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 The definitions for all previously defined capitalized terms are herein incorporated by

reference.

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF FLORIDA

GAINESVILLE DIVISION

IN RE: 

THE PROGRESSIVE CORPORATION ) 

INSURANCE UNDERWRITING )

AND RATING PRACTICES LITIGATION )

MDL Docket No. 1519

Consolidated Cases:

No. 1:00-210; No. 5:02-2384;

No. 3:01-1465; No. 3:02-2552;

and No. 3:03-1176.

Judge: Maurice Paul

________________________________________________________________________

SECOND AMENDED ORDER PRELIMINARILY APPROVING SETTLEMENT

AND CERTIFYING A CLASS FOR SETTLEMENT PURPOSES, DIRECTING

THE ISSUANCE OF CLASS NOTICE, AND SCHEDULING A FAIRNESS

HEARING

________________________________________________________________________

This matter came before the Court on July 28, 2004 upon Plaintiffs’ motion for

entry of an order (I) preliminarily approving settlement and certifying a class for

settlement purposes, (ii) directing issuance of a Notice of Class Action Settlement, and

(iii) scheduling a Fairness Hearing.1

This multidistrict litigation arises from the following Consolidated Cases:

(a) Cathryn Smith, Margaret Jones, and Laura Sprague v. The

Progressive Corporation, et al., Case No. 1:00-CV-210-MMP (N.D. Fla.,

Gainesville Division);

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2

 The Settling Defendants are: The Progressive Corporation, Progressive Casualty Insurance

Company, Progressive Specialty Insurance Company, Progressive Classic Insurance

Company, Progressive Halcyon Insurance Company, Progressive Universal Insurance

Company of Illinois, Mountain Laurel Assurance Company, National Continental Insurance

Company, Progressive Hawaii Insurance Corporation, Progressive American Insurance

Company, Progressive Bayside Insurance Company, Progressive Mountain Insurance

Company, Progressive Northeastern Insurance Company, United Financial Casualty

Company, Progressive Gulf Insurance Company, Progressive Home Insurance Company,

Specialty Risk Insurance Company, Progressive Max Insurance Company, Progressive

Consumers Insurance Company, Progressive West Insurance Company, Progressive

Northern Insurance Company, Progressive Northwestern Insurance Company, Progressive

Preferred Insurance Company, Progressive Paloverde Insurance Company, Progressive

Express Insurance Company, Progressive Premier Insurance Company of Illinois,

Progressive Southeastern Insurance Company, Progressive County Mutual Insurance

Company, Progressive Michigan Insurance Company, Progressive Marathon Insurance

Company, and Progressive Security Insurance Company (also collectively referred to as

“Progressive”).

Case No: 1:03cv1519

(b) Sharele Dikeman and Michael Whitman v. The Progressive

Corporation, Case No. CV 01-1465 JE (D. Oregon, Portland Division);

(c) Paul K. Cooley v. Progressive Insurance Co., Case No. CV 02 2384-S

(W.D. Louisiana, Shreveport Division);

(d) Timothy James Carlson v. Progressive Insurance Co., Case No. 02-

CV-2552 (N.D. Texas, Dallas Division); and

(e) Gloria Warren v. Progressive Casualty Ins. Co., Case No. 3:03-1176

(N.D. Ala.).

Plaintiffs in the Consolidated Cases alleged, among other things, that the Settling

Defendants2 violated the Fair Credit Reporting Act, 15 U.S.C. §§ 1681, et seq. (“FCRA”)

by not providing proper notice of adverse action to Policyholders and Quotation

Recipients that were denied insurance coverage, had insurance coverage cancelled or

were charged or quoted higher premiums based in whole or in part on information

contained in their consumer reports. Plaintiffs sought compensatory damages for

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Case No: 1:03cv1519

negligent violations of the FCRA, punitive damages, and statutory damages for willful

violations of the FCRA, and injunctive and declaratory relief.

By Orders dated April 15 and July 3, 2003 the Judicial Panel on Multidistrict

Litigation transferred the Consolidated Cases to this Court for coordinated and

consolidated pre-trial proceedings pursuant to 28 U.S.C. § 1407.

The Parties, through their respective counsel, conducted intensive investigation

and more than three years of litigation of this matter, including extensive document

discovery and depositions of fact and expert witnesses. Class Counsel, on behalf of the

named Plaintiffs and Class Members, have made a thorough investigation of the facts and

circumstances underlying the issues raised in this case, the applicable law and the relative

strengths of their claims. As a result of their investigation and after more than three years

of intensive litigation and a period of arms’ length negotiations with the Settling

Defendants, Class Counsel reached the conclusion that it was desirable and in the best

interests of the Class Members that the lawsuit be settled on the terms and conditions set

forth in the Settlement Agreement, attached as Exhibit 1.

Plaintiffs and their respective counsel have agreed to the Settlement Agreement

based on: (I) the substantial benefits to Plaintiffs and the Class under the terms of the

Settlement Agreement; (ii) the uncertainty of being able to prove all of the allegations

raised in the Consolidated Cases, and the uncertainty of being able to overcome

Progressive’s legal and factual defenses thereto; (iii) the attendant uncertainties and risks

of litigation, especially in complex actions such as these, as well as the difficulties and

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delays inherent in such litigation; (iv) the uncertainty inherent in various theories of

damages, even if Plaintiffs could establish Progressive’s liability; and (v) the desirability

of consummating the Settlement Agreement promptly, in order to provide effective relief

to Plaintiffs and the Class as soon as possible.

Plaintiffs and their counsel believe that the settlement is fair, reasonable and

adequate because it provides substantial benefits to and is in the best interests of the

Class.

The Settling Defendants have expressly denied the Plaintiffs’ allegations and have

asserted numerous defenses to Plaintiffs’ claims. The Settling Defendants do not admit

liability to any Class Member and do not admit liability in any case for any of Plaintiffs’

allegations. Further, Settling Defendants deny any wrongful conduct toward Plaintiffs or

the Class, and assert that the alleged wrongful actions were lawful in all respects.

Progressive and its counsel have agreed to the Settlement Agreement based upon:

(I) Progressive’s desire to address any dissatisfaction that its Current Policyholders,

Former Policyholders and Quotation Recipients may have with respect to disclosures

allegedly required to be made by Progressive pursuant to the FCRA by providing to them

benefits to fairly, adequately and reasonably compensate them for any claims they may

have (without acknowledging the validity of any such claims) as set forth in the

Settlement Agreement; and (ii) the desirability of avoiding the further expense and

disruption of its business due to the pendency of the Consolidated Cases and putting to

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rest similar allegations that could be raised against Progressive in other time-consuming

and expensive litigation.

NOW, THEREFORE, based upon the foregoing and upon reviewing the

Settlement Agreement, upon reviewing all prior proceedings held herein, and having

heard argument of counsel and otherwise being fully advised in the premises, with the

consent of the Settling Defendants, it is hereby 

ORDERED AND ADJUDGED:

1. Jurisdiction. This Court has jurisdiction over the subject matter of these

Consolidated Cases, pursuant to 28 U.S.C. § 1331 and 28 U.S.C. §

1367(a), and over the parties hereto and the Class.

2. Class Representatives. Plaintiffs Cathryn Smith, Margaret Jones, Laura

Sprague, Sharele Dikeman, Michael Whitman, Paul K. Cooley, Timothy

James Carlson, and Gloria Warren are hereby preliminarily designated as

representatives of the Class, as defined below, for the sole purpose of

seeking a settlement of the Consolidated Cases, and shall hereinafter be

referred to as “Plaintiffs” or the “Class Representatives.”

3. Lead Counsel. The Court appoints Terry A. Smiljanich, Esq., James,

Hoyer, Newcomer & Smiljanich, P.A., One Urban Centre, Suite 550, 4830

West Kennedy Boulevard , Tampa, Florida 33609 as Lead Counsel for the

Class.

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4. Preliminary Class Findings. For purposes of the settlement of the

Consolidated Cases (and only for such purposes and without an

adjudication of the merits), it appears that the requirements of applicable

law for preliminary certification of the Class, as defined below, including

Rule 23 of the Federal Rules of Civil Procedure, have been met in that:

A. The Class consists of several million Current Policyholders,

Former Policyholders and Quotation Recipients, and, therefore, the members of

the Class are so numerous that joinder of all members is impracticable.

B. There appears to be a well-defined community of interest among

members of the Class in that certain issues of law and fact raised by Plaintiffs are

common to the Class and are substantially similar. Those issues include whether

Progressive failed to advise the Class Members that were adversely affected by

premiums, or quotations for premiums, in excess of the otherwise best premiums

available to them, based in whole or in part on information from their Consumer

Reports obtained from a Consumer Reporting Agency, in violation of 15 U.S.C.

§ 1681m(a). These common issues appear to predominate over issues affecting

only individual members of the Class.

C. The claims of the Class Representatives appear to be typical of the

claims of the Class. The Class Representatives will fairly and adequately protect

the interests of the Class in that: (I) the interests of the Class Representatives are

consistent with those of the Class; (ii) there are no conflicts between the Class

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Representatives and the Class; (iii) the Class Representatives have been and are

capable of continuing to be active participants in both the prosecution of, and the

negotiations to settle, the Consolidated Cases; and (iv) the Class Representatives

and the Class are represented by qualified, reputable counsel who are experienced

in preparing and prosecuting large, complicated class actions, including those

involving the sort of claims alleged in the Consolidated Cases.

D. A settlement of the Consolidated Cases in the manner proposed by

the Settlement Agreement appears to be superior to other available methods for

the fair and efficient adjudication of the Consolidated Actions.

In making these preliminary findings, the Court has considered, among others, the

following factors: (I) the interests of the members of the Class in individually controlling

the prosecution or defense of separate actions; (ii) the extent and nature of any litigation

concerning these claims already commenced by or against members of the Class; and

(iii) the desirability of concentrating the litigation of the claims in a particular forum.

5. Preliminary Class Certification for Settlement Purposes. A national class

for settlement purposes is hereby preliminarily certified consisting of: 

All residents of the United States of America who are members of

Sub-Class A or Sub-Class B, defined as follows:

Sub-Class A: shall include all Current Policyholders and Former

Policyholders where (I) such Policyholders would have received a

lower premium rate from Progressive but for the information

contained in a Consumer Report, and (ii) the Policy inception date

for the Current Policyholder or Former Policyholder occurred

between January 1, 1997 and the earlier of the Preliminary

Approval Date or the Notice Cutoff Date;

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Sub-Class B: shall include all Quotation Recipients that obtained a

no obligation quotation at any time, from January 1, 1997 to the

Preliminary Approval Date.

6. Findings Regarding Proposed Settlement. The Court finds that: (I) the

proposed settlement resulted from extensive arms’ length negotiations and

was concluded only after counsel for Plaintiffs had (a) conducted broad

discovery and taken the depositions of employees or agents of

Progressive, and (b) conducted a vast independent investigation before

and throughout the litigation; and (ii) the proposed settlement evidenced

by the Settlement Agreement is sufficient to warrant (a) notice thereof as

set forth below, and (b) a full hearing on the settlement. 

7. Fairness Hearing. A hearing (the “Fairness Hearing”) will be held on

October 29 2004, at 10:00 a.m. in the courtroom of the Honorable

Maurice Paul, U.S. District Courthouse, 401 S.E. First Avenue,

Gainesville, Florida 32601, to determine: (I) whether the Class should be

finally certified; (ii) whether the Settlement should be approved as fair,

reasonable and adequate; (iii) whether the Consolidated Cases should be

dismissed with prejudice pursuant to the terms of the Settlement

Agreement; (iv) whether Class Members should be bound by the release

set forth in the Settlement Agreement; (v) whether Class Members should

be subject to a permanent injunction that, among other things, bars Class

Members from filing, commencing, prosecuting, intervening in, or

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participating in (as class members or otherwise), any lawsuit, claim,

demand or proceeding in any jurisdiction that is based on or related to,

directly or indirectly, the actions, claims and causes of action that were

raised, or could have been raised, in the Consolidated Cases; and (vi)

whether the application of Plaintiffs’ counsel for payment of attorneys’

fees, costs and expenses should be approved.

8. Retention of Class Administrators. The Court authorizes Progressive to

retain one or more Class Administrators to help implement the terms of

the proposed settlement, and authorizes such Class Administrators to

assist the Parties in (I) mailing the Mailing Notice, (ii) publishing the

Publication Notice, (iii) establishing and maintaining the Website, and (iv)

carrying out such other responsibilities as are provided for in the

Settlement Agreement or may be agreed to by the Parties.

9. Notice by Mail. No later than 53 days before the Fairness Hearing

Progressive shall cause the Class Administrator, at Progressive’s expense,

to mail the Mailing Notice in accordance with the Settlement Agreement.

The Mailing Notice shall be sent by standard mail, postage prepaid, to the

persons’ last known address of record. The Mailing Notice shall, among

other things, contain: (I) contain a short, plain statement of the

background of the Consolidated Actions, class certification and the

proposed settlement; (ii) describe the relief available under the proposed

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settlement; (iii) explain the procedures for obtaining relief under the

proposed settlement and for objecting to the Settlement or requesting

exclusion from the Class; (iv) state that any relief to Class Members is

limited to that provided by the proposed settlement and is contingent on

the Court’s final approval of the proposed settlement; (v) give information

regarding attorneys’ fees and costs; and (vi) incorporate the provisions of

the release and describe the effect that the proposed settlement, if

approved, may have on pending disputes or actions. The Mailing Notice

shall include a claim form.

10. Notice by Publication. In addition to mailing the Class Notice, the Parties

shall publish a notice of the proposed settlement (the “Publication

Notice”), the Fairness Hearing and Class Members’ exclusion rights in the

national editions of Parade Magazine, USA Today, USA Weekend, and

Vista. The Publication Notice shall be substantially in the form attached

as Exhibit B to the Settlement Agreement. The Publication Notice shall be

published no later than 53 days before the Fairness Hearing.

11. Proof of Mailing and Publication. On or before the Fairness Hearing,

Progressive or the Class Administrator shall file with the Court an

affidavit of mailing of the Mailing Notice and an affidavit of publication

of the Publication Notice.

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12. Findings Concerning Notice. Having considered, among other factors, (I)

the cost of giving notice by various methods, (ii) the resources of the

parties, (iii) the stake of each Class Member, and (iv) the likelihood that

significant numbers of Class Members might desire to exclude themselves

from the Class or appear individually, the Court finds that notice given in

the form and manner provided above in this Order is the best practicable

notice and is reasonably calculated, under the circumstances, to apprise

Class Members (a) of the pendency of the Consolidated Cases, (b) of their

right to exclude themselves from the proposed settlement, (c) that any

judgment, whether favorable or not, will include all Class Members who

do not request exclusion, and (d) that any Class Member who does not

request exclusion may object to the settlement in writing, and, if he or she

desires, and at his or her own expense, the Class Member may enter his or

her appearance and attend the Fairness Hearing, either personally or

through counsel. The Court further notes that the Mailing Notice and

Publication Notice provided in the Settlement Agreement are written in

simple language and should be readily understandable by Class Members.

In sum, the Court finds that such Notice is reasonable, that it constitutes

due, adequate and sufficient notice to all persons entitled to be provided

with notice, and that it meets the requirements of applicable law and is

hereby approved by the Court.

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13. Exclusion from the Class. Any potential Class Member who wishes to be

excluded from the Settlement must timely submit a properly completed

request for exclusion in accordance with the Notice. The original requests

for exclusion shall be filed with the Court by the Class Administrator at or

before the Fairness Hearing. Any potential Class Member who does not

file a timely written request for exclusion shall be bound by the settlement

and by all subsequent proceedings, orders and judgments in the

Consolidated Cases, even if such person has pending or subsequently

initiates litigation against Progressive relating to the matters or the claims

released in the Actions.

14. Objections to Settlement. Any Class Member who has not filed a timely

written request for exclusion and who wishes to object to the fairness,

reasonableness, or adequacy of the Settlement Agreement or the proposed

settlement, or to Class Counsel’s application for attorneys’ fees and

expenses, must serve on Plaintiffs’ Lead Counsel and Defendants’ counsel

and file with the Court, no later than 23 days before the Fairness Hearing

or as the Court otherwise may direct, (I) a statement of the objection and

the specific reason(s) for each objection, including any legal support that

the Class Member wishes to bring to the Court’s attention, (ii) a copy of

any documentary evidence, and (iii) a brief summary of any testimonial

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evidence the Class Member wishes to introduce in support of the

objection. Service on counsel shall be directed as follows:

Lead Counsel for Plaintiffs:

Terry A. Smiljanich, Esq.

James, Hoyer, Newcomer & Smiljanich, P.A.

One Urban Centre, Suite 550 

4830 West Kennedy Boulevard 

Tampa, Florida 33609

Counsel for Defendants:

Barry Richard, Esq.

Greenberg Traurig PA

101 East College Avenue

Tallahassee, Florida 32301

Class Members may submit objections either on their own or through an

attorney hired at their own expense. If a Class Member hires an attorney to represent him

or her, the attorney must (I) file a notice of appearance with the Clerk of Court no later

than 23 days before the Fairness Hearing or as the Court otherwise may direct, and (ii)

serve a copy of the notice on Plaintiff’s Lead Counsel and Progressive’s counsel no later

than 23 days before the Fairness Hearing.

Any Class Member who files and serves a written objection, as provided

above, may appear at the Fairness Hearing, either in person or through personal counsel

hired at the Class Member’s expense, to object to the fairness, reasonableness, or

adequacy of the Settlement Agreement or to any other aspect of the proposed settlement,

or to the application for attorneys’ fees, costs and expenses or the payments, if any, to

named Plaintiffs. Class Members, or their attorneys, intending to make an appearance at

the Fairness Hearing must serve on Plaintiff’s Lead Counsel and Progressive’s counsel

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and file with the Court, no later than 23 days before the Fairness Hearing or as the Court

otherwise may direct, a notice of their intention to appear at the Fairness Hearing.

Any Class Member who fails to comply with the provisions of the

preceding paragraphs shall waive and forfeit any and all rights he or she may have to

appear separately and/or object, and shall be bound by all the terms of the Settlement

Agreement and by all proceedings, orders and judgments in the Consolidated Cases.

Submission of a claim form shall not waive a Class Member’s right to object as set forth

herein.

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15. Preliminary Injunction. All Class Members who have not timely excluded

themselves from the Class are hereby preliminarily enjoined from filing,

commencing, prosecuting, intervening in, or participating in (as class

members or otherwise) any lawsuit, claim, demand, or proceeding against

the Settling Defendants in any jurisdiction that is based on or related to,

directly or indirectly, the claims arising from or relating to conduct

alleged against the Settling Defendants in the Consolidated Cases.

16. Service of Papers. Counsel for the Parties shall serve on each other and

on all other parties who have filed notices of appearance, at or before the

Fairness Hearing, any further documents in support of the proposed

settlement, including responses to any papers filed by Class Members. 

Counsel for the Parties shall promptly furnish to each other any and all

objections or written requests for exclusion that may come into their

possession and shall file such objections or requests for exclusion with the

Court on or before the date of the Fairness Hearing.

17. Termination of Settlement. This Order shall become null and void, and

shall be without prejudice to the rights of the Parties, all of whom shall be

restored to their respective positions as they existed immediately before

this Court entered this Order, if (I) the proposed settlement is not finally

approved by the Court, or does not become final, pursuant to the terms of

the Stipulation of Settlement, or (ii) the proposed settlement is terminated

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in accordance with the Settlement Agreement or does not become

effective as required by the terms of the Settlement Agreement for any

other reason. In such event, and except as provided therein, the proposed

settlement and Settlement Agreement shall become null and void and be

of no further force and effect, and neither the Settlement Agreement nor

the Court’s orders relating thereto, including this Order, shall be used or

referred to for any purpose whatsoever.

18. Use of Order. This Order shall be of no force or effect if the settlement

does not become final and nothing in this Order shall be construed or used

as an admission, concession or declaration by or against any Settling

Defendant, of any fault, wrongdoing, breach or liability. Nor shall this

Order be construed by or against Plaintiffs or the Class Members that their

claims lack merit or that the relief requested in the Actions is

inappropriate, improper or unavailable, or as a waiver by any party of any

defenses it may have.

DONE AND ORDERED this 15th day of September, 2004.

 s/Maurice M. Paul 

 Maurice M. Paul, Senior District Judge

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