hereinafter “Petition”) filed on April 21, 2014, John

Soileau, Sr.; Alvin Brossette; Justin Dehart; Donald Watson; Joseph Manucy;

Lucas Constantin; Danny Lavergne; John Hamilton; Jo Baia Foreman; and

Kenneth L. Roberts are named as plaintiffs (hereinafter collectively referred to as

“Plaintiffs”). Therein, Plaintiffs described themselves as members of a class of

“Louisiana quarter-horse owners, trainers, and jockeys” who “are ‘horsemen’

entitled to the payment of supplemental purses pursuant to La. R.S. 27:438” and

its predecessor statutes due to underpayment of quarter-horse purses won at the

Fair Grounds Race Course & Slots since 2008.6

APPELLEES

Jo Baia Foreman and Kenneth L. Roberts are named plaintiffs in the

Petition, as previously discussed. In the February 18, 2020 order, the trial court

named them as the other two class representatives. (Though, as previously

mentioned, Mr. Lavergne and Mr. Hamilton are also class representatives, the

phrase “Class Representatives” will hereinafter collectively refer to Mrs.

Foreman and Mr. Roberts only). They signed the proposed settlement agreement

and continue to support it based on their testimony before the trial court.

Churchill Downs Louisiana Horseracing Company, L.L.C. (CDLHR), owns

the Fair Grounds Race Course & Slots facility in New Orleans, Louisiana. It is a

“licensed establishment” under the Video Draw Poker Devices Control Law. La.

R.S. 27:401, et seq. Specifically, it qualifies as a licensed establishment because it

6

Louisiana Revised Statutes 27:438 relates to the “[d]istribution of device

revenues” in quarter-horse and thoroughbred horse racing.

4

is a “Louisiana state racing commission licensed race track [and] pari-mutuel

wagering facility.” La. R.S. 27:402(10).

Churchill Downs Louisiana Video Poker Company, L.L.C. (CDLVPC), is a

subsidiary or related business interest of CDLHR according to Plaintiffs’ Petition.

It is a “device owner” under the Video Draw Poker Devices Control Law. La. R.S.

27:401, et seq. Specifically, it qualifies as a device owner because it “owns and

operates . . . video draw poker devices in licensed establishments[,]” including at

the CDLHR-owned Fair Grounds Race Course & Slots facility and at off-track

waging facilities. La. R.S. 27:402(5).

The Louisiana Horsemen’s Benevolent and Protective Association 1993,

Inc. (HBPA), is “designated and recognized as an authorized representative that

shall represent member and other horsemen racing at licensed race meetings held

in the state of Louisiana for the purpose of but not limited to negotiating contracts

for such horsemen with all racing associations licensed by the state of Louisiana,

relative to purses . . . and all other matters of interest and concern to such

horsemen.” La. R.S. 4:179.1.

As noted previously, this matter consists of three consolidated appeals that

are the result of protracted class action litigation that has come before this Court on

multiple occasions. In Soileau v. Churchill Downs Louisiana Horseracing Co.,

L.L.C., 2017-1003, 2017-1004, pp.1-2 (La. App. 4 Cir. 6/13/18), 317 So.3d 491,

493-94, writ denied, 2018-1349 (La. 11/14/18), 256 So.3d 283, this Court

observed:

This lawsuit constitutes complicated and protracted litigation

involving a dispute in the horse racing industry between ...

[quarter-horsemen] and Churchill Downs Louisiana

Horseracing Company, LLC, owner of the Fair Grounds Race

5

Course & Slots facility in New Orleans, and Churchill Downs

Louisiana Video Poker Company, LLC.

....

Soileau, et al. v. Churchill Downs Louisiana Horse Racing Co., LLC,

et al., 17-0264, slip op. at pp. 1-2 (La. App. 4 Cir. 8/23/2017)

(unpub.).

The quarter-horsemen, Mr. Soileau, Mr. Brossette, Mr. Dehart, Mr.

Hamilton, Mr. Lavergne, Mr. Watson, Mr. Munacy, and Mr. Constantin, Mrs.

Foreman, and Mr. Roberts (collectively, “Plaintiffs”) instituted the litigation by

filing a “Petition for Declaratory Judgment, Permanent Injunction, and Damages -

Class Action” on April 21, 2014.7 The Petition averred that Plaintiffs were owners,

trainers, and jockeys of quarter-horses racing at the Fair Grounds and were entitled

to payment of supplemental purse money pursuant to La. R.S. 27:438.8 Soileau,

7

Note that this Court is utilizing “Plaintiffs” when necessary to refer to all

plaintiffs named in the Petition. In the instant appeal, however, Plaintiffs disagree

on the proposed settlement at issue herein. That is, at this stage of the proceedings,

some named Plaintiffs appear as Appellants, and other named Plaintiffs appear as

Appellees.

8

Louisiana Revised Statutes 27:438 is titled “Distribution of device revenues;

particular licensed establishments; pari-mutuel wagering facilities.” During the

relevant time frame, La. R.S. 27:438 provided in pertinent part:

A. The owner of the licensed establishment shall pay twenty percent

of the net device revenue derived from the operation of devices at the

licensed establishment to be used to supplement purses for horsemen

as provided in subsection B of this Section. Such monies shall be

made available for use as purses monthly, prior to the twentieth day of

the month following the month in which they are earned.

B. Revenues earned or purse supplements under subsection A shall be

disbursed, accounted for, and used as follows:

1. Monies earned for purse supplements from devices located at

a racing facility currently conducting live racing shall be in

addition to all other monies currently provided for purses and

purse supplements under other provisions of law and shall be

used at the current race meeting.

6

2017-1003, p.5, 317 So.3d at 496. Louisiana Revised Statutes 27:438 requires a

percentage of video poker net device revenue from off-track facilities to be set

aside to supplement the purses issued to the top finishers in horse races.

The April 21, 2014 Petition further contended that Fair Grounds Defendants

disbursed the video poker revenue in favor of the owners of thoroughbred horses in

violation of La. R.S. 27:438. The Petition claimed that Plaintiffs were entitled to

the revenue from the end of the thoroughbred racing in March through the last day

of quarter-horse racing in September, which constitutes approximately half of the

revenue set aside for purses.

By law, quarter-horse racing totals ten days in a fifty-two week period. In

comparison, thoroughbred racing compromises at least eighty days. See La. R.S.

4:214.1(B). It is undisputed that all of the video poker revenue supplemented the

purses of the thoroughbred races. Fair Grounds Defendants did not retain

possession of the video poker revenues, rather, they sent the money to HBPA, and

HBPA distributed the money to thoroughbred races. See La. R.S. 4:179.1 and

4:185. The parties further agreed the disputed video poker funds totaled

$35,820,731.00.

By their First Amended Petition filed on August 14, 2014, Plaintiffs added

HBPA as a defendant. Therein they described HBPA as “organized, in part, to

foster, protect, represent, and promote the welfare and common interest of

2. Monies earned for purse supplements from devices located at

a racing facility not currently conducting live racing shall be

placed in an interest-bearing account until the first day of the

next live race meeting conducted at that facility, at which time

the accumulated monies derived from this Paragraph shall be

added to all other monies currently provided for purses and

purse supplements at that race meeting under other provisions

of the law and shall be used at that race meeting.

7

thoroughbred and quarter[-]horse owners and trainers to improve conditions in the

horse racing industry and to improve the relationships between horsemen.” They

further explained that “[m]embership in HBPA is open to those persons who are

licensed owners and/or trainers of thoroughbred and/or quarter[-]racehorses

meeting the minimum requirements established by the bylaws of HBPA and

approved for membership by its board of directors.” Additionally, Plaintiffs noted

in the First Amended Petition that they have all been members of HBPA since at

least 2008 and that, upon information and belief, all members of the class are

members of HBPA. Plaintiffs alleged in the First Amended Petition that “[t]o the

extent that HBPA represented or purported to represent quarter[-]horsemen in

negotiating purses allowing the payment of all La. R.S. 27:438 purse[]

supplements to thoroughbred horsemen, then HBPA breached its statutory duty to

represent the quarter[-]horsemen in good faith.” HBPA receives the purse funds

from the various racetracks in Louisiana and distributes winnings to the owners,

trainers, and jockeys.

In response to the Petition, Fair Grounds Defendants filed an exception of

primary jurisdiction, arguing that the trial court should transfer the matter to the

Louisiana Racing Commission (“Commission”). The trial court agreed and

transferred the matter to the Commission on December 2, 2014 because the

Commission has regulatory and adjudicatory authority over all aspects of

horseracing, which is a highly regulated industry. Soileau, unpub., 2017-0264,

p.2.9

9

This Court denied Plaintiffs’ application for supervisory writs seeking review of

the judgment granting the exception of primary jurisdiction. Soileau v. Churchill

Downs Louisiana Horse Racing Co., L.L.C., unpub., 2014-1398, p.1 (La. App. 4

Cir. 1/26/15).

8

Thereafter, this matter proceeded before the Commission, with the parties

seeking review of several issues in the district court, as well as in this Court. Fair

Grounds Defendants and HBPA filed exceptions of no right of action before the

Commission. On August 24, 2015, the Commission granted the exceptions.

Thereafter, on September 18, 2015, Plaintiffs filed a petition to appeal that

administrative ruling of the Commission. The trial court heard the appeal and

affirmed the Commission’s ruling. On December 18, 2016, Plaintiffs filed a notice

of appeal to this Court, and this Court remanded the matter for procedural

corrections to the judgment, with which the trial court complied in an amended

judgment dated September 15, 2017.10 On October 31, 2017, Plaintiffs filed a

motion for devolutive appeal from the amended judgment, which the trial court

granted on November 6, 2017. On June 13, 2018, this Court rendered judgment in

favor of Plaintiffs, concluding that they did have a right of action to proceed

against Fair Grounds Defendants and HBPA. See Soileau, 2017-1003, p. 9, 317

So.3d at 498.

On February 28, 2019, Fair Grounds Defendants formally requested that the

Commission set their previously-filed exception of nonjoinder for a hearing. The

hearing occurred on June 24, 2019, and the Commission ultimately denied the

exception. On July 24, 2019, Fair Grounds Defendants filed an appeal of this

ruling.

10

The amended judgment states, in pertinent part: “The Court hereby amends the

Judgment dated September 5, 2016 for typographical errors. The Court

inadvertently omitted defendant Churchill Downs Louisiana Horseracing

Company, LLC. Additionally, the date of the Judgment rendered incorrectly listed

the year as 2016.”

9

On or about July 2, 2019, Fair Grounds Defendants advised Plaintiffs that all

persons seeking a horse stall for the 2019 Quarter Horse Meet at the Fair Grounds

would be required to execute a Stall Agreement that waived their claims in the

lawsuit (hereinafter referred to as “2019 Stall Agreement”). On July 3, 2019,

Plaintiffs filed a rule to show cause, in which they asked the Commission to set a

hearing to enjoin Fair Grounds Defendants from requiring execution of the waiver

in the 2019 Stall Agreement. They also asked the Commission to declare the

waiver to be unenforceable. On July 22, 2019, the Commission held a hearing on

the matter and ordered the waiver language to be stricken from the 2019 Stall

Agreement. That same day, Fair Grounds Defendants filed a petition with another

division of the trial court to reverse this ruling. They received a temporary

restraining order, which temporarily prohibited the enforcement of the

Commission’s July 22, 2019 order.

On August 2, 2019, Plaintiffs and Fair Grounds Defendants jointly obtained

an order from the trial court to stay the pending appeals of the two above-discussed

matters, i.e., Fair Grounds Defendants’ appeal of the nonjoinder issue and of the

2019 Stall Agreement issue, pending further settlement discussions.

On September 13, 2019, Plaintiffs, Fair Grounds Defendants, and HBPA

met to discuss a potential settlement. On October 25, 2019, class counsel met with

Plaintiffs to review the terms of the proposed settlement agreement. Soileau

Plaintiffs objected to the proposed settlement agreement. Class counsel withdrew

from representing Soileau Plaintiffs, and the trial court eventually signed an order

enrolling new counsel for Soileau Plaintiffs on February 18, 2020.11 Class counsel

11

On February 18, 2020, the trial court signed an order enrolling Singletary &

Associates, APLC, as counsel for Soileau Plaintiffs.

10

continued to represent those Plaintiffs who supported the proposed settlement

agreement, namely Mrs. Foreman, Mr. Roberts, Mr. Lavergne, and Mr. Hamilton.

The trial court eventually named them as representatives of the class in a February

18, 2020 order, and they ultimately executed the proposed settlement agreement.

On January 23, 2020, all enrolled counsel12 filed a “Joint Motion to Set

Court Dates for Class Certification and Related Relief,” and the trial court ordered

a hearing to be held on February 18, 2020. On February 14, 2020, all enrolled

counsel13 filed a “Joint Motion for Preliminary Approval of Class Action

Settlement Agreement and for Related Relief.” In pertinent part, the proposed

settlement agreement provided:

1) Quarter-horse races would receive 12.5% of the video poker purse

proceeds at the Fair Grounds, up to a maximum of $1,000,000.00 per

year;

2) $1,000,000.00 would be designated for the payment of “past due”

claims (from 2008 through the present); the settlement of past due

12

This occurred prior to class counsel, Kelly & Townsend, LLC, and Corkern,

Crews & Guillet, L.L.C., withdrawing from their representation of Soileau

Plaintiffs and prior to the trial court enrolling new counsel for the Soileau

Plaintiffs. Accordingly, Kelly & Townsend, LLC, and Corkern, Crews, and Guillet

filed the motion on behalf of Soileau Plaintiffs and Mrs. Foreman, Mr. Roberts,

Mr. Lavergne, and Mr. Hamilton. Carver, Darden, Koretzky, Tessier, Finn,

Blossman & Areaux LLC filed the motion for Fair Grounds Defendants. Jones

Walker, LLP, filed the motion for HBPA.

13

Again, this occurred prior to class counsel, Kelly & Townsend, LLC, and

Corkern, Crews & Guillet, L.L.C., withdrawing from their representation of

Soileau Plaintiffs and prior to the trial court enrolling new counsel for the Soileau

Plaintiffs. Accordingly, Kelly & Townsend, LLC, and Corkern, Crews, and Guillet

filed the motion on behalf of Soileau Plaintiffs and Mrs. Foreman, Mr. Roberts,

Mr. Lavergne, and Mr. Hamilton. Carver, Darden, Koretzky, Tessier, Finn,

Blossman & Areaux LLC filed the motion for Fair Grounds Defendants. Jones

Walker, LLP, filed the motion for HBPA.

11

claims would be funded by 25% of the $1,000,000.00 video purse

proceeds for the first four years, with the other 75% of video poker

purse proceeds going to current races for purse supplements;

3) The Fair Grounds would add five extra race days for quarter-horses;

4) Quarter-horse races would receive 30% of the video poker proceeds at

other Louisiana race tracks besides the Fair Grounds; and

5) The Fair Grounds would not enforce waivers contained in the 2019

Stall Agreement or in any other prospective stall agreement.

Notably, the proposed settlement agreement contemplated the Louisiana

Legislature amending current law to reflect this agreement.14

On February 18, 2020, Soileau Plaintiffs filed an opposition to the “Joint

Motion for Preliminary Approval of Class Action Settlement Agreement and for

Related Relief.” In the opposition, counsel for Soileau Plaintiffs requested

additional time to respond to the “Joint Motion for Preliminary Approval of Class

Action Settlement Agreement and for Related Relief.” Soileau Plaintiffs also filed

a motion to substitute counsel.

On the same day that Soileau Plaintiffs filed their opposition, February 18,

2020, the trial court held a hearing on the “Joint Motion for Preliminary Approval

of Class Action Settlement Agreement and for Related Relief.” After the hearing,

the trial court executed an order granting the “Joint Motion for Preliminary

Approval of Class Action Settlement Agreement.” The order certified the proposed

class of quarter-horse owners, trainers, and jockeys who won purses at the Fair

Grounds Race Course from January 1, 2008, and who claimed or could claim

14

By 2020 La. Acts No. 342, §2, the Louisiana Legislature passed the required

amendment. Nonetheless, the amendment is contingent on a final judgment being

rendered in this case.

12

entitlement to supplement purse funds from video poker revenue. The trial court

named Mrs. Foreman, Mr. Roberts, Mr. Hamilton, and Mr. Lavergne, as

representatives of the class. The trial court ordered opt-out forms to be received by

the HBPA by April 13, 2020; objection forms to be received by the clerk of court

by April 3, 2020; and claim forms to be received by the HBPA by August 1, 2020.

The trial court set a fairness hearing for April 27, 2020. According to counsel for

Fair Grounds Defendants, all counsel received a copy of the February 18, 2020

order in open court. The notice of judgment for this order is dated November 12,

2020.

On April 3, 2020, Soileau Plaintiffs filed a “Motion for Clarification, or in

the Alternative, Motion for Continuance.” In their motion, Soileau Plaintiffs noted

that Louisiana Governor John Bel Edwards issued proclamations and that the

Louisiana Supreme Court issued orders that extended certain legal deadlines in

response to the COVID-19 pandemic. In light of this, Soileau Plaintiffs requested

that the trial court clarify all pending deadlines for the class, including those for

opting out, objecting, and the submission of claims forms, i.e. to clarify whether

those deadlines were affected by the Governor’s proclamations and the Louisiana

Supreme Court’s orders. Alternatively, Soileau Plaintiffs requested a continuance

of all deadlines “in order to maintain the same notice and evaluation periods

between deadlines that were originally contemplated in establishing the Order.”

Considering Soileau Plaintiffs’ motion, the trial court ordered the parties to

participate in a telephone status conference on June 16, 2020. After the telephone

conference, on June 18, 2020, the trial court issued a scheduling order, which

provided:

13

1. The hearing on any dispositive motions or exceptions to the

Second Amended Petition of Certain Plaintiffs for Damages is set for

July 20, 2020 at 9:00 am. Dispositive motions and/or exceptions to be

heard on this date must be filed by July 6, 2020 and any objections

thereto filed by July 13, 2020. Churchill Downs Louisiana

Horseracing Commission [sic] Company, LLC, Churchill Downs

Louisiana Video Poker Company, LLC and Horsemen’s Benevolent

and Protective Association have agreed to waive service of the

Second Amended Petition.

2. The Fairness Hearing that had been scheduled for April 27,

2020 pursuant to this Court’s Order dated February 18, 2020 is reset

to October 7-9, 2020 at 9:00 am.

Though the scheduling order reset the fairness hearing from April 27, 2020, to

October 7-9, 2020, it did not continue the other deadlines, such as the deadline to

opt-out, object, or submit a claim. Soileau Plaintiffs did not seek review of the trial

court’s failure to clarify the deadlines to opt-out, object, or submit claim forms, nor

the trial court’s failure to grant the continuance in the alternative.

On May 28, 2020, Soileau Plaintiffs filed a Second Amended Petition. In

the Second Amended Petition, Soileau Plaintiffs essentially requested that the trial

court appoint them as class representatives and allow them to continue litigating

the merits. The Second Amended Petition identified an identical class and set forth

identical claims and damages. In response to the Second Amended Petition,

HBPA and Fair Grounds Defendants separately filed exceptions of lack of

procedural capacity, prematurity, and lis pendens, as well as a motion to strike.

Soileau Plaintiffs filed an opposition to those exceptions, and Fair Grounds

Defendants filed a reply in support of the exceptions. On July 22, 2020, the trial

court granted the exceptions and dismissed the Second Amended Petition filed by

Soileau Plaintiffs. Soileau Plaintiffs filed an application for supervisory writs

regarding the July 22, 2020 judgment that dismissed their Second Amended

14

Petition. On September 16, 2020, this Court denied the writ application “as the

trial court did not err.”

On September 18, 2020, Soileau Plaintiffs filed a motion to vacate the

February 18, 2020 order. On September 22, 2020, Hamilton Plaintiffs also filed a

motion to vacate the trial court’s February 18, 2020 order. Though Hamilton

Plaintiffs initially agreed to the proposed settlement agreement, signed the

proposed settlement agreement, and were named by the trial court as

representatives of the class, they eventually objected to the proposed settlement

agreement. The trial court held a hearing on the motions to vacate on October 7,

2020, and ultimately denied the motions to vacate on November 12, 2020.

Prior to the fairness hearing scheduled for October 7-9, 2020, Fair Grounds

Defendants filed a brief in support of final approval of the proposed settlement

agreement on September 21, 2020. Fair Grounds Defendants attached numerous

exhibits to their brief and asserted that the factors outlined in La. C.C.P. art. 591

were met for class certification. Further, Fair Grounds Defendants contended the

proposed settlement agreement was fair, reasonable, and adequate according to

Reed v. General Motors Corporation, 703 F.2d 170 (5th Cir. 1983).

Also on September 21, 2020, Soileau Plaintiffs and Hamilton Plaintiffs filed

an “Objection to Fairness Hearing and Subject to that Objection Opposition to the

Entry of Final Judgment on the Proposed Settlement.” They objected to the trial

court holding a fairness hearing by asserting that the Governor’s Proclamations and

the Supreme Court’s orders issued as a result of the COVID-19 pandemic required

the trial court to issue new deadlines to opt-out, object, or submit a claim form.

They also objected to the court holding a fairness hearing by claiming that the

February 18, 2020 order was null due to a lack of service and contended that the

15

class notice was defective. Alternatively, Soileau Plaintiffs and Hamilton

Plaintiffs argued the proposed settlement agreement was not fair, reasonable, or

adequate.

On September 22, 2020, class counsel filed a memorandum in support of the

proposed settlement agreement on behalf of Class Representatives. Class counsel

provided a background of the litigation and the numerous issues presented to the

Commission, the trial court, and this Court. In support of the fairness of the

proposed settlement agreement, class counsel indicated the parties fought

numerous exceptions before the Commission, the trial court, and this Court and

agreed to stay two issues while engaging in settlement negotiations, namely the

issues of nonjoinder and the enforceability of the Fair Grounds’ 2019 Stall

Agreement waivers. Further, class counsel noted the outcome of those two issues

could affect the litigation. Class counsel outlined why they believed the proposed

settlement agreement was fair, reasonable, and adequate. On September 22, 2020,

HBPA filed a memorandum in support of the proposed settlement agreement by

adopting the memorandum filed by class counsel.

Fair Grounds Defendants filed a reply to Soileau Plaintiffs’ objection to the

fairness hearing and opposition to the proposed settlement agreement. Fair

Grounds Defendants submitted that if Soileau Plaintiffs truly believed in their

claim, they would have opted out of the settlement and continued the litigation.

Fair Grounds Defendants noted that, instead, Soileau Plaintiffs objected to the

proposed settlement agreement.

16

FAIRNESS HEARING ON OCTOBER 7, 2020, AND NOVEMBER 17, 2020

The trial court conducted a fairness hearing on October 7, 2020, and

November 17, 2020. During the fairness hearing, the trial court received both

documentary and testimonial evidence.

APPELLEES’ CASE IN CHIEF

Documentary Evidence Presented by Appellees

At the fairness hearing, Appellees introduced numerous exhibits into

evidence. The exhibits numbered one through thirty-three and numbered forty-one

through sixty-one included, in pertinent part, both completed and incomplete opt-in

forms (also referred to as claim forms); both completed and incomplete opt-out

forms; completed objection forms; and claim value calculations.15

15

The exhibits introduced into evidence include:

1. Exhibit #1: Completed Opt-In Forms (also referred to as claim forms)

2. Exhibit #2: Incomplete Opt-In Forms

3. Exhibit #3: Completed Objection Forms

4. Exhibit #4: Completed Opt-Out Forms

5. Exhibit #5: Incomplete Opt-Out Forms

6. Exhibit #6: Objector Claim Value Calculation, Brossette, Alvin,

Owner

7. Exhibit #7: Objector Claim Value Calculation, Brossette, Alvin,

Trainer

8. Exhibit #8: Objector Claim Value Calculation, Dehart, Justin, Owner

9. Exhibit #9: Objector Claim Value Calculation, Dehart, Justin, Trainer

17

10. Exhibit #10: Objector Claim Value Calculation, Connie Nobles and

Guillory Bros., LLC (Lyle and Carl Guillory), Owner

11. Exhibit #11: Objector Claim Value Calculation, JLS Speed Horse

Ranch Inc. (John Soileau), Owner

12. Exhibit #12: Objector Claim Value Calculation, M&D Racing Stables

(Norris Davis & Levi Mays), Owner

13. Exhibit #13: Objector Claim Value Calculation, Manucy, Carly C.,

Owner

14. Exhibit #14: Objector Claim Value Calculation, Manucy, Joseph D.,

Trainer

15. Exhibit #15: Objector Claim Value Calculation, N V Racing (Norris

Davis), Owner

16. Exhibit #16: Objector Claim Value Calculation, Watson, Donald R.,

Jockey

17. Exhibit #17: Objector Claim Value Calculation, Williams, Darrell,

Owner

18. Exhibit #18: Incomplete Opt-Out Claim Value, Carter, III, James C.,

Owner

19. Exhibit #19: Incomplete Opt-Out Claim Value, Dugas, Carl, Owner

20. Exhibit #20: Completed Opt-Out Claim Value, Demouchet, Ricky

Joseph, Trainer

21. Exhibit #21: Completed Opt-In Claim Value (Total for class)

22. Exhibit #22: No Form Objector Claim Value Calculation, Hamilton,

John E., Jockey

18

23. Exhibit #23: No Form Objector Claim Value Calculation, Lavergne,

Danny, Jockey

24. Exhibit #24: February 18, 2020 Mailing: Notice of Class Settlement

25. Exhibit #25: February and September 2020: Claimant Members

Mailing List

26. Exhibit #26: February 27, 2020 Mailing Transaction Receipt

27. Exhibit #27: February 28, 2020 Mele Printing Invoice

28. Exhibit #28: Non-deliverable Returned Mail Envelopes (3)

29. Exhibit #29: August 2020 Mailing: Class Action Notice Regarding

Date Change of #Fairness Hearing from April 27, 2020, to October 7,

2020

30. Exhibit #30: September 4, 2020 Mailing Transaction Receipt

31. Exhibit #31: September 4, 2020 Mele Printing Invoice

32. Exhibit #32: September 28, 2020 Administrator’s (HBPA’s) Report

by Edwin J. Fenasci

33. Exhibit #33: Administrator’s (HBPA’s) Master Return Mail Log

(Please note that the subsequent exhibits numbered 34 through 40 are not included

in this list because they were proffered but not admitted.)

41. Exhibit #41: Fair Grounds 2019 Stall Application

42. Exhibit #42: 2015 Condition Book Exemplar

43. Exhibit #43: February 18, 2020 Order, which preliminarily approved a

class settlement, a class, class representatives, class counsel, and

deadlines to opt-out, object, and submit a claim form

19

44. Exhibit #44: February 14, 2020 Joint Motion for Preliminary

Approval of Class Action Settlement

45. Exhibit #45: Spreadsheets: Reports of 20% of Video Poker Net

Device Revenue for 2008 - 2019 (in globo)

46. Exhibit #46: July 2, 2014 Letter to Louisiana Racing Commission

from Counsel for Fair Grounds and Excerpts of Commission’s

October 21, 2014 Meeting (in globo)

47. Exhibit #47: August 13, 2018 Letter to Louisiana Racing Commission

from Counsel for Fair Grounds and Excerpts of Commission’s August

28, 2018 Meeting (in globo)

48. Exhibit #48: May 23, 2019 Letter to Louisiana Racing Commission

from Counsel for Fair Grounds and Excerpts of Commission’s June

19, 2019 Meeting (in globo)

49. Exhibit #49: August 20, 2020 Letter to Louisiana Racing Commission

from Counsel for Fair Grounds

50. Exhibit #50: February 21, 2020 Minutes of a Special Meeting of the

Board of Directors of the Louisiana Quarter Horse Breeders

Association (LQHBA)

51. Exhibit #51: March 1, 2020 LQHBA Memorandum to Members

52. Exhibit #52: August 12, 2013 LQHBA Letter to Jeff Traylor, Audit

Director, Louisiana State Police, Gaming Audit Section

53. Exhibit #53: November 26, 2013 LQHBA Letter to Tim Bryant,

President, Fair Grounds

54. Exhibit #54: January 9, 2014 LQHBA letter to Stanley Seelig, HBPA

20

Testimonial Evidence Presented by Appellees

Testimony of Ryan Robicheaux

Ryan Robicheaux testified he is the current President of LQHBA and the

owner of a quarter-horse breeding farm, including quarter-horses that race. Mr.

Robicheaux testified he had been in the quarter-horse business for thirty-one years.

He indicated he accepted the purse amount listed in the condition book prior to

racing horses at the Fair Grounds between 2008 and 2019. Additionally, Mr.

55. Exhibit #55: October 12, 2018 LQHBA letter to Charles Gardiner, III,

Executive Director, Commission

56. Exhibit #56: CDLHR Responses to Request for Admissions

57. Exhibit #57: CDLHR Responses to Interrogatories and Request for

Production

58. Exhibit #58: CDLVPC Responses to Request for Admissions,

Interrogatories, and Request for Production

59. Exhibit #59: HBPA Responses to Request for Admissions,

Interrogatories, and Request for Production

60. Exhibit #60: Affidavit of Mr. Guillet (one of the attorneys who serves

as class counsel). As of November 17, 2020, Mr. Guillet worked

1,020 hours providing legal services in this matter and paid

approximately $11,597.78 for costs.

61. Exhibit #61: Affidavit of Mr. Townsend (one of the attorneys who

serves as class counsel). As of November 17, 2020, Mr. Townsend

worked 653 hours providing legal services in this matter and paid

approximately $22,070.62 for costs.

21

Robicheaux testified that he understood the terms of the proposed settlement

agreement and supported the proposed settlement agreement. Mr. Robicheaux

claimed the addition of the supplemental 12.5% of video poker purse money would

be very beneficial to quarter-horse breeding and racing in Louisiana. Further, he

asserted the quarter horse-purses would increase by forty to fifty percent. During

cross-examination, Mr. Robicheaux admitted he did not file a claim or opt-in to the

proposed settlement agreement. Mr. Robicheaux noted he was aware that the

disputed video poker funds totaled thirty-five million dollars.

Testimony of Edwin Joseph Fenasci

Edwin Joseph Fenasci, the current executive director of the HBPA, testified

he worked in the racing industry for a total of thirty-eight years. He indicated

HBPA is the appointed administrator in this case. Mr. Fenasci testified that the

Louisiana Legislature tasked HBPA with handling the payout of purses from the

four racetracks to the winners of all races (owners typically receive 80% of the

purse, trainers 10%, and jockeys 10%). Further, he explained HBPA issues checks

to the owners, trainers, and jockeys and thus maintains addresses. Mr. Fenasci

identified Exhibit #25, a list of owners, trainers, and jockeys, along with their

addresses, who won races at the Fair Grounds between 2008 and 2019. He noted

that 3,567 notices of the proposed settlement agreement were mailed to the class

on February 27, 2020, utilizing the information from Exhibit #25. Mr. Fenasci

indicated that the United States Postal Service (hereinafter referred to as “USPS”)

returned four notices as undeliverable16; that HBPA received 179 completed claim

16

Note that Mr. Fenasci testified that USPS returned four notices as undeliverable;

but in the record before this Court, Exhibit #28 contains only three notices returned

as undeliverable.

22

or opt-in forms; that HBPA received thirty-three incomplete claim or opt-in forms;

and that HBPA received one complete opt-out form and two incomplete opt-out

forms. Additionally, Mr. Fenasci noted the clerk of court received ten completed

objection forms. As requested, Mr. Fenasci testified he performed various

calculations. He calculated the value of the claim of the member who completed an

opt-out form totaled $12,968.49. He further determined the value of the claims of

the members submitting incomplete opt-out forms totaled $2,931.36. Mr. Fenasci

also calculated the value of the claims of the members who submitted completed

claim or opt-in forms totaled $4,610,062.00.

Mr. Fenasci determined the total value of the claims of the ten members

objecting to the proposed settlement agreement as follows:17

a) Mr. Brossette: $43,730.91.18

b) Mr. Dehart: $29,804.93.19

c) Lyle Guillory: $92,875.00.20

d) JLS Speed Horses (Mr. Soileau): $58,698.52.21

17

The total value of the claims of the ten members objecting to the proposed

settlement agreement is $518,544.96.

18

Per Exhibit #6 (claim value for Mr. Brossette as an owner, $6,965.83) and

Exhibit #7 (claim value for Mr. Brossette as a trainer, $36,765.08).

19

Per Exhibit #8 (claim value for Mr. Dehart as an owner, $2,840.64) and Exhibit

#9 (claim value for Mr. Dehart as a trainer, $26,964.29).

20

Per Exhibit #10 (claim for Lyle and Carl Guillory, Guillory Bros., $0; claim for

Dwayne J. Saucier and Lyle Guillory, $807.41; claim for Lyle Guillory,

$66,562.97; claim for Lyle Guillory and Teddy Abrams, $22,922.22; claim for

Lyle Guillory and John Soileau, $0; and Lyle Guillory, Teddy Abrams, Lou

Phillips, and Darryl Williams, $2,582.40).

21

Per Exhibit #11 (Objector Claim Value Calculation, JLS Speed Horse Ranch Inc.

(John Soileau), Owner).

23

e) M&D Racing Stables: $66,370.48.22

f) Carly Munacy: $0.00.23

g) Joseph Munacy: $34,916.03.24

h) NV Racing: $16,697.52.25

i) Donald R. Watson: $124,912.63.26

j) Darryl Williams: $51,538.94.27

Mr. Fenasci noted Mr. Hamilton, one of the class representatives who initially

supported and signed the proposed settlement agreement, did not submit an

objection form. Mr. Fenasci indicated that he was asked to calculate the value of

Mr. Hamilton’s claim and determined the value was $363,414.46. Additionally,

Mr. Fenasci explained that Mr. Lavergne, one of the other class representatives

who initially supported and signed the proposed settlement agreement, did not

submit an objection form. Mr. Fenasci explained that he was asked to calculate the

value of Mr. Lavergne’s claim, which he determined to be $113,377.56.

Mr. Fenasci identified the condition book for 2015, which the trial court

admitted as Exhibit #42. Mr. Fenasci testified a condition book provides a road

map for trainers so they know the requirements of the race, such as the age and/or

22

Per Exhibit #12 (Objector Claim Value Calculation, M&D Racing Stables

(Norris Davis & Levi Mays), Owner).

23

Per Exhibit #13 (Objector Claim Value Calculation, Manucy, Carly C., Owner).

24

Per Exhibit #14 (Objector Claim Value Calculation, Manucy, Joseph D.,

Trainer).

25

Per Exhibit #15 (Objector Claim Value Calculation, N V Racing (Norris Davis),

Owner).

26

Per Exhibit #16 (Objector Claim Value Calculation, Watson, Donald R.,

Jockey).

27

Per Exhibit #17 (Objector Claim Value Calculation, Williams, Darrell, Owner).

24

weight requirement for a horse to be eligible for participation, as well as the

amount of the purse for that race and the source of the funds for the purse. He

stated HBPA reviews the condition books before the track issues it and works with

each track to insure they offer the races indicated therein. Further, Mr. Fenasci

indicated that the Commission approves the condition book prior to issuance.

Mr. Fenasci testified he attends Commission meetings in his capacity as

executive director of HBPA. Mr. Fenasci stated he attended meetings wherein the

Commission instructed the Fair Grounds to place the disputed video poker funds

into the thoroughbred races.

Mr. Fenasci testified that Exhibit #1 comprises all of the properly completed

and timely submitted opt-in forms (also referred to as claim forms). He recalled

classifying the claim form from Mrs. Foreman, one of the class representatives

who approved the proposed settlement agreement, as timely. Mr. Fenasci

indicated he checked every claim form carefully as they arrived and as the deadline

to submit a claim neared, he checked the postmark to determine if a claim arrived

timely. Mrs. Foreman’s claim form indicates she signed it on August 1, 2020, and

HBPA received it on August 7, 2020. HBPA designated several claim forms

received after August 1, 2020, as timely.

The notice advised the class “THE CLAIM FORM MUST BE

SUBMITTED (MAILED/POSTMARKED) NO LATER THAN AUGUST 1,

2020.” (Emphasis in original). In reviewing exhibit one, this Court notes Mrs.

Foreman’s claim form indicates she signed it on August 1, 2020, and the HBPA

received it on August 7, 2020. Mr. Fenasci designated her claim form filed timely.

Exhibit #1 reveals HBPA designated several claim forms received after August 1,

2020, as timely. For instance, Anthony Arey submitted a claim form signed on

25

July 30, 2020, and it was received by HBPA on August 6, 2020. Frank Cavazos

submitted a claim form signed June 6, 2020, and it was received by HBPA on

August 7, 2020. Andrea G. Lematta submitted a claim form signed July 28, 2020,

and it was received by HBPA on August 6, 2020. Daisy Sanchez submitted a

claim form signed August 1, 2020, and it was received by HBPA on August 5,

2020. Noe R. Sanchez submitted a claim form signed August 1, 2020, and it was

received by HBPA on August 5, 2020. HBPA designated the claim forms timely.

Mr. Fenasci noted Mr. Roberts, one of the class representatives who

approved the proposed settlement agreement, did not submit an individual claim

form. However, Mr. Fenasci indicated Mr. Roberts is a partner/owner with other

entities and that HBPA received claim forms on behalf of Mr. Roberts and

Jumonville Farms, as well as JD&C Jumonville and Mr. Roberts.

On cross-examination, Mr. Fenasci noted Mr. Jumonville signed the claim

forms, not Mr. Roberts. On re-direct, Mr. Fenasci indicated HBPA received several

claim forms for multi-owner accounts signed by a single owner.

Also on cross-examination, Mr. Fenasci agreed Evangeline Downs

distributes video poker proceeds to both quarter-horse and thoroughbred races, but

noted the other tracks do not have poker machines. Mr. Fenasci testified he

believed Evangeline Downs had quarter horse races in 1991 when the Louisiana

Legislature passed the video poker statute, La. R.S. 27:438. He noted the Fair

Grounds did not have set quarter horse races in 1991 except for Champion’s Day,

when there might be a few quarter horse races on that particular day.

Testimony of Bruce Salaid

Bruce Salaid, the executive director of LQHBA, testified he had an

understanding of the proposed settlement agreement and was present when

26

LQHBA passed a resolution supporting the proposed settlement agreement. He

noted that on March 1, 2020, LQHBA issued a detailed letter to their members

urging their 1,700 plus members to support the settlement. At the beginning and

the end of the March 1, 2020 letter, LQHBA urged its members “*****PLEASE

DO NOT OPT OUT OF SETTLEMENT*****.” In addition to the capitalization

and red ink, LQHBA enlarged the font to distinguish the plea from the rest of the

memorandum. Mr. Salaid indicated LQHBA raised the issue of video poker purse

supplements beginning in 2013 and was very aware of the situation. Beginning in

2013, LQHBA sent letters to the State Police, the President of the Fair Grounds,

HBPA, and the Commission claiming quarter-horsemen were entitled to a portion

of the video poker proceeds from Fair Grounds Defendants. Mr. Salaid affirmed

that LQHBA’s vote in support of the proposed settlement agreement was not a

knee jerk reaction.

Mr. Salaid indicated he has owned and raced quarter-horses since 1980-

1981. He stated that he personally looked forward to the additional purse money

and additional race days, believing both were significant, especially after the

COVID-19 pandemic.

During cross-examination, Mr. Salaid acknowledged LQHBA knew the

amount of the disputed purse funds totaled thirty-five million dollars. Mr. Salaid

indicated LQHBA possessed a general idea of the attorneys’ fees included with the

proposed settlement agreement. Further, Mr. Salaid noted LQHBA knew the

proposed settlement agreement allowed the Fair Grounds to seek to move the

quarter-horse races to another track, but noted the proposed settlement agreement

provided the video poker supplemental purse money would transfer from the Fair

Grounds to the receiving track.

27

Mr. Salaid acknowledged he was eligible to file a claim as an owner but that

he had not filed a claim.

Testimony of Kenneth Roberts

Kenneth Roberts, who is a class representative, testified he is an owner and

trainer of quarter-horses. Mr. Roberts indicated he understood the terms of the

proposed settlement agreement. Further, Mr. Roberts stated he discussed the multi-

owner claim with Mr. Jumonville and knew Mr. Jumonville was filing it. Mr.

Roberts noted he intended to submit an individual claim form, though he was not

sure if he did so. He acknowledged he would not participate in the million dollars

for past claims in an individual capacity. Mr. Roberts indicated he still supported

the proposed settlement agreement because it was not about him but about helping

all horsemen. Mr. Roberts acknowledged it was alleged that thirty-five million

dollars was owed for past claims, but he expressed a desire to move forward and

believed the proposed settlement agreement was in the best interest of the quarter-

horse racing industry. Finally, Mr. Roberts indicated he attended proceedings

before the Commission and the district court and was aware Plaintiffs won some

battles and lost some battles.

Testimony of Jo Baia Foreman

Jo Baia Foreman, a class representative, testified she owns quarter-horses.

Mrs. Foreman expressed she understood the terms of the proposed settlement

agreement. She indicated that she believed the proposed settlement agreement was

the best solution for horsemen because she wants horseracing to continue in

Louisiana. The trial court questioned Mrs. Foreman about her enthusiasm for the

additional five days of racing at the Fair Grounds. Mrs. Foreman indicated that she

has to pay a trainer to take her horse(s) to a track. Mrs. Foreman explained with

28

additional race days over several weeks, a horse could run twice, making it easier

to justify the costs of getting the horse to the track. Mrs. Foreman indicated she

attended many of the Commission meetings and was aware Plaintiffs won some

battles and lost some battles during the litigation. She acknowledged the disputed

past due claims are alleged to total just over thirty-five million dollars. However,

Mrs. Foreman testified she supported the proposed settlement agreement because it

provides certainty for the quarter-horse industry.

Mrs. Foreman noted she executed a claim form on August 1, 2020, at the

office of class counsel. She watched class counsel leave with her claim form in an

envelope to deposit it in the mail. Mrs. Foreman stated that if HBPA denied her

claim, she would still support the proposed settlement agreement because it was in

the best interest of Louisiana horsemen.

During cross-examination, Mrs. Foreman explained she lost her claim form

and went to the office of class counsel to obtain another one. Mrs. Foreman

indicated she never believed the class would receive the thirty-five million dollars

and thought, instead, that they were fighting for the future of quarter-horse racing

at the Fair Grounds.

Testimony of Jason Boulet

Jason Boulet indicated he is the senior director of racing at the Fair Grounds.

Mr. Boulet testified that during the first one hundred and seventeen years of racing

at the Fair Grounds, only thoroughbred horses raced there. Mr. Boulet indicated

that, in 2008, the Louisiana Legislature added five quarter-horse race days and

later increased the number of quarter-horse race days to ten. He noted the

minimum number of thoroughbred race days is eighty. Mr. Boulet explained the

29

sources of purse funds are slots, video poker, and pari-mutuel wagering, or funds

from individuals betting on the race.

Mr. Boulet acknowledged that he attends Commission meetings and

possessed personal knowledge of the Commission ordering the Fair Grounds to

place disputed video poker funds into thoroughbred races. Further, he confirmed

that the Fair Grounds paid purses pursuant to the Commission’s directive. Mr.

Boulet acknowledged that the Fair Grounds sought the Commission’s direction in

2014 when Plaintiffs raised the issue because the video poker statute differs from

the slot machine law. He noted the slot machine law specifically mandates seventy

percent of revenue be paid to thoroughbred races and thirty percent of revenue be

paid to quarter-horse races.

Mr. Boulet explained that a condition book informs trainers and owners of

the type of race and purse offered by the Fair Grounds.

Mr. Boulet noted the first five horses to finish a race are entitled to purse

funds. He explained that he never received a complaint about the purses paid to

any quarter-horse owner, trainer, or jockey prior to the filing of suit.

Mr. Boulet read the following waiver from the 2019 Fair Grounds Stall

Agreement:

Applicant does not have any claims against Fair Grounds and to the

extent Applicant has any such claims, Applicant knowingly and

voluntarily releases any such claims, including but not limited to any

and all claims set forth in that certain suit John L. Soileau et al v.

Churchill Downs Louisiana Horseracing Company, L.L.C. et al, filed

as case no. 14-3873, Div. G, in the Civil District Court for the Parish

of Orleans, State of Louisiana, and now pending with the Louisiana

Racing Commission.

Mr. Boulet testified approximately 550 - 600 horses were stabled in 2019 during

quarter horse racing days at the Fair Grounds. He stated that all trainers and/or

30

owners of the 550 - 600 horses executed the 2019 Stall Agreement containing the

waiver. Mr. Boulet explained that Fair Grounds Defendants intended to utilize the

stall application containing the waiver in the future.

On cross-examination, Mr. Boulet asserted his belief that applying La. R.S.

27:438 as suggested by Appellants would devastate the thoroughbred industry. He

indicated such an application would result in the quarter-horse races receiving five

and a half months of video poker purse supplemental funds for ten days of racing,

doubling the purses of quarter-horse races, and removing significant funds from

thoroughbred races. Further, Mr. Boulet contended the public interest in quarter-

horse races is not at the same level as that of thoroughbred races. He testified that

for every $100.00 placed in bets on races, less than $1.00 is placed on a quarter-

horse race. Mr. Boulet asserted there is no real fan base because owners and their

guests are the individuals attending quarter-horse races.

Testimony of Arthur Morrell

Arthur Morrell, who is Clerk of Criminal District Court for Orleans Parish,

testified he previously served in the Louisiana Legislature. Mr. Morrell indicated

he served in the Louisiana Legislature from 1984 through 2006 and authored, or

co-authored, 99% of the horse bills passed during his tenure. He acknowledged he

was a member of the Louisiana Legislature at the time of the passage of the bill

regarding video poker purse supplements. In particular, Mr. Morrell indicated the

bill came about after he purchased a horse farm and was approached by other

horsemen who asked how the horse industry could be protected. Mr. Morrell

testified that he “devised a couple of bills”, including the video poker purse

supplement bill to keep the thoroughbred industry in existence by not allowing

video poker machines at a racetrack unless some of the proceeds supplemented the

31

purses. Mr. Morrell noted the Fair Grounds did not conduct quarter-horse races at

the time of the bill’s passage. Mr. Morrell indicated the intent of La. R.S. 27:438,

which is titled “Distribution of device revenues; particular licensed establishments;

pari-mutuel wagering facilities”, was to increase purses for thoroughbred races.

Mr. Morrell explained that the video poker money generated by the enactment of

the bill was for the meets in existence at the time of the creation of the bill. He

noted that at the time of the passage of the bill the Fair Grounds only conducted

thoroughbred horse races. Mr. Morrell noted a portion of the funds did go to the

quarter-horse breeders’ award and that race received video poker funds, but

quarter-horse races did not receive video poker funds.

APPELLANTS’ CASE IN CHIEF

Testimonial Evidence Presented by Appellants

Testimony of Danny Lavergne

Appellants called Danny Lavergne, who was a jockey from 1976 through

2016 when he retired. Mr. Lavergne testified that he won approximately 100 races

at the Fair Grounds. He explained that he raced at the Fair Grounds between 2008

and 2016. Mr. Lavergne indicated some of the jockeys and trainers learned that

the Fair Grounds Defendants withheld money that should have gone to quarter-

horse races and placed the money into thoroughbred races. He recalled meeting

once with a lawyer at the racetrack, but believed he had not spoken to a lawyer

since. Mr. Lavergne did not know the names of the attorneys representing him

previously and testified that he did not know he was a class representative. When

asked about the proposed settlement agreement, Mr. Lavergne noted he got

something in the mail and that Mr. Roberts suggested Mr. Lavergne should sign it,

so he did. Further, Mr. Lavergne explained that he used to ride for Mr. Roberts and

32

believed Mr. Roberts had his best interests at heart. Mr. Lavergne admitted he did

not read all of the proposed settlement agreement or ask a lawyer to review it,

though he should have. He explained that he was now opposed to the proposed

settlement agreement because he learned that the amount alleged to be owed was

thirty-five million dollars. Additionally, Mr. Lavergne stated he spoke with Mr.

Hamilton and Mr. Watson about the amount alleged to be owed and learned it was

thirty-five million dollars. Mr. Lavergne indicated “[a]ll I want is what they said

that they were supposed to do and so, what’s owed to me.”

During cross-examination, Mr. Lavergne noted his signature appeared on the

proposed settlement agreement. He agreed he did not opt-out of the settlement and

did not file an objection to the proposed settlement agreement. Mr. Lavergne

stated his problem with the proposed settlement agreement is that he would only

get $250.00, according to his lawyer, Mr. Brandt, who represented him as of the

day of the hearing. Mr. Lavergne did not know the value of his claim totaled

$113,377.56. He recalled one or two meetings with Mr. Townsend (one of the

attorneys who serves as class counsel) talking to a group that included Mr.

Lavergne, Mr. Roberts, Mr. Hamilton, and Mr. Watson. However, Mr. Lavergne

did not recall participating in a telephone meeting to discuss the terms of the

proposed settlement agreement.

Testimony of Donald Watson

Donald Watson, a jockey, testified he won quite a few races at the Fair

Grounds. He testified when he won races at Evangeline Downs, Louisiana Downs,

or Delta Downs, they would pay from video poker and slot machine revenue.

Later, Mr. Watson indicated he did not know whether Louisiana Downs and Delta

Downs included video poker revenue with their purse funds. Mr. Watson testified

33

that for what it cost him to come to New Orleans to race, it was not fair to be

cheated out of his money. He noted that he missed weddings, funerals, and

vacations being a jockey. Mr. Watson stated he wanted to continue the litigation.

On cross-examination, Mr. Watson acknowledged additional racing days

would be beneficial. Mr. Watson admitted he attended a meeting with an attorney

at Evangeline Downs, another in Baton Rouge, and one Shreveport. Mr. Watson

declared his objection to the proposed settlement agreement was that it was not fair

to keep the money he worked for and that was supposed to be distributed by the

Fair Grounds. He agreed the value of his claim totaled $124,912.63. Mr. Watson

testified he was not told had he submitted a claim he would have received

approximately $25,000.00.

Testimony of Joseph Munacy

Joseph Munacy, a horse trainer, testified he trained horses that ran at the Fair

Grounds. He testified he did not like the million dollar settlement because he

believed they should receive the money owed to them. Accordingly, Mr. Munacy

expressed a desire to continue the litigation.

During cross-examination, Mr. Munacy acknowledged he participated in

several group meetings and that he had the opportunity throughout the litigation to

discuss the case. Mr. Munacy testified he did not like the cap portion of the

proposed settlement agreement. He noted he always believed the Fair Grounds

should have more days of quarter-horse races. Further, Mr. Munacy stated that

when he raced at the Fair Grounds between 2008 and 2014, he did not complain

about the amount of the purses. Mr. Munacy indicated he reviewed the condition

book for the purse amount and would see the source of the purse funds. He

acknowledged his claim totaled $34,916.03. When informed that people were

34

receiving approximately twenty cents on the dollar if they submitted a claim form,

Mr. Munacy testified more money should be in the settlement and “I think I should

be entitled to what’s mine.”

Testimony of Alvin Brossette

Alvin Brossette, who was a jockey for thirty-eight years, testified he owned

and trained quarter-horses for the last seven or eight years. He indicated by the

time the Fair Grounds held quarter-horse meets in 2008, he trained horses that ran.

Mr. Brossette noted after learning the Fair Grounds did not pay video poker

proceeds to the quarter-horse industry, he instituted suit on behalf of the quarter-

horse industry. Mr. Brossette testified he did not like the proposed settlement

agreement because one million dollars for past claims was not enough when,

according to his interpretation, the amount due was thirty-five million dollars. He

advised he did not like the yearly amount being capped at one million dollars.

Further, Mr. Brossette insisted he was not worried about what he might get

individually but was fighting for the whole industry.

During cross-examination, Mr. Brossette acknowledged receiving a

condition book prior to a race that revealed the purse and the sources of funds for

the purse. Mr. Brossette agreed he decided whether or not to enter a horse in a race

based on the condition book and did not complain about the purse amount until

2014. On re-direct examination, he testified he learned of the terms of the proposed

settlement agreement prior to October 2019 and participated in several settlement

meetings. Mr. Brossette stated he knew the amount in dispute totaled thirty-five

million dollars. Additionally, he indicated he had the opportunity to discuss the

proposed settlement agreement with others. Mr. Brosette noted after the terms of

35

the proposed settlement agreement were revealed, some were in favor of the

proposed settlement agreement and some were against it.

REBUTTAL BY APPELLEES

Jo Baia Foreman Rebuttal Testimony

Appellees recalled Mrs. Foreman. Mrs. Foreman testified she participated in

several meetings pertaining to the proposed settlement agreement. She indicated

that in October 2019, she, Mr. Roberts, and Mr. Brossette attended a meeting in

person with class counsel while Mr. Lavergne, Mr. Hamilton, and Mr. Munacy

participated by telephone. Mrs. Foreman noted after the meeting, some were in

favor of the proposed settlement agreement and some were against it. She also

indicated she knew the amount in dispute potentially totaled thirty-five million

dollars. Mrs. Foreman acknowledged that all Plaintiffs discussed the proposed

settlement agreement amongst themselves to determine whether they supported it

or not.

POST-FAIRNESS HEARING BRIEFS

The trial court granted the parties until December 18, 2020, to submit post-

trial briefs. On December 18, 2020, Soileau Plaintiffs and Hamilton Plaintiffs

submitted a “Post Hearing Brief in Support of Opposition to the Entry of Final

Judgment on the Proposed Settlement [Agreement].” Also on December 18, 2020,

Fair Grounds Defendants filed a “Post Trial Memorandum in Support of Final

Approval of Class Action Settlement.” Mrs. Foreman and Mr. Roberts, as class

representatives, submitted a “Post-Hearing Memorandum in Support of

Settlement” on December 18, 2020. Pursuant to the trial court’s request, Mrs.

Foreman and Mr. Roberts, in their capacity as Class Representatives, also filed a

document titled “Proposed Findings of Fact and Relevant Procedural History.”

36

HBPA filed a “Motion and Incorporated Memorandum in Support to Join and

Adopt the Post-Hearing Memorandum in Support of Settlement and Proposed

Findings of Fact and Law,” i.e., to adopt the Post-Hearing Memorandum and

Proposed Findings of Fact filed by Class Representatives, Mrs. Foreman and Mr.

Roberts. Thereafter, on December 28, 2020, Soileau Plaintiffs and Hamilton

Plaintiffs filed an objection to the “Motion for Final Approval of the Settlement

Agreement,” which was filed by Class Representatives, Mrs. Foreman and Mr.

Roberts; Fairgrounds Defendants; and HBPA.

TRIAL COURT JUDGMENT AND REASONS FOR JUDGMENT

On January 28, 2021, the trial court issued a final judgment, which granted

final approval to the proposed settlement agreement, the class, the class

representatives, the amount of the settlement, the payout procedure, and

$787,500.00 as reasonable attorneys’ fees and reimbursement of expenses for class

counsel. In the trial court’s written reasons for judgment, the trial court

acknowledged the proposed settlement agreement was not perfect because no

settlement is perfect. The trial court believed the proposed settlement agreement

was in the best interests of all. The trial court indicated the need to add the

thoroughbred defendants would lead to additional, years-long litigation at a

considerable expense to all. Further, the trial court indicated it was not impressed

with the testimony of the objectors.

Appellants now seek review of the January 28, 2021 judgment, as well as the

trial court’s November 12, 2020 denial of the Soileau Plaintiffs’ and Hamilton

Plaintiffs’ motions to vacate; failure to reset deadlines in light of the Governor’s

Proclamations and the Supreme Court’s Orders in response to the COVID-19

37

pandemic; and February 18, 2020 grant of the joint motion for preliminary

approval of the proposed settlement agreement.

For purposes of this Opinion, we will consider each consolidated appeal

separately.

DISCUSSION

2021-CA-0022: Appeal of the Trial Court’s Denial of the Motions to Vacate

In this appeal, Appellants seek review of the trial court’s denial of their

motions to vacate.28 The appellants assign three errors:

[1]. The Trial Court erred in denying the [] Motion[s] to Vacate.

[2]. The Trial Court erred in not resetting the deadlines as required by

the Governor’s Proclamations and Supreme Court’s Orders in

response to COVID-19.

3. The Class Notice is Defective.[29]

Each of these assignments of error is discussed in turn.

Jurisdiction of Moot Issue

Prior to addressing the merits, we note that in this consolidated appeal

Appellants seek review of the judgment, which denied their motions to vacate the

judgment granting preliminary approval to the proposed settlement agreement and

the judgment granting final approval of the proposed settlement agreement. In

28

Note that in their first assignment of error, Appellants state that “[t]he Trial

Court erred in denying the Soileau Plaintiffs’ Motion to Vacate.” Soileau Plaintiffs

filed their Motion to Vacate on September 18, 2020, and Hamilton Plaintiffs filed

their Motion to Vacate on September 22, 2020. Though the assignment of error

references only Soileau Plaintiffs’ motion, we consider the trial court’s denial of

both motions in this section.

29

Appellants did not assign as error the argument regarding the class notice being

defective. Appellants’ brief to this Court includes it as a major heading and

designated the argument as number three. Appellees likewise designated their

response as number three. For consistency, the Court will utilize the numbering of

the parties.

38

2021-CA-0199, Fair Grounds Defendants contend that any objection to the

judgment granting preliminary approval is moot because the trial court held a

fairness hearing on the merits of the proposed settlement agreement and thereafter

granted final approval to the proposed settlement agreement.

In Edward v. Badie, in discussing whether an issue was moot, this Court

indicated:

The Louisiana Supreme Court provided that “[t]he

jurisprudence of this Court is well settled that courts will not decide

abstract, hypothetical or moot controversies, or render advisory

opinions with respect to such controversies.” Cat’s Meow, Inc. v. City

of New Orleans Through Dep’t of Fin., 98-0601, p.8 (La. 10/20/98),

720 So. 2d 1186, 1193. Further,

an issue is “moot” when a judgment or decree on that

issue has been “deprived of practical significance” or

“made abstract or purely academic.” Perschall v. State,

96-0322 (La. 7/1/97), 697 So.2d 240; Louisiana

Associated Gen. Contractors, Inc.[v. State Through Div.

of Admin., Office of State Purchasing], 669 So.2d [1185]

at 1193 [ (1996) ]; American Waste & Pollution Control

Co. [v. St. Martin Parish Police Jury], 627 So.2d [158] at

162 [ (1993) ]. A case is “moot” when a rendered

judgment or decree can serve no useful purpose and give

no practical relief or effect. Robin [v. Concerned Citizens

for Better Ed. in St. Bernard, Inc.], 384 So.2d [405] at

405 [(1980)]. If the case is moot, then “‘there is no

subject matter on which the judgment of the court can

operate.’” St. Charles Parish Sch. Bd. [v. GAF Corp.],

512 So.2d [1165] at 1171 [ (1987) ] (citing Ex parte

Baez, 177 U.S. 378, 20 S.Ct. 673, 44 L.Ed. 813 (1900)).

That is, jurisdiction, once established, may abate if the

case becomes moot. Id.

2019-0332, p. 2 (La. App. 4 Cir. 8/28/19), 282 So.3d 269, 270-71.

In the case sub judice, an argument exists that any claim pertaining to the

judgment granting preliminary approval is moot because the trial court issued a

final judgment approving the settlement. Similarly, any objection to the order

granting preliminary approval to the class and the proposed settlement agreement

39

ceased to exist upon rendition of the final judgment. The joint motion for

preliminary approval served as a procedural vehicle to obtain court approval of the

notice to be disseminated to the class. The notice issued to the class informed the

class of the terms of the proposed settlement agreement; their opportunity to opt-

out, object, or opt-in; and the date of the fairness hearing. The final judgment

approving the class and the proposed settlement agreement occurred after the

issuance of the notice and the opportunity to present testimony and evidence at the

fairness hearing. A decision by this Court pertaining to the order granting

preliminary approval would be deprived of practical significance because there is a

final judgment granting approval of the class and the proposed settlement

agreement.

We note the appeals appeared in a unique procedural posture because

appellate courts typically review an objection to an order granting preliminary

approval prior to the fairness hearing. See, e.g., Pollard v. Alpha Tech., 2010-

0788, p. 53 (La. App. 4 Cir. 8/12/11), 102 So.3d 71, 106 (wherein this Court

reversed the trial court’s judgment granting preliminary approval of a class

settlement prior to the trial court holding a fairness hearing). Herein, Appellants

sought review of the order granting preliminary approval in such close proximity

to the request to review the final judgment that this Court consolidated the appeals.

Nonetheless, appeals are favored by law. Alexander v. La. State Bd. of

Private Investigator Exam’rs, 2019-0778, p. 20 (La. App. 4 Cir. 4/1/20), 293 So.3d

1243, 1256, writ denied, 2020-01072 (La. 11/10/20), 303 So.3d 1039. Further, an

appellant is entitled to seek review of all adverse interlocutory rulings prejudicial

to him when taking an unrestricted appeal from a final judgment. Elysian, Inc. v.

Neal Auction Co., 2020-0674, p. 9 (La. App. 4 Cir. 7/21/21), 325 So.3d. 1075,

40

1083. Thus, we consider the assignments of error pertaining to the preliminary

order and do not deem them moot.

Jurisdiction to Consider the November 12, 2020 Judgment

Prior to addressing the merits of Appellants’ argument, the Court notes that

Fair Grounds Defendants and Class Representatives assert the November 12, 2020

judgment denying the motions to vacate is interlocutory and not appealable. “A

judgment that does not determine the merits but only preliminary matters in the

course of the action is an interlocutory judgment. A judgment that determines the

merits in whole or in part is a final judgment.” La. C.C.P. art. 1841. Notably, “an

interlocutory judgment is appealable only when expressly provided by law.” La.

C.C.P. art. 2083(C). In this instance, the November 12, 2020 judgment denying

the motions to vacate determined preliminary matters and not the merits. Further,

there is no law that expressly provides the right to appeal the denial of a motion to

vacate. Thus, the proper procedural vehicle to seek review of an interlocutory

judgment is by the filing of an application for supervisory writs. Sullivan v. Malta

Park, 2016-0875, p. 4 (La. App. 4 Cir. 1/31/17), 215 So.3d 705, 708; see also

Narcise v. Jo Ellen Smith Hosp., 98-2417, p. 4 (La. App. 4 Cir. 3/10/99), 729 So.2d

748, 751 (wherein this Court noted the plaintiffs filed an application for

supervisory writs asking this Court to consider the merits of the trial court’s denial

of a motion to vacate).

Nonetheless, while an interlocutory judgment may not itself be immediately

appealable, it is nevertheless subject to review by an appellate court when an

appealable judgment is rendered in the case. Elysian, Inc., 2020-0674, p. 9, 325

So.3d. at 1083 (citing People of the Living God v. Chantilly Corp., 251 La. 943,

947-48, 207 So.2d 752, 753 (1968)). “When an unrestricted appeal is taken from a

41

final judgment, the appellant is entitled to seek review of all adverse interlocutory

rulings prejudicial to him, in addition to the review of the final judgment.” Id.

(quoting Wimsatt v. City of New Orleans, 2019-0461, p. 7, n. 6 (La. App. 4 Cir.

12/20/19), 286 So.3d 1217, 1223).

Appellants were not entitled to appellate review of the November 12, 2020

judgment denying the motions to vacate at the time of the lodging of the appeal in

this Court on January 15, 2021, because the judgment was interlocutory. On

January 28, 2021, the trial court rendered a final judgment in this matter.

Appellants sought an unrestricted appeal of the final judgment, and this Court

ordered consolidation of the appeals.30 Thus, this Court will review the

interlocutory judgment, which denied the motions to vacate, as part of the

unrestricted appeal of the final judgment rendered on January 28, 2021.

STANDARD OF REVIEW

Appellate courts review the denial of a motion to vacate under an abuse of

discretion standard. Narcise, 98-2417, p.9, 729 So.2d at 753.

Assignment of Error No. 1 – Denial of the Motions to Vacate

The motions to vacate requested that the trial court vacate the February 18,

2020 order granting preliminary approval of the settlement agreement. Appellants

set forth several arguments to support the assertion that the trial court erred in

denying the motions to vacate.

30

The Court consolidated the cases after the parties filed separate briefs in 2021-

CA-0022 and 2021-CA-0049. The parties thereafter filed separate briefs in 2021-

CA-0199. There is some overlap in the assignments of error and/or arguments in

support thereof. The Court will address the issues raised in the various appeals

separately while omitting detailed discussion of the similar assignments and/or

arguments.

42

Applicability of La. C.C.P. art. 2002

Appellants first contend the preliminary order is null pursuant to La. C.C.P.

art. 2002(A)(2). That provision states:

A final judgment shall be annulled if it is rendered against a

defendant who has not been served with process as required by law

and who has not waived objection to jurisdiction, or against whom a

valid final default judgment has not been taken.

Appellants aver that Appellees failed to serve them with a copy of the “Joint

Motion for Preliminary Approval of Class Action Settlement Agreement and for

Related Relief.” Thus, Appellants contend the February 18, 2020 preliminary order

is null.

In their Appellee brief, Fair Grounds Defendants first contend the specific

articles governing class actions do not require a contradictory hearing to approve a

preliminary settlement. Fair Grounds Defendants aver La. C.C.P. art. 594, which

pertains to “[d]ismissal or compromise” of a class action, requires the court to hold

a fairness hearing after notice of the proposed settlement has been provided to the

class. In support, Fair Grounds Defendants cite Pollard. Therein, this Court

acknowledged that pursuant to La. C.C.P. art. 594(B), a formal hearing is not

required until after preliminary approval and notice of the compromise has been

provided to the class. Pollard, 2010-0788, p. 5, 102 So.3d at 76. Fair Grounds

Defendants further cite Kent A. Lambert, Class Action Settlements in Louisiana,

61 LA. L. REV. 89, 125 (2000) (noting preliminary approval of a settlement is often

granted with no formal hearing, even at the federal level). Fair Grounds

Defendants also aver La. C.C.P. art. 2002 is not applicable. They note that the

February 18, 2020 order granting preliminary approval of the settlement is not a

final judgment.

43

Similarly, Class Representatives note that Appellants received notice of the

February 18, 2020 hearing in a letter dated January 29, 2020, and sent via Federal

Express. Class Representatives aver that Appellants obtained new counsel; new

counsel appeared at the February 18, 2020 hearing; new counsel argued against

granting preliminary approval of the settlement; and new counsel did not object to

a lack of service during the February 18, 2020 hearing.

We agree the February 18, 2020 order determined preliminary matters and

not the merits. Hence, the February 18, 2020 order is interlocutory. Louisiana

Code of Civil Procedure Article 2002 applies to final judgments. Thus, Appellants’

contention that La. C.C.P. art. 2002 applies is misplaced.

Additionally, La. C.C.P. art. 2002 provides that a final judgment shall be

annulled if rendered “[a]gainst a defendant who has not been served with process

as required by law and who has not waived objection to jurisdiction.” La. C.C.P.

art. 2002(A)(2). In Washington v. Landry’s Seafood House New Orleans, Inc., the

plaintiff claimed the defendant did not properly serve him with a motion. 2014-

0128, p. 4, n. 4 (La. App. 4 Cir. 11/19/14), 154 So.3d 677, 680. This Court

determined that the objection to service was voluntarily waived because the

plaintiff made a general appearance and argued the merits of the motion. Id.

Two Appellants, Mr. Watson and Mr. Brossette, appeared at the February

18, 2020 hearing with counsel. Counsel for Appellants argued the merits of the

motion. At no point did counsel for Appellants object due to a lack of service.

Rather, counsel for Appellants first requested additional time to prepare for the

fairness hearing. Next, counsel for Appellants indicated that he would require two

days to present evidence at the fairness hearing. Appellants voluntarily waived the

right to object to a lack of service when they made a general appearance, argued

44

the merits, and did not object to a lack of service. See Washington, 2014-0128, p.

4, n. 4, 154 So.3d at 680. This argument lacks merit.

Applicability of La. C.C.P. art. 1312

Appellants next cite La. C.C.P. art. 1312, which states that “every pleading

subsequent to the original petition shall be served on the adverse party as provided

by [La. C.C.P. arts.] 1313 or 1314.” Appellants aver that class counsel, Fair

Grounds Defendants, and HBPA filed a joint motion for preliminary approval of

class settlement. Appellants submit that Appellees did not request service on

Appellants, an adverse party. Appellants contend that Appellees failed to comply

with La. C.C.P. art. 1312.

In their briefs, Appellees again note counsel for Appellants appeared on

February 18, 2020, and argued the merits of the motion. Appellees contend that

counsel for Appellants did not object due to a lack of service. Thus, Appellees

conclude that Appellants waived the right to object to a lack of service.

As indicated above, Appellants and their counsel appeared at the February

18, 2020 hearing and did not object to a lack of service. Rather, counsel for

Appellants argued the merits and participated fully in the hearing. Thus,

Appellants voluntarily waived the right to object to a lack of service when they

made a general appearance, argued the merits, and did not object to a lack of

service. See Washington, 2014-0128, p. 4, n. 4, 154 So.3d at 680. This argument

lacks merit.

Applicability of La. C.C.P. art. 963

Appellants further cite La. C.C.P. art. 963, which is titled “Ex parte and

contradictory motions; rule to show cause.” Louisiana code of Civil Procedure

Article 963 provides, in pertinent part, that “[i]f the order applied for by written

45

motion is one to which the mover is not clearly entitled, or which requires

supporting proof, the motion shall be served on and tried contradictorily with the

adverse party.” Appellants suggest that Appellees, as the movers, were not clearly

entitled to the relief sought in the joint motion. Appellants contend that Appellees

were required to serve the adverse parties and try the motion contradictorily.

Appellants aver that they were not served with the joint motion and that the trial

court should have thus vacated the February 18, 2020 order.

In their briefs, Appellees again note counsel for Appellants appeared on

February 18, 2020, and argued the merits of the motion. Appellees contend

counsel for Appellants did not object due to a lack of service. Thus, Appellees

conclude that Appellants waived the right to object to a lack of service.

This Court has acknowledged that a formal hearing is not required until after

preliminary approval and notice of the settlement has been sent to the class. In

Pollard, this Court quoted from the trial court’s reasons for judgment as follows:

The two-step approach for approval of a settlement class is laid

out in Gates v. Rohm & Haas Co., 248 F.R.D. 434, 438-439 (E.D. Pa.

2008); Armstrong v. B. Of School Dirs., 616 F.2d 305, 314 (7th Cir.

1980), overruled on other grounds by Felzen v. Andreas, 134 F.3d 873

(7th Cir. 1998); In re Mid-Atlantic Toyota Antitrust Litig., 564

F.Supp. 1379, 1384 (D.Md. 1983); Horton v. Merrill Lynch, Pierce

Fenner & Smith, Inc., 855 F.Supp. 825, 827 (E.D. N.C. 1994).

First, the Court issues a preliminary approval of the settlement,

where the court reviews the proposed settlement for obvious

deficiencies, schedules a fairness hearing, and provides the class with

notice of the proposed settlement and hearing. Second, the court

considers the final approval of the proposed settlement at a formal

fairness hearing during which arguments and evidence are presented

in support of and in opposition to the proposed settlement.

On a motion for preliminary approval the Court need only

ascertain whether there is “probable cause” to notify the class

members of the proposed settlement and to proceed with a fairness

hearing. Mid-Atlantic Toyota, 564 F.Supp. at 1384. When making the

preliminary determination of fairness of the settlement, the standard is

46

not whether the settlement was the best of all possible deals, but

rather, “whether it is fair, adequate, and free from collusion.” Hanlon

v. Chrysler Corp., 150 F.3d 1011, 1027 (96 Cir, 1988) [(9 Cir.1998)].

When a proposed settlement appears to fall within the range of

possible approval, it is appropriate to issue preliminary approval and

direct notice to members of the settlement class. Horton, 855 F.Supp.

[825] at 827.

Pollard, 2010-0788, pp. 4-5, 102 So.3d at 75-76.

In this instance, the trial court complied with the two-step approach. The

trial court reviewed the proposed settlement agreement, granted preliminary

approval of the settlement class, and ordered notice of the proposed settlement

agreement be provided to the class. The trial court ordered the notice inform the

class of the deadline to opt-out, object, and submit a claim form, as well as the date

of the fairness hearing. The trial court held a formal fairness hearing on October 7,

2020, and November 17, 2020, during which the parties presented testimony and

evidence in support of, and in opposition to, the proposed settlement agreement.

The Pollard Court further noted that Louisiana courts refer to cases

interpreting the federal class action statute because the Louisiana class action

statute is largely derived from the federal class action statute, which is codified at

Federal Rule of Civil Procedure 23. 2010-0788, p. 11, 102 So.3d at 79-80.

Federal courts often grant preliminary approval of a class settlement with no

formal hearing, much less notice to any named plaintiff who objected to the

settlement. See Kent A. Lambert, Class Action Settlements in Louisiana, 61 LA. L.

REV. 89, 125 (2000). Appellants’ argument that La. C.C.P. art. 963 applied,

thereby requiring service of the joint motion and a contradictory hearing, is

misplaced.

Significantly, to the extent that La. C.C.P. art. 963 applied, class counsel and

the trial court complied. Class counsel informed the named plaintiffs of the terms

47

of the proposed settlement agreement in October 2019. Class counsel provided

notice of the hearing date to the named plaintiffs objecting to the proposed

settlement agreement. Counsel for Soileau Plaintiffs filed an opposition to the

joint motion; appeared at the February 18, 2020 hearing; and argued against the

granting of the joint motion for preliminary approval at the hearing. Additionally,

counsel for Soileau Plaintiffs requested a thirty-day extension to file an opposition

to the joint motion. Counsel for Soileau Plaintiffs also did not object to a lack of

service. Counsel for Soileau Plaintiffs noted that Fair Grounds Defendants and

HBPA had not filed an answer. Further, Counsel for Soileau Plaintiffs provided he

would require two days to present evidence at the fairness hearing. Class counsel

and counsel for Fair Grounds Defendants set forth reasons to move forward with

setting dates to opt-out, object, and submit a claim form. The trial court clearly

held a contradictory hearing as contemplated by La. C.C.P. art. 963. This

argument lacks support.

Applicability of White v. White

Appellants cite this Court’s decision in White v. White, 398 So.2d 1257 (La.

App. 4 Cir. 1981). Therein, this Court declared a judgment of contempt, which

imposed both a fine and a jail term, to be absolutely null because the record

reflected no service and no evidence the appellant received notice of the

proceeding. White, 398 So.2d at 1259. Appellants contend the February 18, 2020

order is likewise an absolute nullity.

In their briefs, Appellees again note that counsel for Appellants appeared on

February 18, 2020, and argued the merits of the motion. Appellees contend that

counsel for Appellants did not object due to a lack of service. Thus, Appellees

conclude that Appellants waived the right to object to a lack of service.

48

We find the facts in White are distinct from those found herein. In White,

the wife filed a rule for contempt and requested service on the husband via the

long-arm statute. White, 398 So.2d at 1258. At the hearing, the wife and her

counsel appeared, but the husband did not. Id. The trial court granted the rule for

contempt, imposed a fine on the husband, and sentenced him to a jail term. Id.

This Court determined:

[A] judgment rendered against a defendant who has not been

served with process and who has not entered a general appearance is

an absolute nullity. C.C.P. 2594, 2002(2), Thompson v. Courville, 372

So.2d 579 (La. App. 3rd Cir. 1979). Since the record reflects no

service whatsoever in this matter, and since there is no evidence of

appellant being given notice of the summary proceedings set for

October 12, 1979, then the judgment based on this hearing and

rendered on October 17, 1979 is an absolute nullity.

Id., 398 So.2d at 1259.

Unlike White, the record herein reflects service of the hearing date. Also,

unlike White, the judgment herein is not an appealable judgment.31 Additionally,

unlike White, Appellants voluntarily waived an objection regarding service by

making a general appearance and arguing the merits of the joint motion without

objection. Thus, Appellants’ reliance upon White is misplaced.

Applicability of Louisiana District Court Rule 9.8

Appellants lastly contend the hearing on the joint motion violated Rule 9.8

of the Louisiana District Court Rules. The pertinent part of La. Dist. Ct. Rule 9.8

states:

In cases other than juvenile and family law proceedings, no

hearing on an exception or motion will be scheduled until at least

fifteen calendar days after filing. A party seeking to have an

exception or motion heard less than fifteen days after filing shall show

31

A judgment imposing sanction for contempt is a final judgment subject to appeal

pursuant to La. C.C.P. art. 1915(A)(6).

49

good cause and shall state in the exception or motion the reasons why

an expedited hearing is necessary.

Rule 9.8(c), La. Dist. Ct. Rules.

Appellants assert the trial court erred in holding a hearing on February 18,

2020, because the parties filed the joint motion on February 14, 2020, which was

fewer than fifteen days before the hearing. Appellants contend this violates

procedural due process. Appellants did not cite to any law or jurisprudence in

support of the assertion of procedural due process.

In their briefs, Appellees again note counsel for Appellants appeared on

February 18, 2020, and argued the merits of the motion. Appellees also contend

counsel for Appellants did not object due to an alleged violation of La. Dist. Ct.

Rule 9.8. Thus, Appellees conclude that Appellants waived the right to object.

As we previously noted, Class Representatives and Fair Grounds Defendants

filed the joint motion to set hearing dates for class certification and related relief on

January 23, 2020. The trial court set a hearing for February 18, 2020. On January

29, 2020, class counsel notified Appellants of the February 18, 2020 hearing date

by letter sent via Federal Express. Appellants filed an opposition to the joint

motion for preliminary approval of class settlement, appeared at the hearing,

participated in the hearing, and did not object to a violation of La. Dist. Ct. Rule

9.8.

Admittedly, the parties filed the joint motion for preliminary approval on

February 14, 2020, which was four days before the February 18, 2020 hearing.

However, Appellants suffered no prejudice due to the alleged violation of La. Dist.

Ct. Rule 9.8. See In re Succession of Benoit, 2014-0546, p. 4, n. 1 (La. App. 5 Cir.

11/25/14),165 So.3d 1017, 1018 (wherein the appellant asserted a lack of sufficient

50

notice to defend against a summary judgment and the Fifth Circuit Court of Appeal

determined the appellant was not prejudiced because she filed an opposition to the

motion, including three supporting affidavits). As noted, counsel for Soileau

Plaintiffs filed an opposition, appeared at the hearing, and participated in the

hearing. While counsel for Soileau Plaintiffs requested additional time to prepare

for the fairness hearing, counsel then indicated he would require two days to

present evidence at the fairness hearing. Appellants failed to demonstrate any

prejudice due to the alleged violation of La. Dist. Ct. Rule 9.8. This argument

lacks support.

Assignment of Error No. 2 – The Trial Court Erred in Not Resetting Deadlines

Due to COVID-19.

Pursuant to the crisis imposed by COVID-19, Governor Edwards issued a

public health emergency declaration on March 11, 2020. 25 JBE 2020. In

connection therewith, the Louisiana Supreme Court issued an order dated March

20, 2020, continuing all civil trial, hearings, and court appearances set between the

date of the order and April 13, 2020. Appellants contend the Governor’s

Proclamations and the Supreme Court’s orders required the rescheduling of the

deadlines (to opt-out or object to the proposed settlement agreement) contained in

the February 18, 2020 preliminary order. Appellants aver the time between the

receipt of the notice and the time to respond was impacted because the deadlines

occurred during the declared state of emergency. Appellants contend any resulting

hearing or order violated the due process rights of the entire class. However,

Appellants did not cite to any law or jurisprudence in support of the assertion of a

violation of due process rights.

51

In their brief, Fair Grounds Defendants explain that Appellants filed a

motion for clarification concerning the deadlines, and, in response, the trial court

set a telephone status conference. During the telephone status conference, the trial

court accommodated the request of Appellants to reschedule the fairness hearing to

October 7 - 9, 2020. Fair Grounds Defendants contend that counsel for Appellants

did not raise the deadlines to opt-out, object, or submit a claim form due to

COVID-19, or otherwise, during the telephone status conference.

Further, Fair Grounds Defendants aver that the plain language of the

Governor’s Proclamations and the Supreme Court orders did not supersede or

vacate any deadline. Rather, Fair Grounds Defendants contend the Governor’s

Proclamations and the Supreme Court’s orders extended certain legal deadlines.

Fair Grounds Defendants note that during the 2020 legislative session, the

Louisiana Legislature enacted Louisiana Act 162, which extended all legal

deadlines impacted by the Governor’s Proclamations to July 6, 2020. 32 Fair

Grounds Defendants submit the Supreme Court’s orders did not vacate the

deadlines to opt-out or object. The Supreme Court’s March 20, 2020 order

addressed “civil trials, hearings and court appearances.” The Supreme Court’s

April 6, 2020 order continued jury trials and non-emergency in person-proceedings

scheduled prior to May 4, 2020, to a date to be reset by trial court order. Fair

Grounds Defendants note the only trial, hearing, or court appearance contained in

the February 18, 2020 order was the fairness hearing, which was originally

scheduled for April 27, 2020, but reset for October 7 - 9, 2020 (and ultimately held

on October 7, 2020, and November 17, 2020).

32

2020 La. Acts 162 was codified as La. R.S. 9:5828 - 5830.

52

Lastly, Fair Grounds Defendants contend that Appellants lack standing to

raise lack of due process as to this issue. Fair Grounds Defendants note that new

counsel represented Appellants and filed objections to the proposed settlement

agreement. Appellants did not opt-out of the proposed settlement agreement. Fair

Grounds Defendants avow the Governor’s Proclamations and/or the Supreme

Court’s orders did not confuse Appellants because they timely filed objections to

the proposed settlement agreement. Further, Appellants fully participated in the

full trial on the fairness of the proposed settlement agreement. Fair Grounds

Defendants aver that Appellants may not now claim confusion to an order after

fully complying with the order.

Likewise, Class Representatives argue that Appellants misconstrue the

Governor’s Proclamations and the Supreme Court’s orders pertaining to COVID-

19. Class Representatives aver that the Governor’s Proclamations and the

Supreme Court’s orders extended deadlines, not vacated deadlines.

This Court first notes that the February 18, 2020 order required class

members to opt-out by April 13, 2020, and to object by April 3, 2020. The

individual Appellants filed their objections to the proposed settlement agreement

timely and failed to present evidence that a single member of the class suffered

confusion about the deadlines due to the Governor’s Proclamations or the Supreme

Court’s orders.

Turning to the language contained in the Governor’s Proclamation itself, the

Proclamation notably declared that legal deadlines were “suspended.”33 The

Supreme Court ordered that all civil trials, hearings, and court appearances were

33

See 30 JBE 2020; 84 JBE 2020.

53

continued and would be re-set.34 Further, the Louisiana Legislature codified the

Governor’s Proclamations and proclaimed:

All prescriptions, including liberative, acquisitive, and the

prescription of nonuse, abandonment periods, and all peremptive

periods shall be subject to a limited suspension or extension during

the time period of March 17, 2020, through July 5, 2020; however, the

suspension or extension of these periods shall be limited and shall

apply only if these periods would have otherwise expired during the

time period of March 17, 2020, through July 5, 2020. The right to file

a pleading or motion to enforce any right, claim, or action which

would have expired during the time period of March 17, 2020,

through July 5, 2020, shall expire on July 6, 2020.

La. R.S. 9:5829(A).

This Court discussed La. R.S. 9:5829(A) in American Global Insurance Co.,

v. 4503 Prytania Street, L.L.C., 2020-0438 (La. App. 4 Cir. 4/4/21), __ So.3d __,

2021 WL 1399742. Therein, this Court determined that “the statutory language [of

La. R.S. 9:5829(A)] is clear and unambiguous. All deadlines were subject to a

‘limited suspension or extension until July 6, 2020.’ Thus, any deadline that would

have expired between March 17, 2020 and July 5, 2020, expired July 6, 2020.”

American Global Ins. Co., 2020-0438, p. 3, 2021 WL 1399742 at *2.

The Governor’s Proclamations and La. R.S. 9:5829(A) did not vacate any

deadlines. Pursuant to the clear and unambiguous language contained in La. R.S.

9:5829(A) and American Global, the deadlines to opt-out or object contained in the

February 18, 2020 order, which are deadlines that would have expired between

March 17, 2020, and July 5, 2020, expired July 6, 2020. 35 Further, the deadlines to

submit opt-out or objection forms did not contemplate a court hearing, trial, or the

like. Thus, the Supreme Court’s orders did not affect the deadlines contained in

34

See La. Sup. Ct. Orders dated March 16, 2020, and March 20, 2020.

35

The Governor’s Proclamations and La. R.S. 9:5829(A) did not impact the

August 1, 2020 deadline to mail a claim form.

54

the February 18, 2020 order. The Supreme Court’s orders affected the date of the

fairness hearing. The trial court properly reset the fairness hearing by order.

The Court is cognizant that USPS continued mail service throughout the

COVID-19 pandemic. The February 18, 2020 order set the deadline to file an

objection for April 3, 2020. On April 2, 2020, Appellants all filed objections

timely. Appellants failed to present evidence that any class member encountered

difficulties in receiving or sending mail.

Appellants did not cite any authority for the assertion of a violation of the

due process rights of the members of the class. Considering the importance of the

due process right guaranteed by both the United States and Louisiana

Constitutions, we will briefly address the issue. This Court discussed due process

in the context of a class action and noted:

“Adequate notice is one of the most elementary requirements of

procedural due process.” Vincent v. Vincent, 2011-1822, p.13 (La.

App. 4 Cir. 5/30/12), 95 So.3d 1152, 1161. “Adequate notice given

must be reasonably calculated, under all the circumstances, to apprise

interested parties of the pendency of the action and to afford them an

opportunity to present their objections.” Id. (citation omitted).

Moreover, “procedural due process requires an opportunity to be

heard.” Miller v. Crescent City Health Care Ctr., 2011-0403, pp. 3-4

(La. App. 4 Cir. 11/9/11), 78 So.3d 219, 221 (citation omitted).

Claborne v. Hous. Auth. of New Orleans, 2014-1050, pp. 25-26 (La. App. 4 Cir.

4/15/15), 165 So.3d 268, 288.

As indicated earlier, the racing industry is highly regulated by the

Commission. In accordance with laws, regulations, and rules, Fair Grounds

Defendants provide money to HBPA and HBPA pays the owners, trainers, and

jockeys who win quarter-horse and thoroughbred races. HBPA keeps records of

this information and easily compiled the names and addresses of the winners of

quarter-horse races beginning January 1, 2008, through the time of the settlement.

55

HBPA mailed approximately 3,567 notices. USPS returned three or four notices36

as undeliverable. One claimant opted out. Ten class members filed objections.

Approximately 179 class members submitted claim forms.

In Etter v. Hibernia Corp., objectors to a class settlement complained the

notice sent to class members was deficient. 2006-0646, p.12 (La. App. 4 Cir.

2/14/07), 952 So.2d 782, 791. This Court first noted that La. C.C.P. art. 594(A)(2)

requires notice of a settlement to be given in the manner that the court directs.

Etter, 2006-0646, p.12, 952 So.2d at 791. The trial court issued a scheduling order

requiring a notice to be sent to the class members no less than thirty days prior to

the fairness hearing. The parties mailed the notice more than thirty days prior to

the fairness hearing. This Court noted the objectors themselves received notice.

Further, this Court indicated not a single class member sought to extend the time to

object or claimed deprivation of the right to object. This Court determined the

objectors’ complaint about the deficient notice to be without merit. Id.

Likewise, the class members in this case received notice of the proposed

settlement agreement and the date of the fairness hearing. Significantly, no

member of the class requested an extension or otherwise claimed deprivation of the

right to object based on the COVID-19 pandemic or otherwise. Indeed, Appellants

themselves received the notice, complied with the notice by submitting objections

timely, and fully participated in the fairness hearing. There is no evidence that the

failure to set new deadlines and send a new notice violated the due process rights

of any class member. This argument is without merit.

36

As noted previously, Mr. Boulet testified that USPS returned four notices; but in

the record before this Court, Exhibit #28 contains only three notices returned as

undeliverable.

56

Assignment of Error No. 3 - The Class Notice was Defective

Lastly, in support of the argument the trial court should have vacated the

February 18, 2020 order, Appellants contend the class notice was defective. They

aver that the class notice failed to provide any information concerning the

opposition by a majority of the Plaintiffs; the amount of the disputed purses; the

amount of attorneys’ fees; the fact the court had not ruled on the merits; or the

position of the parties. In support, Appellants reference State v. Sprint Commc’n

Co., L.P., 2003-1264 (La. App. 1 Cir. 10/29/04), 897 So.2d 85, on reh’g (April 6,

2005), writ denied, 2005-1180 (La. 12/9/05), 916 So.2d 1056 and writ denied,

2005-1190 (La. 12/9/05), 916 So.2d 1057 (“Sprint”). However, Appellants cite to

no particular portion of the Sprint opinion.

In response, Fair Grounds Defendants assert the class notice was not

defective. Fair Grounds Defendants note the Sprint court differentiated between

information that must be included and information a trial court should consider for

inclusion in a class notice. Fair Grounds Defendants aver the class notice sent out

in this case was very detailed and included all information required by La. C.C.P.

art. 594.

Fair Grounds Defendants note that Appellants consistently assert that a

majority of the Plaintiffs objected to the proposed settlement agreement. Fair

Grounds Defendants aver that Plaintiffs’ approval to the proposed settlement

agreement is not necessary. Fair Grounds Defendants cite several federal cases in

support of this point. In Charron v. Wiener, 731 F.3d 241, 254 (2d Cir. 2013), the

United States Court of Appeals, Second Circuit, determined:

Finally, to the extent that appellants argue that the rejection of

the settlement by all five remaining named class representatives

requires its rejection by the Court, we cannot agree. As our sister

57

circuits have noted, the assent of class representatives is not essential

to the settlement, as long as the Rule 23 requirements are met. See

Elliott v. Sperry Rand Corp., 680 F.2d 1225, 1226, 1228 (8th

Cir.1982); Kincade v. Gen.Tire & Rubber Co., 635 F.2d 501, 508 (5th

Cir.1981) (“[T]he assent of named plaintiffs is not a prerequisite to the

approval of a settlement.” (internal quotation marks omitted)); Laskey

v. Int'l Union, 638 F.2d 954, 957 (6th Cir.1981) ( “Accepting a

settlement over the objections of the named representatives is not

necessarily an abuse of discretion.”); Flinn v. FMC Corp., 528 F.2d

1169, 1174 n. 19 (4th Cir.1975). “Class counsel is supposed to

represent the class, not the named parties: that the named parties

objected does not prove the settlement was unfair or that the class

counsel acted improperly.” Laskey, 638 F.2d at 956. We believe those

cases correctly state the law.

731 F.3d 241, 254 (2d Cir. 2013).

Thus, Fair Grounds Defendants aver that the approval of Plaintiffs, whether

a majority or otherwise, was not necessary for the trial court to grant preliminarily

approval of the class settlement.

Likewise, Class Representatives contend that the notice contained all of the

information required by law. The notice defined the class; described the terms of

the proposed settlement agreement; described the payout procedure for past due

claims; informed members of the right to opt-out or object; informed them of the

process to submit a claim; and notified them of the time and place of the fairness

hearing. The notice did not mention attorneys’ fees. Class Representatives note

that Appellees are paying the fees separately from the amount of the settlement.

Further, Class Representatives aver the law does not require that information to be

included.

In Louisiana, class action proceedings are governed by La. C.C.P. art. 591,

et seq. Once a class is certified, the best practicable notice must be provided to the

members of the class. La. C.C.P. art. 592(B)(1). The notice shall include:

(a) A general description of the action, including the relief sought, and

the names and addresses of the representative parties or, where

58

appropriate, the identity and location of the source from which the

names and addresses of the representative parties can be obtained.

(b) A statement of the right of the person to be excluded from the

action by submitting an election form, including the manner and time

for exercising the election.

(c) A statement that the judgment, whether favorable or not, will

include all members who do not request exclusion.

(d) A statement that any member who does not request exclusion may,

if the member desires, enter an appearance through counsel at that

member’s expense.

(e) A statement advising the class member that the member may be

required to take further action as the court deems necessary, such as

submitting a proof of claim in order to participate in any recovery had

by the class.

(f) A general description of any counterclaim brought against the

class.

(g) The address of counsel to whom inquiries may be directed.

(h) Any other information that the court deems appropriate.

La. C.C.P. art. 592(B)(2).

As this matter involves a proposed settlement or compromise of a class

action, La. C.C.P. art. 594 is implicated. Louisiana Code of Civil Procedure

Article 594(A) mandates notice of the proposed settlement or compromise be

provided to all members of the class in the manner directed by the trial court.

After the class receives notice, then the trial court “shall order a hearing to

determine whether the proposed compromise is fair, reasonable, and adequate for

the class. At such hearing, all parties to the action, including members of the class,

shall be permitted an opportunity to be heard.” La. C.C.P. art. 594(B).

The first requirement is that the notice contain a general description of the

action, including the relief sought and the names and addresses of the

representative parties, or, where appropriate, the identity and location of the source

59

from which the names and addresses of the representative parties can be obtained.

The notice herein provided the title of the action, including the trial court’s docket

number. The notice indicated the Petition claimed Fair Grounds Defendants failed

to pay supplemental purse money from video poker revenue to quarter-horse races

as required by La. R.S. 27:438. The notice averred the Petition claimed HBPA

allowed this to happen. The notice set forth the defenses of Fair Grounds

Defendants: La. R.S. 27:438 does not apply to quarter-horse races, and the

revenues were distributed in accordance to the terms set forth in the condition

books, orders of the Commission, and other Louisiana law, such that the claims

were barred by estoppel. The notice indicated Fair Grounds Defendants disputed

liability. The notice provided the names of the Class Representatives and that the

addresses of the Class Representatives were located in the record.

The second requirement mandates that the notice inform the class members

that they had the right to exclude themselves from the action. The notice herein

included the approved opt-out form and instructed the class members desiring to

exclude themselves that they must complete the opt-out form and return it to

HBPA. The notice included the address for HBPA and provided the deadline to

opt-out.

The third requirement mandates inclusion of a statement that informs the

class they will be bound by the judgment, favorable or not, if they do not opt-out.

The notice herein informed class members if they did not opt-out, the judgment

would be binding on them.

The fourth requirement is inclusion of a statement that a member who does

not opt-out may enter an appearance through counsel. The notice provided that a

member could file an objection through counsel who enrolled in the lawsuit.

60

The fifth requirement is inclusion of a statement advising the member that

they may be required to submit a claim form. The notice herein advised members

who wished to participate in the settlement to return the attached claim form.

Specifically, the notice advised the class members to return the completed form to

HBPA, provided HBPA’s address, and set forth the deadline to submit the claim

form.

The sixth requirement mandates inclusion of any counterclaim brought

against the class. In this instance, Fair Grounds Defendants and HBPA did not file

any counterclaims. Notably, Fair Grounds Defendants had the owners execute the

2019 Stall Agreement that contained a waiver of claims against Fair Grounds

Defendants. The notice therein warned those desiring to opt-out that Fair Grounds

Defendants intended to raise the waiver as a defense in any litigation. While the

warning is a defense and not a counterclaim, the inclusion of the warning speaks to

the thoroughness of the notice.

The seventh requirement is inclusion of the address of counsel to whom the

class member may direct inquiries. The notice herein informed class members they

could direct inquiries to class counsel and provided the addresses and telephone

numbers of class counsel.

The last requirement is inclusion of any other information the court deems

appropriate. In this instance, no one requested the inclusion of other information.

The court did not deem the inclusion of any other information appropriate.

Appellants claimed certain information was required to be included in the

notice pursuant to Sprint. In Sprint, the First Circuit Court of Appeal determined:

Notice required to be sent in a class action must provide the

class members with information sufficient to consider the terms of the

proposed settlement and determine whether there is a basis for

61

challenging the proposed settlement. See In re Shell Oil Refinery,

155 F.R.D. 552, 558 (E.D.La.1993). Further, notice in a class action

should: describe succinctly and simply the substance of the action and

the positions of the parties; identify the opposing parties, class

representatives, and counsel; indicate the relief sought; explain any

special risks of class members, such as being bound by the judgment,

while emphasizing that the court has not ruled on the merits of any

claims or defenses; and, describe clearly the procedures and deadlines

for opting out. Robert H. Klonoff and Edward K.M. Bilich, Class

Actions and Other Multi-Party Litigation, p. 393 (West 2000), citing

Manual for Complex Litigation (Third), § 30.21 (1995).

2003-1264, pp. 10-11, 897 So.2d at 93 (emphasis added).

Herein, the notice outlined the terms of the proposed settlement agreement.

It informed the members they were eligible for a cash payment for past claims

from the settlement amount of $1,000,000.00. In addition to a cash payment for

past claims, the proposed settlement agreement included guaranteed funds for

future purse supplements. Not only did the parties agree to the purse supplements

for the future, the parties requested the Louisiana Legislature amend existing

legislation adopting the terms of the proposed settlement agreement. As amended,

La. R.S. 27:438 specifies “[t]welve and one-half percent of the monies earned for

such purse supplements shall be used to supplement purses for quarter[-]horse

races at that licensed eligible facility, or as authorized by R.S. 4:147.1,[37] up to a

maximum of one million dollars per state fiscal year.” La. R.S. 27:438(B)(2)(a).

Additionally, Fair Grounds Defendants agreed to increase the number of quarter-

horse racing days from ten to fifteen. The notice informed the class that Fair

Grounds Defendants disputed all liability in the case and set forth numerous

defenses asserted by Fair Grounds Defendants, including: 1) La. R.S. 27:438 does

not allocate funds to quarter-horsemen thus the class should not have received the

37

Louisiana Revised Statutes 4:147.1 is titled “Commission; purse supplements;

additional or substitute races and race days; force majeure.”

62

purse supplements described therein; 2) the funds were disbursed to horsemen in

accordance with approved condition books; 3) the funds were disbursed to

horsemen by orders of the Commission; 4) the funds were disbursed to horsemen

in accordance with Louisiana law; and 5) Plaintiffs’ claims were barred by

estoppel. The class members possessed sufficient information regarding the terms

of the proposed settlement agreement and the defenses asserted by Fair Grounds

Defendants to make an informed decision to opt-out, object, submit a claim form,

or do nothing.

Further, the notice herein described the substance of the action and the

positions of the parties; identified the opposing parties, class representatives, and

counsel; indicated the relief sought; explained any special risks of class members,

such as being bound by the judgment; and described clearly the procedures and

deadlines for opting out and objecting. In this instance, the notice did not specify

whether the court had ruled on the merits of the claims or defenses. However,

whether the court ruled on the merits or defenses is not information required by the

class action statutes. Notably, in Sprint, the First Circuit Court of Appeal indicated

that information should be included, not that it must be included in the notice.

2003-1264, pp. 10-11, 897 So.2d at 93. There is no requirement that the notice

include the amount in controversy, reveal that some named plaintiffs oppose the

settlement, specify the number of members in the class, or provide the amount of

attorneys’ fees. Additionally, the public record of this proceeding identified the

disputed amount of video poker purse funds; revealed that the trial court had not

ruled on the merits; demonstrated that some named plaintiffs opposed the

settlement; listed the number of members in the class; and provided the amount of

attorneys’ fees, as well as the fact that the attorneys’ fees are in addition to the

63

settlement amount, i.e., the fees will not reduce the $1,000,000.00 settlement

amount for past due claims.

The notice herein complied with the statutory requirements. HBPA mailed

the notice well in advance of the fairness hearing, which gave every member the

opportunity to consult outside counsel, ask questions of the class counsel, opt-out,

or object. The trial court properly approved the notice of the proposed settlement

agreement. As the trial court did not abuse its discretion, the November 12, 2020

judgment denying the motions to vacate is affirmed.

2021-CA-0049: Appeal of the Trial Court’s Preliminary Approval of the

Proposed Settlement Agreement

In this appeal, Appellants seek review of the trial court’s February 18, 2020

order, which granted preliminary approval of the settlement agreement. Appellants

assign five errors:

[1]. The Trial Court erred in granting the “Joint Motion for

Preliminary Approval of Settlement Agreement.

[2]. The Trial Court erred in not resetting the deadlines as required by

the Governor’s Proclamations and Supreme Court’s Orders in

response to COVID-19.

3. The class notice is defective.[38]

4. [Appellees] have failed to dispute the allegations of the petition(s)

and therefore the Court is without any evidence from [Appellees] to

determine whether there is probable cause to notify the class of the

proposed settlement.

5. Issues Raised by Soileau Plaintiffs’ Second Amended Petition Have

Never Been Admitted or Denied by [Appellees] as Required by

Louisiana Code of Civil Procedure Articles 1001-1006; and

Therefore, Have Not Been Addressed by the Court.

38

Appellants did not assign the last three contentions as error or include them as an

issue presented for review, but they did include them as major headings in the

argument and designated them as numbers three, four, and five. Likewise,

Appellees responded to the arguments with corresponding numbers. For

consistency, this Court will utilize the numbering of the parties.

64

Each of these is discussed in turn.

Jurisdiction to Consider the February 18, 2020 Judgment

Appellants seek review of the February 18, 2020 judgment, which granted

the “Joint Motion for Preliminary Approval of Class Action Settlement Agreement

and for Related Relief.” The February 18, 2020 order set deadlines to opt-out,

object, and submit a claim form, as well as set a date for the fairness hearing.

Appellees aver that the February 18, 2020 order is interlocutory. Thus, Appellees

contend this Court lacks jurisdiction to consider the merits of the February 18,

2020 order.

We agree the February 18, 2020 order did not determine the merits in whole

or in part. Thus, it is interlocutory and not appealable unless expressly provide by

law. See La. C.C.P. art. 2083(C). The February 18, 2020 order grants preliminary

approval of the class. The class action statutes expressly provide that one may take

a suspensive or devolutive appeal from an order or judgment maintaining a class

action. La. C.C.P. art. 592(A)(3)(c). Nonetheless, Appellants’ arguments

substantively do not address the certification of the class. Thus, La. C.C.P. art. 592

does not provide authority for an express appeal of an interlocutory judgment.

Nonetheless, as indicated previously, while an interlocutory judgment may

not itself be immediately appealable, it is nevertheless subject to review by an

appellate court when an appealable judgment is rendered in the case. Elysian,

Inc., 2020-0674, p.9, 325 So.3d at 1083 (citing People of the Living God, 251 La.

at 947-48, 207 So.2d at 753).

Appellants were not entitled to appellate review of the February 18, 2020

judgment granting preliminary approval of the settlement agreement at the time of

65

the lodging of the appeal in this Court on February 1, 2021, because the judgment

was interlocutory. However, on January 28, 2021, the trial court rendered a final

judgment in this matter. Thereafter, Appellants sought an unrestricted appeal of the

final judgment, and this Court ordered consolidation of the appeals. Thus, this

Court will review the interlocutory judgment, which granted preliminary approval

of the proposed settlement agreement, as part of the unrestricted appeal of the final

judgment rendered January 28, 2021.

STANDARD OF REVIEW

This appeal seeks review of the February 18, 2020 order granting

preliminary approval of the settlement agreement. Appellate courts review a trial

court’s decision on a motion for preliminary approval of a class settlement under

the abuse of discretion standard. In Pollard, this Court reviewed a judgment

granting a motion for preliminary approval of a class settlement. Pollard, 2010-

0788, p.10, 102 So.3d 79. This Court determined the following fundamentals

guide the Court’s review of class certification cases:

Furthermore,

“[f]our fundamentals guide our review of class certification

cases[:] (1) the standard of our review is abuse of discretion; (2)

we are to be guided by the state and federal jurisprudence

interpreting Federal Rule 23 and our own law; (3) for purposes

of certification, a court is not permitted to review the claims in

a case on their substantive merits; and (4) the burden is on the

plaintiffs to establish that the statutory criteria for a class

certification are met.” Duhe v. Texaco, 2008-0665, p. 3 (La.

App. 3d Cir. 12/10/08), 998 So.2d 1220, 1222–1223, citing

Duhe v. Texaco, 779 So.2d 1070 [(La. App. 3 Cir. 2/7/01)].

Id.

66

Assignment of Error No. 1 - The Trial Court Erred in Granting the Joint Motion

for Preliminary Approval of the Proposed Settlement Agreement

In support of this assignment, Appellants repeat their argument from

assignment of error number one in 2021-CA-0022. Specifically, Appellants

contend that Appellees failed to serve the joint motion as required by La. C.C.P.

art. 2002; La. C.C.P. art. 963; La. C.C.P. art. 1312; and this Court’s decision in

White. Appellants aver that the joint motion and hearing date did not comply with

La. Dist. Ct. Rule 9.8. Thus, Appellants conclude that this Court should reverse

the February 18, 2020 judgment, which granted preliminary approval of the

proposed settlement agreement. Appellants cite no new law or jurisprudence in

support of their argument. For the reasons set forth above, we find this assignment

of error to be without merit.

Assignment of Error No. 2 - The Trial Court Erred in Not Resetting Deadlines

Due to COVID-19

In support of this assignment, Appellants reassert the same argument from

assignment of error number two in 2021-CA-0022. Appellants contend that the

trial court erred in not resetting deadlines (to opt-out, etc.) as required by the

Governor’s Proclamations and Supreme Court’s Orders in response to the COVID-

19 pandemic. Appellants contend this Court must vacate the February 18, 2020

order, which granted preliminary approval of the proposed settlement agreement,

due to the failure to reset those deadlines. Appellants cite no new law or

jurisprudence in support of their argument. For the reasons set forth above, we

find this assignment of error to be without merit.

Assignment of Error No. 3 - The Class Notice was Defective

In support of this assignment, Appellants reassert the same argument from

assignment of error number three in 2021-CA-0022. Appellants contend the notice

67

failed to provide an accurate characterization of the matter. Thus, Appellants

conclude the defect in the notice could not be cured by a fairness hearing.

Appellants cite no new law or jurisprudence in support of their argument. For the

reasons set forth above, we find this assignment of error to be without merit.

Assignment of Error No. 4 - The Trial Court Lacked Evidence to Determine

There was Probable Cause to Notify the Class of the Proposed Settlement

Agreement

In support of this assignment of error, Appellants contend Fair Grounds

Defendants and HBPA did not answer the petition. Appellants aver that the trial

court lacked evidence to determine whether probable cause existed to notify the

class of the proposed settlement agreement. Appellants note that a court must

conduct preliminary approval of the proposed settlement agreement and determine

whether it is within the range of possible approval, or, in other words, whether

probable cause exists to notify the class of the proposed settlement agreement.

Then, the court conducts a fairness hearing wherein the court affords all parties an

opportunity to be heard on the proposed settlement agreement. Appellants insist

that without an answer, the trial court could not determine whether the proposed

settlement agreement was within the range of possible approval. In support,

Appellants cite Horton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 855 F.

Supp. 825 (E.D. N.C. 1994).

Additionally, in the summary of their argument, Appellants contend the trial

court failed to issue an order containing detailed factual findings with respect to the

factors necessary for class certification. Appellants cite La. C.C.P. arts. 591(A),

591(B)(1)(b), and 591(B)(3) in support. Appellants failed to brief this contention

in the “Argument” section of their brief to this court.

68

In their brief, Fair Grounds Defendants submit that Appellants’ claim that

the trial court could not settle the class action absent the filing of an answer is

baseless. Fair Grounds Defendants note that Appellants cited Horton, 855 F.Supp

825. Fair Grounds Defendants argue that nothing in the Horton decision supports

Appellants’ argument. Fair Grounds Defendants contend this matter did not just

“fall in the lap” of the district court. Rather, Fair Grounds Defendants aver that the

parties litigated this matter for six years before the Commission, the district court,

and this Court. Fair Grounds Defendants submit the trial court acquired substantial

knowledge of the claims and defenses of the parties over the years and that a

formal answer would not add anything to the understanding of the trial court in this

matter.

Fair Grounds Defendants aver that the trial court did not err in declining to

produce written detailed factual findings. Fair Grounds Defendants note that

written reasons are required if a party makes a request no later than ten days after

notice of the order. La. C.C.P. art. 592(A)(3)(c). Fair Grounds Defendants assert

no party requested written reasons for the class certification.

Fair Grounds Defendants contend that Appellants’ argument regarding the

February 18, 2020 order is moot. Fair Grounds Defendants submit that the trial

court issued a final judgment on the settlement, which mooted any argument

regarding the preliminary order.

In their response, Class Representatives aver that Fair Grounds Defendants

disputed the claims in every pleading they filed since 2014. Class Representatives

reference the memorandum in support of the exceptions of primary jurisdiction, no

cause of action, and nonjoinder of proper parties-in-interest, which Fair Grounds

Defendants filed in 2014. Therein, Fair Grounds Defendants averred that “[t]he

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Plaintiffs’ interpretation of the statute governing video poker purse funds is not

only incorrect and contrary to other provisions of Louisiana’s racing law, but

would result in absurdly overfunding quarter horse purses to the great detriment of

thoroughbred purses.”

In Pollard, this Court determined that when considering a motion for

preliminary approval, the trial court “need only ascertain whether there is

‘probable cause’ to notify the class of the proposed settlement and to proceed with

a fairness hearing.” Pollard, 2010-0788, p. 8, 102 So.3d at 78. If the proposed

settlement falls within the range of possible approval, the court may grant

preliminary approval and direct notice of the settlement to the class. Id.

Appellants contend the trial court could not determine probable cause

without an answer on file, citing Horton. In Horton, the court did not imply or

affirmatively state probable cause could not be determined without an answer on

file. This Court found no reported decision that requires a defendant to file an

answer prior to preliminary approval of a class settlement. Significantly, in one

instance, the court found deficiencies and denied the motion for preliminary

approval. Munday v. Navy Fed. Credit Union, unpub., SACV 15-1629-JLS

(KESx), 2016 WL 7655796, at *5 (C.D. Cal. May 26, 2016). The court required

that the parties cure the deficiencies by a certain date and then file a renewed

motion for preliminary approval of a class action settlement. Munday, SACV 15-

1629-JLS (KESx), 2016 WL 7655796, at *5. If the parties failed to file the

renewed motion by the specified date, then the court ordered the defendant to file

an answer or otherwise respond to the complaint. Id. Thus, the court determined it

could grant preliminary approval of the class settlement absent an answer.

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Moreover, since the filing of the initial petition in 2014, the trial court

presided over numerous hearings. Beginning in 2014, Fair Grounds Defendants, in

various pleadings, set forth the substance of their defenses to the claims. In the

memorandum in support of the exceptions of primary jurisdiction, no cause of

action, and nonjoinder of proper parties-in-interest filed on August 11, 2014, Fair

Grounds Defendants averred that “[t]he Plaintiffs’ interpretation of the statute

governing video poker purse funds is not only incorrect and contrary to other

provisions of Louisiana’s racing law, but would result in absurdly overfunding

quarter-horse purses to the great detriment of thoroughbred purses.” On October

19, 2014, Fair Grounds Defendants filed exceptions to the First Amended Petition.

In their memorandum in support, Fair Grounds Defendants averred that La. R.S.

27:438 passed years before mandatory quarter-horse racing at the Fair Grounds.

Fair Grounds Defendants claimed that if the Louisiana Legislature had intended for

La. R.S. 27:438 to apply to quarter-horse races, the Louisiana Legislature would

have done so specifically. The same trial judge presided over all of the

proceedings in civil district court. The trial court, over a period exceeding six

years, gained knowledge of the defenses to the claims asserted in the petitions

sufficient to determine probable cause.

Appellants cite La. C.C.P. art. 592 in support of their argument that the trial

court did not issue an order containing detailed factual findings. However, no

provision of La. C.C.P. art. 592 required the trial court to set forth detailed factual

findings. Rather, La. C.C.P. art. 592 provides:

If the court finds that the action should be maintained as a class

action, it shall certify the action accordingly. If the court finds that the

action should not be maintained as a class action, the action may

continue between the named parties. In either event, the court shall

give in writing its findings of fact and reasons for judgment provided

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a request is made not later than ten days after notice of the order or

judgment.

La. C.C.P. art. 592(A)(3)(c)(emphasis added). Appellants failed to make a request

to the trial court to provide its findings of fact in writing. This assignment of error

lacks merit.

Assignment of Error No. 5 - The Trial Court Failed to Address the Issues Raised

in the Second Amended Petition

Lastly, Appellants contend Fair Grounds Defendants and HBPA have not

admitted or denied the issues raised in the Second Amended Petition. Appellants

conclude the trial court did not address the issues contained therein. Further,

Appellants aver La. C.C.P. arts. 1001 - 1006 required Fair Grounds Defendants and

HBPA to dispute the issues raised in the Second Amended Petition, including

whether Appellants committed conversion and/or conspired together to commit

conversion; whether Appellants breached a fiduciary duty and/or conspired

together to breach a fiduciary duty; whether Appellants breached a statutory duty

and/or conspired together to breach a statutory duty; and whether Appellants

invaded the business interests of the class and/or conspired together to invade the

business interests of the class.

In response, Fair Grounds Defendants contend that Appellants

mischaracterize La. C.C.P. art. 1004. Fair Grounds Defendants aver that La.

C.C.P. art. 1004 does not deem admitted any allegation that a defendant does not

deny. Rather, Fair Grounds Defendants note that La. C.C.P. art. 1004 provides that

an allegation not denied in an answer is admitted. They note that their voluminous

pleadings state why the claim to thirty-five million dollars is baseless. Further,

Fair Grounds Defendants assert that Appellants failed to cite any case or other

72

legal authority to support their argument that an answer was required before

preliminary approval of the proposed settlement agreement.

Additionally, Fair Grounds Defendants aver the list of “justiciable issues” is

inflammatory and refuted by allegations in Appellants’ own Second Amended

Petition, as well as in publicly available information. For instance, Fair Grounds

Defendants note that Appellants’ claim that Fair Grounds Defendants committed

conversion is a justiciable issue. Fair Grounds Defendants assert that the Second

Amended Petition admitted the disputed funds were disbursed to thoroughbred

horsemen and, inherently, no conversion took place. They also contend the

publicly available information refutes the other justiciable issues. Specifically, Fair

Grounds Defendants note that the publicly available information includes the

orders issued by the Commission to Fair Grounds Defendants and HBPA to

disburse the funds into the thoroughbred meet; the approved condition books for

all races at the Fair Grounds revealing the sources of purse funds; HBPA records

pertaining to the disbursement of the purse funds; and the State and the

Commission audits of the purse funds.

Class Representatives note that the trial court granted the exceptions filed by

Fair Grounds Defendants and Class Representatives in response to the Second

Amended Petition. Class Representatives aver this Court denied Appellants’

application for supervisory writs. Thus, Class Representatives contend they were

not required to answer the Second Amended Petition.

Appellants’ argument is unfounded. The trial court dismissed the Second

Amended Petition. This Court denied Appellants’ application for supervisory

writs. There is no Second Amended Petition for Fair Grounds Defendants or

HBPA to answer or for the trial court to consider. Further, as detailed above, an

73

answer is not required prior to a court granting preliminary approval to a class

settlement. The voluminous record contains sufficient evidence for the trial court

to make a probable cause determination and grant preliminary approval of the

proposed settlement agreement. Our review of the record shows that the trial court

possessed sufficient knowledge of the issues, including an understanding of the

numerous defenses Fair Grounds Defendants intended to assert, to grant

preliminary approval and instruct counsel to notify the class. As the trial court did

not abuse its discretion, the February 18, 2020 judgment granting preliminary

approval of the proposed settlement agreement is affirmed.

2021-CA-0199: Appeal of the Trial Court’s January 28, 2021 Final Judgment

Approving the Proposed Settlement Agreement

In this appeal, Appellants seek review of the trial court’s January 28, 2021

final judgment, which followed the fairness hearing on October 7, 2020, and

November 17, 2020, and granted approval to the proposed settlement agreement,

the class, the class representatives, the amount of the settlement, the payout

procedure, and $787,500.00 as reasonable attorneys’ fees and reimbursement of

expenses for class counsel. Appellants assign as error that “[t]he [t]rial [c]ourt

abused its discretion in approving the [proposed] [s]ettlement [a]greement”. They

list seven issues presented for review:

A. Did the trial court err in approving the Settlement Agreement

when no Defendant filed an Answer to the allegations and 8 out

of 10 original plaintiffs, including class representatives,

objected to the Settlement Agreement?

B. Did the trial court err in approving the Settlement Agreement

when the Foreman Plaintiffs and Defendants failed to meet their

burden showing the Settlement Agreement was in the best

interests of the class?

C. Did the trial court err in approving the Settlement Agreement

when Notice of Class Settlement was inadequate?

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D. Did the trial court abuse its discretion by approving the

Settlement Agreement when the objection, opt out and opt in

deadlines have yet to run?

E. Did the trial court err in approving the Settlement Agreement

when the Class Representatives failed to represent the class and

fairly and adequately protect the interests of the class and their

claims were not typical of the claims of the class as a whole?

F. Did the trial court abuse its discretion by approving the

Settlement Agreement when the Soileau Plaintiffs filed their

Second Amended Petition?

G. Did the trial court abuse its discretion by approving the

Settlement Agreement when the Settlement Agreement is void

“ab initio” by its own terms?

We address each issue listed by Appellants in turn.

STANDARD OF REVIEW

Jurisprudence has long noted that “[t]he public interest strongly favors the

voluntary settlement of class actions.”39 Hays v. Eaton Grp. Attorneys, L.L.C.,

unpub.,17-88-JWD-RLB (M.D. La. Feb. 4, 2019), 2019 WL 427331 at *8 (quoting

In re Oil Spill by Oil Rig Deepwater Horizon in Gulf of Mexico, on April 20, 2010,

(E.D. La. 2012), 910 F.Supp.2d 891, 930, aff’d sub nom., In re Deepwater

Horizon, 739 F.3d 790 (5th Cir. 2014)). “Because the public interest strongly

39

In the concurring opinion in Orrill, it was noted:

One reason that class action settlements are favored, by way of

example, is that “[i]n Orleans Parish, the Civil District Court has seen on

average more than 20,000 suits per year over the last decade with an upward

trend.” [Lambert, supra, at 127] at n.7. As an inevitable result, “[e]ven one

large class action suit . . . can forestall justice to literally thousands of

litigants in these over-burdened state trial courts, as well as consume an

inordinate amount of appellate court resources.” Id. (citing Dawn M.

Barrios, The Long and Winding Road for Spitzfaden, Louisiana’s Breast

Implant Class Action: Ad Astra per Aspera, 74 TUL. L.REV.1941 (2000)).

Orrill v. AIG, Inc., 2009-0888, p.16 (La. App. 4 Cir. 4/21/10), 38 So.3d 457, 467-

68 (Belsome, J., concurring).

75

favors the voluntary settlement of class actions, there is a strong presumption in

favor of finding the settlement fair, reasonable and adequate.” Hays, 2019 WL

427331 at *8 (quoting In re Oil Spill, 910 F.Supp.2d at 930-31). Thus, an

appellate court may not overturn a trial court’s approval of a proposed settlement

absent an abuse of discretion. Orrill, 2009-0888, p.11, 38 So.3d at 464 (citing

Reed, 703 F.2d at 172).

Issue (A) - The Trial Court Erred in Approving the Settlement Because No

Defendant Filed an Answer

Appellants contend courts utilize a two-step approach in approving a class

settlement. In support, Appellants cite Armstrong v. Board of School Directors of

City of Milwaukee, 616 F.2d 305, 312 (7th Cir. 1980).40 Therein, the United States

Court of Appeals, Seventh Circuit, indicated a court must first determine whether

the proposed settlement is within the range of possible approval or whether there is

probable cause to notify the class of the settlement. Armstrong, 616 F.2d at 314.

If the court finds the settlement is within the range of possible approval, the court

allows the parties to notify the class of the settlement and holds a fairness hearing,

at which all interested parties have the opportunity to be heard, before the court

determines whether the settlement is fair, reasonable, and adequate. Id.

Appellants contend the trial court could not determine whether the proposed

settlement agreement was within the range of possible approval or whether

40

Armstrong was overruled on other grounds in Felzen v. Andreas, 134 F.3d 873

(7th Cir.1998), aff’d sub nom. California Pub. Employees’ Ret. Sys. v. Felzen, 525

U.S. 315; 119 S.Ct. 720; 142 L.Ed.2d 766 (1999)(overruling the portion of

Armstrong allowing a nonparty to appeal from a decision in a class action).

Appellants also cite In Re Mid-Atlantic Toyota Antitrust Litig., 564 F. Supp. 1379,

1384 (D. Md. 1983) in support.

76

probable cause existed to notify the class of the proposed settlement agreement

because no defendant filed an answer. In support of this proposition, Appellants

again cite Horton.

Further, Appellants repeat the assertion that the trial court did not issue

specific and detailed factual findings regarding the preliminary approval of the

proposed settlement agreement. In support, Appellants again cite La. C.C.P. art.

592.

Appellants contend the trial court could not supply the affirmative defenses

for Appellees. For this point, Appellants cite Dofflemyer v. Gilley, 384 So.2d 435

(La. 1980) and Prestenbach v. Sentry Insurance Co., 340 So.2d 1331 (La. 1976).

They cite to no particular portion of the cases.

In support of this argument, Appellants again contend that a defendant shall

file an answer, in which the defendant must admit or deny each allegation in the

petition. They further assert that if the defendant fails to admit or deny an

allegation in the petition, the allegation is treated as admitted. Appellants cite to

La. Civil Law Treatise, Civil Proc., §6.9. Appellants argue that Appellees are

attempting to settle the lawsuit when the court has not considered the claims that

Fair Grounds Defendants and HBPA committed conversion, conspiracy, breach of

fiduciary duties, breach of statutory duties, and invasion of the business interests of

Plaintiffs.

In response, Fair Grounds Defendants aver nothing in Horton supports

Appellants’ argument that an answer is required for a trial court to grant

preliminary approval of a proposed class settlement.41 Fair Grounds Defendants

41

On June 10, 2021, HBPA filed a motion to adopt the brief filed by Fair Grounds

Defendants.

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note the parties have litigated this matter for over six years before the Commission,

the district court, and this Court. Fair Grounds Defendants aver the voluminous

record provided the trial court with ample knowledge of the issues in this matter to

determine whether the settlement is within the range of possible approval.

Fair Grounds Defendants contend the trial court was not required to issue

written reasons. Fair Grounds Defendants note written findings are required when

a party requests those findings within ten days after the notice of the order or

judgment, as provided in La. C.C.P. art. 592(A)(3)(c). Fair Grounds Defendants

aver that Appellants failed to make such a request.

Fair Grounds Defendants argue the trial court could issue final approval of

the class settlement absent an answer. They note that Appellants cited no law or

jurisprudence in support of their argument. Further, Fair Grounds Defendants aver

the trial court received pre- and post- trial briefs addressing the merits, including

defenses, and possessed sufficient information and evidence to determine whether

the proposed settlement agreement was fair.

Fair Grounds Defendants next assert that Appellants misstate the wording of

La. C.C.P. art. 1004. Specifically, Fair Grounds Defendants note that La. C.C.P.

art. 1004 provides that allegations that are not denied in the answer are deemed

admitted. They argue that nothing in La. C.C.P. art. 1004 supports Appellants’

contention that allegations are admitted absent an answer.

Fair Grounds Defendants aver the trial court did not supply affirmative

defenses to Fair Grounds Defendants and HBPA. Fair Grounds Defendants note

the fairness hearing did not lead to a ruling on the merits. Rather, Fair Grounds

Defendants explain that the trial court considered the legal issues and the evidence

78

presented at the fairness hearing to determine whether the proposed settlement

agreement was fair. They contend that Appellants had every opportunity to present

evidence to contradict or refute the defenses asserted in the pleadings but failed to

do so.

Fair Grounds Defendants aver that Appellants failed to cite any law or

jurisprudence to support their argument that the trial court lacked authority to

approve the proposed settlement agreement because the trial court never

considered “justiciable issues,” such as whether Fair Grounds Defendants

committed conversion. Additionally, Fair Grounds Defendants argue that

Appellants possessed the opportunity to present evidence and testimony at the

fairness hearing that they believed the trial court should consider. Fair Grounds

Defendants note the testimony presented by Appellants consisted of the objectors

wanting more money.

Likewise, Class Representatives note the cases relied on by Appellants do

not hold that a defendant must file an answer to settle a case. Class

Representatives note that Fair Grounds Defendants and HBPA have sought

outright dismissal by filing various exceptions. Further, Class Representatives

note that Fair Grounds Defendants set forth various defenses in the memorandum

filed to support their exceptions. Additionally, Class Representatives aver the trial

court was not required to analyze the merits of the claims asserted in the Second

Amended Petition.

As we determined earlier, the Horton court did not imply or affirmatively

state probable cause could not be determined without an answer on file. The

Horton court indicated:

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First, the court conducts a preliminary approval or pre-

notification hearing to determine whether the proposed settlement is

“within the range of possible approval” or, in other words, whether

there is “probable cause” to notify the class of the proposed

settlement. . . . [A]ssuming that the court grants preliminary approval

and notice is sent to the class, the court conducts a “fairness” hearing,

at which all interested parties are afforded an opportunity to be heard

on the proposed settlement. The ultimate purpose of the fairness

hearing is to determine if the proposed settlement is “fair, reasonable,

and adequate.”

Horton, 855 F.Supp. at 827.

As previously noted, the Munday court determined it could grant preliminary

approval of the class settlement absent an answer. Munday, SACV 15-1629-JLS

(KESx), 2016 WL 7655796, at *5. Further, as we earlier stated, the trial court

possessed a plethora of pleadings to determine probable cause in this case.

Appellants point to the trial court’s reasons for judgment wherein the trial

court indicated that it had considered the complete legal and factual issues.

Appellants conclude the trial court could not consider the complete legal and

factual issues without an answer on file or deposition testimony. However, as

detailed above, the trial court possessed sufficient information regarding the

defenses of Fair Grounds Defendants and HBPA.42

42

Further, the procedural posture of the case indicates that Fair Grounds

Defendants sought to have the case dismissed outright by its exceptions and still

had a pending exception (the exception of nonjoinder) at the time of the proposed

settlement agreement. Based on the procedural posture of the case, Fair Grounds

Defendants were not required to file an answer until resolution of the exception.

Louisiana Code of Civil Procedure Article 1001 is titled “Delay for Answering”

and provides:

A defendant shall file his answer within fifteen days after service of

citation upon him, except as otherwise provided by law.

When an exception is filed prior to answer and is overruled or referred

to the merits, or is sustained and an amendment of the petition

ordered, the answer shall be filed within ten days after the exception is

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Appellants’ contention that no depositions were taken is confounding

because there is no evidence in the record that Appellants sought to take a single

deposition in the six-plus months between the trial court’s February 18, 2020 order

and the October 7, 2020 fairness hearing. Further, there is no requirement that the

parties take depositions prior to approval of a settlement agreement.

Appellants assert that a defendant shall file an answer and admit or deny

each allegation in the petition. They claim that

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