Cutting-Edge Bet the Company Mega Class Action CLE

Transcription

The Public Interest Law Project
Lewis and Clark Law School
CUTTING-EDGE BET THE COMPANY MEGA
CLASS ACTION LITIGATION - CLE
Support the Public Interest Law Project while learning about many highprofile cases, including Volkswagen Diesel Emissions, National Football
League Concussion, British Petroleum Deepwater Horizon, and General
Motors Ignition Switch, from attorneys who are lead counsel in those cases.
February 16, 2016
Portland, OR
Lewis & Clark Law School
Cutting-edge Bet the Company Mega Class Action Litigation - CLE
Page 1
Table of Contents
1. Program..........................................................................................................................................
4
2. Participant Biographies…………………………………………………………………………….
5
3. In Re: NFL Players’ Concussion Injury Litigation………………………………………
19
4. Class/Mass Tort Settlements: Participation Requirements
By John H. Beisner……………………..……………………..………………………………………..
152
5. Incentive Payments to Class Representatives: Ethical Issues
By Elizabeth Chamblee Burch……………………..……………………..………………………..
163
6. Radcliffe v. Experian Information Solutions Inc., 715 F.3d 1157 (9th Cir. 2013)
Submitted by Elizabeth Chamblee Burch……………………..……………………………….
166
7. The Aggregate Settlement Rule
By Howard M. Erichson……………………..……………………..………………………………….
175
8. ABA Formal Opinion 06-438: Lawyer Proposing to Make or Accept and
Aggregate Settlement or Aggregated Agreement (Feb 10, 2006)
Submitted by Howard M. Erichson……………………..…………………………………………
180
9.
Creative Montessori Learning Centers v. Ashford Gear LLC, 662 F.3d 913
(7th Cir. 2011)
Submitted by the Honorable Diane P. Wood…………………………………………………
185
10. Eubank v. Pella Corporation, 753 F.3d 718 (7th Cir, 2014)
Submitted by the Honorable Diane P. Wood………………………………………………….
197
11. Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981)
Submitted by the Honorable Lee H. Rosenthal……………………………........................
221
12. Key Issues in Consumer Data Breach Litigation
By Paul G. Karlsgodt…………………………………………………………………………………...
232
13. Appendix of Additional Biographical Information
R. Klonoff………………………………………………………………………………..….…………...
C. Seeger…………………………………………………………………………………......................
R. Godfrey……………………………………………………………………………………………….
L. Hazam…………………………………………………………………………………………………
P. Karlsgoldt……………………………………………………………………………......................
D. Sugerman……………………………………………………………………………......................
L. Rosenbaum………………………………………………………………………….......................
M. Preusch……………………………………………………………………………….……………...
M. Price…………………………………………………………………………………..……………….
241
251
255
261
263
265
267
270
271
14. CLE Credit Form………………………………………………………………………………………...
273
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Further Reading:
Robert H. Klonoff, The Decline of Class Actions, 90
Wash. U. L. Rev. 729 (2013).
Available at:
http://openscholarship.wustl.edu/law_lawreview/vol9
0/iss3/6
Page 3
Moderator:
Robert H. Klonoff, Jordan D. Schnitzer Professor of Law
PANEL ONE:
• Christopher A. Seeger; SeegerWeiss LLP: NFL Concussion: A
Case Study
• David F. Sugerman; Attorney P.C.: Consumer Fraud Class
Actions
• Lois O. Rosenbaum; Stoel Rives LLP: Securities Fraud Class
Actions
• Matthew Preusch; Keller Rohrback LLP: Volkswagen
Emissions: A Case Study
Total: 60 minutes, 11:00-12:00 pm
• Roundtable Ethics Discussion: Ethical Issues in Class and
Non-Class Settlements
• 12:30, Lunch
PANEL TWO:
• Lexi J. Hazam; Lieff, Cabraser, Heimann & Bernstein: Qui Tam
Actions
• Richard C. Godfrey; Kirkland & Ellis LLP: Defending High
Profile Class Actions
• Paul G. Karlsgodt; BakerHostetler: Data Breach Class Actions
• Roundtable Ethics Discussion: Communications With Class
Members; Incentive Payments to Class Representatives
Commentator:
Meredith Price, Perkins Coie LLP
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Participants
Robert Klonoff
Jordan D. Schnitzer Professor of Law
Moderator
Professor Klonoff served as Dean of the Law School
from 2007-2014. His areas of expertise include class
action litigation, civil procedure, and appellate litigation.
He is the co-author of a leading casebook on class
actions, published by West, and the author of the West
Nutshell on class actions, as well as the author of
numerous law review articles. He is also the co-author
of a leading text on trial advocacy and co-author of a
West Nutshell on federal appellate practice. Moreover,
he has written numerous articles on class actions and
other topics. He has taught and lectured throughout the
United States and in several foreign countries on class
actions and appellate litigation. In addition, he is a member of the American Law Institute
(ALI) and served as an Associate Reporter for the ALI’s class action project, “Principles of the
Law of Aggregate Litigation.” He is also a Fellow in the American Academy of Appellate
Lawyers and served as a Reporter for the 2005 National Conference on Appellate Justice. He
is also an elected member of the International Association of Procedural Law, and he serves
as an advisory board consulting editor of Class Action Litigation Report (BNA).
After graduating from Yale Law School, Professor Klonoff clerked for the Honorable John R.
Brown, Chief Judge of the United States Court of Appeals for the Fifth Circuit. He then served
as an Assistant United States Attorney in D.C. and as an Assistant to the Solicitor General of
the United States. After his government service, he was a visiting professor at the University
of San Diego Law School. He later served for many years as a partner at the international law
firm of Jones Day. At Jones Day, Professor Klonoff handled complex litigation at both the trial
and appellate levels and also held the administrative post of chair of the pro bono program
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for all of the firm’s 20+ offices. He received an award from the DC Bar for public service, was
instrumental in establishing a free walk-in clinic in DC’s Shaw neighborhood, and served as a
board member for the Washington Lawyers’ Committee for Civil Rights and Urban Affairs and
for Bread for the City. As well, while practicing at Jones Day, Professor Klonoff served for
many years as an Adjunct Professor of Law at Georgetown University Law Center.
In 2003, Professor Klonoff was selected as the Douglas Stripp/Missouri Endowed Professor of
Law at the University of Missouri/Kansas City School of Law. As the holder of this position,
Professor Klonoff received two awards for most outstanding teacher and an award for service
to the law school community. Professor Klonoff was also selected by the third year class to
deliver the 2007 commencement speech. In 2013, Professor Klonoff was awarded the Oregon
Consular Corps’ individual award for international engagement.
Professor Klonoff has extensive litigation experience. He has argued eight cases before the
United States Supreme Court, including Gentile v. Nevada Bar and Kungys v. United States,
and has argued dozens of cases in other federal and state appellate courts throughout the
country. He has also tried dozens of cases (primarily jury trials). In addition, he has served as
an expert witness on class action issues in numerous federal and state court cases, including
the British Petroleum Deepwater Horizon oil spill litigation and the National Football League
concussion litigation. He has personally represented clients on both the plaintiff and defense
side in more than 100 class actions. His pro bono cases have included death penalty, civil
rights, and veterans’ rights cases.
In 2011, Chief Justice John G. Roberts, Jr., appointed Professor Klonoff to serve as the
academic member of the United States Judicial Conference Advisory Committee on Civil Rules.
He was reappointed by Chief Justice Roberts in May 2014 for a second three-year term.
PROFESSOR KLONOFF’S LIST OF HONORS AND ACHIEVEMENTS APPEARS
IN THE APPENDIX TO THESE MATERIALS.
Page 6
Christopher A. Seeger
SeegerWeiss LLP
Panelist
Christopher A. Seeger is broadly admired as one of the
nation’s most versatile, innovative and accomplished
members of the plaintiff’s trial bar.
Since founding
Seeger Weiss LLP in 1999, Mr. Seeger has earned
leadership appointments from state and federal courts
throughout the United States in many of the country’s
most complex and noteworthy multidistrict litigations.
Mr. Seeger earned his law degree magna cum laude in
1990 from the Benjamin N. Cardozo School of Law, where
he served as the Managing Editor of the Cardozo Law
Review, and which honored him with its Alumnus of the
Year Award in 2009, the highest honor bestowed on an
alumnus of the Law School. Mr. Seeger’s undergraduate career was similarly distinguished,
graduating summa cum laude in 1987 from Hunter College of the City University of New York,
which inducted Mr. Seeger into its Alumni Hall of Fame in 2007.
In recognition of his
preeminence in the trial bar, Hunter College honored Mr. Seeger with its Distinguished
Alumni Lawyer Award in 2013.
Mr. Seeger is a Fellow of the International Society of Barristers, a member of the Dean’s
Advisory Counsel, Cardozo School of Law, a member of the Advisory Board, NYU Law School’s
Center for Civil Justice, and a member of the Advisory Counsel, Duke Law School Center for
Judicial Studies, among other prestigious designations.
Mr. Seeger regularly lectures
nationwide on a myriad of complex litigation issues and has taught a class in Trial Advocacy
at the Benjamin N. Cardozo School of Law. As a professional outlet, Mr. Seeger competes in
the art of Brazilian Jiu Jitsu, culminating in a Gold Medal victory in the 2012 Pan American
No-Gi Jiu Jitsu Championship in his age and weight class. Seeger Weiss LLP has offices in
New York, NY, Newark, NJ, and Philadelphia, PA.
MR. SEEGER'S LIST OF REPRESENTATIVE CASES AND ACHIEVEMENTS
APPEARS IN THE APPENDIX TO THESE MATERIALS.
Page 7
Richard C. Godfrey, P.C.
Kirkland & Ellis LLP
Panelist
Mr. Godfrey is a senior litigation partner of Kirkland, and a
director and/or Trustee of various non-profit educational
and cultural institutions, including Boston University, The
Chicago Symphony Orchestra, Augustana College, The
Appleseed Foundation, and The American Air Museum in
Britain, among others.
He has over 36 years of experience
as a trial and appellate counsel litigating numerous complex
and class action matters, including as counsel for BP in
matters arising out of the Deepwater Horizon oil spill (MDL
2179, E.D. La.), and as GM’s counsel in the Vehicle Ignition
Switch Recall Litigation (MDL 2543, S.D.N.Y.). Mr. Godfrey is the 2013 recipient of the Pillars
of Justice Award, presented by the Appleseed Foundation and the Chicago Appleseed Fund
for Justice in recognition of his contributions to pro bono work.
MR. GODFREY’S LIST OF REPRESENTATIVE CASES AND ACHIEVEMENTS
Page 8
Lexi J. Hazam
Lieff, Cabraser, Heimann & Bernstein
Panelist
An emerging leader within the plaintiffs’ bar, Lexi
J. Hazam represents clients in mass torts cases
and qui tam actions, as well as complex class
actions.
Lexi represents hip replacement patients in the
DePuy ASR, DePuy Pinnacle metal-on-metal, and
Stryker Rejuvenate hip implant injury lawsuits,
representing over 300 clients and working with
leading
regulatory
appointed
by
the
nationwide
Benicar
experts.
court
MDL
Lexi
has
overseeing
litigation
to
been
the
the
Plaintiffs' Steering Committee, and serves as Co-Chair of the MDL Plaintiffs' Science and
Experts Committee. She has also spoken at several conferences on Benicar injuries and
Benicar lawsuits.
Lexi has spoken at two conferences for plaintiffs’ counsel on the DePuy litigation. She has
also spoken on mass torts topics at the Women En Mass conference for women in mass torts,
the annual CAOC conference, and the California Lawyer's Product Liability Roundtable.
Lexi’s qui tam cases include the $21.7 million settlement of litigation against Avaya, Lucent
Technologies, and AT&T for charging governmental agencies for the lease of communications
systems they no longer possessed and/or were no longer maintained by defendants. She
worked on the Office Depot qui tam litigation, a lawsuit alleging that Office Depot knowingly
overcharged California cities, counties, and school districts on office and school supplies
purchased under U.S. Communities contracts, that settled in 2015 for $68.5 million. Lexi has
also worked on several additional qui tam cases alleging Medicare fraud. Lexi has been a
speaker on the California Lawyer's False Claims Act Roundtable.
Lexi previously represented hemophiliacs worldwide, or their survivors and estates, who
contracted HIV and/or Hepatitis C from contaminated blood factor products in America. A
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confidential settlement was reached in 2009. Lexi played a key role in litigating the case and
in negotiating and administering a settlement of the claims of 1,600 clients in 15 countries,
utilizing her multilingual skills in working with co-counsel on several continents. The blood
factor litigation constitutes one of the only, if not the only, case in which major U.S.
pharmaceutical companies entered a settlement with plaintiffs worldwide. Lexi also has
significant experience representing the families of victims in major international aviation
disasters, including the crash of Gol Airlines Flight 1907 in Brazil in 2006.
Lexi’s class action practice includes representing nursing home patients of Evergreen and
Kindred facilities who received deficient care due to understaffing. A settlement in the
Evergreen case includes an injunction requiring adequate staffing for several years, without
any release of claims by the class. Combined with related cases against other leading nursing
home facilities, the litigation is helping to create a new standard for the staffing of nursing
homes in California.
In 2015, Lexi was elected as Vice Chair of the American Association for Justice's Section on
Toxic, Environmental, and Pharmaceutical Torts (STEP). Lexi was also selected for the AAJ
Leadership Academy, and for the Sedona Conference Working Group 1 Drafting Team for the
Primer on Technology-Assisted Review. Lexi has also served on the Court Funding and
Litigation Challenge Group Task Force of the Bar Association of San Francisco and the
Diversity Committee of the San Francisco Trial Lawyers Association.
MS. HAZAM’S LIST OF REPRESENTATIVE CASES AND ACHIEVEMENTS
Page 10
Paul G. Karlsgodt
Baker Hostetler
Panelist
Paul has significant experience defending class
actions in the complex and cutting edge area of
data privacy. Paul has also played a lead role in
defending class actions arising out of three of the
top four largest healthcare breaches in history, as
well as various other healthcare breach class
actions
arising
out
of
hacking,
theft,
and
inadvertent disclosure.
•
Paul led a cross-office team in the
successful defense of a California hospital in one
of the largest data breach class actions ever filed
under the California Confidentiality of Medical Information Act. The client, which
initially faced more than $500 million in potential statutory damages exposure,
ultimately prevailed in all aspects of the case and the case was finally dismissed by
the plaintiff with no payment by the defendant.
•
Paul coordinated the defense in state and federal courts in Missouri and Illinois in a
multidistrict litigation against a grocery store chain arising out of a payment card data
breach. The case was ultimately resolved by a nationwide settlement, which was finally
approved over the significant efforts of objectors to block it.
•
Capitalizing on his experience in the courtroom, Paul obtained a denial of class
certification after serving as lead counsel in a multi-day evidentiary hearing in a
consumer class action involving the sale of uninsured motorist insurance coverage.
•
Paul played a central role in a nationwide class action against a telecommunications
company, mitigating the effects of discovery sanctions that had been imposed against
the client prior to retaining BakerHostetler. The cutting-edge electronic discovery case
ultimately was settled favorably for the client.
•
As lead counsel for an insurer in a putative class action in California involving auto
body shop labor rate surveys and direct repair programs, Paul obtained an order
granting judgment on the pleadings and was able to settle the case on an individual
basis while an appeal of that judgment was pending.
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•
Paul obtained an order denying class certification in a putative class action against an
insurer involving demands for reimbursement of medical payments benefits. He was
able to settle the case on an individual basis during an appeal of that order.
•
In several threatened class actions involving communication privacy issues, Paul
resolved the individual claims due to his willingness to connect with the plaintiff’s
counsel before the cases were filed. Millions of dollars of potential exposure were
settled for significantly less cost to multiple clients.
MR. KARLSGODT’S LIST OF REPRESENTATIVE CASES AND ACHIEVEMENTS
Page 12
David F. Sugerman
Attorney P.C.,
Panelist
David F. Sugerman Attorney, PC is a law practice
dedicated to protecting consumers. The firm has
had special success on structural cases—those
rare, important cases that take on fundamental
problems. Some of our major successes include
a $409 million consumer fraud class action over
BP for illegal debit card charges, an $85 million
federal court win for Oregon veterans poisoned
in Iraq by defense contractor KBR, and a multimillion dollar settlement against Comcast for
illegally charging cable TV late fees.
David represents consumers. His practice spans a range of areas, with a focus on complex
injury and consumer class action cases. David opened his solo law practice in January 2010.
From 1991-2009, he practiced in the Portland law firm of Paul & Sugerman, PC. David is
admitted to practice in state and federal courts in Oregon.
David has had remarkable success as a trial lawyer. His most notable verdict, Scharfstein v. BP
West Coast Products, was tried in state court. As lead counsel, David achieved a recordsetting consumer class action verdict, with a judgment that will exceed $400 million. The case
is ongoing.
In federal court, David was part of a trial team that obtained an $85 million verdict for a
group of Oregon Army National Guard veterans poisoned in Iraq at a KBR work site. The case,
Bixby v. KBR, has been refiled in Texas, following a remand from the Ninth Circuit Court of
Appeals.
David received the Oregon State Bar President’s Award in 2008. David was admitted to the
American Board of Trial Advocates in 2011. Martindale-Hubble gives David its highest peer
review rating of 5.0.
David devotes a substantial portion of his professional time to pro bono activities. He
advocates for consumer protection in the Oregon Legislature. He also trains and mentors
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young attorneys and speaks at legal education seminars. He has served on the Oregon
Council on Court Procedures, the Oregon Trial Lawyers Association Board of Governors, and
various boards and committees.
David completed his undergraduate degree at the University of Texas, with a BA from the
Plan II Honors Program. David completed his JD at Lewis & Clark. He is admitted in state and
federal courts in Oregon.
Outside of work, David’s passions include cooking, good food, bourbon, and the joys and
challenges of being a dad and husband.
MR. SUGERMAN’S LIST OF REPRESENTATIVE CASES AND ACHIEVEMENTS
Page 14
Lois Rosenbaum
Stoel Rives LLP
Panelist
Lois Rosenbaum joined Stoel Rives LLP in 1977 and has
been a partner with the Litigation group since 1981. She
has
represented
numerous
public
and
private
companies and their officers and directors in defending
class actions, SEC and other government actions and
investigations,
and
represented plaintiffs
M
&
and
A
litigation,
defendants in
and
has
complex
litigation, fiduciary duty disputes, Internet-defamation,
unfair competition, Lanham Act, and RICO cases. She
has served as national coordinating counsel in major
products
liability
litigation
involving
asbestos
and
contaminated food products and has served as special
counsel to special litigation committees and audit committees.
Ms. Rosenbaum has been listed for many years as a Tier 1 lawyer in Chambers USA, America's
Leading Lawyers for Business, and has been designated Best Lawyers’ 2014 and 2016 Oregon
Mergers and Acquisitions Lawyer of the Year and by her peers as Best Lawyers in America for
securities litigators, mergers and acquisitions litigation, and commercial litigation.
Ms. Rosenbaum was an associate at Fried, Frank, Harris, Shriver & Kampelman (D.C.),from
1974-1975, and at Orrick Herrington Rowley & Sutcliffe (San Francisco) from 1975-1977.
MS. ROSENBAUM’S LIST OF REPRESENTATIVE CASES AND ACHIEVEMENTS
Page 15
Matthew Preusch
Keller Rohrback LLP
Panelist
Matthew Preusch practices in Keller Rohrback’s
nationally
Group.
recognized
Before
joining
Complex
Litigation
Keller
Rohrback,
Matthew served as an honors attorney in the
Oregon Department of Justice’s appellate and
trial divisions. Prior to his legal career, he
spent ten years as a journalist in the Pacific
Northwest, covering regional and national
news for The Oregonian, The New York Times,
and other publications.
Professional and Civic Involvement
Oregon State Bar Association, Environmental and Natural Resources Section, Case Notes
Editor
Federal Bar Association, Member.
MR. PREUSCH’S LIST OF REPRESENTATIVE CASES AND ACHIEVEMENTS
Page 16
Meredith Price
Perkins Coie LLP
Commentator
Associate
Meredith
Price
focuses
on
complex
commercial litigation. She has experience drafting
memoranda, pleadings and motions related to civil,
class action, patent and environmental litigation in
federal and state courts.
Meredith clerked for the Honorable D. Brooks Smith
on the U.S. Court of Appeals for the Third Circuit.
While a clerk, Meredith focused on class action law,
specializing in issues related to the Class Action
Fairness Act of 2005, the scope of appellate review
under Rule 23(f), and class certification under Federal
Rule of Civil Procedure 23. Meredith was a guest
lecturer for Penn State Law’s Class Action Seminar and during the summer of 2015, she
researched cutting-edge issues and attended the invitation-only Class Action Settlement
Conference hosted by the Duke Law Center for Judicial Studies.
In another clerkship, for the Honorable Michael H. Simon on the U.S. District Court for the
District of Oregon, Meredith gained experience with complex commercial litigation as well as
jury and bench trials.
While in law school, Meredith was named the 2013 Environmental Advocate of the Year in
Lewis & Clark’s inaugural competition by a panel of federal judges, consisting of Chief Justice
John R. Roberts, Jr., Circuit Judge Diarmuid O'Scannlain and District Judge Anna J. Brown. She
was also a two-time finalist in Pace University School of Law’s National Environmental Law
Moot Court Competition and won the National Animal Law Competition in the area of
legislative drafting & lobbying.
Before pursuing a career in the law, Meredith was a licensing analyst in the legal department
at Intel Corporation, providing business analysis and executing transactions related to patent
acquisitions and divestitures, cross licensing and strategic intellectual property initiatives.
Page 17
MS. PRICE’S LIST OF REPRESENTATIVE CASES AND ACHIEVEMENTS
Page 18
Case 2:12-md-02323-AB Document 6509 Filed 04/22/15 Page 1 of 132
IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF PENNSYLVANIA
IN RE: NATIONAL FOOTBALL LEAGUE
PLAYERS’ CONCUSSION INJURY
LITIGATION
No. 2:12-md-02323-AB
MDL No. 2323
THIS DOCUMENT RELATES TO:
Hon. Anita B. Brody
ALL ACTIONS
April 22, 2015
I.
Anita B. Brody, J.
Background and Procedural History ...................................................................................... 4
A.
Initial Lawsuits and Consolidation ..................................................................................... 4
B.
Motions to Dismiss Based on Preemption .......................................................................... 7
C.
Settlement Negotiations and Preliminary Approval ........................................................... 8
D.
The Settlement .................................................................................................................. 12
i.
Monetary Award Fund ................................................................................................. 14
ii.
Claims Process ............................................................................................................. 17
iii.
Baseline Assessment Program...................................................................................... 18
iv.
Education Fund............................................................................................................. 19
v.
Releases of Claims ....................................................................................................... 20
vi.
Attorneys’ Fees............................................................................................................. 21
E.
Reactions to the Settlement and Resulting Amendments ................................................. 21
II.
Class Certification ................................................................................................................ 23
A.
Numerosity........................................................................................................................ 24
B.
Commonality..................................................................................................................... 24
C.
Typicality .......................................................................................................................... 26
D.
Adequacy of Representation ............................................................................................. 28
i.
Adequacy of Class Counsel .......................................................................................... 29
1
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ii.
Adequacy of Named Parties ......................................................................................... 33
iii.
Absence of Conflicts of Interest ................................................................................... 34
E.
Predominance .................................................................................................................... 42
F.
Superiority......................................................................................................................... 47
III.
Notice ................................................................................................................................... 49
A.
Content of Class Notice .................................................................................................... 50
B.
Distribution of Class Notice.............................................................................................. 53
C.
Notice of Amendments to the Settlement ......................................................................... 55
IV. Final Approval of the Settlement ......................................................................................... 56
A.
The Presumption of Fairness ............................................................................................ 58
B.
The Girsh Factors ............................................................................................................. 60
i.
The Complexity, Expense, and Likely Duration of the Litigation ............................... 60
ii.
The Reaction of the Class to the Settlement................................................................. 62
iii.
The Stage of the Proceedings and the Amount of Discovery Completed .................... 63
iv.
The Risks of Establishing Liability and Damages ....................................................... 66
v.
The Risks of Maintaining the Class Action through Trial ........................................... 72
vi.
The Ability of Defendants to Withstand a Greater Judgment ...................................... 73
vii. The Range of Reasonableness of the Settlement in Light of the Best Possible Recovery
and in Light of All Attendant Risks of Litigation ........................................................ 73
C.
The Prudential Factors ..................................................................................................... 75
V.
Responses to Specific Objections ........................................................................................ 77
A.
Objections Related to CTE ............................................................................................... 78
i.
State of Scientific and Medical Knowledge of CTE .................................................... 79
ii.
Compensation of Symptoms Allegedly Associated with CTE .................................... 83
iii.
Compensation of Death with CTE ............................................................................... 87
iv.
Development of Scientific and Medical Knowledge of CTE....................................... 89
B.
Objections to Monetary Awards ....................................................................................... 91
i.
Definitions of Levels 1.5 and 2 Neurocognitive Impairment ....................................... 91
ii.
List of Qualifying Diagnoses and their Maximum Awards ......................................... 94
C.
Objections to Offsets......................................................................................................... 98
i.
Age Offset .................................................................................................................... 98
2
Page 20
ii.
Severe TBI Offset ....................................................................................................... 100
iii.
Stroke Offset............................................................................................................... 101
iv.
Eligible Season Offset ................................................................................................ 102
v.
BAP Offset ................................................................................................................. 106
D.
Objections to the Baseline Assessment Program ............................................................ 106
i.
BAP Fund ................................................................................................................... 106
ii.
Test Battery ................................................................................................................ 107
iii.
BAP Protocols ............................................................................................................ 110
iv.
Selection Process for Qualified BAP Providers ......................................................... 111
v.
Use of Mail Order Pharmacy Vendors ....................................................................... 112
E.
Objections to the Claims Process .................................................................................... 113
i.
Cognitive Impairment of Certain Retired Players ...................................................... 114
ii.
Registration Requirement ........................................................................................... 115
iii.
Use of Qualified MAF Physicians.............................................................................. 116
iv.
Claim Package ............................................................................................................ 117
v.
Appeals Process .......................................................................................................... 119
vi.
Anti-Fraud Provisions ................................................................................................ 120
F.
Other Objections ............................................................................................................. 120
i.
Education Fund........................................................................................................... 120
ii.
Statutes of Limitations Waiver ................................................................................... 122
iii.
Releases ...................................................................................................................... 124
iv.
NFL Parties’ Security ................................................................................................. 125
v.
Objector Signature Requirement ................................................................................ 127
vi.
Lien Resolution Program............................................................................................ 127
vii. Parties’ Experts........................................................................................................... 129
viii. Parties’ Disclosures .................................................................................................... 130
ix.
Opt-Out Procedure ..................................................................................................... 131
VI. Conclusion ......................................................................................................................... 132
3
Page 21
MEMORANDUM
Plaintiffs Kevin Turner and Shawn Wooden, through their Co-Lead Class Counsel, Class
Counsel, and Subclass Counsel, and Defendants National Football League (“NFL”) and NFL
Properties LLC (collectively, the “NFL Parties”) have negotiated and agreed to a Class Action
Settlement (the “Settlement”) that will resolve all claims against the NFL Parties in this
multidistrict litigation.
On November 12, 2014, Class Plaintiffs moved for class certification and final approval of
the Settlement. 1 Pursuant to Federal Rule of Civil Procedure 23, I certify the Settlement Class
and Subclasses, find that the Settlement is fair, reasonable, and adequate, and approve the
Settlement in its entirety. Therefore, I will grant the motion for class certification and final
approval of the Settlement.
I.
Background and Procedural History
A.
Initial Lawsuits and Consolidation
On July 19, 2011, 73 former professional football players filed suit in the Superior Court of
California, Los Angeles County, against the NFL Parties. See Compl., Maxwell v. Nat’l Football
League, No. BC465842 (Cal. Super. Ct. July 19, 2011). They alleged that the NFL Parties failed
to take reasonable actions to protect players from the chronic risks created by concussive and
sub-concussive head injuries and fraudulently concealed those risks from players. Three
substantially similar lawsuits followed in quick succession. See Compl., Pear v. Nat’l Football
League, No. LC094453 (Cal. Super. Ct. Aug. 3, 2011); Compl., Barnes v. Nat’l Football League,
No. BV468483 (Cal. Super. Ct. Aug. 26, 2011); see also Easterling v. Nat’l Football League,
1
The Settlement was initially filed on June 25, 2014, and amended on February 13, 2015. See Parties’
Joint Amendment, Ex. A. As used in this Memorandum, the term Settlement refers to the amended
version, except when the history of the initial filing is discussed.
4
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No. 11-5209, ECF No. 1 (E.D. Pa. Aug. 17, 2011). In response, the Judicial Panel on
Multidistrict Litigation consolidated these cases before this Court as a multidistrict litigation
(“MDL”), pursuant to 28 U.S.C. § 1407. See MDL Panel Transfer Order, ECF No. 1.
Since consolidation, about 5,000 players (“MDL Plaintiffs”) have filed over 300 substantially
similar lawsuits against the NFL Parties, 2 all of which have been transferred to this Court. To
effectively manage these actions, I appointed Christopher Seeger and Sol Weiss as Co-Lead
Class Counsel, and appointed individuals to a Plaintiffs’ Executive Committee and a Steering
Committee. See Case Mgmt. Order No. 2 at 1-2, ECF No. 64; Case Mgmt. Order No. 3 at 1,
ECF No. 72 (appointing Sol Weiss as additional Co-Lead Class Counsel and appointing
additional members of the Steering Committee). I ordered Co-Lead Class Counsel to submit
both a Master Administrative Long-Form Complaint and a Master Administrative Class Action
Complaint, which were filed on June 7, 2012. See Case Mgmt. Order No. 4 at 1-3, ECF. No. 98.
Subsequently, Co-Lead Class Counsel filed an Amended Master Administrative Long-Form
Complaint. This Amended Complaint, along with the Master Administrative Class Action
Complaint (collectively, the “Complaints”), became the operative pleadings of this MDL. See
Master Administrative Class Action Compl., ECF No. 84; Am. Master Administrative LongForm Compl., ECF No. 2642 (“Am. MAC”).
In the Complaints, MDL Plaintiffs allege that the NFL Parties had a “duty to provide players
with rules and information that protect [players] as much as possible from short-term and long-
2
Many MDL Plaintiffs also brought suit against Riddell, Inc., All American Sports Corporation, Riddell
Sports Group, Inc., Easton-Bell Sports Inc., Easton-Bell Sports, LLC, EB Sports Corp., and RBG
Holdings Corp. (collectively, the “Riddell Defendants”). The Judicial Panel on Multidistrict Litigation
also transferred claims against the Riddell Defendants into this MDL. The Riddell Defendants, however,
are not parties to the Settlement.
5
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term health risks,” including from the risks of repetitive mild traumatic brain injury (“TBI”). 3
Am. MAC ¶ 6, 8. They claim “the NFL held itself out as the guardian and authority on the issue
of player safety,” yet failed to properly investigate, warn of, and revise league rules to minimize
the risk of concussive and sub-concussive hits in NFL Football games. See id. ¶¶ 6, 43, 86.
MDL Plaintiffs allege that the NFL Parties fostered a culture surrounding football that glorified
violence and a gladiator mentality, encouraging NFL players to play despite head injuries.
MDL Plaintiffs also allege that, as concern about head injuries in contact sports grew in the
medical community, “the NFL voluntarily inserted itself into the private and public discussion”
regarding these dangers. Id. ¶ 150. In 1994, the NFL Parties created a Mild Traumatic Brain
Injury Committee (“MTBI Committee”) to study the effects of concussive and sub-concussive
injuries on their players. Through the MTBI Committee, the NFL Parties allegedly obfuscated
the connection between NFL Football and long-term brain injury, despite knowing “for decades”
that such a connection exists. Id. ¶¶ 108, 243. The MTBI Committee also allegedly pressured
those who criticized its conclusions to retract or otherwise distance themselves from their
findings. MDL Plaintiffs claim that, “[b]efore June of 2010, the NFL made material
misrepresentations to its players, former players, the United States Congress, and the public at
large that there was no scientifically proven link between repetitive traumatic head impacts and
later-in-life cognitive/brain injury.” Id. ¶ 308.
MDL Plaintiffs allege that head injuries lead to a host of debilitating conditions, including
Alzheimer’s Disease, dementia, depression, deficits in cognitive functioning, reduced processing
speed, attention and reasoning, loss of memory, sleeplessness, mood swings, and personality
3
The scientific community recognizes three categories of TBI: mild, moderate, and severe. See Decl. of
Dr. Kristine Yaffe ¶ 41, ECF No. 6422-36. NFL Football allegedly puts players at risk of repetitive mild
TBI, including concussions. Am. MAC. ¶ 2; Decl. of Dr. Christopher Giza ¶ 12, ECF No. 6423-18
(noting “concussion overlaps significantly” with mild TBI).
6
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Page 25
changes. MDL Plaintiffs also allege that the repetitive head trauma sustained while playing
football causes a gradual build-up of tau protein in the brain, resulting in Chronic Traumatic
Encephalopathy (“CTE”). CTE allegedly causes an increased risk of suicide, and many
symptoms often associated with Alzheimer’s Disease and dementia, as well as with mood
disorders such as depression and loss of emotional control.
The Complaints assert fourteen claims against the NFL Parties, which can be generally
grouped into negligence claims and fraud claims. 4 MDL Plaintiffs seek declaratory relief,
medical monitoring, and damages. See Am. MAC at Prayer for Relief.
B.
Motions to Dismiss Based on Preemption
Before allowing the litigation to proceed to its merits, I determined that a significant
threshold legal issue had to be addressed: whether MDL Plaintiffs’ negligence and fraud claims
are preempted by the Collective Bargaining Agreements (“CBAs”) between the Retired Players
and the 32 Member Clubs that make up the National Football League. I was aware that in a
number of analogous cases, courts ruled that state law claims brought against the NFL and
associated parties implicated provisions of the CBAs. Accordingly, § 301 of the Labor
Management Relations Act (“LMRA”), 29 U.S.C. 185(a), preempted those state law claims. A
preemption ruling in this MDL would necessarily require MDL Plaintiffs to resolve their claims
through arbitration rather than in federal court because the CBAs contain mandatory arbitration
provisions. Because of the importance of this issue, I stayed discovery and granted the request of
the NFL Parties to file motions to dismiss on the preemption argument only. See Case Mgmt.
Order No. 2 at 2 (noting that preemption was to be considered on an expedited basis); Case
4
Specifically, the Complaints assert claims against the NFL Parties for declaratory relief, medical
monitoring, wrongful death and survival actions, fraudulent concealment, fraud, negligent
misrepresentation, negligence (three separate counts), loss of consortium, negligent hiring, negligent
retention, and civil conspiracy. Am MAC. ¶¶ 246-382, 422-25, Prayer for Relief.
7
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Mgmt. Order No. 4 at 3-4; Tr. of Organizational Courtroom Conference, Apr. 25, 2012 at 28:1416 (staying discovery); Order, Aug. 21, 2012, ECF No. 3384.
On August 30, 2012, the NFL Parties moved to dismiss both Complaints. See Defs.’ Mot. to
Dismiss Am. MAC, ECF No. 3589; Defs.’ Mot. to Dismiss Master Administrative Class Action
Complaint, ECF No. 3590. The NFL Parties argue that MDL Plaintiffs’ claims necessarily
implicate provisions of the CBAs that address player safety. Specifically, they argue that the
CBAs control or implicate the duties of the NFL Parties and individual Member Clubs to treat
player injuries, make return-to-play decisions, inform players of medical risks associated with
continuing to play, and promulgate rule changes to enhance player safety. See Mot. to Dismiss
Am. MAC at 12-18. If the NFL Parties are correct, then § 301 of the LMRA requires MDL
Plaintiffs to arbitrate their claims because they agreed in the CBAs to resolve their disputes
before an arbitrator, not in federal court.
The parties completed briefing on the motions to dismiss on January 28, 2013, and I heard
oral argument on April 9, 2013. The NFL Parties’ motions to dismiss remain pending.
C.
Settlement Negotiations and Preliminary Approval
On July 8, 2013, I ordered the Parties to participate in mediation with the hope that a
negotiated, mutually beneficial settlement could be reached. Pending their negotiations, I agreed
to withhold my ruling on the motions to dismiss that might have sent the litigation to arbitration.
See Order, July 8, 2013, ECF No. 5128. I appointed retired United States District Court Judge
Layn Phillips as mediator to help the Parties explore settlement. Id.
A genuine dialogue between zealous and well-prepared adversaries transpired. Judge
Phillips reports that the Parties engaged in “arm’s-length, hard-fought negotiations.” Decl. of
Layn R. Phillips ¶ 5, ECF No. 6073-4 (“Phillips Decl.”). During this time, the Parties met for
8
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more than “twelve full days” of formal mediation. See id. ¶¶ 5-6; Decl. of Christopher Seeger
¶ 31, ECF No. 6423-3 (“Seeger Decl.”). “The negotiations were intense, vigorous, and
sometimes quite contentious.” Supplemental Decl. of Layn R. Phillips ¶ 4, ECF No. 6423-6
(“Phillips Supp. Decl.”).
The Parties came prepared for these discussions. The Parties had already retained wellqualified medical experts to help determine the merits of the case. These experts advised the
Parties on difficult questions such as the type of head trauma associated with NFL Football and
the long term health effects of trauma on Retired Players. See Phillips Decl. ¶ 8; Seeger Decl.
¶ 32; Decl. of Arnold Levin ¶¶ 14-15, ECF No. 6423-10 (“Levin Decl.”); Decl. of Dianne Nast
¶¶ 13-14 (“Nast Decl.”); Decl. of Dr. Scott Millis ¶ 11, ECF No. 6422-34 (noting he “assisted the
NFL Parties during their negotiations” regarding the Test Battery and other Settlement
provisions) (“Dr. Millis Decl.”); Decl. of Dr. John Kelip ¶ 16, ECF No. 6423-20 (noting he has
consulted with Class Counsel on scientific issues since the summer of 2013) (“Dr. Kelip Decl.”).
Judge Phillips met with the Parties’ experts and observed the valuable services they provided.
See Phillips Decl. ¶8.
In addition to experts, the Parties had access to considerable information about the Retired
Players, including from the short form complaints filed with the Court. The NFL Parties’
records provided the Parties with biographical information about the vast majority of the former
players, including the number of seasons played. See Material Provided by Counsel to Pls.,
Report of the Analysis Research Planning Corp. to Special Master Perry Golkin at 13-15, ECF
No. 6167 (“Class Counsel’s Actuarial Materials”); Material Provided by Counsel to the NFL,
Report of the Segal Group to Special Master Perry Golkin ¶ 16, ECF No. 6168 (“NFL Parties’
Actuarial Materials”). Co-Lead Class Counsel also created and maintained a comprehensive
9
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database of the symptoms of MDL Plaintiffs. As a result, the Parties had information about the
current cognitive impairment of over 1,500 Retired Players. See NFL Parties’ Actuarial
Materials ¶ 16; Seeger Decl. ¶ 20.
The mediation efforts were successful. On August 29, 2013, after two months of near
continuous negotiations, the Parties signed a term sheet setting forth the “principal terms of a
settlement.” See Order, Aug. 29, 2013, ECF No. 5235. The term sheet included $765 million to
fund medical exams and provide compensation for player injuries. Id. Given the Parties’
progress in reaching a settlement, I continued to withhold decision on the NFL Parties’ motions
to dismiss on preemption grounds. Id.
The Parties negotiated further, and over the next four months established the specific terms
of the Settlement. On January 6, 2014, Class Counsel, 5 with Kevin Turner and Shawn Wooden
as Class Representatives, filed the complaint in Turner v. Nat’l Football League, No. 14-0029,
ECF No. 1 (E.D. Pa. Jan. 6, 2014) (the “Class Action Complaint”). 6 In that action, Class
Counsel sought preliminary class certification and preliminary approval of their proposed
settlement. See Mot. for Prelim Approval, Jan. 6, 2014, ECF No. 5634.
Though I commended the Parties for their efforts, I denied the motion for preliminary class
certification and preliminary approval of the Settlement without prejudice. See Order Den. Mot.
for Prelim. Approval, ECF No. 5658. I was primarily concerned that the capped fund would
exhaust before the 65-year life of the Settlement; I feared that “not all Retired Players who
ultimately receive[d] a Qualifying Diagnosis or their related claimants will be paid.” Mem. Op.
5
Class Counsel includes Co-Lead Class Counsel Christopher Seeger and Sol Weiss, Subclass Counsel
Arnold Levin and Dianne Nast, as well as Gene Locks and Steven Marks. See Settlement § 2.1(r).
6
Turner was originally marked as a related action to this MDL. On June 25, 2014, “in the interest of
justice and to promote judicial economy and avoid duplication,” I ordered that “[a]ll motion practice and
other filings related to or based on Turner v. NFL, shall be filed only on [this] MDL docket . . . .” Turner,
ECF No. 20.
10
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at 10, ECF No. 5657. I was also concerned that the deal released claims against the National
College Athletic Association (“NCAA”) and other collegiate, amateur, and youth football
organizations. Id. at 10 n.6. To address my concerns, I ordered the Parties to share the actuarial
data and analyses performed by their economic experts 7 with Special Master Perry Golkin. 8
Five more months of arm’s-length, hard fought negotiations followed. Special Master
Golkin oversaw these negotiations, during which the Parties revisited many provisions of the
Settlement. See Seeger Decl. ¶ 61.
These negotiations proved fruitful. The Parties ultimately reached a revised settlement. The
revised deal retained the same basic structure as the original, and included large maximum
awards for Qualifying Diagnoses subject to a series of offsets, a separate fund to allow for
baseline assessment examinations for Retired Players, and a fund dedicated to educating former
players and promoting safety and injury prevention for football players of all ages. Crucially,
this revised deal uncapped the fund to compensate Retired Players with Qualifying Diagnoses;
the NFL Parties agreed to pay all valid claims over the duration of the settlement regardless of
the total cost. The NFL Parties also agreed to narrow the scope of the Releases. In exchange for
these concessions, the NFL Parties received heightened anti-fraud provisions to ensure that funds
were only disbursed to deserving claimants. On June 25, 2014, Class Counsel filed a motion for
preliminary class certification and preliminary approval of the Settlement. See Mot. for Prelim.
Approval, June 25, 2014, ECF No. 6073.
7
The Parties have since disclosed this information, and it is publicly available. See Class Counsel’s
Actuarial Materials; NFL Parties’ Actuarial Materials.
8
I appointed Special Master Golkin on December 16, 2013 in light of the “expected financial complexity
of the proposed settlement.” See Order Appointing Special Master at 1, ECF No. 5607. As always, I am
grateful to Mr. Golkin for his forthright and astute advice.
11
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On July 7, 2014 (“Preliminary Approval Date”), after making a preliminary determination on
class certification for the purpose of issuing notice of settlement, 9 I granted the motion for
preliminary class certification and preliminary approval of the Settlement. See Order Granting
Prelim. Approval, ECF No. 6084. As discussed more fully infra Section I.E, on February 13,
2015, the Parties amended the Settlement, making it more favorable to the Class. See Parties’
Joint Amendment, ECF No. 6481.
D.
The Settlement
The Class consists of “[a]ll living NFL Football Players who, prior to the date of Preliminary
Approval . . . retired . . . from playing professional football with the NFL,” as well as their
Representative and Derivative Claimants. See Settlement §§ 1.1, 2.1(ffff). Representative
Claimants are those duly authorized by law to assert the claims of deceased, legally
incapacitated, or incompetent Retired Players. See id. § 2.1(eeee). Derivative Claimants are
those, such as parents, spouses, or dependent children, who have some legal right to the income
of Retired Players. See id. § 2.1(ee).
The Settlement sorts Class Members into one of two subclasses based on Retired Players’
injuries as of the Preliminary Approval Date. Subclass 2 consists of:
Retired NFL Football Players who were diagnosed with a Qualifying
Diagnosis prior to the date of the Preliminary Approval and Class
Certification Order and their Representative Claimants and Derivative
Claimants, and the Representative Claimants of deceased Retired NFL
Football Players who were diagnosed with a Qualifying Diagnosis prior to
death or who died prior to the date of the Preliminary Approval and Class
Certification Order and who received a postmortem diagnosis of CTE.
Id. § 1.2(b).
9
Despite language in the Preliminary Approval Order and accompanying Memorandum that the Class
had been “conditionally” certified, I reserved class certification analysis until after the Fairness Hearing to
allow for full development of the record. See In re Nat’l Football Players Concussion Injury Litig., 775
F.3d 570, 584-87 (3d Cir. 2014).
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Subclass 1 consists of the remainder:
Retired NFL Football Players who were not diagnosed with a Qualifying
Diagnosis prior to the date of the Preliminary Approval and Class
Certification Order and their Representative Claimants and Derivative
Claimants.
Id. § 1.2(a).
The Settlement has three primary components. An uncapped Monetary Award Fund
(“MAF”), overseen by a Claims Administrator, provides compensation for Retired Players who
submit sufficient proof of Qualifying Diagnoses. A $75 million Baseline Assessment Program
(“BAP”) provides eligible Retired Players 10 with free baseline assessment examinations of their
objective neurological functioning. BAP funds will also be used to provide BAP Supplemental
Benefits, including counseling and prescription drug benefits, to those who are impaired but have
not deteriorated to the point of receiving a Qualifying Diagnosis. Third, an Education Fund will
educate Class Members regarding the NFL Parties’ existing CBA Medical and Disability
Benefits programs, and promote safety and injury prevention for football players of all ages,
including youth football players. I will appoint Wendell Pritchett and Jo-Ann Verrier jointly as
Special Master responsible for overseeing, implementing, and administering the entire
Settlement. See id. § 10.1.
10
Only Retired Players may receive Qualifying Diagnoses or baseline assessment examinations because
they are the only Class Members who played NFL Football. Because Representative Claimants assume
the legal rights of the Retired Players they represent, the Settlement treats them similarly to Retired
Players for the purposes of calculating, submitting, and receiving Monetary Awards.
Derivative Claimants are Class Members because of their relationship with a Retired Player, not
because they stand in the shoes of a Retired Player. As a result, the Derivative Claimant Awards work
somewhat differently. Derivative Claimants are eligible to receive up to 1% of a Retired Player’s
Monetary Award. Unlike a Representative Claimant, a Derivative Claimant must wait until a Retired
Player files for a Monetary Award, and then file a Derivative Claim Package seeking a portion of that
Award. See Settlement § 7.2. In most other respects, Derivative Claimants are treated similarly to
Representative Claimants.
Because a Retired Player is essential to every claim, for ease of reference I generally describe the
requirements Retired Players must satisfy to receive benefits of the Settlement.
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i. Monetary Award Fund
The Monetary Award Fund is an uncapped, inflation-adjusted fund that provides cash awards
for Retired Players who receive Qualifying Diagnoses. By cost, the MAF constitutes the
majority of the Settlement. 11
The Settlement creates six Qualifying Diagnoses: Level 1.5 Neurocognitive Impairment,
Level 2 Neurocognitive Impairment, Alzheimer’s Disease, Parkinson’s Disease, Amyotrophic
Lateral Sclerosis (“ALS”), and Death with CTE.
Levels 1.5 and 2 Neurocognitive Impairment are defined by the Settlement. They require
both a decline in cognitive function and a loss of functional capabilities, such as the ability to
hold a job or perform household chores. See generally id. Ex. 1. These diagnoses correspond
with commonly accepted clinical definitions of mild 12 and moderate dementia, respectively. 13
The Settlement adopts the definitions of Alzheimer’s Disease, Parkinson’s Disease, and ALS
found in the World Health Organization’s International Classification of Diseases. Id.
Diagnoses of Alzheimer’s Disease or Parkinson’s Disease may alternatively meet the definitions
provided by the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition (“DSM5”). Id. Death with CTE requires a post-mortem diagnosis of CTE made by a board-certified
neuropathologist. Id.
After the Effective Date of the Settlement, only pre-approved Qualified MAF Physicians and
Qualified BAP Providers may render Qualifying Diagnoses. See id. §§ 5.7(a)(i), 6.3(b), 6.5(a),
Ex. 1. The Claims Administrator and BAP Administrator will select these specialists, subject to
the written approval of Co-Lead Class Counsel and the NFL Parties. See id. §§ 5.7(a)(i), 6.5(a).
11
The MAF accounted for roughly 90% of the original settlement. See Mem. Op. at 4-5, ECF No. 5657.
Uncapped, this percentage may grow.
12
As stated on the record at the Fairness Hearing, for the purposes of the Settlement, the terms mild
dementia and early dementia are synonymous. See Am. Fairness Hr’g Tr. at 13:11-25, ECF No. 6463.
13
See infra Section V.B.i.
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The Settlement will also honor Qualifying Diagnoses made before the Effective Date by
appropriately credentialed medical professionals. See id. §§ 6.3(c)-6.3(e).
Both Qualified MAF Physicians and Qualified BAP Providers may render Qualifying
Diagnoses of Levels 1.5 and 2 Neurocognitive Impairment, but only Qualified MAF Physicians
may render Qualifying Diagnoses of Alzheimer’s Disease, Parkinson’s Disease, and ALS. Id.
§ 6.3(b). A Retired Player may only receive a Qualifying Diagnosis of Death with CTE if he
died before the Final Approval Date of the Settlement. Id. Ex. 1.
A Qualifying Diagnosis entitles a Retired Player to a substantial maximum award, subject to
mitigating offsets. The Settlement waives all causation requirements for Qualifying Diagnoses.
A Retired Player is not required to show that playing in the NFL caused his injury or show actual
damages. The maximum awards are as follows:
Qualifying Diagnosis
Level 1.5 Neurocognitive Impairment
Level 2 Neurocognitive Impairment
Parkinson’s Disease
Alzheimer’s Disease
Death with CTE
ALS
Maximum Award
$1.5 Million
$3 Million
$3.5 Million
$3.5 Million
$4 Million
$5 Million
If a Retired Player’s condition worsens to the point that he receives an additional Qualifying
Diagnosis meriting a higher award, he is entitled to a Supplemental Monetary Award to make up
the difference. See id. § 6.8.
A Retired Player’s Monetary Award is subject to a series of incremental offsets. The older a
Retired Player is at the time he receives a Qualifying Diagnosis, the smaller his award will be. 14
Id. Ex. 3. A Retired Player who played fewer than five Eligible Seasons in the NFL will see his
14
See infra Section V.C.i.
15
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award decreased as well. 15 See id. § 6.7(b). A Retired Player who has not yet received a
Qualifying Diagnosis will be subject to an offset if he fails to participate in the BAP. 16 See id.
Some medical conditions also trigger more substantial offsets in Monetary Awards. A
Retired Player who suffers a Stroke or a severe TBI outside of NFL Football will receive a
significantly smaller award. See id. 17 However, a Retired Player subject to these offsets will
have the opportunity to challenge whether his Stroke or severe TBI is related to his Qualifying
Diagnosis. See id. § 6.7(d).
Finally, any Monetary Award will be reduced by the extent necessary to satisfy any
applicable and legally enforceable government liens. See id. § 11.3(c)(iv). Federal and state law
allow the Medicare and Medicaid programs to recoup any health insurance payments made to an
insured if a third party is found responsible for the underlying injury. 18 Pursuant to the
Settlement, a Lien Resolution Administrator will identify and resolve these liens and
reimbursement claims on behalf of Class Members. See id. § 11.1. Class Members are already
required by law to repay these obligations, but will likely do so at a discount because the Lien
Resolution Administrator will be able to negotiate on a class-wide basis. See Aff. of Matthew
Garretson ¶¶ 23-29, ECF No. 6423-4 (noting success of similar programs in the Vioxx, Avandia,
Zyprexa, and Deepwater Horizon settlements) (“Garretson Aff.”). The lien resolution process
represents a substantial benefit for Class Members.
Because the MAF is uncapped, every Class Member who timely registers and qualifies for a
Monetary or Derivative Claimant Award will receive an award. Additionally, every eligible
15
See infra Section V.C.iv.
See infra Section V.C.v.
17
See infra Sections V.C.ii and V.C.iii.
18
Because significant penalties exist for noncompliance with these requirements, virtually all defendants
in mass tort personal injury settlements, including the NFL Parties, require that liens be satisfied as a
condition of any cash payout. See Affidavit of Matthew Garretson ¶ 23, ECF No. 6423-4.
16
16
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Representative Claimant of a deceased Retired Player who died on or after January 1, 2006 will
receive a Monetary Award. However, any eligible Representative Claimant of a deceased
Retired Player who died prior to January 1, 2006 will receive a Monetary Award only if he can
show that his wrongful death or survival claim would not be barred by the statute of limitations
under applicable state law. See Settlement § 6.2(b).
ii. Claims Process
To collect from the MAF or participate in the BAP, a Class Member must register with the
Claims Administrator within 180 days of receiving notice that the Settlement has been approved
and is in effect. See id. §§ 4.2(c), 14.1(d). A Class Member must provide basic biographical and
contact information and, in the case of a Representative or Derivative Claimant, identify the
Retired Player whose injuries form the basis of the claim. See id. § 4.2(b). If a Class Member
can demonstrate good cause, then he may receive an extension to the 180-day registration period.
See id. § 4.2(c).
A Claim Package “must be submitted to the Claims Administrator no later than two (2) years
after the date of the Qualifying Diagnosis or within two (2) years after the Settlement Class
Supplemental Notice is posted on the Settlement Website, whichever is later.” Id. § 8.3(a)(i).
Failure to comply with the applicable Claim Package submission deadline will preclude a Class
Member from receiving an award, unless he can show substantial hardship. See id. The Claim
Package must include a certification by the physician who diagnosed the Retired Player, medical
records supporting that diagnosis, and proof that the Retired Player played in the NFL. 19 See id.
§ 8.2(a). The Claims Administrator, after providing the Class Member with an opportunity to
19
If a Retired Player lacks these records, the NFL Parties have a good faith obligation to provide any
records in their possession. See id. § 9.1(a).
17
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cure an incomplete or insufficient Claim Package, must notify the Class Member within 60 days
whether he is entitled to an award. Id. § 9.1(b).
Class Members, Co-Lead Class Counsel, and the NFL Parties have the right to appeal a
Monetary Award determination, a right they must exercise in good faith. See id. §§ 9.5, 9.6(a).
To appeal, a Class Member must submit a $1,000 fee, which will be refunded if his appeal is
successful. Id. § 9.6(a). The Claims Administrator may waive the fee if the Class Member can
show financial hardship. Id. § 9.6(a)(i). Appellants have five single-spaced pages to prove their
case by clear and convincing evidence. Id. § 9.7(a). The Court is the ultimate arbiter of any
appeal, and may consult an Appeals Advisory Board for medical advice. See id. § 9.8.
The Claims Administrator must, and Co-Lead Class Counsel and the NFL Parties may, audit
approved Monetary Awards to prevent fraud. See id. §§ 10.3(a), 10.3(c). The Claims
Administrator must complete a monthly audit of 10% of the Monetary Awards and Derivative
Claimant Awards approved in the preceding month. See id. § 10.3(c). Co-Lead Class Counsel
and the NFL Parties have the right to audit as many claims as they wish, but must do so at their
expense and in good faith. See id. § 10.3(a).
iii. Baseline Assessment Program
The BAP is a $75 million fund that provides Retired Players with an opportunity to be tested
for cognitive decline. Any Retired Player who has played at least half of an Eligible Season can
receive a baseline assessment examination, even if he has not yet developed any adverse
symptoms nor received a Qualifying Diagnosis. See id. § 5.1. A baseline assessment
examination consists of a standardized neuropsychological examination and a basic neurological
18
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examination. 20 Appropriately credentialed physicians selected by a court-appointed BAP
Administrator will provide these examinations at no cost to Retired Players. See id. § 5.6(a)(i).
Baseline assessment examinations serve several functions. Exams may produce a Qualifying
Diagnosis. Qualified BAP Providers may diagnose Retired Players with Level 1, 1.5, or 2
Neurocognitive Impairment; the latter two are Qualifying Diagnoses that entitle a Retired Player
to a Monetary Award. 21 Id. Ex. 1. The results of BAP examinations can also be compared with
any future tests to determine whether a Retired Player’s cognitive abilities have deteriorated.
Finally, a baseline assessment examination may entitle a Retired Player to BAP
Supplemental Benefits. Retired Players diagnosed with Level 1 Neurocognitive Impairment—
evidencing some objective decline in cognitive function, but not yet rising to the level of early
dementia—are eligible to receive medical benefits, including further testing, treatment,
counseling, and pharmaceutical coverage. See id. §§ 5.2, 5.11, Ex. 1.
The BAP lasts for ten years. Id. § 5.5. Every eligible Retired Player age 43 or over must
take a baseline assessment examination within two years of the BAP’s commencement. Id.
§ 5.3. Every eligible Retired Player younger than age 43 must do so before the end of the
program or by his 45th birthday, whichever comes first. Id.
iv. Education Fund
The Education Fund is a $10 million fund to promote safety and injury prevention for
football players of all ages, including youth football players. The fund will also educate Retired
Players about their NFL CBA Medical and Disability Benefits. Co-Lead Class Counsel and the
20
For an in-depth discussion of the contents of a baseline assessment examination, see infra Section
V.D.ii.
21
The BAP is not designed to test for Alzheimer’s Disease, Parkinson’s Disease, or ALS. Retired Players
may not be diagnosed with these Qualifying Diagnoses during a baseline assessment examination.
19
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NFL Parties, with input from Retired Players, will propose specific initiatives for the Court’s
approval. See id. § 12.1.
v. Releases of Claims
In exchange for the benefits described above, Class Members release and dismiss with
prejudice all claims and actions against the Released Parties “arising out of, or relating to, head,
brain and/or cognitive injury, as well as any injuries arising out of, or relating to, concussions
and/or sub-concussive events,” including claims relating to CTE. Id. Art. XVIII. Class
Members also covenant not to sue the Released Parties. Id. All claims that “were, are or could
have been asserted in the Class Action Complaint” are also released. Id.
Class Members, however, remain free to pursue a number of claims for their injuries even
after the Settlement takes effect. Claims against the Riddell Defendants, who are not parties to
this Settlement, remain pending. The Releases similarly have no effect on claims against the
NCAA or other collegiate, amateur, or youth football organizations.
Additionally, the Releases do not compromise the benefits that Retired Players are entitled to
under their CBAs with individual Member Clubs. These NFL CBA Medical and Disability
Benefits provide significant additional compensation. For example, the “88 Plan” reimburses or
pays for up to $100,000 of medical expenses per year for qualifying Retired Players with
dementia, ALS, and Parkinson’s Disease. See Decl. of Dennis Curran ¶¶ 5-7, ECF No. 6422-32
(“Curran Decl.”). Retired Players also retain access to a Neuro-Cognitive Disability Benefit,
which provides compensation for those who have mild or moderate neurocognitive impairment.
See id. ¶¶ 8-9. General retirement benefits, disability benefits, and health insurance programs are
also left unaffected. See id. ¶¶ 11-17.
20
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vi. Attorneys’ Fees
During their initial negotiations, the Parties did not discuss fees until after the key terms of
the Settlement—including the total size of the original capped fund—were publicly announced
on the docket. See ECF No. 5235; Phillips Supp. Decl. ¶ 19.
The NFL Parties have agreed not to contest any award of attorneys’ fees and costs equal to or
below $112.5 million. Any fee award will be separate from, and in addition to, the NFL Parties’
other obligations under the Settlement. See Settlement § 21.1. Class Counsel have not yet
moved for any fee award. I will determine an appropriate fee award at a later date.
The Settlement also provides that Co-Lead Class Counsel may petition the Court to set aside
up to 5% of each Monetary and Derivative Claimant Award to administer the Settlement. This
request is subject to court approval, and any petition must include the amount of any set aside
and its proposed use. Id.
E.
Reactions to the Settlement and Resulting Amendments
The order granting preliminary approval afforded Class Members 90 days to review the
Settlement, object, and opt out. See Order Granting Prelim. Approval ¶ 4. Ultimately, 208 Class
Members submitted requests to exclude themselves 22 from the Settlement, and a total of 205
Objectors filed 83 written objections. 23 These figures each represent approximately one percent
of Retired Players. See Class Counsel’s Actuarial Materials at 13-14; NFL Parties’ Actuarial
Materials ¶ 16 (estimating over 20,000 Retired Players). Retired Players, as opposed to their
Representative or Derivative Claimants, submitted the vast majority of the objections and opt-out
22
See Eighth Opt-Out Report of Claims Administrator ¶ 2, ECF No. 6507. As of the Fairness Hearing,
there were 234 timely and untimely opt-out requests. Since then, 26 Class Members have revoked these
requests and have been allowed back into the Settlement. Compare id. with First Opt-Out Report of
Claims Administrator ¶ 3, ECF No. 6340.
23
All objections are publicly available on this MDL’s docket. A list of Objectors can be found at
Appendix A of the NFL Parties’ Memorandum of Law in Support of Final Approval, ECF No. 6422, and
Exhibit 12 of Class Plaintiffs’ Motion for Final Approval and Class Certification, ECF No. 6423-14.
21
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requests. See Eighth Opt-Out Report of Claims Administrator ¶ 2, ECF No. 6507. I also
accepted amicus curiae submissions from two groups. See Submission of Brain Injury
Association of America, Decl. of Drs. Brent Masel & Gregory O’Shanick, ECF No. 6180-2
(“Drs. Masel & O’Shanick Decl.”); Mem. of Public Citizen, ECF. No. 6214-1; Supp. Mem. of
Public Citizen, ECF. No. 6451-1.
On November 12, 2014, Class Plaintiffs moved for class certification and final approval of
the Settlement. See Class Plaintiffs’ Mot. for Final Approval and Class Certification, ECF No.
6423. On November 19, 2014, I held a day-long final Fairness Hearing on the merits of the
Settlement. See Am. Fairness Hr’g Tr., ECF No. 6463. Because many of the objections raised
duplicative issues, I asked Objectors represented by attorneys to coordinate their presentations to
streamline the Fairness Hearing. 24 Every Class Member who submitted a timely objection, and
who was not represented by an attorney, was given an opportunity to speak at the Fairness
Hearing. See Notice, Nov. 4, 2014, ECF No. 6344; Notice of Fairness Hr’g Schedule, ECF No.
6428.
Though participants discussed a host of issues, much of the Fairness Hearing focused on the
scientific underpinnings of CTE. In support of their positions, the Parties, Objectors, and Amici
collectively submitted briefs, hundreds of pages of exhibits, dozens of scientific articles, and 22
expert declarations.
After reviewing the moving papers, the objections, and the arguments made at the Fairness
Hearing, I proposed several changes to the Settlement that would benefit Class Members. See
Order, Feb. 2, 2015, ECF No. 6479. Specifically, I requested that:
24
See Notice, Nov. 4, 2014, ECF No. 6344. At my request, attorney Steven Molo and his firm undertook
this task.
22
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•
Retired Players receive credit for time they spent playing in overseas NFL affiliate
leagues; 25
•
All Retired Players who seek and are eligible for a baseline assessment examination
receive one, notwithstanding the $75 million cap;
•
The NFL Parties compensate Qualifying Diagnoses of Death with CTE up until the Final
Approval Date;
•
The Parties relax certain procedural requirements in the claims process in extenuating
circumstances.
Id. On February 13, 2015, Class Counsel and the NFL Parties agreed with my proposed changes
in their entirety, and submitted the amended Settlement described supra Section I.D. See
Parties’ Joint Amendment.
II.
Class Certification
For a class action to have preclusive effect and bind absent class members, a class must first
be certified. Rule 23(a) of the Federal Rules of Civil Procedure lays out four threshold
requirements for certification: (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy
of representation. Fed. R. Civ. P. 23(a). See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613
(1997). Because this is a Rule 23(b)(3) class, two additional requirements must be met: (1)
common questions must predominate over any questions affecting only individual members, and
(2) class resolution must be superior to other available methods to adjudicate the controversy.
Fed. R. Civ. P. 23(b)(3).
Class certification “demand[s] undiluted, even heightened, attention in the settlement
context.” Amchem, 521 U.S. at 620; In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods.
25
These include the World League of American Football, NFL Europe League, and NFL Europa League
(collectively, “NFL Europe”).
23
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Liab. Litig., 55 F.3d 768, 797-99 (3d Cir. 1995) (hereinafter “GM Trucks”). However, the
existence of a settlement means that “certain Rule 23 considerations . . . are not applicable.”
Rodriguez v. Nat’l City Bank, 726 F.3d 372, 378 (3d Cir. 2013). For example, because a
settlement obviates the need for trial, concerns regarding the manageability of a Rule 23(b)(3)
class disappear. See Amchem, 521 U.S. at 619; see also Sullivan v. DB Investments, Inc., 667
F.3d 273, 297 (3d Cir. 2011) (en banc) (noting that “concerns regarding variations in state law
largely dissipate when a court is considering the certification of a settlement class”); In re
Warfarin Sodium Antitrust Litig., 391 F.3d 516, 529 (3d Cir. 2004) (“[C]oncerns with regards to
case manageability that arise with litigation classes are not present with settlement classes, and
thus those variations are irrelevant . . . . ” (citing Amchem, 521 U.S. at 620)).
The proposed Class and Subclasses meet the Rule 23(a) and 23(b)(3) requirements and
warrant certification.
A.
Numerosity
Rule 23(a)(1) requires that a class be “so numerous that joinder of all members is
impracticable.” Fed. R. Civ. P. 23(a)(1). Thousands of Retired Players have filed suit against
the NFL Parties in this MDL. The Parties estimate that there are over 20,000 Retired Players in
the Class, as well as additional Representative Claimants and Derivative Claimants. See Class
Counsel’s Actuarial Materials at 3; NFL Parties’ Actuarial Materials ¶ 16. The numerosity
requirement of Rule 23(a) is satisfied. See, e.g., Stewart v. Abraham, 275 F.3d 220, 227-28 (3d
Cir. 2001) (noting requirement typically satisfied by more than 40 plaintiffs).
B.
Commonality
Rule 23(a)(2) requires that class members’ claims share common questions of law or
common questions of fact. The standard is not stringent; only one common question is required.
24
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See Rodriguez, 726 F.3d at 382 (concluding the bar commonality sets “is not a high one”); In re
Prudential Ins. Co. of Am. Sales Practices Litig., 148 F.3d 283, 310 (3d Cir. 1998) (factor
satisfied “if the named plaintiffs share at least one question of fact or law” with the prospective
class (internal quotation marks omitted)). To satisfy commonality, class claims “must depend
upon a common contention . . . of such a nature that it is capable of classwide resolution—which
means that determination of its truth or falsity will resolve an issue that is central to the validity
of each one of the claims in one stroke.” Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551
(2011).
Commonality is satisfied here. The critical factual questions in this case are common to all
Class Members. These include whether the NFL Parties knew and suppressed information about
the risks of concussive hits, as well as causation questions about whether concussive hits
increase the likelihood that Retired Players will develop conditions that lead to Qualifying
Diagnoses. Class Members also face a host of common legal questions, such as the nature and
extent of any duty owed to Retired Players by the NFL Parties, and whether LMRA preemption,
workers’ compensation, or some affirmative defense would bar their claims.
Citing Wal-Mart, Objectors contend that commonality is not satisfied because each Retired
Player was injured “in unique and disparate ways.” 26 Heimburger Obj. at 13, ECF No. 6230.
While it is true that no two Retired Players’ concussion history or symptoms are identical,
commonality still exists. Common legal and factual questions are at the heart of this case.
Essential questions include whether the CBAs mandate compulsory arbitration, and whether the
26
Section V addresses the majority of the objections. Where relevant however, specific objections to
class certification, Class Notice, and the application of the factors enunciated in Girsh v. Jepson, 521 F.2d
153 (3d Cir. 1975) and In re Prudential Insurance Co. of America Sales Practices Litigation, 148 F.3d
283 (3d Cir. 1998) are discussed in Sections II, III, and IV, respectively.
25
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NFL Parties used the MTBI Committee to fraudulently refute the dangers of head injuries. No
Class Member could prevail without proving the NFL Parties’ misconduct.
The common issues in this case satisfy the Supreme Court’s concerns in Wal-Mart. In WalMart, a putative class of female employees argued they were systematically denied promotions
and pay raises because of their gender. The Court found no commonality because Wal-Mart had
no formal policy regarding either promotions or pay raises; each decision was left to a local
manager’s discretion. Wal-Mart, 131 S. Ct. at 2554. Thus, the determination that one manager’s
decision was sexist would not affect the determination of whether another manager’s decision in
a different store was sexist as well. Id. By contrast, the NFL Parties allegedly injured Retired
Players through the same common course of conduct: refusing to alter league rules to make the
game safer, failing to warn of the dangers of head injuries, and establishing the MTBI
Committee. See Sullivan, 667 F.3d at 299.
The commonality requirement is satisfied.
C.
Typicality
Rule 23(a)(3) requires that the class representatives’ claims be “typical of the claims . . . of
the class.” Fed. R. Civ. P. 23(a)(3). “The typicality requirement is designed to align the interests
of the class and the class representatives . . . .” Prudential, 148 F.3d at 311.
The Third Circuit has “set a low threshold for satisfying” the typicality requirement. Newton
v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 183 (3d Cir. 2001). “‘Even
relatively pronounced factual differences will generally not preclude a finding of typicality
where there is a strong similarity of legal theories’ or where the claim arises from the same
practice or course of conduct.” Prudential, 148 F.3d at 311 (quoting Baby Neal v. Casey, 43
F.3d 48, 58 (3d Cir. 1994)); see also Warfarin, 391 F.3d at 532 (holding district court did not
26
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abuse its discretion in finding the typicality requirement was satisfied where the claims of the
representative plaintiffs arose “from the same alleged wrongful conduct . . . [and] the same
general legal theories”)
The Class Representatives have claims typical of those they represent. Shawn Wooden, the
Representative of Subclass 1, is a Retired Player who has not been diagnosed with a Qualifying
Diagnosis. Like many other Class Members, he seeks a baseline assessment examination to
determine whether he has any neurocognitive impairment resulting from his years of playing
NFL Football. If he ultimately develops a Qualifying Diagnosis, he will seek a Monetary
Award. Kevin Turner, the Representative of Subclass 2, is a Retired Player who has been
diagnosed with ALS. Similar to other Class Members who have already received Qualifying
Diagnoses, he seeks compensation from the NFL Parties for his injuries.
Wooden and Turner seek recovery pursuant to the same legal theories as the absent Class
Members. They claim the NFL Parties should have known of, or intentionally concealed, the
risks of head injuries in NFL Football. The claims of all Class Members, Wooden and Turner
included, derive from the same wrongful course of conduct: the NFL Parties’ decision to
promote and structure NFL Football in a way that increased concussive impacts.
Some Objectors argue that Wooden’s and Turner’s claims are not typical because they did
not play in NFL Europe, and they both had long careers in the NFL while others’ careers were
relatively brief. Objectors point to Retired Player Craig Heimburger as an example that
typicality is lacking because Heimburger had a relatively short career and neither Representative
suffers from Heimburger’s specific symptoms. See Heimburger Obj. at 3, 12.
The factual differences among Retired Players do not defeat typicality. Class members need
not “share identical claims.” Baby Neal, 43 F.3d at 56. “[C]ases challenging the same unlawful
27
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conduct which affects both the named plaintiffs and the putative class usually satisfy the
typicality requirement irrespective of the varying fact patterns underlying the individual claims.”
Id. at 58. Heimburger’s short form complaint demonstrates that his damages stem from the same
source as Wooden’s and Turner’s damages: “repetitive, traumatic sub-concussive and/or
concussive head impacts during NFL games and/or practices.” Heimburger Short Form Compl.
at 2, ECF No. 1938. Like Wooden, Heimburger seeks medical monitoring. Id. at 5. Like
Wooden’s and Turner’s injuries, Heimburger’s injuries sound in negligence and fraud. Id. The
remaining differences between Heimburger and the Class Representatives are immaterial to the
typicality analysis.
The typicality requirement is satisfied.
D.
Adequacy of Representation
Rule 23(a)(4) requires class representatives to “fairly and adequately protect the interests of
the class.” Fed. R. Civ. P. 23(a)(4). It tests both the qualifications of class counsel and the class
representatives to represent a class. Bogosian v. Gulf Oil Corp., 561 F.2d 434, 449 (3d Cir.
1977) (requiring both “representatives and their attorneys [to] competently, responsibly and
vigorously prosecute the suit”), abrogated on unrelated grounds by In re Ins. Brokerage
Antitrust Litig., 618 F.3d 300, 325 n.25 (3d Cir. 2010). It also seeks to uncover conflicts of
interest between class representatives and the class they represent. See Warfarin, 391 F.3d at
532.
28
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i. Adequacy of Class Counsel
When examining settlement classes, courts “have emphasized the special need to assure that
class counsel: (1) possessed adequate experience; (2) vigorously prosecuted the action; and (3)
acted at arm’s length from the defendant.” 27 GM Trucks, 55 F.3d at 801.
No Objector challenges the expertise of Class Counsel. Co-Lead Class Counsel Christopher
Seeger has spent decades litigating mass torts, class actions, and multidistrict litigations. He has
served as plaintiffs’ lead counsel, or as a member of the plaintiffs’ executive committee or
steering committee in over twenty cases. See Seeger Decl. ¶¶ 2-4. Co-Lead Class Counsel Sol
Weiss, Subclass Counsel Arnold Levin and Dianne Nast, and Class Counsel Gene Locks and
Steven Marks possess similar credentials. See In re Diet Drugs Prods. Liab. Litig., MDL No.
1203, 2000 WL 1222042, at *44 (E.D. Pa. Aug. 28, 2000) (“Each of the Class Counsel [Arnold
Levin, Sol Weiss, Gene Locks and others] are experienced in the conduct of class litigation, mass
tort litigation and complex personal injury litigation . . . .”); Seeger Decl. ¶ 27 (noting that Steven
Marks and Sol Weiss are “attorneys with decades of class action and MDL litigation
experience”); Levin Decl. ¶ 2 (noting leadership positions in over 100 class actions, mass torts,
and complex personal injury suits); Nast Decl. ¶ 2 (noting leadership positions in over 48
complex cases).
27
In 2003, Congress amended Rule 23 to include subdivision 23(g), which provides a non-exhaustive list
of factors for a court to consider when scrutinizing the adequacy of class counsel’s representation. See
Fed R. Civ. P. 23(g). The addition was meant to transfer the analysis of class counsel’s representation
from Rule 23(a)(4), where it had little textual support, to Rule 23(g). See Newberg on Class Actions
§ 3:80 (5th ed.). Rule 23(g) “builds on” the existing 23(a)(4) jurisprudence instead of “introducing an
entirely new element into the class certification process.” See Fed. R. Civ. P. 23(g) advisory committee’s
notes (2003 amendments). Accordingly, the Third Circuit continues to apply the factors GM Trucks
relied on prior to the addition of Rule 23(g). See In re Cmty. Bank of N. Va., 622 F.3d 275, 304-05 (3d
Cir. 2010); In re Cmty. Bank of N. Va., 418 F.3d 277, 307 (3d Cir. 2005). Class Counsel’s representation
of the Class satisfies both Rule 23(g) and 23(a)(4).
29
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Class Counsel vigorously prosecuted the action at arm’s length from the NFL Parties.
Mediator Judge Phillips notes that during negotiations “Plaintiffs’ counsel [] consistently and
passionately expressed the need to protect the interests of the retirees and their families and
fought hard for the greatest possible benefits . . . .” Phillips Supp. Decl. ¶¶ 2-5, 8-10; Phillips
Decl. ¶¶ 2, 5-7, 11; Mem. in Supp. of Preliminary Approval Order, ECF No. 6083 (“[I]t appears
that the proposed Settlement is the product of good faith, arm’s length negotiations.”). “It was
evident throughout the mediation process that Plaintiffs’ counsel were prepared to litigate and try
these cases . . . if they were not able to achieve a fair and reasonable settlement . . . .” Phillips
Supp. Decl. ¶ 3.
The substantial concessions Class Counsel were able to extract from the NFL Parties confirm
Judge Phillips’ observations. “[T]he uncapped nature of the proposed settlement . . . indicate[s]
that class counsel and the named plaintiffs have attempted to serve the best interests of the class
as a whole.” Prudential, 148 F.3d at 313.
Some Objectors point to Class Counsel’s proposed fee award as evidence that representation
was collusive or self-serving. 28 See, e.g., Morey Obj. at 79-80, ECF No. 6201; Heimburger Obj.
at 19-21. Class Counsel, however, did not move for a fee award in connection with final
approval. At an appropriate time after the Effective Date of the Settlement, Class Counsel may
file a fee petition that Class Members will be free to contest. Any award will be separate from,
and in addition to, the NFL Parties’ other obligations under the Settlement. See Settlement
§ 21.1. The NFL Parties have agreed not to contest any award of attorneys’ fees and costs equal
to or below $112.5 million.
None of the fee provisions in the Settlement indicate inadequate representation. Courts are
wary when attorneys’ fees are taken from a common fund because any fee given to class counsel
28
For an additional discussion of fees, see infra Section IV.C.
30
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will detract from funds available to the class. Courts are sometimes wary even when attorneys’
fees are taken from an ostensibly separate fund because of the fear that the formal division
between fees and class funds is illusory and that attorneys’ fees will still deplete the amount
available to the class. See GM Trucks, 55 F.3d at 803-05, 819-20.
A fee award in this case will not come from a common fund. The ultimate amount the NFL
Parties must pay in attorneys’ fees will have no impact on the Monetary Awards paid or baseline
assessment examinations given because the NFL Parties have already guaranteed these benefits,
in full, to eligible claimants. See Settlement § 21.1; see also Court Awarded Attorney Fees:
Report of the Third Circuit Task Force, 108 F.R.D. 238, 266 (1985) (noting a conflict of interest
exists when “a large attorney’s fee means a smaller recovery to plaintiff”).
Moreover, the course of negotiations in this case provides assurances that attorneys’ fees did
not reduce the recovery available to the Class. According to Mediator Phillips, the Parties were
careful not to discuss fees until after the Court had announced, on the record, an agreement
regarding the total compensation for Class Members. See Phillips Supp. Decl. ¶ 19; Order, Aug.
29, 2013. Because Class benefits were fixed by the time the Parties discussed fees, the amount
given to the Class was not compromised. See In re Oil Spill by Oil Rig Deepwater Horizon, 295
F.R.D. 112, 138 (E.D. La. 2013) (“Deepwater Horizon Clean-Up Settlement”) (noting mediator’s
involvement during negotiations “further ensured structural integrity”); cf. In re Cmty. Bank of N.
Va., 418 F.3d 277, 308 (3d Cir. 2005) (noting “special danger of collusiveness” when fees “were
negotiated simultaneously with the settlement”).
Finally, Objectors point to the presence of a clear sailing provision, meaning that the NFL
Parties have agreed not to contest any award of attorneys’ fees and costs equal to or below
$112.5 million, as evidence of collusion. While Objectors are correct that a clear sailing
31
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provision “should put a court on its guard,” Weinberger v. Great Northern Nekoosa Corp., 925
F.2d 518, 525 (1st Cir. 1991), “not every ‘clear sailing’ provision demonstrates collusion.”
Gooch v. Life Investors Ins. Co. of Am., 672 F.3d 402, 426 (6th Cir. 2012). “[N]umerous cases . .
. have approved agreements containing such clear-sailing clauses.” Deepwater Horizon CleanUp Settlement, 295 F.R.D at 138.
A clear sailing provision does not “bar approval of [a] [s]ettlement” where a court “strictly
scrutinize[s] both the process and substance” of the proposed agreement. In re Excess Value Ins.
Coverage Litig., MDL No. 1339, 2004 WL 1724980, at *10 (S.D.N.Y. July 30, 2004). As
discussed, the negotiation process that led to the Settlement in this case indicates that the clear
sailing provision is not problematic. See Shames v. Hertz Corp., No. 07-2174, 2012 WL
5392159, at *13 (S.D. Cal. Nov. 5, 2012) (overruling objection based on clear sailing provision
in part because the “fee amount was negotiated separately and only after the class settlement was
finalized”); McKinnie v. JP Morgan Chase Bank, N.A., 678 F. Supp. 2d 806, 813 (E.D. Wis.
2009) (overruling objection to a clear sailing provision in part because “the settlement was
achieved after arms-length negotiation with the assistance of a Seventh Circuit mediator”).
The substance of the Settlement likewise indicates an absence of collusion. The Settlement
provides uncapped, guaranteed Monetary Awards and baseline assessment examinations. See
LaGarde v. Support.com, Inc., No. 12-0609, 2013 WL 1283325, at *10 (N.D. Cal. Mar. 26,
2013) (noting that “Plaintiffs did not bargain away benefits to the class . . . when they secured
the clear sailing provision” because “[h]ad Plaintiffs colluded . . . the settlement would not
[have] provide[d] such a substantial value”).
Moreover, the clear sailing provision caps uncontested attorneys’ fees at just over 10% of the
Parties’ estimates of Class recovery. Compare Settlement § 21.1 with Class Counsel’s Actuarial
32
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Materials at 3 and NFL Parties’ Actuarial Materials ¶ 20. Courts are wary of clear sailing
provisions when they insulate disproportionate fee awards. In re Bluetooth Headset Prods. Liab.
Litig., 654 F.3d 935, 947 (9th Cir. 2011) (clear sailing provision was a “warning sign[]” when
attorneys’ fees cap was “up to eight times the monetary cy pres relief afforded the class,” and
there was no other recovery); cf. Gooch, 672 F.3d at 426 (“We find collusion particularly
unlikely in this instance where the clear sailing provision caps attorney compensation at
approximately 2.3% of the total expected value of the settlement to the class members. The
majority of common fund fee awards fall between 20% and 30% of the fund.” (internal quotation
marks omitted)); Harris v. Vector Mktg. Corp., No. 08-5198, 2012 WL 381202, at *5 (N.D. Cal.
Feb. 6, 2012) (approving revised settlement because “[u]nlike the initial settlement, the award to
the class . . . [was] not substantially outstripped by a ‘clear sailing’ attorney fee provision”).
Here, the uncontested fee award cap is not disproportionate to the compensation provided to the
Class.
Of course, the clear sailing provision does not require the Court to approve the uncontested
$112.5 million award, or any other requested amount. The Court reserves full discretion to
award reasonable attorneys’ fees. See infra Section IV.C.
ii. Adequacy of Named Parties
A class representative must also capably and diligently represent a class. This standard is
easily met: “A class representative need only possess a minimal degree of knowledge” about the
litigation to be adequate. New Directions Treatment Servs. v. City of Reading, 490 F.3d 293, 313
(3d Cir. 2007) (internal quotation marks omitted); see also Greenfield v. Villager Indus., Inc.,
483 F.2d 824, 832 n.9 (3d Cir. 1973) (“Experience teaches that it is counsel for the class
representative and not the named parties, who direct and manage these actions.”). Despite this,
33
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Objectors challenge whether Shawn Wooden and Kevin Turner fulfilled their roles as Class
Representatives. See Morey Obj. at 80; Heimburger Obj. at 12-13; Utecht Obj. at 6-7, ECF No.
6243 (arguing that Class Representatives should be required to testify that they were advised of
various provisions of the Settlement).
Both Class Representatives ably discharged their duties. Wooden and Turner have followed
the litigation closely, including the negotiations process and the multiple revisions to the
Settlement. See Aff. of Kevin Turner ¶¶ 6-9, ECF No. 6423-7 (“Turner Aff.”); Aff. of Shawn
Wooden ¶¶ 3-5, 7, ECF No. 6423-8 (“Wooden Aff.”). Each authorized the filing of the Class
Action Complaint and approved the Settlement. Turner Aff. ¶¶ 8-9; Wooden Aff. ¶¶ 6-8.
Although Wooden and Turner did not actively participate in settlement negotiations, their
participation is not required. See Lewis v. Curtis, 671 F.2d 779, 789 (3d Cir. 1982) (“The
adequacy-of-representation test is not concerned [with] whether plaintiff . . . will personally be
able to assist his counsel.”), abrogated on other grounds by Garber v. Lego, 11 F.3d 1197, 120607 (3d Cir. 1993).
iii. Absence of Conflicts of Interest
“The adequacy inquiry under Rule 23(a)(4) serves to uncover conflicts of interest between
named parties and the class they seek to represent.” Amchem, 521 U.S. at 625 (citing Gen. Tel.
Co. of Sw. v. Falcon, 457 U.S. 147, 157-58, n.13 (1982)). The “linchpin of the adequacy
requirement is the alignment of interests and incentives between the representative plaintiffs and
the rest of the class.” Dewey v. Volkswagen Aktiengesellschaft, 681 F.3d 170, 183 (3d Cir.
2012).
Not every distinction between a class member and a class representative renders the
representative inadequate. “A conflict must be fundamental to violate Rule 23(a)(4).” Id. at 184
34
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(internal quotation marks omitted). “A fundamental conflict exists where some [class] members
claim to have been harmed by the same conduct that benefitted other members of the class.” Id.
(alteration in original) (internal quotation marks omitted). This occurs when, “by maximizing
their own interests, the putative representatives would necessarily undercut the interests of
another portion of the class.” Newberg on Class Actions § 3:58 (5th ed.). Benefits awarded to
some class members, but not others, without adequate justification may indicate that other class
members were inadequately represented. See GM Trucks, 55 F.3d at 797.
Structural protections in the class definition and settlement, such as separate subclasses or an
uncapped fund, may eliminate fundamental conflicts. See Georgine v. Amchem Prods., Inc., 83
F.3d 610, 631 (3d Cir. 1996) (suggesting use of “structural protections to assure that differently
situated plaintiffs negotiate for their own unique interests”), aff’d sub nom. Amchem, 521 U.S. at
591. In this case, no fundamental conflicts exist.
All Class Members allegedly were injured by the same scheme: the NFL Parties negligently
and fraudulently de-emphasized the medical effects of concussions to keep Retired Players in
games. Class incentives are aligned because “[t]he named parties, like the members of the class,
would need to establish this scheme in order to succeed on any of the claims” asserted.
Prudential, 148 F.3d at 313; see also Warfarin, 391 F.3d at 532 (finding adequacy satisfied in
part because “all shared the same goal of establishing the liability of DuPont”).
The Class includes two Subclasses that prevent conflicts of interest between Class Members.
Amchem held that an undifferentiated class containing those with present injuries and those who
have not yet manifested injury is beset by a conflict of interest. See Prudential, 148 F.3d at 313.
Recognizing this problem, Class Counsel subdivided the Class into two Subclasses: Retired
Players who have already received a Qualifying Diagnosis (and their Representative and
35
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Derivative Claimants) and Retired Players who have not. See Ortiz v. Fibreboard, 527 U.S. 815,
856 (1999) (holding that “a class including holders of present and future claims . . . requires
division into homogenous subclasses”). Each Subclass has its own independent counsel.
Warfarin, 391 F.3d at 533 (noting that “any potential for conflicts of interest . . . that may have
arisen prior to and during the settlement negotiations were adequately [addressed] by the
presence of separate counsel”).
Each Subclass Representative’s interests reflect the interests of the Subclass as a whole. As
with all other Retired Players who already have a Qualifying Diagnosis, Kevin Turner is
interested in immediately obtaining the greatest possible compensation for his injuries and
symptoms. Shawn Wooden, like all other Retired Players without a Qualifying Diagnosis, is
interested in monitoring his symptoms, guaranteeing that generous compensation will be
available far into the future, and ensuring an agreement that keeps pace with scientific advances.
Because Wooden does not know which, if any, condition he will develop, he has an interest in
ensuring that the Settlement compensates as many conditions as possible.
Additional structural protections in the Settlement ensure that each Class Member is
adequately represented. Every Retired Player who receives a Qualifying Diagnosis during the
65-year life of the Settlement is entitled to a Monetary Award. The Monetary Award Fund is
uncapped and baseline assessment examinations are guaranteed for all eligible Retired Players.
That one Retired Player receives a Monetary Award or undergoes a baseline assessment
examination presents no impediment to any other Class Member’s recovery. See Warfarin, 391
F.3d at 532 (holding that the district court did not abuse its discretion in finding adequacy of
representation satisfied in part because “recovery did not change depending on the number of the
people in the class, [avoiding] the problem of ‘splitting the settlement’”). Monetary Awards are
36
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also indexed to inflation. Retired Players who receive Qualifying Diagnoses in the future will be
on equal footing with those who are currently suffering. Additionally, the Settlement provides
Supplemental Monetary Awards for worsening symptoms. Retired Players who receive more
severe Qualifying Diagnoses after receiving initial Monetary Awards are entitled to
supplemental payments. See Diet Drugs, 2000 WL 1222042, at *49 (noting that class members
with injuries that will worsen over time “are protected by the settlement in that they may ‘step
up’ to higher amounts of compensation on the matrices as their level of disease progresses”).
Moreover, the presence of Mediator Judge Phillips and Special Master Golkin helped
guarantee that the Parties did not compromise some Class Members’ claims in order to benefit
other Class Members. “Plaintiffs’ counsel . . . fought hard for the greatest possible benefits for
all of the players” and “demanded that a range of injuries consistent with those alleged in the
Complaints be considered eligible for a monetary award.” Phillips Supp. Decl. ¶¶ 2, 8 (emphasis
added).
Objectors contend that an additional subclass is necessary for Retired Players who suffer
from CTE. They argue that Subclass Representative Shawn Wooden does not allege that he is at
risk of developing the disease. See, e.g., Morey Obj. at 27 (“Mr. Wooden, by contrast, has not
alleged that he suffers from CTE.”); Chelsey Obj. at 11, ECF No. 6242; Duerson Obj. at 17-18,
ECF No. 6241; Miller Obj. at 3-4, ECF No. 6213; Chelsey Supplemental Obj. at 7, ECF No.
6453.
Shawn Wooden has adequately alleged that he is at risk of developing CTE. In the Master
Administrative Class Action Complaint, one of the operative pleadings for this MDL, Wooden
alleges he “is at increased risk of latent brain injuries caused by [] repeated traumatic head
impacts,” which, as Objectors point out, include CTE. See Master Administrative Class Action
37
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Complaint ¶ 7; Morey Obj. at 21 (alleging “CTE . . . is associated with repetitive mild traumatic
brain injury” (internal quotation marks omitted)). Moreover, as Subclass Representative,
Wooden authorized the filing of the Class Action Complaint, which alleges that Retired Players
are at risk for developing “mood swings, personality changes, and the debilitating and latent
disease known as CTE.” Class Action Complaint ¶ 61; see also Wooden Aff. ¶ 6.
A subclass of CTE sufferers is both unnecessary and poses a serious practical problem. It is
impossible to have a Class Representative who has CTE because, as Objectors concede, CTE can
only be diagnosed after death. See, e.g., Morey Obj. at 26; Chelsey Obj. at 9; infra Section
V.A.i. Thus, the best Subclass Representative for individuals who will be diagnosed with CTE
post mortem is one who alleges exposure to the traumatic head impacts that cause CTE and who
has an incentive to negotiate for varied and generous future awards in light of the current
uncertainty in his diagnosis. In other words, the best Subclass Representative for CTE is
someone in Shawn Wooden’s position.
Finally, Objectors and Amici incorrectly allege that a variety of fundamental conflicts exist
because Retired Players receive different compensation based on their age, 29 medical history, 30
the number of seasons they played, 31 and other distinctions contained within the Settlement. 32 In
the same vein, Amici argue that inadequate representation exists because different Qualifying
Diagnoses have different maximum awards. 33 Retired Players with ALS, for example, can
receive a maximum award of $5 million, while Retired Players with Alzheimer’s Disease can
29
See Mem. of Public Citizen at 4, ECF. No. 6214-1 (alleging conflict of interest based on age offsets).
See, e.g., Morey Obj. at 32-34, ECF No. 6201 (objecting to Stroke and severe TBI offsets); Armstrong
Obj. at 17, ECF No. 6233.
31
See Armstrong Obj. at 15-16. (alleging conflict of interest based on number of eligible seasons offset).
32
Many Objectors also point to the lack of Eligible Season credit for Retired Players who played in NFL
Europe as evidence of inadequate representation. However, the Parties amended the Settlement to
address this concern, so this objection is no longer relevant. See infra Section V.C.iv.
33
See Mem. of Public Citizen at 5 (“The third set of conflicts relates to how and why the dollar figures
were assigned for each compensated disease category on the grid.”).
30
38
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only receive a maximum award of $3.5 million. Additionally, Objectors argue that many
symptoms, particularly mood and behavioral symptoms such as depression, impulsivity, or
suicidality, are not compensated. 34 They call for increased benefits under the Settlement and the
creation of additional subclasses. See, e.g., Heimburger Obj. at 8 (“Two settlement classes are
not enough for a fact-pattern this complex . . . .”).
Adequacy of representation of a class is not compromised simply because there may be
differences in the condition or treatment of different class members. “[V]aried relief among
class members with differing claims is not unusual. Such differences in settlement value do not,
without more, demonstrate conflicting or antagonistic interests within the class.” In re Pet Food
Prods. Liab. Litig., 629 F.3d 333, 346 (3d Cir. 2010) (citations omitted). Differing recovery is
“simply a reflection of the extent of the injury that certain class members incurred.” In re Ins.
Brokerage Antitrust Litig., 579 F.3d 241, 272 (3d Cir. 2009). Plaintiffs with different injuries
can coexist in a class consistent with Rule 23 and Due Process. See Warfarin, 391 F.3d at 532
(upholding class certification of “a single class including several types of injured plaintiffs”).
In this case, differing levels of compensation in the Settlement reflect the underlying strength
of Class Members’ claims. See Pet Food, 629 F.3d at 347 (affirming district court’s conclusion
that differing awards to class members “reflect the relative value of the different claims,” not
“divergent interests between the allocation groups”); Petrovic v. Amoco Oil Co., 200 F.3d 1140,
34
See, e.g., Heimburger Obj. at 10, ECF No. 6230 (noting conflict because of “cognitive injur[ies] . . . not
compensated by the [S]ettlement”); Duerson Obj. at 20-21, 25, ECF No. 6241 (noting lack of
compensation for “sensitivity to noise, visual impairment, chronic pain, chronic headaches, incessant
ringing in ears, attention disorders, trouble sleeping, aggression, agitation, impulsivity, suicidal thoughts
and difficulty regulating, expressing and controlling complex emotions,” and epilepsy); Armstrong Obj.
at 10-12 (listing pituitary hormonal dysfunction, atherosclerosis, fatigue, decreased muscle mass and
weakness, mood abnormalities, epilepsy, vestibular (balance) disturbances, anosmia, ageusia, and other
“physical, neurological and neurobehavioral consequences” that are “missing from the list of [Q]ualifying
[D]iagnoses in the [Settlement]”); Chelsey Obj. at 5, ECF No. 6242 (noting lack of compensation for
“chronic headaches, depression, mood disorders, sleep dysfunction,” and other symptoms).
39
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1146 (8th Cir. 1999) (“If the objectors mean . . . that a conflict of interest requiring subdivision is
created when some class members receive more than other class members in a settlement, we
think that the argument is untenable.”).
The factual basis for the distinctions among Class Members will be addressed in detail during
the Rule 23(e) analysis because Objectors’ challenges to the fairness of the Settlement overlap
with their challenges to adequacy of representation. 35 A brief summary of the justifications for
distinctions made between Class Members follows.
The different maximum awards that Class Members receive for different Qualifying
Diagnoses reflect the severity of the injury and symptoms suffered by each Retired Player, and
do not indicate inadequate representation. See Diet Drugs, 2000 WL 1222042, at *21-22
(approving personal injury class settlement providing a range of monetary awards based on
severity of injury).
The offset for Retired Players with fewer than five Eligible Seasons is a reasonable proxy for
Retired Players’ exposure to repetitive head trauma in the NFL. Retired Players with brief
careers endured fewer hits, making it less likely that NFL Football caused their impairments.
Research supports the claim that repeated head trauma has an association with the Qualifying
Diagnoses.
The Stroke, severe TBI, and age offsets all represent scientifically documented risk factors
for the Qualifying Diagnoses. Each is strongly associated with neurocognitive illness. Older
Retired Players, as well as Retired Players who suffered from Stroke or severe TBI outside of
NFL Football, would find it more difficult to prove causation if they litigated their claims,
justifying a smaller award. See In re Phenylpropanolamine (PPA) Prods. Liab. Litig., 227
35
For a discussion of the Settlement’s offsets, see infra Section V.C. For a discussion of the differences
in monetary awards, and which conditions are compensated, see infra Section V.B.ii. For a discussion of
CTE, see infra Section V.A.
40
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F.R.D. 553, 562 (W.D. Wash. 2004) (“[D]isparate treatment of claims is obviously necessary if
claims are to be valued . . . . Placing a lower value on claims that would have been barred by a
defense . . . is hardly evidence of a conflict.”).
Finally, the Settlement’s failure to compensate every alleged symptom related to concussive
hits is not fatal to the adequacy of representation requirement. Because Wooden does not yet
know which symptoms he will contract, he had an incentive to ensure that the Settlement
compensated as many symptoms as possible. Additionally, the decision to exclude mood and
behavioral symptoms is reasonable because Retired Players typically have many other risk
factors for these symptoms, such as exposure to major lifestyle changes, a history of drug or
alcohol abuse, and a high Body Mass Index (“BMI”).
To address the factual distinctions between Class Members, Objectors suggest the creation of
a number of additional subclasses. A proliferation of subclasses to address each difference
between Class Members, however, would not leave Class Members better off. “‘[I]f subclassing
is required for each material legal or economic difference that distinguishes class members, the
Balkanization of the class action is threatened.’” In re Cendant Corp. Sec. Litig., 404 F.3d 173,
202 (3d Cir. 2005) (alteration in original) (quoting “leading expert” John C. Coffee Jr., Class
Action Accountability: Reconciling Exit, Voice, and Loyalty in Representative Litigation, 100
Colum. L. Rev. 370, 398 (2000)). The result, “a class action containing a multitude of
subclasses[,] loses many of the benefits of the class action format.” Id.
Objections related to the symptoms that the Settlement fails to compensate are a perfect
example of the risks involved in creating additional subclasses to address each difference.
Several Objectors claim that there is inadequate representation because the Settlement fails to
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compensate dozens of symptoms allegedly associated with repeated concussions. 36 They assert
that because Class Representative Kevin Turner only has ALS, he cannot adequately represent
individuals with different symptoms. See Morey Obj. at 27; Miller Obj. at 3; Mem. of Public
Citizen at 3. Requiring independent representation to address each of these symptoms likely
would not have increased the total recovery of Class Members. Instead, negotiations probably
would have ground to a halt. Moreover, Shawn Wooden, Class Representative for Subclass 1,
already represents all Class Members because he does not know which, if any, condition he will
develop. Thus, he has an interest in ensuring that the Settlement compensates as many
conditions and symptoms as possible, and provides Class Members with the highest possible
maximum award for each Qualifying Diagnosis.
In conclusion, Class Counsel and Class Representatives adequately represented absent Class
Members. There are no fundamental conflicts of interest between Class Representatives and the
Class. The adequacy of representation requirement is satisfied.
E.
Predominance
Under Rule 23(b)(3), an opt-out class may be maintained if “the court finds that the questions
of law or fact common to class members predominate over any questions affecting only
individual members.” Fed. R. Civ. P. 23(b)(3). Predominance “tests whether proposed classes
are sufficiently cohesive to warrant adjudication by representation,” Amchem, 521 U.S. at 623, to
determine whether the proposed class “‘would achieve economies of time, effort, and expense.’”
Id. at 615 (quoting Fed R. Civ. P. 23(b)(3) advisory committee’s notes (1966 amendments)).
The predominance inquiry is a more stringent version of the commonality analysis; common
questions must drive the litigation. See Danvers Motor Co. v. Ford Motor Co., 543 F.3d 141,
148 (3d Cir. 2008) (“[T]he commonality requirement is subsumed by the predominance
36
See supra note 34.
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requirement.” (internal quotation marks omitted)); Warfarin, 391 F.3d at 528 (noting the
predominance requirement to be “far more demanding” than the commonality requirement).
“[T]he focus of the predominance inquiry is on whether the defendant’s conduct was
common as to all of the class members, and whether all of the class members were harmed by
the defendant’s conduct.” Sullivan, 667 F.3d at 298. A common scheme generates predominant
legal and factual questions. See Community Bank, 418 F.3d at 309 (“[T]he record below
supports . . . a finding of predominance. All plaintiffs’ claims arise from the same alleged
fraudulent scheme.”); Warfarin, 391 F.3d at 528 (upholding certification where “plaintiffs have
alleged that DuPont engaged in a broad-based campaign” (emphasis added)); Prudential, 148
F.3d at 314-15 (holding fraudulent sales practices by the defendant sufficient for common issues
to predominate despite existence of individual questions of reliance for each investor).
Central to this case are factual questions regarding the NFL Parties’ knowledge and conduct.
Class Members’ negligence claims depend on establishing that the NFL Parties knew of the
dangers of concussive hits, yet failed to modify the rules of NFL Football to mitigate them, or
even to warn Retired Players that they were risking serious cognitive injury by continuing to
play. Class Members’ fraud claims suggest a similarly far-reaching scheme, alleging that the
NFL Parties’ MTBI Committee repeatedly obfuscated the link between football play and head
trauma. See Prudential, 148 F.3d at 314-15 (affirming district court’s finding of predominance
where case “involve[ed] a common scheme to defraud millions of life insurance policy holders”).
Importantly, the NFL Parties’ alleged conduct injured Class Members in the same way:
Retired Players all returned to play prematurely after head injuries and continued to experience
concussive and sub-concussive hits. Predominance exists even though these hits resulted in
different symptoms with different damages. The calculation of damages on an individual basis
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does not prevent certification. 37 See Insurance Brokerage, 579 F.3d at 269 (3d Cir. 2009)
(“[W]e are satisfied that . . . the fact of damages [] is susceptible to common proof, even if the
amount of damage that each plaintiff suffered could not be established by common proof.”); GM
Trucks, 55 F.3d at 817 (“Because separate proceedings can, if necessary, be held on
individualized issues such as damages or reliance, such individual questions do not ordinarily
preclude the use of the class action device.”).
Additionally, the NFL Parties’ alleged conduct raises common and dispositive scientific
questions. Each Class Member would have to confront the same causation issues in proving that
repeated concussive blows give rise to long-term neurological damage.
Resolution of these issues would “so advance the litigation that they may fairly be said to
predominate,” In re Sch. Asbestos Litig., 789 F.2d 996, 1010 (3d Cir. 1986), because the “same
set of core operative facts and theory of proximate cause apply to each member of the class.” In
re Pet Food Prods. Liab. Litig., No. 07-2867, 2008 WL 4937632, at *6 (D.N.J. Nov. 18, 2008),
aff’d in part, vacated in part, remanded, 629 F.3d 333 (3d Cir. 2010).
This case is far more cohesive than the “sprawling” class at issue in Amchem. There, the
Supreme Court found a settlement class of asbestos victims overbroad because class members
were exposed to the different asbestos products of over twenty companies during a variety of
37
The Supreme Court’s decision in Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013), does not
undermine this conclusion. “Comcast . . . did not hold that proponents of class certification must rely
upon a classwide damages model to demonstrate predominance.” Roach v. T.L. Cannon Corp., 778 F.3d
401, 407 (2d Cir. 2015). All of the Circuit Courts that have had an opportunity to apply Comcast have
reached this same conclusion. Id. at 408 (citing opinions of the First, Fifth, Sixth, Seventh, Ninth, and
Tenth Circuits). Rather, “Comcast held that a model for determining classwide damages relied upon to
certify a class under Rule 23(b)(3) must actually measure damages that result from the class’s asserted
theory of injury . . . .” Id. at 407. Thus, in order to prove predominance, “a plaintiff cannot rely on
challenged expert testimony, when critical to class certification, to demonstrate conformity with Rule 23
unless the plaintiff also demonstrates, and the trial court finds, that the expert testimony satisfies the
standard set out in Daubert.” In re Blood Reagents Antitrust Litig., --- F.3d---, No. 12-4067, 2015 WL
1543101, at *3 (3d Cir. Apr. 8, 2015) (discussing Comcast). Here, Class Plaintiffs seek to certify a class
for settlement purposes, and the NFL Parties do not challenge any expert testimony relied on to establish
predominance. Thus, Comcast and Blood Reagents are inapposite to this case.
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different activities. See Amchem, 521 U.S. at 597, 624. Here, all injuries stem from repeated
participation in the same activity, NFL Football, an activity created and administered only by the
NFL Parties.
Further, Amchem involved thousands of plaintiffs who had little or no relationship with each
other. Many did not even know definitively whether they had been exposed to asbestos. See 521
U.S. at 628. By contrast, Retired Players are of course all aware of the fact that they played in
the NFL. Indeed, Retired Players and their families think of themselves as a discrete group, and
many continue to interact with one another because they all shared the common experience of
professional football. See, e.g., Am. Fairness Hr’g Tr. at 185:14-18 (one Objector noting that she
was “raised in the NFL” because she spent a lot of time around Retired Players and that former
players called themselves her “brothers”). Class Members in this case self-associate in a way
that those in a typical mass tort, involving, for example, purchasers of a car with a defective part,
simply do not. Cf. Dewey, 681 F.3d at 170. As a result, the Class is far more cohesive.
Additionally, settlement itself allows common issues to predominate. “[C]ourts are more
inclined to find the predominance test met in the settlement context,” Sullivan, 667 F.3d at 304
n.29 (3d Cir. 2011) (internal quotation marks omitted), because the “individual issues which are
normally present in personal injury litigation become irrelevant, allowing the common issues to
predominate.” Diet Drugs, 2000 WL 1222042, at *43; see also Newberg on Class Actions
§ 4:63 (5th ed.) (“[I]n settlement class actions . . . predominance . . . recedes in importance . . . .
Thus, many courts have held that individualized issues may bar certification for adjudication
because of predominance-related manageability concerns but that these same problems do not
bar certification for settlement.”).
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Objectors argue that “courts simply do not permit the certification of personal-injury
classes.” Heimburger Obj. at 15. This is incorrect. Even Amchem, the case on which they
primarily rely, states that “the text of [Rule 23] does not categorically exclude mass tort cases
from class certification, and District Courts, since the late 1970’s, have been certifying such
cases in increasing number.” 521 U.S. at 625. Indeed, the trend has been particularly strong
where, as here, “there are no unknown future claimants and the absent class members are readily
identifiable and can be given notice and an opportunity to opt out.” 38 Manual for Complex
Litigation § 22.72 (4th ed.); see, e.g., Diet Drugs, 2000 WL 1222042, at *68 (certifying personal
injury settlement class for individuals who received harmful drug prescriptions); In re Diet
Drugs (Phentermine/Fenfluramine/Dexfenfluramine) Prods. Liab. Litig., 369 F.3d 293, 317 (3d
Cir. 2004) (describing settlement as a “landmark effort to reconcile the rights of millions of
individual plaintiffs with the efficiencies and fairness of a class-based settlement”); Deepwater
Horizon Clean-Up Settlement, 295 F.R.D. at 161 (certifying a Rule 23(b)(3) settlement class for
personal injuries resulting from oil spill); In re Serzone Prods. Liab. Litig., 231 F.R.D. 221, 223
(S.D. W. Va. 2005) (certifying a Rule 23(b)(3) settlement class of “users and purchasers” of
pharmaceutical products alleging a “range of physical and economic injuries”); PPA Prods. Liab.
Litig., 227 F.R.D. at 555-56 (certifying a Rule 23(b)(3) class and approving settlement of claims
alleging “increased risk of hemorrhagic stroke” and “a variety of injuries” caused by defective
products).
The predominance requirement is satisfied.
38
See infra Section III.B, discussing how Class Members are easily identifiable by virtue of having
played NFL Football, a well-catalogued and documented event. Because the Settlement covers only
Retired Players (and their Representative and Derivative Claimants), the Class is a closed set and the
Court and the Parties have an almost complete list of possible claimants. See Class Counsel’s Actuarial
Materials at 13-14 (concluding that because “extensive historical data are available from a variety of
authoritative sources . . . the entire population of former NFL players,” including the deceased, have been
identified).
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F.
Superiority
Rule 23(b)(3)’s superiority requirement “asks the court to balance, in terms of fairness and
efficiency, the merits of a class action against those alternative available methods of
adjudication.” Warfarin, 391 F.3d at 533-34 (internal quotation marks omitted).
Superiority is satisfied because the Settlement avoids thousands of duplicative lawsuits and
enables fast processing of a multitude of claims. The Third Circuit recognizes that
“concentrating the litigation of [] claims in a single superior action” is preferable to “numerous
individual suits brought by claimants.” Sullivan, 667 F.3d at 311-12 (internal quotation marks
omitted).
The Class consists of over 20,000 Retired Players, as well as their Representative and
Derivative Claimants. See supra Section I.E. Consolidated in this MDL are over 300 lawsuits
representing the claims of about 5,000 Retired Players. In the absence of aggregate resolution,
more lawsuits will surely follow. See Prudential, 148 F.3d at 316 (finding superiority satisfied
because of the “sheer volume” of individual claims). These cases could result in decades of
litigation at significant expense. See Am. Fairness Hr’g Tr. at 51:25-52:2 (Counsel for the NFL
Parties noting: “The [NFL Parties] could have fought these claims, successfully fought these
claims in [his] view for many, many years.”). Compensation would be uncertain, and many
Retired Players with progressive neurodegenerative conditions would continue to suffer while
awaiting relief.
Rule 23(b)(3) specifically directs a court to consider the “desirability . . . of concentrating the
litigation of the claims in the particular forum,” and “class members’ interests in individually
controlling the prosecution or defense of separate actions.” Fed R. Civ. P. 23(b)(3). 39
39
Rule 23 also requires consideration of “the extent and nature of any litigation concerning the
controversy already begun” and “the likely difficulties in managing a class action.” Fed. R. Civ. P.
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Because I currently oversee the MDL involving these cases and have coordinated pretrial
proceedings, there is a unique advantage to class resolution by this Court. See Diet Drugs, 2000
WL 1222042, at *55 (noting that “from the perspective of judicial efficiency, there is a strong
desirability in implementing a settlement in this MDL [] transferee court, the jurisdiction with
the most individual and class actions pending”).
Finally, Class Members have not demonstrated that they have an interest in individually
resolving their claims against the NFL Parties. Despite extensive notice and generous
opportunity to opt out, only one percent of the Class elected to pursue separate litigation. See
supra Section I.E; infra Section III; see also Warfarin, 391 F.3d at 534 (finding superiority even
though some plaintiffs had “significant individual claims” because they had the opportunity to
opt out); Community Bank, 418 F.3d at 309 (same). Thus, the superiority requirement is
satisfied.
In conclusion, I will certify the Class because the requirements of Rule 23(a) and
23(b)(3) are met.
23(b)(3). The Advisory Committee notes to Rule 23 indicate that the extent and nature of ongoing
litigation ties into class members’ interests in individually controlling their own claims. See Newberg on
Class Actions § 4:70 (5th ed.). Additionally, because this is a settlement, there are no manageability
concerns. See Amchem, 521 U.S. at 620.
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III. Notice 40
Because Class Counsel seek simultaneous certification of the proposed Class and approval of
the proposed Settlement, notice must satisfy both the requirements of Rule 23(c)(2)(B) and Rule
23(e)(1). See Carlough v. Amchem Prods., Inc., 158 F.R.D. 314, 324 (E.D. Pa. 1993).
For a class certified under Rule 23(b)(3), “the court must direct to class members the best
notice that is practicable under the circumstances, including individual notice to all members
who can be identified through reasonable effort.” Fed R. Civ. P. 23(c)(2)(B). Rule 23(c)(2)(B)
provides:
The notice must clearly and concisely state in plain, easily understood
language:
(i) the nature of the action; (ii) the definition of the class certified; (iii) the
class claims, issues, or defenses; (iv) that a class member may enter an
appearance through an attorney if the member so desires; (v) that the court
will exclude from the class any member who requests exclusion; (vi) the
time and manner for requesting exclusion; and (vii) the binding effect of a
class judgment on members under Rule 23(c)(3).
Id.
Rule 23(e)(1) of the Federal Rules of Civil Procedure requires a district court to “direct
notice in a reasonable manner to all class members who would be bound by the proposal.” Fed.
R. Civ. P. 23(e)(1). “Rule 23(e) notice is designed to summarize the litigation and the settlement
and to apprise class members of the right and opportunity to inspect the complete settlement
40
Within ten days of Class Counsel moving for preliminary approval of the Settlement, the NFL Parties
sent copies of the Class Action Complaint and the proposed Settlement, as well as a list of Class Members
organized by state residence to the United States Attorney General, and to the Attorney General for each
state, the District of Columbia, and the territories. See ECF No. 6501 at 2-3. Within ten days of the
Preliminary Approval Date, the NFL Parties sent these same officials copies of this Court’s Preliminary
Approval Order and Memorandum, copies of the Long-Form Notice and Summary Notice, and notice of
the date, time, and location of the Fairness Hearing. See id. These mailings satisfy the notice
requirements of the Class Action Fairness Act. See 28 U.S.C. § 1715(b). Because final approval of the
Settlement will occur more than 90 days after the relevant Attorneys General received these materials, the
timing requirements of the Class Action Fairness Act have also been satisfied. See id. § 1715(d).
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documents, papers, and pleadings filed in the litigation.” Prudential, 148 F.3d at 327 (internal
quotation marks omitted).
In addition to the requirements of Rule 23, the Due Process Clause of the Fourteenth
Amendment requires that notice be “reasonably calculated, under all the circumstances, to
apprise interested parties of the pendency of the action and afford them an opportunity to present
their objections.” Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950).
The content of the Settlement Class Notice and the methods chosen to disperse it satisfy all
three requirements.
A.
Content of Class Notice
The content of the Long-Form Notice and Summary Notice satisfy the requirements of Rule
23 and due process. See Long-Form Notice, ECF No. 6093-1; Summary Notice, ECF No. 60932. Each was written in plain and straightforward language. The Long-Form Notice apprised all
Class Members of: the nature of the action; the definition of the Class; the Class claims and
issues; the opportunity to enter an appearance through an attorney at the Fairness Hearing; the
opportunity to opt out of the Settlement; and the binding effect of a class judgment on Class
Members under Rule 23(c)(3)(B). The Long-Form Notice also properly disclosed the date, time,
and location of the Fairness Hearing.
Objectors contend that the notice materials “misleads [C]lass [M]embers about the basic
compromise of the settlement” because they failed to inform Class Members that there is no
compensation for Death with CTE for Retired Players who died after the Preliminary Approval
Date. 41 Morey Obj. at 38; see also Miller Obj. at 7-8; Alexander Obj. at 2-3, ECF No. 6237;
41
Before the parties amended the Settlement, the cutoff date for compensation for Death with CTE was
the Preliminary Approval Date, July 7, 2014. See Settlement as of June 25, 2014, ECF No. 6073-2
§ 6.3(f). The cutoff date is now the Final Approval Date. See Settlement § 6.3(f). Because amendment
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Duerson Obj. at 29-30 (calling notice “misleading, at best—blatantly wrong, at worst”).
Objectors first argue that the Summary Notice is misleading because it neglects to mention the
cutoff date for Death with CTE claims. See Morey Obj. at 38-40. The Summary Notice states
that only “certain cases of chronic traumatic encephalopathy” receive Monetary Awards.
Summary Notice at 1 (emphasis added). In context, this is more than adequate: none of the other
Qualifying Diagnoses listed contain any type of limiting language. Id. Moreover, the purpose of
the one-page Summary Notice is not to provide exhaustive information, but to alert Class
Members to the suit and direct them to more detailed information. See Varacallo v. Mass Mut.
Life Ins. Co., 226 F.R.D. 207, 227 (D.N.J. 2005) (explaining that settlement notice is “designed
only to be a summary of the litigation and the settlement and should not be unduly specific”
(internal quotation marks omitted)). The Summary Notice does exactly that, with a large banner
at the bottom of the page listing both a toll-free phone number and the URL of the Settlement
Website.
Objectors unsuccessfully argue that the Long-Form Notice is also misleading. Objectors
concede that that the Long-Form Notice states that compensation is limited to “diagnoses of
Death with CTE prior to July 7, 2014.” 42 Long-Form Notice at 6. Yet they maintain that this
statement is misleading because it “does not outright disclose” that those who die after that date
will not be compensated. Morey Obj. at 41. This is not enough to confuse a careful reader. See
In re Katrina Canal Breaches Litig., 628 F.3d 185, 199 (5th Cir. 2010) (“The choice of words,
while less than one hundred percent accurate, does not render the notice so clearly misleading . .
. .”); In re Nissan Motor Corp. Antitrust Litig., 552 F.2d 1088, 1104-05 (5th Cir. 1977) (noting
notice need not “[be] perfectly correct in its form,” and instead that “[t]he standard [] is that the
of the Settlement occurred after the Fairness Hearing, the Settlement Class Notice, and the objections
discussing it, refer to the Preliminary Approval Date.
42
See supra note 41.
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notice . . . must contain information that a reasonable person would consider to be material in
making an informed, intelligent decision” about whether to opt out); Rodgers v. U.S. Steel Corp.,
70 F.R.D. 639, 647 (W.D. Pa. 1976) (holding that notice is adequate when it “enable[s]
reasonable and competent individuals to make an informed choice” and there is “no reason to
believe . . . that the language of the tender notice and release forms must be reduced to a pablum
in order for [class members] to digest its import”).
Objectors further argue that the Long-Form Notice is confusing because the term “Death
with CTE” appears several times without the accompanying cutoff date. See Morey Obj. at 4344. Both the Summary Notice and the Long-Form Notice indicate that only “certain” cases of
CTE are covered. See Summary Notice at 1; Long-Form Notice at 1.
Even if the Long-Form Notice were unclear, it repeatedly instructs readers to sources that can
answer their questions. Like the Summary Notice, the Long-Form Notice contains a banner at
the bottom of each page directing those with “Questions?” to call a toll-free support number or
visit the Settlement Website. Warnings that the Long-Form Notice is only a summary and that
readers should look to the Settlement for specific details appear five times in the Long-Form
Notice. 43 See Long-Form Notice at 2, 6, 7, 15, 19 (“This Notice is only a summary of the
Settlement Agreement and your rights. You are encouraged to carefully review the complete
Settlement Agreement [on the Settlement Website].”).
Finally, Objectors argue that Co-Lead Class Counsel made misleading statements during
interviews, news articles, and other media outreach. See Morey Obj. at 48-52. Any allegedly
43
Amici contend that the notice materials are inadequate because they insufficiently disclose that
Monetary Awards are subject to reduction because of applicable Medicare and Medicaid liens. See Mem.
of Public Citizen at 11. Yet they concede that the Long-Form Notice discusses possible reductions based
on “[a]ny legally enforceable liens on the award.” See Long-Form Notice at 11, ECF No. 6093-1.
Because the Notice directly alerts Class Members of this possibility, and refers them to the Settlement
where this topic is discussed in detail, the argument is meritless.
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misleading statements made by Co-Lead Class Counsel are irrelevant, however, because only the
Summary Notice and the Long-Form Notice are pertinent to the analysis of Rule 23 and due
process. See Newberg on Class Actions § 16:20 (4th ed.) (“In reviewing the class notice to
determine whether it satisfies [the notice] requirements, the court must look solely to the
language of the notices and the manner of their distribution.” (emphasis added)); Adams v. S.
Farm Bureau Life Ins. Co., 493 F.3d 1276, 1286 (11th Cir. 2007) (same).
B.
Distribution of Class Notice
No objection challenges the efforts undertaken to distribute notice. Class Counsel conducted
a thorough campaign across several fronts that successfully apprised the Class of the suit. They
retained three separate firms—Kinsella Media LLC (“Kinsella Media”), BrownGreer PLC
(“BrownGreer”), and Heffler Claims Group (“Heffler”)—to design, implement, and distribute
Settlement Class Notice. See Nichols v. SmithKline Beecham Corp., No. 00-6222, 2005 WL
950616, at *10 (E.D. Pa. Apr. 22, 2005) (praising use of a professional firm experienced in class
action notice).
First, BrownGreer constructed a master list of all readily identifiable Class Members and
their addresses by aggregating 33 datasets of information from the NFL Parties, individual
Member Clubs, sports statistics databases, and prior class actions involving Retired Players. See
Decl. of Katherine Kinsella ¶ 7, ECF No. 6423-12 (“Kinsella Decl.”); Decl. of Orran L. Brown
¶¶ 8-14, 25-26, ECF No. 6423-5 (“Brown Decl.”). Kinsella Media used that master list to send a
cover letter and a copy of the Long-Form Notice through first-class mail to the over 30,000
addresses identified. See Kinsella Decl. ¶¶ 8-10; Zimmer Paper Prods., Inc. v. Berger &
Montague, P.C., 758 F.2d 86, 90 (3d Cir. 1985) (“It is well settled that in the usual situation first-
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class mail and publication in the press fully satisfy the notice requirements of both Fed. R. Civ.
P. 23 and the [D]ue [P]rocess [C]lause.”).
Second, Kinsella Media supplemented the direct notice with extensive publication notice.
Kinsella Media placed advertisements in major publications, including full-page advertisements
in Ebony, People, Sports Illustrated, and Time, and thirty-second television commercials on
ABC, CBS, CNN, and others. See Kinsella Decl. ¶¶ 15-18, 21; In re CertainTeed Corp. Roofing
Shingle Prods. Liab. Litig., 269 F.R.D. 468, 481-82 (E.D. Pa. 2010) (approving a class action
settlement with a notice program including ads placed on four national cable networks); In re
Aetna Inc. Sec. Litig., MDL No. 1219, 2001 WL 20928, at *5 (E.D. Pa. Jan. 4, 2001) (approving
notice program that included first-class mail and publication notice in the Wall Street Journal).
Internet ads were also placed on popular sites such as CNN, Facebook, Weather.com, and
Yahoo!. See Kinsella Decl. ¶¶ 19-20.
Third, BrownGreer established a Settlement Website containing links to the Long-Form
Notice and the Settlement and providing answers to frequently asked questions. Brown Decl.
¶¶ 37, 39-41. Fourth, Heffler established and maintained a dedicated toll-free number that
provided the opportunity to speak with a live operator to answer any questions about the case.
See Decl. of Edward Radetich ¶¶ 3-10, ECF No. 6423-13 (“Radetich Decl.”); Carlough, 158
F.R.D. at 333 (finding notice satisfied in personal injury tort case where advertisements “urge[d]
class members to call the toll-free number to obtain the complete individual notice materials”).
Finally, independent of any efforts of Class Counsel, national broadcasts and major news
programs covered the case extensively. Over 900 articles have been published since the Parties
first announced their initial settlement on August 29, 2013. Seeger Decl. Attachment. This
“unsolicited news coverage” supplemented “the combination of individual and publication notice
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. . . [and] greatly increased the possibility” that Class Members were informed of the litigation.
Prudential, 148 F.3d 283, 327.
Within three weeks of the Preliminary Approval Date, the Settlement Website was launched,
the toll-free number became available, and direct notice was mailed. See Kinsella Decl. ¶¶ 8-10,
27; Brown Decl. ¶ 37; Radetich Decl. ¶¶ 4-8. As a result, Class Members had approximately 90
days to determine whether to object or opt out. Courts routinely hold that between 30 and 60
days is a sufficient amount of time for class members to evaluate the merits of a settlement. See
In re Prudential Ins. Co. of Am. Sales Practices Litig., 962 F. Supp. 450, 562 (D.N.J. 1997)
(citing cases). Kinsella Media estimates that these programs reached 90% of Class Members.
See Kinsella Decl. ¶ 48; see also In re Heartland Payment Sys., Inc. Customer Data Sec. Breach
Litig., 851 F. Supp. 2d 1040, 1061 (S.D. Tex. 2012) (notice plan that expert estimated would
reach 81.4% of class was sufficient); Alberton v. Commonwealth Land Title Ins. Co., No. 063755, 2008 WL 1849774, at *3 (E.D. Pa. Apr. 25, 2008) (direct notice projected to reach 70% of
class plus publication in newspapers and internet was sufficient); Grunewald v. Kasperbauer,
235 F.R.D. 599, 609 (E.D. Pa. 2006) (direct mail to 56% of class and publication in three
newspapers and on internet sites was sufficient).
In conclusion, the Settlement Class Notice clearly described of the terms of the Settlement
and the rights of Class Members to opt out or object. Class Counsel’s notice program ensured
that these materials reached those with an interest in the litigation. The requirements of Rule 23
and due process are satisfied.
C.
Notice of Amendments to the Settlement
After the Fairness Hearing, the Parties made several amendments to the Settlement that I
proposed in consideration of some of the issues raised by Objectors. See Parties’ Joint
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Amendment. Class Members who opted out (“Opt Outs”) received adequate notice of these
changes, and notification of Class Members is not required.
The Settlement allows Opt Outs the opportunity to rejoin the Class any time before the Final
Approval Date. See Settlement § 14.2(c). After making amendments to the Settlement, Class
Counsel informed all Opt Outs by first-class mail of the revisions to the Settlement and their
right to revoke their requests to opt out. See Notice, Mar. 31, 2015, ECF No. 6500.
Because these changes improved the deal for Class Members without providing any
concessions to the NFL Parties, an additional round of notice for Class Members is unnecessary.
See Prudential, 962 F. Supp. at 473 n.10 (holding that class members “need not be informed of
the Final Enhancements to the settlement because the Proposed Settlement is only more valuable
with these changes. Plainly, class members who declined to opt out earlier, would not choose to
do so now.”); Trombley v. Bank of Am. Corp., No. 08-0456, 2013 WL 5153503, at *6 (D.R.I.
Sept. 12, 2013) (“Because the compensation provided by the Revised Settlement Agreement is
more beneficial to the class than the compensation offered by the original settlement agreement,
no additional notice nor a second hearing is necessary.”); Harris v. Graddick, 615 F. Supp. 239,
244 (M.D. Ala. 1985) (finding new notice unnecessary when “plaintiff class [was] in no way
impaired by the amendment”).
IV. Final Approval of the Settlement
A class action cannot be settled without court approval, based on a determination that the
proposed settlement is fair, reasonable, and adequate. See Prudential, 148 F.3d at 316; Fed. R.
Civ. P. 23(e)(2).
“[T]here is an overriding public interest in settling class action litigation, and it should
therefore be encouraged.” Warfarin, 391 F.3d at 535 (citing GM Trucks, 55 F.3d at 784). These
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complex actions “consume substantial judicial resources and present unusually large risks for the
litigants.” GM Trucks, 55 F.3d at 805. When evaluating a settlement, a court should be “hesitant
to undo an agreement that has resolved a hard-fought, multi-year litigation.” In re Baby Prods.
Antitrust Litig., 708 F.3d 163, 175 (3d Cir. 2013) (citing Warfarin, 391 F.3d at 535).
“Settlements are private contracts reflecting negotiated compromises. The role of a district
court is not to determine whether the settlement is the fairest possible resolution—a task
particularly ill-advised given that the likelihood of success at trial (on which all settlements are
based) can only be estimated imperfectly.” Id. at 173-74 (citation omitted). A court must
recognize that a settlement is a “yielding of the highest hopes in exchange for certainty and
resolution” and “guard against demanding too large a settlement based on its view of the merits.”
GM Trucks, 55 F.3d at 806; see also In re Imprelis Herbicide Mktg. Sales Practices & Prods.
Liab. Litig., 296 F.R.D. 351, 364 (E.D. Pa. 2013) (“[B]ecause a settlement represents the result
of a process by which opposing parties attempt to weigh and balance the factual and legal issues
that neither side chooses to risk taking to a final resolution, courts have given considerable
weight to the views of experienced counsel as to the merits of a settlement.”)
In this vein, “[a] presumption of correctness is said to attach to a class settlement reached in
arms-length negotiations between experienced, capable counsel after meaningful discovery.” In
re Linerboard Antitrust Litig., 292 F. Supp. 2d 631, 640 (E.D. Pa. 2003) (internal quotation
marks omitted); see also Warfarin, 391 F.3d at 535 (holding presumption of fairness applied
even though settlement negotiations preceded certification); In re Cendant Corp. Litig., 264 F.3d
201, 232 n.18 (3d Cir. 2001).
Despite the strong policy favoring private resolution, “the district court acts as a fiduciary
who must serve as a guardian of the rights of absent class members.” GM Trucks, 55 F.3d at 785
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(internal quotation marks omitted). This role requires special rigor “where settlement
negotiations precede class certification, and approval for settlement and certification are sought
simultaneously.” Warfarin, 391 F.3d at 534. The fiduciary obligation “is designed to ensure that
class counsel has demonstrated sustained advocacy throughout the course of the proceedings and
has protected the interests of all class members.” Prudential, 148 F.3d at 317 (internal quotation
marks omitted).
A.
The Presumption of Fairness
The Third Circuit applies “an initial presumption of fairness . . . where: ‘(1) the settlement
negotiations occurred at arm’s length; (2) there was sufficient discovery; (3) the proponents of
the settlement are experienced in similar litigation; and (4) only a small fraction of the class
objected.’” Warfarin, 391 F.3d at 535 (quoting Cendant, 264 F.3d at 232 n.18 (3d Cir. 2001)).
Each factor is satisfied.
At every stage of the proceedings, Class Counsel vigorously pursued Class Members’ rights
at arm’s length from the NFL Parties. As Judge Phillips notes, “[t]he negotiations were intense,
vigorous, and sometimes quite contentious. At all times the talks were at arm’s length and in
good faith. There was no collusion.” Phillips Supp. Decl. ¶ 4; see also Phillips Decl. ¶¶ 2, 5-7,
11; In re Cigna Corp. Sec. Litig., No. 02-8088, 2007 WL 2071898, at *3 (E.D. Pa. July 13, 2007)
(agreement presumptively fair in part because “negotiations for the settlement occurred at arm’s
length, as the parties were assisted by a retired federal district judge who . . . served as a
mediator”). The Parties tabled discussion of attorneys’ fees until after they reached an
agreement in principle, and the Settlement provides that attorneys’ fees will be paid out of a fund
that is separate from the funds available to Class Members. See Phillips Supp. Decl. ¶ 19;
Settlement § 21.1.
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As discussed more thoroughly in Section IV.B.iii, Class Counsel were aware of the strengths
and weaknesses of their case through informal discovery. Class Counsel created and maintained
a comprehensive database of claims and symptoms of thousands of individual MDL Plaintiffs.
See Seeger Decl. ¶ 20. Class Counsel also retained numerous medical experts to analyze issues
of general and specific causation. When settlement negotiations began, Class Counsel’s strategy
“reflected a sound appreciation of the scientific issues” and an “aware[ness] of mainstream
medical literature.” Phillips Supp. Decl. ¶ 8; see also In re Processed Egg Prods. Antitrust
Litig., 284 F.R.D. 249, 267 (E.D. Pa. 2012) (applying presumption in part because “although no
formal discovery was conducted . . . [class counsel] conducted informal discovery, including,
inter alia, independently investigating the merits”).
Additionally, Class Counsel have decades of experience in these matters. Co-Lead Class
Counsel, Subclass Counsel, and Class Counsel collectively have served as class counsel or as
members of leadership committees in over 170 class actions, mass torts, and complex personal
injury suits. See Seeger Decl. ¶¶ 2-4; Levin Decl. ¶ 2; Nast Decl. ¶ 2.
Finally, as discussed in greater detail in Section IV.B.ii, the Class has tacitly endorsed the
Settlement. Estimates indicate that Class Counsel reached over 90% of Class Members through
direct mail and indirect advertisements. Furthermore, major newspapers and television programs
consistently discussed the Settlement and its terms. Given this publicity, an opt-out and
objection rate of approximately 1% each reflects positively on the Settlement. See Processed
Egg Prods., 284 F.R.D. at 269 (applying presumption of fairness when 1.14% of class opted out,
noting that the opt-out rate was “virtually di minimis”).
Therefore, the presumption of fairness applies.
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B.
The Girsh Factors
In evaluating a settlement, a court must consider the factors set forth in Girsh v. Jepson:
(1) the complexity, expense and likely duration of the litigation; (2) the
reaction of the class to the settlement; (3) the stage of the proceedings and
the amount of discovery completed; (4) the risks of establishing liability;
(5) the risks of establishing damages; (6) the risks of maintaining the class
action through the trial; (7) the ability of the defendants to withstand a
greater judgment; (8) the range of reasonableness of the settlement fund in
light of the best possible recovery; (9) the range of reasonableness of the
settlement fund to a possible recovery in light of all the attendant risks of
litigation.
521 F.2d 153, 157 (3d Cir. 1975) (internal quotation marks and ellipses omitted). These factors
indicate that the Settlement is a fair, reasonable, and adequate compromise.
i. The Complexity, Expense, and Likely Duration of the Litigation
This factor captures “the probable costs, in both time and money, of continued litigation.”
GM Trucks, 55 F.3d at 812 (internal quotation marks omitted); see also Cendant, 264 F.3d at
233. The litigation attempts to resolve issues of considerable scale. Class Members allege
negligence and a fraudulent scheme dating back a half-century. The claims of over 20,000
Retired Players are at issue. See Prudential, 148 F.3d at 318 (noting “sheer magnitude of the
proposed settlement class”). The sheer size of the Class supports settlement.
The case implicates complex scientific and medical issues not yet comprehensively studied.
As discussed in greater detail in Section IV.B.iv, the association between repeated concussive
trauma and long-term neurocognitive impairment remains unclear. See Decl. of Dr. Kristine
Yaffe ¶¶ 13, 22, ECF No. 6422-36 (“Dr. Yaffe Decl.”) (noting “emerging consensus,” but
stressing that “the medical and scientific communities have not yet determined that mild
repetitive TBI causes any of the Qualifying Diagnoses”). Even if general causation could be
proven, an even more daunting question of specific causation would remain.
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Absent settlement, Class Members would have to conclusively establish what and when the
NFL Parties knew about the risks of head injuries. This would require voluminous production
from the NFL Parties, and time to sort through decades of records. Non-party discovery would
be inevitable; Class Members would seek documents from individual NFL Member Clubs. To
fully investigate scientific causation, the Parties would have to continue to retain costly expert
witnesses. See Prudential, 148 F.3d at 318 (noting necessity of “several expert witnesses”
supported factor). In turn, the NFL Parties would seek discovery about the medical history of
20,000 Retired Players. See GM Trucks, 55 F.3d at 812 (concluding that the need for class
discovery by the defendants “into the background of the six million vehicles owned by class
members” pointed towards settlement).
Finally, continued motion practice in this MDL would be burdensome, expensive, and time
consuming. For example, the Parties likely would seek to exclude each other’s scientific
evidence, and a battle of the experts would ensue.
All the while, Retired Players with Qualifying Diagnoses would continue to suffer while
awaiting uncertain relief. See Prudential, 148 F.3d at 318 (noting “trial . . . would be a long,
arduous process requiring great expenditures of time and money” and that “such a massive
undertaking clearly counsels in favor of settlement”); Warfarin, 391 F.3d at 536. Class
Representative Kevin Turner, who suffers from ALS, is a sobering example. Between the
Preliminary Approval Date and the Fairness Hearing, Turner’s symptoms worsened to the point
that he was unable to attend the Fairness Hearing because he can no longer breathe or eat without
assistance. See Am. Fairness Hr’g Tr. at 5:22-6:4 (noting Kevin Turner “has deteriorated to the
point where he is now on a breathing—he needs assistance with his breathing and he’s got a
feeding tube . . . .”).
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The complexity, expense, and likely duration of the litigation weigh in favor of approving the
Settlement.
ii. The Reaction of the Class to the Settlement
This factor “attempts to gauge whether members of the class support the settlement” and to
use their opinions as a proxy for the settlement’s fairness. Prudential, 148 F.3d at 318. Courts
look “to the number and vociferousness of the objectors,” while “generally assum[ing] that
silence constitutes tacit consent to the agreement.” GM Trucks, 55 F.3d at 812 (internal
quotation marks omitted). The Class has tacitly consented to this Settlement.
“[A] combination of observations about the practical realities of class actions has led a
number of courts to be considerably more cautious about inferring support from a small number
of objectors to a sophisticated settlement.” Id. In this case, however, so many Class Members
were intimately aware of the Settlement that an inference of support from silence is sound. Class
Counsel provided an estimated 90% of Class Members with notice through direct mail and a
variety of secondary publications. See supra Section III.B. Substantial and sustained media
coverage notified the entire country, not just Class Members, of the Settlement’s terms. See
supra Section III.B.
Class Counsel’s records confirm Class Members’ active engagement. Since the Preliminary
Approval Date, the Settlement Website has received 62,989 unique visitors, and the Settlement’s
toll-free hotline received 4,544 calls. Brown Decl. ¶ 43; Kinsella Decl. ¶ 28. 2,302 callers
requested to speak to a live operator, and received 140 hours of personal support. Radetich Decl.
¶ 9. 3,175 website visitors and 1,800 callers signed up to receive additional information about
the Settlement. Kinsella Decl. ¶ 26; Brown Decl. ¶ 43; Radetich Decl. ¶ 10.
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Despite this, only approximately 1% of Class Members filed objections, and only
approximately 1% of Class Members opted out. 44 These figures are especially impressive
considering that about 5,000 Retired Players are currently represented by counsel in this MDL,
and could easily have objected or opted out to pursue individual suits. For comparison, at least
eight times as many Class Members registered to receive additional information about the
Settlement as expressed formal dissatisfaction with its terms.
The reaction of the Class to the Settlement weighs in favor of approving the Settlement.
See, e.g., Prudential, 148 F.3d at 318 (affirming district court’s conclusion that class reaction
was favorable when 19,000 out of 8,000,000 class members opted out and 300 objected);
Stoetzner v. U.S. Steel Corp., 897 F.2d 115, 118-19 (3d Cir. 1990) (concluding that “response of
the class members . . . strongly favor[ed] settlement” where roughly 10% of 281 class members
objected); Processed Egg Prods., 284 F.R.D. 249, 269 (E.D. Pa. 2012) (approving settlement
with no objections and an opt-out rate of 1.14% from an original notice to 13,200 class members,
which was “virtually de minimis”).
iii. The Stage of the Proceedings and the Amount of Discovery Completed
This factor “captures the degree of case development that class counsel [had] accomplished
prior to settlement. Through this lens, courts can determine whether counsel had an adequate
appreciation of the merits of the case before negotiating.” GM Trucks, 55 F.3d at 813. The aim
is to avoid settlement “at too incipient a stage of the proceedings.” Id. at 810; see also In re Oil
Spill by Oil Rig Deepwater Horizon, 910 F. Supp. 2d 891, 932 (E.D. La. 2012) aff’d sub nom. In
re Deepwater Horizon, 739 F.3d 790 (5th Cir. 2014) (“Deepwater Horizon Economic Loss
44
The Morey Objectors point out that some Retired Players criticized the Settlement in the media. See
Morey Obj. at 59-60. Tellingly, however, only one of the seven Retired Players identified by the Morey
Objectors opted out, and none of them objected. See Eighth Opt-Out Report of Claims Administrator
Exs. 1-2, ECF Nos. 6507-1, 6507-2; NFL Parties’ Mem. of Law in Supp. of Final Approval App. A.
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Settlement”) (“Thus, the question is not whether the parties have completed a particular amount
of discovery, but whether the parties have obtained sufficient information about the strengths and
weaknesses of their respective cases to make a reasoned judgment about the desirability of
settling the case on the terms proposed . . . .” (internal quotation marks omitted)).
“The Third Circuit Court of Appeals has recognized that, even if a settlement occurs in an
early stage of litigation, there are means for class counsel to apprise themselves of the merits of
the litigation . . . .” Processed Egg Prods., 284 F.R.D. at 270. Formal discovery is not necessary
where other means of obtaining information exist. In re Corrugated Container Antitrust Litig.,
643 F.2d 195, 211 (5th Cir. 1981) (“[W]e are not compelled to hold that formal discovery was a
necessary ticket to the bargaining table.”). Despite this Court’s stay of discovery, Class Counsel
adequately evaluated the merits of two dispositive issues in the case: preemption and scientific
causation. See Prudential, 148 F.3d at 319 (finding no error with the district court’s conclusion
that “use of informal discovery was especially appropriate . . . because the Court stayed
plaintiffs’ right to formal discovery for many months, and because informal discovery could
provide the information that plaintiffs needed” (internal quotation marks omitted)).
First, the Parties completed full, adversarial, briefing about whether the Retired Players’
Collective Bargaining Agreements preempt their negligence and fraud claims. See Pet Food,
2008 WL 4937632, at *14 (factor satisfied when “Plaintiffs . . . performed an extensive analysis
of the legal claims”); cf. GM Trucks, 55 F.3d at 814 (concluding stage of proceedings factor
weighed against settlement approval where there was “little adversarial briefing on either class
status or the substantive legal claims.”). The NFL Parties’ motions to dismiss remain pending,
and have the potential to eliminate all or a majority of Class Members’ claims. Because
preemption is a legal question, further discovery would not have increased Class Counsel’s
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understanding of this issue. Cendant, 264 F.3d at 236 (noting when viability of defense “turns
more on legal considerations than on factual development [] it does not substantially affect
[objectors’] claim that more discovery was needed” (emphasis added) (citation omitted)); Briggs
v. Hartford Fin. Servs. Grp., Inc., No. 07-5190, 2009 WL 2370061, at *11, 13 (E.D. Pa. July 31,
2009) (noting that “counsel could reasonably estimate the strength and value of the case . . .
based on an assessment of Pennsylvania law” in part because of a “threshold” legal issue).
This preemption research occurred before the Parties began settlement discussions, and
influenced their strategy during negotiations. See Phillips Supp. Decl. ¶ 20 (“Ever present in the
minds of the parties . . . were the potential risks of litigation . . . [including] Defendants’
preemption motions . . . .”).
Second, Class Counsel had an adequate appreciation of the scientific issues relating to
causation. Class Counsel constructed a dataset to catalogue the cognitive impairment of
thousands of MDL Plaintiffs. See NFL Parties’ Actuarial Materials ¶ 16; Seeger Decl. ¶ 20.
From there, Class Counsel retained multiple medical, neurological, neuropsychological, and
actuarial experts to both interpret this data and the science underlying these injuries. See Seeger
Decl. ¶ 30. Class Counsel’s research occurred prior to settlement negotiations, and played a vital
role in their negotiation strategy. See id. ¶¶ 20, 22; Phillips Supp. Decl. ¶ 5.
Like the legal authorities on preemption, the scientific literature discussing repetitive mild
traumatic brain injury is publicly available. Formal discovery, or discovery from the NFL
Parties, would not have enhanced Class Counsel’s position on causation. Pet Food, 2008 WL
4937632 at *12, 14 (factor satisfied when “informal discovery, including extensive consultation
with experts” occurred with respect to “complex medical and toxicological issues”).
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Objectors focus narrowly on the lack of discovery concerning the NFL Parties’ conduct,
ignoring preemption and causation to argue that Class Counsel lacked an adequate appreciation
of the merits of the case before negotiating. See Morey Obj. at 55 (noting that “Class Counsel
appear to have conducted no discovery” and that “[t]he absence of discovery is particularly
glaring because the [Class Action Complaint] alleges fraud and negligent concealment, where
the best evidence is likely in the Defendants’ hands”). 45 However, proof that the NFL Parties
believed concussions to be harmful would not help Class Members remain in federal court if
their CBAs required them to submit their claims to an arbitrator.
Objectors rely heavily on GM Trucks to support their argument that insufficient discovery
occurred here. GM Trucks, however, involved far more nascent proceedings. Only four months
separated the filing of the consolidated complaint from the filing of the proposed Settlement. See
GM Trucks, 55 F.3d at 813. By contrast, this case involved over ten months of settlement
negotiations overseen by both a mediator and a special master. Class counsel in GM Trucks had
neither “conducted significant independent discovery,” nor “retained their own experts.” Id. at
813-14. Both occurred here.
In sum, Class Counsel were intimately aware of the potential limitations of their case with
respect to two dispositive issues as they entered settlement negotiations. The stage of the
proceedings and the amount of discovery completed weigh in favor of approving the Settlement.
iv. The Risks of Establishing Liability and Damages
The next two Girsh factors consider the risks of establishing liability and damages should the
case go to trial. Because these two Girsh factors are closely related, they are addressed together.
The analysis of these factors “need not delve into the intricacies of the merits of each side’s
45
The same Objector, several pages later, argues that “[t]he publicly available facts show that the NFL
was aware of its responsibility to protect its players.” Morey Obj. at 61.
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arguments.” Perry v. FleetBoston Fin. Corp., 229 F.R.D. 105, 115 (E.D. Pa. 2005); see also Diet
Drugs, 2000 WL 1222042, at * 61 (acknowledging that “the risks of establishing liability and
damages are readily apparent” and “not[ing] several obstacles that [plaintiffs] would have to
overcome” to recover). These factors are satisfied because Class Members face stiff challenges
surmounting the issues of preemption and causation. Other legal issues also weigh in favor of
approving this Settlement.
The NFL Parties’ motions to dismiss based on preemption under § 301 of the LMRA remain
pending. The NFL Parties argue that Class Members’ claims must be dismissed because they
would require a judge to interpret provisions of the Retired Players’ Collective Bargaining
Agreements, many of which address player health and safety. If the NFL Parties prevailed on
their motions, many, if not all, of Class Members’ claims would be dismissed.
Other courts have accepted the NFL Parties’ preemption arguments. Many of the cases
transferred into this MDL were originally filed in state court. The NFL Parties removed these
cases to federal court on the basis of federal question jurisdiction under § 301 of the LMRA.
When the plaintiffs in these actions sought to remand, the NFL Parties made the same arguments
in support of jurisdiction that they assert in their motions to dismiss: that the former players’ tort
claims require interpretation of players’ CBAs. See Caterpillar Inc. v. Williams, 482 U.S. 386,
393 (1987) (noting that § 301 preemption “converts an ordinary state common-law complaint
into one stating a federal claim for purposes of the well-pleaded complaint rule”) (internal
quotation marks omitted)).
For example, in Duerson v. National Football League, Retired Player David Duerson’s
representative alleged that the NFL Parties “fail[ed] to educate players about the risks of
concussions and the dangers of continuing to play after suffering head trauma.” No. 12-2513,
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2012 WL 1658353, at *1, 4, 6 (N.D. Ill. May 11, 2012). The court denied Duerson’s motion to
remand because resolving his claims would implicate provisions of the CBAs that require player
notice if the player possessed an injury that could be exacerbated by returning to the field.
Similarly, in Maxwell v. National Football League, the court denied Retired Player Vernon
Maxwell’s motion to remand because resolving his claims would implicate provisions of the
CBAs that give team physicians “primary responsibility” for diagnosing player injuries. Order
Den. Pls.’ Mot. to Remand at 1-2, Maxwell, No. 11-8394, ECF No. 58 (C.D. Cal. Dec. 8, 2011);
see also Order Den. Pls.’ Mot. to Remand at 1-2, Pear v. Nat’l Football League, No. 11-8395,
ECF No. 61 (C.D. Cal. Dec. 8, 2011); Order Den. Pls.’ Mot. to Remand at 1-2, Barnes v. Nat’l
Football League, No. 11-8396, ECF No. 58 (C.D. Cal. Dec. 8, 2011); Smith v. Nat’l Football
League Players Ass’n, No. 14-1559, 2014 WL 6776306, at *8 (E.D. Mo. Dec. 2, 2014) (finding
negligent misrepresentation claims relating to concussive injury preempted based on provision in
CBA that also bound the NFL). 46
Based on similar reasoning, other courts have outright dismissed claims involving other
injuries allegedly resulting from NFL Football. In Stringer v. National Football League, Retired
Player Korey Stringer’s representative alleged that the NFL Parties had a duty “to use ordinary
care in overseeing, controlling, and regulating practices, policies, procedures, equipment,
working conditions and culture of the NFL teams . . . to minimize the risk of heat-related
illness.” 474 F. Supp. 2d 894, 899 (S.D. Ohio 2007). The court granted summary judgment for
46
Objectors rely exclusively on Green v. Ariz. Cardinals Football Club LLC, which granted a motion to
remand on the same issue. No. 14-0461, 2014 WL 1920468, at *3 (E.D. Mo. May 14, 2014). Green is an
outlier, and is insufficient to show that there is no litigation risk on this issue. See Prudential, 148 F.3d at
319-20 (holding fourth and fifth Girsh factors satisfied in part because district court took notice of
adverse outcome in one similar case against the defendant); Aetna, 2001 WL 20928, at *9 (noting that
“[i]f further litigation presents a realistic risk of dismissal,” then “plaintiffs have a strong interest to settle
the case early”).
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the NFL Parties because it found that these claims “must be considered in light of pre-existing
contractual duties imposed by the CBA on the individual NFL clubs concerning the general
health and safety of the NFL players.” Id. at 910. In Dent v. National Football League, the court
dismissed claims that the NFL Parties negligently and fraudulently concealed the dangers of
repeated painkiller use to allow players to return to the field. Order at 7-10, 20-21, Dent v. Nat’l
Football League, No. 14-2324, ECF No. 106 (N.D. Cal. Dec. 17, 2014). The court held that the
claims were encompassed by the CBAs because it was “through [] CBAs [that] players’ medical
rights have steadily expanded.” Id. at 7, 12.
Class Members also face serious hurdles establishing causation. Though “[t]here has been
widespread media coverage and speculation regarding the late-life or post-retirement risks of
cognitive impairment in athletes who engaged in sports involving repetitive head trauma[,] . . .
there has been very little in the way of peer-reviewed scientific literature involving data that
suggests any such risk.” Christopher Randolph et al., Prevalence and Characterization of Mild
Cognitive Impairment in Retired National Football League Players, 19 J. Int’l
Neuropsychological Soc’y 873, 873 (2013), ECF No. 6422-7 (noting “the first attempt to
systematically explore late-life cognitive impairments in retired NFL players” occurred in 2005);
Paul McCrory et al., Consensus Statement on Concussion in Sport: The 4th International
Conference on Concussion in Sport Held in Zurich, November 2012, 47 Brit. J. Sports. Med 250,
257 (2013), ECF No. 6422-8 (“Consensus Statement on Concussions”) (noting that “the
speculation that repeated concussion or subconcussive impacts cause CTE remains unproven”).
A consensus is emerging that repetitive mild brain injury is associated with the Qualifying
Diagnoses. Dr. Yaffe Decl. ¶ 13; Decl. of Dr. Kenneth Fischer ¶¶ 6-7, 9, ECF No. 6423-17 (“Dr.
Fischer Decl.”); Decl. of Dr. Christopher Giza ¶ 21, ECF No. 6423-18 (“Dr. Giza Decl.”); Decl.
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of Dr. David Hovda ¶ 25, ECF No. 6423-19 (“Dr. Hovda Decl.”). However, the available
research is not nearly robust enough to discount the risks that Class Members would face in
litigation. The scientific community has long recognized the existence of multiple categories of
traumatic brain injury. See Dr. Yaffe Decl. ¶ 41 (noting scientists “categorize[] TBI into three
categories: severe, moderate, and mild”). However, investigation into repetitive mild TBI,
typical of Retired Players, is relatively new. Most studies linking head injury with Qualifying
Diagnoses have been limited to serious brain injuries, often involving a loss of consciousness.
See Dr. Yaffe Decl. ¶¶ 42-45. Results regarding the effect of repetitive mild TBI have been
more mixed. See Yi-Kung Lee et al., Increased Risk of Dementia in Patients with Mild
Traumatic Brain Injury: A Nationwide Cohort Study, 8 PLOS ONE 1, 1 (2013), ECF No. 642226 (“A [s]ystematic review has found that [Alzheimer’s Disease] was associated with moderate
and severe TBI, but not with mild TBI unless there was loss of consciousness . . . .”); id. at 7 (“A
history of severe and moderate TBI increased the risk of dementia, but there was no significant
risk of dementia . . . in those with mTBI.”); M. Anne Harris et al., Head Injuries and Parkinson’s
Disease in a Case-Control Study, 70 Occupational & Envtl. Med. 839, 839 (2013), ECF No.
6422-27 (“Severe injuries and those entailing loss of consciousness seem more strongly
associated with [Parkinson’s Disease].” (footnotes omitted)); Inst. of Med. of the Nat’l Acads.,
Sports-Related Concussions in Youth: Improving the Science, Changing the Culture (2013), at 2,
ECF No. 6422-10 (“Changing the Culture”) (“[I]t remains unclear whether repetitive head
impacts and multiple concussions sustained in youth lead to long-term neurodegenerative
diseases . . . .”). Complicating matters, scientists have only recently begun to standardize the
criteria used to discuss the differing levels of severity of TBI. Therefore, it is difficult to
determine any one study’s utility to Class Members’ case. See Dr. Yaffe Decl. ¶ 41.
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Given this background, continued litigation would be a risky endeavor. Even if Class
Members ultimately prevailed, a battle of the experts would be all but certain. See Sullivan, 667
F.3d at 322 (“find[ing] no flaw in the District Court’s decision that the additional risk in
establishing damages counsel[ed] in favor of approval of the settlement” when “proceedings
would likely entail a battle of the experts” (internal quotation marks omitted)); Prudential, 962 F.
Supp. at 539 (“[A] jury’s acceptance of expert testimony is far from certain, regardless of the
expert’s credentials. And, divergent expert testimony leads inevitably to a battle of the
experts.”).
Even if Class Members could conclusively establish general causation, the problem of
specific causation remains. Class Members argue that the cumulative effect of repeated
concussive blows Retired Players experienced while playing NFL Football led to permanent
neurological impairment. Yet the overwhelming majority of Retired Players likely experienced
similar hits in high school or college football before reaching the NFL. Brain trauma during
youth, while the brain is still developing, could also play a large role in later neurological
impairment. See Inst. of Med., Changing the Culture at 2 (“[L]ittle research has been conducted
specifically on changes in the brain following concussions in youth . . . .”). Isolating the effect
of hits in NFL Football from hits earlier in a Retired Player’s career would be a formidable task.
See id. (“Currently, there is a lack of data concerning the overall incidence of sports-related
concussions in youth, although the number of reported concussions has risen over the past
decade.”).
Finally, in addition to preemption and causation risks, Class Members would face other legal
barriers to successful litigation, such as affirmative defenses and risks establishing damages. For
example, Retired Players would have to demonstrate that their claims would not be barred by the
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relevant state’s statute of limitations in order to proceed with litigation. This is especially true
given that many of these players have been suffering, and may have been aware of their suffering
for some time. Further, Class Members’ recovery might be compromised by a state’s
comparative fault or contributory negligence regime. Football is an inherently violent sport and
a voluntary activity. If a Retired Player contributed to his injury in any way, such as a
particularly aggressive playing style or poor tackling form, he could see his award reduced or
eliminated. See Dr. Hovda Decl. ¶ 18 (noting that “some risks for repeat concussion are biobehavioral, that is, aggressive styles of play or poor playing style”).
In sum, Class Members would face a host of challenges if they proceeded with litigation.
The Settlement eliminates or mitigates each of these substantial risks. The risks of establishing
liability and damages weigh strongly in favor of approving the Settlement.
v. The Risks of Maintaining the Class Action through Trial
This factor “measures the likelihood of obtaining and keeping a class certification if the
action were to proceed to trial.” Warfarin, 391 F.3d at 537. Because class certification is subject
to review and modification at any time during the litigation, the uncertainty of maintaining class
certification favors settlement. See Zenith Labs., Inc. v. Carter-Wallace, Inc., 530 F.2d 508, 512
(3d Cir. 1976).
The Third Circuit, however, cautions that this factor is somewhat “toothless” when analyzing
settlement class actions. Prudential, 148 F.3d at 321. “Because the district court always
possesses the authority to decertify or modify a class that proves unmanageable, examination of
this factor in the standard class action [] appear[s] to be perfunctory.” Id. (noting “that after
Amchem the manageability inquiry in settlement-only class actions may not be significant”).
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The risks of maintaining this Class Action through trial weigh in favor of approving the
Settlement; however, this factor warrants only minimal consideration.
vi. The Ability of Defendants to Withstand a Greater Judgment
This factor assesses the ability of defendants to withstand a greater judgment, and is “most
clearly relevant where a settlement in a given case is less than would ordinarily be awarded but
the defendant’s financial circumstances do not permit a greater settlement.” Reibstein v. Rite Aid
Corp., 761 F. Supp. 2d 241, 254 (E.D. Pa. 2011). However, when there is no “reason to believe
that [d]efendants face any financial instability[,] . . . this factor is largely irrelevant.” Id.; see
also Sullivan, 667 F.3d at 323 (“[I]n any class action against a large corporation, the defendant
entity is likely to be able to withstand a more substantial judgment, and, against the weight of the
remaining factors, this fact alone does not undermine the reasonableness of the instant
settlement.” (internal quotation marks omitted)).
This is not the case here. The NFL Parties do not claim that the Settlement is fair because
they could not pay more. Rather, by uncapping the Monetary Award Fund and establishing
adequate security, they have guaranteed that all Retired Players who receive Qualifying
Diagnoses will be able to receive an award. See Warfarin, 391 F.3d at 538 (“[T]he fact that
[defendant] could afford to pay more does not mean that it is obligated to pay any more than
what . . . class members are entitled to under the theories of liability that existed at the time the
settlement was reached.”).
The ability of the NFL Parties to withstand a greater judgment is a neutral factor.
vii. The Range of Reasonableness of the Settlement in Light of the Best
Possible Recovery and in Light of All Attendant Risks of Litigation
In evaluating these factors, a Court must ask “whether the settlement represents a good value
for a weak case or a poor value for a strong case.” Warfarin, 391 F.3d at 538. Put another way,
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a court must compare “the amount of the proposed settlement” with “the present value of the
damages plaintiffs would likely recover if successful, appropriately discounted for the risk of not
prevailing.” GM Trucks, 55 F.3d at 806. The settlement must be judged “against the realistic,
rather than theoretical, potential for recovery after trial.” Sullivan, 667 F.3d at 323 (internal
quotation marks omitted).
The Settlement offers Monetary Awards of up to $5 million for serious medical conditions
associated with repeated head trauma. Retired Players whose symptoms worsen will receive
Supplemental Monetary Awards to ensure that they receive the maximum possible compensation
for their symptoms. Unlike recoveries achieved after continued litigation, these awards will be
promptly available to Retired Players currently suffering. See Prudential, 962 F. Supp. at 537
(emphasizing that settlement “would afford plaintiffs relief months and perhaps years earlier than
would be possible in a litigation environment”).
The Settlement allows Class Members to choose certainty in light of the risks of litigation.
The Settlement eliminates the possibility that a Class Member’s claims could be arbitrated. It
also eliminates the potentially dispositive issues of issues of general causation, specific
causation, statutes of limitations, and other defenses. The Settlement insulates Class Members
from the practical vagaries of litigation, including the particular judge, jury panel, and the skill of
the attorneys involved. Because the MAF is uncapped, it ensures that all Class Members who
receive Qualifying Diagnoses within the next 65 years will receive compensation. It ensures that
all Retired Players with half of an Eligible Season credit have access to free baseline assessment
examinations so that they may monitor their symptoms, and receive Qualifying Diagnoses more
easily if their symptoms worsen. Finally, for Retired Players who believed they could fare better
in litigation, there was a lengthy opt-out period. See Diet Drugs, 2000 WL 1222042, at *62
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(“[T]he settlement . . . offers choice. Class members who wish to bear the risks of trial had an
initial opt out right . . . .”). In light of these benefits, Class Members receive fair value for their
claims.
Objectors rely on GM Trucks to argue that the Settlement is unfair because it allegedly does
not compensate CTE, which was “at the heart of the Class Action Complaint.” Morey Obj. at
69-70. In GM Trucks, the Third Circuit explained that “the relief sought in the complaint serves
as a useful benchmark” in evaluating a settlement. 55 F.3d at 810. However, GM Trucks is
distinguishable. In GM Trucks, the complaint alleged that the fuel tank design on certain pick-up
trucks made them especially vulnerable to fires, and sought recall of, or repairs for, the trucks at
issue. GM Trucks, 55 F.3d at 777-79. The settlement, however, only offered coupons towards
the purchase of new trucks. In part, the Third Circuit vacated the settlement because the
proposed coupons would do little to remove the dangerous trucks from the road, risking new
injuries. Id. at 810 n.28. Here, Retired Players are at no further risk of injury; they are retired.
The Settlement compensates the key harm alleged—the long term effects of repeated concussive
hits—through medical monitoring and cash awards. Moreover, as discussed in depth infra
Section V.A, Objectors’ claims that the Settlement ignores CTE are baseless.
The range of reasonableness factors weigh in favor of approving the Settlement.
C.
The Prudential Factors
A court may also consider the additional factors identified by the Third Circuit in In re
Prudential Insurance Co. of America Sales Practices Litigation, 148 F.3d 283 (3d Cir. 1998),
when examining a settlement’s fairness. Unlike the mandatory Girsh factors, the Prudential
factors are “permissive and non-exhaustive, ‘illustrat[ing] . . . [the] additional inquiries that in
many instances will be useful for a thoroughgoing analysis of a settlement’s terms.’” Baby
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Prods., 708 F.3d at 174 (quoting Pet Food, 629 F.3d at 350); see also Processed Egg Prods., 284
F.R.D. at 268 (noting Prudential factors “are not essential or inexorable”).
Prudential asks a court to consider:
[1] the maturity of the underlying substantive issues, as measured by
experience in adjudicating individual actions, the development of
scientific knowledge, the extent of discovery on the merits, and other
factors that bear on the ability to assess the probable outcome of a trial on
the merits of liability and individual damages; [2] the existence and
probable outcome of claims by other classes and subclasses; [3] the
comparison between the results achieved by the settlement for individual
class or subclass members and the results achieved—or likely to be
achieved—for other claimants; [4] whether class or subclass members are
accorded the right to opt out of the settlement; [5] whether any provisions
for attorneys’ fees are reasonable; and [6] whether the procedure for
processing individual claims under the settlement is fair and reasonable.
148 F.3d at 323-24.
The relevant Prudential factors weigh in favor of approving the Settlement. Class Counsel
were able to make an informed decision about the probable outcome of trial. See supra Sections
IV.B.iii-IV.B.iv; infra Section V.A; Pet Food, 2008 WL 4937632, at *24 (noting Prudential
factors “are substantially similar to the factors provided in Girsh”). All Class Members had the
opportunity to opt out. Finally, the claims process is reasonable in light of the substantial
monetary awards available to Class Members, and imposes no more requirements than
necessary. See infra Section V.E.
Whether any provisions for attorneys’ fees are reasonable is a neutral factor because Class
Counsel have not yet moved for a fee award. See Processed Egg Prods., 284 F.R.D. at 277
(holding fifth Prudential factor neutral when fee motion would be filed at a later date). Amici
argue that “[t]he absence of a fee application . . . prevents a complete evaluation of the fairness
of the settlement.” Mem. of Public Citizen at 7-8. Although there is no fee application pending,
the Class Notice explained: the NFL Parties have agreed not to contest any award of attorneys’
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fees and costs equal to or below $112.5 million; there may be set-off provisions; and Class
Members with individual counsel may see their awards diminished pursuant to retainer
agreements. See Long-Form Notice at 11, 17.
At an appropriate time after Final Approval, Class Counsel will file a fee petition that Class
Members will be free to contest. This is an accepted approach. See Newberg on Class Actions
§ 14:5 (5th ed.) (“In some situations, the court will give final approval to a class action
settlement and leave fees and costs for a later determination.”); In re Diet Drugs
(Phentermine/Fenfluramine/ Dexfenfluramine) Prods. Liab. Litig., 582 F.3d 524, 534-35 (3d Cir.
2009) (upholding award of attorneys’ fees made six years after final approval of settlement); In
re Orthopedic Bone Screw Prods. Liab. Litig., No. 1014, 2000 WL 1622741, at * 1 (E.D. Pa.
Oct. 23, 2000) (approving fee award three years after final approval). Once Class Counsel files
their fee petition, Objectors will have an opportunity to submit objections to the proposed fee
award. Pursuant to Rule 23(h), the Court will then schedule a hearing to evaluate the
reasonableness of any such fees sought. See Processed Egg Prods., 284 F.R.D. at 277.
Objectors’ arguments regarding attorneys’ fees will be considered at that time.
The Prudential factors weigh in favor of approving the Settlement.
V.
Responses to Specific Objections
Rule 23 does not require a settlement to be perfect, only “fair, reasonable, and adequate.”
Fed. R. Civ. P. 23(e)(2); see also Baby Prods., 708 F.3d at 173-74 (“The role of a district court is
not to determine whether the settlement is the fairest possible resolution . . . .”). Settlements are
negotiated compromises. Inherent in the negotiation process is “a yielding of the highest hopes
in exchange for certainty and resolution;” no Class Member, nor the NFL Parties, will ever
receive everything sought. GM Trucks, 55 F.3d at 806; see also Hamlon v. Chrysler Corp., 150
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F.3d 1011, 1027 (9th Cir. 1998) (“Settlement is the offspring of compromise; the question we
address is not whether the final product could be prettier, smarter or snazzier, but whether it is
fair, adequate and free from collusion.”).
Objectors raised some valid concerns. At my request, the Parties addressed these concerns
by revising the Settlement to improve the deal for Class Members. Retired Players who played
overseas in NFL Europe now receive some Eligible Season credit. Notwithstanding the $75
million funding cap to the BAP, all Retired Players with half of an Eligible Season credit are
now entitled to a baseline assessment examination. The Settlement now compensates Death with
CTE up until the Final Approval Date, instead of the Preliminary Approval Date. The Claims
Administrator now has the authority to waive the $1,000 appeal fee for those who demonstrate
financial hardship. Finally, the Settlement eases the requirements for establishing proof of a
Qualifying Diagnosis for Retired Players whose medical records have been lost because of force
majeure type events. See Parties’ Joint Amendment.
A.
Objections Related to CTE
The most commonly raised objection relates to the Settlement’s treatment of Chronic
Traumatic Encephalopathy. 47 Objectors argue that CTE is the most prevalent, and thus most
important, condition afflicting Retired Players—“the industrial disease of football.” See Am.
Fairness Hr’g Tr. at 76:5-6; Chelsey Obj. at 3 (calling CTE the “NFL’s industrial disease”).
Objectors contend that ending compensation for the disease on the Final Approval Date renders
the Settlement hollow. See Armstrong Obj. at 17, ECF No. 6233 (CTE “is at the heart of this
litigation); Duerson Obj. at 10 (“This has always been a CTE case.”); Chelsey Obj. at 7 (noting
47
See, e.g., Morey Obj. at 22-29; Miller Obj. at 4-5, ECF No. 6213; Jones Obj. at 3-4, ECF No. 6235;
Alexander Obj. at 6-7, ECF No. 6237; Flint Obj. at 1, ECF No. 6347; Gilchrist Obj. at 1, ECF No. 6364;
Jordan Obj. at 1, ECF No. 6375; Carrington Obj. at 2-3, ECF No. 6409.
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lack of CTE compensation is “extraordinary”). Thus, Objectors argue that the Settlement cannot
be fair, reasonable, and adequate unless it continues to compensate Retired Players with CTE.
Objectors are incorrect. Retired Players cannot be compensated for CTE in life because no
diagnostic or clinical profile of CTE exists, and the symptoms of the disease, if any, are
unknown. But the Settlement does compensate the cognitive symptoms allegedly associated
with CTE. The studies relied on by Objectors indicate that the majority of Retired Players whose
brains were examined would have received compensation under the Settlement if they were still
alive. Furthermore, it is reasonable not to compensate the mood and behavioral conditions
anecdotally associated with CTE. Indeed, limiting compensation to objectively measurable
symptoms of cognitive and neuromuscular impairment is a key principle of the Settlement. The
compensation provided for Death with CTE is reasonable because it serves as a proxy for
Qualifying Diagnoses deceased Retired Players could have received while living. The Parties
provided compensation for Death with CTE until the Final Approval Date because they
recognized that Retired Players who died prior to final approval did not have sufficient notice
that they had to obtain Qualifying Diagnoses. Finally, the Settlement recognizes that knowledge
about CTE will expand, and requires the Parties to confer in good faith about possible revisions
to the definitions of Qualifying Diagnoses based on scientific developments.
i. State of Scientific and Medical Knowledge of CTE
The study of CTE is nascent, and the symptoms of the disease, if any, are unknown. Chronic
Traumatic Encephalopathy is a neuropathological diagnosis that currently can only be made post
mortem. 48 Dr. Yaffe Decl. ¶ 55. This means no one can conclusively say that someone had CTE
until a scientist looks at sections of that person’s brain under a microscope to see if abnormally
phosphorylated tau protein (“abnormal tau protein”) is present, and if so whether it is present in a
48
Objectors do not dispute this fact. See supra Section II.D.iii.
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reportedly unique pattern. 49 See id.; Decl. of Dr. Julie Ann Schneider ¶ 22, ECF No. 6422-35
(“Dr. Schneider Decl.”).
Beyond identifying the existence of abnormal tau protein in a person’s brain, researchers
know very little about CTE. They have not reliably determined which events make a person
more likely to develop CTE. McCrory et al., Consensus Statement on Concussions at 257 (“[I]t
is not possible to determine the causality or risk factors [for CTE] with any certainty. As such,
the speculation that repeated concussion or subconcussive impacts cause CTE remains
unproven.”). More importantly, researchers have not determined what symptoms individuals
with CTE typically suffer from while they are alive. See Dr. Schneider Decl. ¶ 38; Dr. Hovda
Decl. ¶ 25.
Arguably, these uncertainties exist because clinical study of CTE is in its infancy. 50 Only
200 brains with CTE have ever been examined, all from subjects who were deceased at the time
49
Some scientists even dispute whether CTE is a unique neuropathology—that is, the extent to which
tissue samples from CTE are distinct from tissue samples associated with other diseases. Abnormal tau
protein is also a primary component of other neurodegenerative conditions such as Alzheimer’s Disease.
Dr. Schneider Decl. ¶ 21. Even if CTE is a unique neuropathology, studies examining it have found
significant differences among subjects, including where the abnormal tau protein typically accumulates in
the brain. Id. ¶ 23.
50
Objectors point out that researchers have been aware of CTE since the 1920s, previously labeling it
“dementia pugilistica” or “punch drunk syndrome.” While this is true, the rigorous study necessary to
understand the symptoms associated with CTE, or its prevalence, have not taken place. See, e.g., Robert
C. Cantu, Chronic Traumatic Encephalopathy in the National Football League, 61 Neurosurgery 223,
224 (2007), ECF No. 6201-11 (chronicling history of CTE research and admitting that “[t]he most
pressing question to be answered concerns the prevalence of the problem” and that “[o]nly an immediate
prospective study will determine the true incidence of this problem”); Philip H. Montenigro et al.,
Clinical Subtypes of Chronic Traumatic Encephalopathy: Literature Review and Proposed Research
Diagnostic Criteria for Traumatic Encephalopathy Syndrome, 6 Alzheimer’s Research & Therapy 68, 70
(2014), ECF No. 6201-4 (“The scientific community also has become dramatically more aware of CTE
since it was discovered in American football players.”). The studies of dementia pugilistica and punch
drunk syndrome Objectors identify are the same type of limited case series reports as those discussed
infra by Drs. McKee and Stern. As a result, these studies suffer from the same limitations and biases.
See Cantu, supra, at 224 (noting several studies of boxers with CTE); see also Baugh et al., Current
Understanding of Chronic Traumatic Encephalopathy, 16 Current Treatment Options in Neurology 306,
307 (2014), ECF No. 6201-4 (noting that “much of the scientific literature on CTE, to-date, is derived
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the studies began. Dr. Schneider Decl. ¶ 25; Dr. Yaffe Decl. ¶ 68. This is well short of the of
the sample size needed to understand CTE’s symptoms with scientific certainty. Dr. Schneider
Decl. ¶ 25. The studies that have occurred suffer from a number of biases intrinsic to their
design that make it difficult to draw generalizable conclusions. Id. ¶¶ 24-25; Dr. Yaffe Decl.
¶¶ 56, 66.
Objectors principally rely on two studies: Ann McKee et al., The Spectrum of Disease in
Chronic Traumatic Encephalopathy, 136 Brain 43 (2013), ECF No. 6201-2 (“McKee Study”) and
Robert Stern et al., Clinical Presentation of Chronic Traumatic Encephalopathy, 81 Neurology
1122 (2013), ECF No. 6201-4 (“Stern Study”). The McKee Study and the Stern Study are
representative of both the broader literature and the limitations of current medical knowledge
about CTE. See Dr. Schneider Decl. ¶¶ 26, 30; Dr. Fischer Decl. ¶ 11; Dr. Hovda Decl. ¶ 22.
The McKee Study and the Stern Study collectively examined the brains of 93 deceased
subjects. 51 Subjects were selected because they had a history of repetitive mild TBI. McKee
Study at 45; Stern Study at 1123. In the McKee Study, 18 individuals without a history of
repetitive mild TBI served as the control group; in the Stern Study, there was no control group.
McKee Study at 45; Stern Study at 1127. The studies found abnormal tau protein accumulation
indicative of CTE in the majority of the brains examined. From there, each study attempted to
reconstruct the symptoms the subjects experienced during life by asking their family members to
describe their behaviors before death. In the McKee Study, researchers only reconstructed the
symptoms of about half of the subjects. See Dr. Schneider Decl. ¶ 31. Thus, the symptoms, if
any, of half of the subjects during life remain unknown.
from clincopathologic [sic] case series” and “early literature about the disease focused on the boxing
population”).
51
The McKee Study and the Stern Study both drew from the same bank of brains diagnosed with CTE.
The McKee Study examined 85 brains. See McKee Study at 45. The Stern Study examined 36 brains, 28
of which had already been examined by the McKee Study. See Stern Study at 1123 & n.1.
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Predictive, generalizable conclusions about CTE cannot be drawn from case reports such as
these. 52 See Dr. Giza Decl., ¶¶ 16-19; Dr. Yaffe Decl. ¶ 66. Because the studies examined only
93 brains, statistically significant conclusions are difficult to draw. Fed. Judicial Ctr., Reference
Manual on Scientific Evidence 576 (3d ed. 2011) (“FJC Manual”) (noting that “[c]ommon sense”
dictates that “a large enough sample of individuals must be studied”). Because the studies
selected subjects with a history of repetitive brain injury, a selection bias exists that makes it
difficult to infer the incidence of CTE in the general population, or even among athletes. FJC
Manual at 583-84; Dr. Hovda, Decl. ¶ 21 (“[S]cience [] has yet to systematically study the
presence or absence of CTE pathology in non-concussed men and women . . . .”). Because the
researchers had to rely on the subjects’ family members instead of medical professionals to
determine how the subjects behaved during life, any attempt to tie the existence of abnormal tau
protein to particular symptoms is suspect. FJC Manual at 586. Finally, the studies did not
control for other potential risk factors for impairment that Retired Players commonly share, such
as higher BMI, lifestyle change, age, chronic pain, or substance abuse. See McCrory et al.,
Consensus Statement on Concussions at 257 (“The extent to which age-related changes,
psychiatric or mental health illness, alcohol/drug use or co-existing medical or dementing
illnesses contribute to [CTE] is largely unaccounted for in the published literature.”); FJC
Manual at 552 (“[I]t should be emphasized that an association is not equivalent to causation.”).
Because of these limitations, researchers do not know the symptoms someone with abnormal
tau protein in his brain will suffer from during life. No diagnostic or clinical profile for CTE
exists. Establishing the relationship between abnormal tau protein and specific symptoms
requires long-term, longitudinal, prospective epidemiological studies in living subjects. See Dr.
52
All agree that Drs. McKee and Stern merit praise for their important and valuable scientific research.
Objectors, however, overstate the results of their studies.
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Yaffe Decl. ¶¶ 23-38, 59-67. For CTE, this long process is just beginning. 53 See McCrory et al.,
Consensus Statement on Concussions at 257 (“At present, the interpretation of causation in the
modern CTE case studies should proceed cautiously.”).
ii. Compensation of Symptoms Allegedly Associated with CTE
Objectors allege that CTE is associated with both neurocognitive symptoms and mood and
behavioral symptoms. The Settlement compensates Retired Players with the neurocognitive
symptoms allegedly associated with CTE. The Settlement reasonably does not compensate
Retired Players with the mood and behavioral symptoms allegedly associated with CTE—or any
other Qualifying Diagnosis.
Relying on the McKee Study, Objectors allege that CTE progresses in four stages. In Stages
I and II, the disease allegedly affects mood and behavior while leaving a Retired Player’s
cognitive functions largely intact. Headache, aggression, depression, explosivity, and suicidality
are common. See e.g., Morey Obj. at 22-23. Later in life, as a Retired Player progresses to
Stages III and IV, severe memory loss, dementia, loss of attention and concentration, and
impairment of language begin to occur. Id. at 23.
No definitive clinical profile yet exists for CTE, however, and the idea that CTE progresses
in defined stages—or even that it is associated with the symptoms listed—has not been
sufficiently tested in living subjects. See supra Section V.A.i; Dr. Hovda Decl. ¶ 20 (“CTE does
not appear to advance in a predictable and sequential series of stages and progression of physical
53
Alzheimer’s Disease provides a useful contrast and a cautionary lesson. Establishing the clinical
profile of Alzheimer’s Disease took decades of studies of millions of subjects. See Dr. Hovda Decl. ¶ 24;
Dr. Yaffe Decl. ¶ 68. Initial conclusions were not always correct. For example, the medical community
once believed that changes in mood, specifically depression, were associated with Alzheimer’s Disease.
This belief has now been thoroughly refuted. See Dr. Schneider Decl. ¶ 45.
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symptoms . . . .”); Dr. Schneider Decl. ¶ 29 (“[A]ssumptions regarding symptoms that constitute
the diagnostic and clinical profile of CTE are premature.”).
Assuming arguendo that Objectors accurately describe the symptoms of CTE, the existing
Qualifying Diagnoses compensate the neurocognitive symptoms of the disease. Levels 1.5 and 2
Neurocognitive Impairment compensate all objectively measurable neurocognitive decline,
regardless of underlying pathology. These Qualifying Diagnoses provide relief for Retired
Players who exhibit decline in two or more cognitive domains, including complex attention and
processing speed, executive function, learning and memory, language, and spatial-perceptual.
See Settlement Ex. 1; Dr. Kelip Decl. ¶ 29. Any Retired Player who becomes sufficiently
impaired in these areas is entitled to compensation, whether his impairment is the result of
abnormal tau protein or any other irregular brain structure.
In the McKee Study, almost all subjects with late-stage CTE allegedly showed decline in
cognitive domains compensated by Levels 1.5 and 2 Neurocognitive Impairment. For Stage III,
“[t]he most common presenting symptoms were memory loss, executive dysfunction . . . and
difficulty with attention and concentration.” McKee Study at 56. The McKee Study states that
“[s]eventy-five per cent [sic] of subjects were considered cognitively impaired.” Id. For Stage
IV, “[e]xecutive dysfunction and memory loss were the most common symptoms at onset, and
all developed severe memory loss with dementia.” Id. 58-59; see also Dr. Yaffe Decl. ¶¶ 72, 8182.
Additionally, CTE studies to date have found a high incidence of comorbid disease. This
means that, in addition to CTE neuropathology, subjects had other conditions, including ALS,
Alzheimer’s Disease, Parkinson’s Disease, and frontotemporal dementia. See Dr. Fischer Decl.
¶ 12; Dr. Giza Decl. ¶ 16; Dr. Schneider Decl. ¶ 43. In the McKee Study, for example, 37% of
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those with CTE had comorbid disease, including Parkinson’s Disease and Alzheimer’s Disease.
McKee Study at 61. The Stern Study excluded from consideration 35% of potential subjects
because they had comorbid disease such as Alzheimer’s Disease. Stern Study at 1123.
In sum, even if CTE is a unique disease, it inflicts symptoms compensated by Levels 1.5 and
2 Neurocognitive Impairment and is strongly associated with the other Qualifying Diagnoses in
the Settlement. “[A]ccepting the findings in the McKee Study as accurate, at least 89% of the
former NFL players studied by Dr. Stern, Dr. McKee, and their colleagues would have been
compensated under the [S]ettlement while living.” Dr. Yaffe Decl. ¶ 83.
Objectors also argue that the alleged mood and behavioral symptoms of early stage CTE,
such as irritability, depression, and proclivity to commit suicide, are excluded from the
Settlement. 54 Objectors are correct. The Settlement does not compensate these symptoms, a
result not limited to CTE. Mood and behavioral symptoms do not entitle a Retired Player to any
Qualifying Diagnosis. See Settlement § 6.6(b) (“Monetary Awards . . . shall compensate
Settlement Class Members only in circumstances where a [Retired Player] manifests actual
cognitive impairment and/or actual neuromuscular impairment . . . .”).
Excluding mood and behavioral symptoms from the Settlement is reasonable. While
Objectors list many symptoms they believe are linked to head trauma, see supra note 34, the
Settlement only provides compensation for serious, objectively verifiable neurocognitive and
neuromuscular impairment with an established link to repetitive head injury. See Deepwater
Horizon Clean-Up Settlement, 295 F.R.D at 156 (approving settlement that provided
54
See Morey Obj. at 28-29; Armstrong Obj. at 19 (“By exclusively focusing on cognitive impairment, the
same BAP program that is supposed to assist CTE sufferers by giving them a general dementia diagnosis
excludes retirees suffering from mood, behavioral and other non-cognitive symptoms . . . .”); Duerson
Obj. at 20 (“This Settlement proposes to take care of the minority of retired NFL players who suffer from
cognitive impairment, while leaving the majority of former players with nothing.”); Flint Obj. at 1;
Johnson Obj. at 2, ECF No. 6395.
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compensation for conditions that had a medical basis to support causation and excluding those
lacking that proof).
Class Members would face more difficulty proving that NFL Football caused these mood and
behavioral symptoms than they would proving that it caused other symptoms associated with
Qualifying Diagnoses. Mood and behavioral symptoms are commonly found in the general
population and have multifactorial causation. 55 Dr. Schneider Decl. ¶ 39; Dr. Yaffe Decl. ¶¶ 7576. Even if head injuries were a risk factor for developing these symptoms, many other risk
factors exist. See Dr. Giza Decl. ¶ 14 (“While medical literature and clinical practice has
associated psychological symptoms such as anxiety, depression, lability, irritability and
aggression in patients with a history of concussions, this association has not led to conclusive
causation.”).
Retired Players tend to have many other risk factors for mood and behavioral symptoms. For
example, a typical Retired Player is more likely than an average person to have experienced
sleep apnea, a history of drug and alcohol abuse, a high BMI, chronic pain, or major lifestyle
changes. Dr. Schneider Decl. ¶ 39; Dr. Yaffe Decl. ¶¶ 75-76 (noting Retired Players’ risk factors
for mood and behavioral issues, as well as for suicide); Dr. Giza Decl. ¶ 14. An individual
Retired Player would have a difficult time showing that head impacts, as opposed to any one of
these other factors, explain his symptoms. See Dr. Giza Decl. ¶ 14 (“It remains a challenge with
an individual patient to discern whether or not these symptoms are a consequence of a head
55
Objectors argue that the link between NFL Football and CTE would be easier to prove at trial because
unlike the Qualifying Diagnoses, repetitive head trauma is a necessary condition for developing CTE.
See Morey Obj. at 30; Chelsey Obj. at 10. As discussed supra, CTE studies to date have not had
sufficient control groups to confirm this link. Moreover, other researchers dispute whether repetitive head
trauma is a prerequisite for developing CTE. See McCrory et al., Consensus Statement on Concussions at
257 (“It was further agreed that CTE was not related to concussions alone or simply exposure to contact
sports.”); Dr. Schneider Decl. ¶ 35. Moreover, even if head trauma were a necessary condition for CTE,
the clinical profile is insufficiently developed to indicate whether specific mood disorders are associated
with the neuropathology.
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injury or associated with comorbidities (e.g., preexisting stress and social difficulties, learning
disabilities, alcohol or drug abuse, etc.) . . . . ”).
The Settlement simply does not entitle any Retired Player with mood and behavioral
symptoms to any Qualifying Diagnosis.
iii. Compensation of Death with CTE
Objectors argue that even if the Settlement compensates the symptoms of CTE in living
Retired Players, it unfairly treats those currently living with CTE less favorably than those with
CTE who died before the Final Approval Date. They argue that there is no reason for Death with
CTE compensation to end. 56 They also argue that Death with CTE benefits are comparatively
more generous than the benefits for the remaining Qualifying Diagnoses, which compensate
living Retired Players allegedly suffering from CTE. See, e.g., Alexander Obj. at 2; Jones Obj.
at 3-4, ECF No. 6235.
Sound reasons exist to distinguish between Retired Players with CTE who died before the
Final Approval Date and those still alive after that date. A prospective Death with CTE benefit
would incentivize suicide because CTE can only be diagnosed after death. One Retired Player
wrote to the Court expressing this concern. E. Williams Obj. at 3, ECF No. 6345 (“Players
diagnosed with CTE (living) today, have to kill themselves or die for their family to ever
benefit.”).
More importantly, after the Final Approval Date, a living Retired Player does not need a
death benefit because he can still go to a physician and receive a Qualifying Diagnosis. The
Death with CTE benefit provides awards to families of Retired Players with compensable
symptoms who died before the Settlement became operative, because neither Retired Players nor
56
See, e.g., Morey Obj. at 25-26; Miller Obj. at 4-5; Jones Obj. at 3-4; Moore Obj. at 3-4, ECF No. 6399;
Carrington Obj. at 2-3.
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their families had sufficient notice that they had to obtain Qualifying Diagnoses. 57 Thus, Death
with CTE serves as a proxy for Qualifying Diagnoses deceased Retired Players could have
received while living.
The Parties extended the Death with CTE benefit from the Preliminary Approval Date to the
Final Approval Date because they recognized that Retired Players who died before final approval
would not have had sufficient notice of the need to obtain Qualifying Diagnoses. See Parties’
Joint Amendment at 4-5. Preliminary Approval of the Settlement and the accompanying notice
program informed Retired Players of the need to seek testing in order to obtain Qualifying
Diagnoses. However, the Parties did not expect that Retired Players could do so immediately.
By final approval, living Retired Players should be well aware of the Settlement and the need to
obtain Qualifying Diagnoses if sick. Thus, by final approval, there no longer is a need for Death
with CTE to serve as a proxy for Qualifying Diagnoses.
Additionally, the benefits for Death with CTE are not more generous than the benefits for
those who receive Qualifying Diagnoses while alive. See, e.g., Morey Post-Fairness Hearing
Supplemental Obj. at 19, ECF No. 6455 (“Morey Final Obj.”) (arguing that “a class member
with CTE would never be able to receive the same maximum compensation through a dementia
diagnosis as could be received through a diagnosis of [D]eath with CTE . . . .”). Monetary
Award values for Death with CTE are higher than awards for Levels 1.5 and 2 Neurocognitive
Impairment in the same age bracket because the alleged symptoms Death with CTE compensates
57
Some Objectors contend that Qualifying Diagnoses are “not the kinds of conditions that could have
been missed during the deceased players’ lifetimes.” Miller Supplemental Obj. at 2, ECF No. 6452.
However, the NFL Parties allegedly encouraged a gladiator mentality, teaching players to ignore or
minimize their injuries as a demonstration of strength. Am. MAC ¶¶ 62, 107. Many Retired Players
allegedly retained that outlook well after retirement, refusing to seek medical help. See, e.g., Stern Obj. at
1, ECF No. 6355 (“Like most men of his generation going to the doctor was for women and children not
men . . . .”); Hawkins Obj. at 9, ECF No. 6373 (“[T]heir pride and honor . . . [have] overshadowed their
willingness to admit their past and current needs or their vulnerability.”).
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did not begin when Retired Players died. Retired Players living with Levels 1.5 and 2
Neurocognitive Impairment now know to seek Qualifying Diagnoses as early as possible. The
Death with CTE awards reflect that deceased Retired Players with CTE did not have that
opportunity.
iv. Development of Scientific and Medical Knowledge of CTE
Finally, Objectors argue that the Settlement unreasonably excludes CTE in light of expected
scientific advances. Specifically, they argue that “CTE will be reliably detectable before death;
within five to ten years, CTE will likely be diagnosed in the living.” Morey Obj. at 26; see also
Morey Final Obj. at 12; Flint Obj. at 1, ECF No. 6347; Chelsey Obj. at 9; Carrington Obj. at 4,
ECF No. 6409.
Objectors again overstate the conclusions of their experts. A reliable method of detecting
CTE via buildup of abnormal tau protein during life may well be available in the next decade,
but the longitudinal epidemiological studies necessary to build a robust clinical profile will still
take a considerable amount of time. See Dr. Schneider Decl. ¶ 47 (noting “the presence of a
biomarker for a protein does not currently tell us whether an individual is exhibiting symptoms
or the likelihood that he will experience symptoms”); Dr. Yaffe Decl. ¶ 77 (noting that even an
FDA approved test “does not mean that we will soon understand what causes CTE or the
diagnostic profile of CTE” and that “[i]t will take many years before science can fully
understand these issues”). The Settlement compensates symptoms that cause Retired Players to
suffer, not the presence of abnormal tau protein (or any other irregular brain structure) alone.
See Settlement § 6.6(b) (“Monetary Awards . . . shall compensate Settlement Class Members
only in circumstances where a [Retired Player] manifests actual cognitive impairment and/or
actual neuromuscular impairment . . . .”).
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Even if Objectors are correct, and researchers ultimately determine that CTE causes the
mood and behavioral symptoms they allege, the Settlement will still be reasonable. As discussed
supra, the decision to compensate only cognitive and neuromuscular impairment across all
Qualifying Diagnoses is justified. Those symptoms tend to be more serious and more easily
verifiable than mood and behavioral symptoms. See supra Section V.A.ii.
The Monetary Award Fund lasts for 65 years; researchers may learn more about CTE and
head trauma in that time. Recognizing this, the Settlement requires the Parties to meet at least
every ten years and confer in good faith about possible modifications to the definitions of
Qualifying Diagnoses. See Settlement § 6.6(a).
Objectors argue that this is an empty benefit because the NFL Parties must consent to any
prospective changes. See e.g., Armstrong Obj. at 27 (“[I]f the NFL unilaterally does not want to
accept a new method of detecting CTE, for example, it will not be required to do so.”); Utecht
Obj. at 7-8. While this is true, the process is subject to judicial oversight, and the NFL Parties
stipulated that they will not withhold their consent in bad faith. See Am. Fairness Hr’g Tr. at
16:16-17:8 (Counsel for the NFL Parties agreeing that “modifications to the settlement” will “in
good faith . . . be implemented”). Independently, the Settlement requires the NFL Parties to
implement the entire agreement in good faith. Settlement § 30.11 (“Counsel for the NFL Parties
will undertake to implement the terms of this Settlement Agreement in good faith.”); id. § 26.1
(“The Parties will cooperate, assist, and undertake all reasonable actions to accomplish the steps
contemplated by this Settlement . . . .”).
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B.
Objections to Monetary Awards
i. Definitions of Levels 1.5 and 2 Neurocognitive Impairment
To receive a Qualifying Diagnosis of Level 1.5 Neurocognitive Impairment through the
BAP, 58 a Retired Player must perform 1.7-1.8 standard deviations worse than his expected level
of pre-impairment (“premorbid”) functioning in two cognitive domains tested by the Test
Battery, and exhibit mild functional impairment consistent with the National Alzheimer’s
Coordinating Center’s Clinical Dementia Rating (“CDR”) scale. Settlement Ex. 1, at 2; id. Ex.
2, at 5. Level 2 Neurocognitive Impairment requires a performance 2 standard deviations worse
than a Retired Player’s expected premorbid functioning, and moderate functional impairment on
the CDR scale. Id. Ex. 1, at 3; id. Ex. 2, at 5. A diagnosis of Level 1 Neurocognitive
Impairment, which triggers BAP Supplemental Benefits as opposed to a Monetary Award,
occurs when a Retired Player performs 1.5 standard deviations worse than his expected
functioning, and exhibits questionable functional impairment on the CDR. Id. Ex. 1, at 1; id. Ex.
2, at 5.
Objectors contend that these cutoffs are “unreasonably high” and will prevent the
compensation of many Retired Players whom physicians typically would diagnose with
dementia. Morey Obj. at 71-72; see also Johnson Obj. at 2, ECF No. 6395 (“I feel the bar should
be lowered even more below the standard 1.0 or 1.5 . . . .”). These concerns are misguided.
Both the cognitive and functional cutoffs are drawn directly from well-established sources.
The Neurocognitive Disorders section of the Diagnostic and Statistical Manual of Mental
Disorders, Fifth Edition (DSM-5), a universally recognized classification and diagnostic tool,
divides neurocognitive disorders into mild and major disorders based on the severity of the
58
Retired Players may also receive diagnoses of Levels 1.5 and 2 Neurocognitive Impairment outside the
BAP, but the diagnosing physician must use similar diagnostic criteria. See Settlement Ex. 1, at 2-3.
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impairment. See Dr. Kelip Decl. ¶ 21. Major disorders require impairment 2 or more standard
deviations below a person’s expected premorbid capabilities. Id. ¶ 22. When this type of
impairment extends beyond a single cognitive domain, it corresponds with a diagnosis of
moderate dementia. Id. Mild disorders fall between 1 and 2 standard deviations below
premorbid expectations. Empirical research demonstrates that 1.5 standard deviations below
population norms is a relevant boundary—it substantially increases the likelihood of progression
from a mild disorder to a major one. Id. ¶ 23.
Thus, the levels of neurocognitive impairment recognized by the Settlement are empirically
tied to the cutoffs in the DSM-5. 59 Level 1 triggers BAP Supplemental Benefits because Retired
Players with that score risk progressing from mild cognitive impairment to dementia. Level 2
matches the DSM-5’s definition of moderate dementia. 60 Level 1.5 includes early dementia and
begins at the midway point between Level 1 and moderate dementia. 61
Likewise, the functional impairment criteria are directly adopted from the CDR scale. The
CDR is a highly validated test for functional impairment associated with dementia. See Keith
Wesnes, Clinical Trials in Which The CDR System Has Been Employed to Detect Enhancements
in Cognitive Function (Feb. 2013), available at http://bracketglobal.com/sites/default/files/
59
One Objector argues that the Settlement is “vague, ambiguous, and/or not sufficiently disclosed”
because, among other things, the user manual participating physicians will receive setting out the specific
cutoff scores for each test within the Test Battery has not been disclosed. Alexander Obj. at 4-5. This
objection is overruled because the methodology is sufficiently clear from the Settlement and the record.
60
Objectors argue that “it is not common for dementia patients to score consistently more than two
standard deviations below healthy controls.” Dr. Stern Decl. ¶ 50, ECF No. 6201-16. The Settlement’s
algorithm, however, recognizes that “[p]eople with neurocognitive impairment and dementia exhibit a
range of scores on neuropsychological testing.” Decl. of Dr. Richard Hamilton ¶ 17, ECF No. 6423-25.
While “some of [the Test Battery’s] scores must be low,” others “can be in the average range (or even
above average),” yet still qualify a Retired Player for a Monetary Award. Id.
61
Objectors provide affidavits from eight physicians indicating that they are “not aware of the use of the
diagnostic or classification categories” of Levels 1, 1.5, and 2 Neurocognitive Impairment anywhere in
the medical community. See Morey Final Obj. Exs. 3, 5-11. This is irrelevant. Although the precise
terms are unique to the Settlement, the levels of impairment they represent are well established.
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ISCTM-Spring-4.pdf (last accessed Apr. 21, 2015) (stating that CDR has been used in
approximately 1,400 clinical trials on over 8,000 patients).
Objectors also contend that the algorithm for translating test performance into compensable
neurocognitive impairment categories is arbitrary and unknown in the medical fields. See Decl.
of Robert Stern ¶¶ 48-51, ECF No. 6201-16 (“Dr. Stern Decl.”). Specifically, they argue that “it
is uncommon to require distinct criteria tables for levels of impairment based on a single
estimate of premorbid functioning to be used across large groups of individuals.” Id. ¶ 51.
The algorithm is reasonable. A single test score is meaningless because there is no baseline
for comparison. The Settlement’s Test Battery includes a test designed to estimate premorbid
function in a test taker. 62 That premorbid estimate compares the test taker’s score to the scores
of other individuals with similar premorbid intelligence. Dr. Kelip Decl. ¶ 45 (“[I]t is a standard
feature of any neuropsychological assessment to only judge raw scores in the context of
demographic factors and estimates of premorbid ability.”); Decl. of Dr. Richard Hamilton ¶ 15,
ECF No. 6423-25 (“Dr. Hamilton Decl.”) (noting “using the [TOPF] together with a complex
demographics statistical model . . . is a fair and reasonable manner to account for individual
variability”). Simply put, Retired Players with lower estimated pre-injury IQs must do
comparatively worse on the same test to qualify for compensation than Retired Players with
higher pre-injury ability. The practice of grouping test scores based on estimated premorbid
intelligence, as well as the specific cutoffs for the three distinct groupings the Settlement uses,
are all based on preexisting empirical research. Dr. Millis Decl. ¶ 21; Dr. Kelip Decl. ¶ 33 (“It is
well known . . . that premorbid ability has a profound effect on the expression of deficits
following brain injury or disease.”). The Settlement’s algorithm for translating these scores into
62
See infra Section V.D.ii for a more in-depth discussion of this test, including evidence that it is
commonly administered as a standalone estimate of premorbid function.
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compensable diagnoses is empirically based and transparent in its rationale. See Dr. Millis Decl.
¶ 33; Dr. Kelip Decl. ¶ 41; Dr. Hamilton Decl. ¶ 16, 23 (“The principles underlying the
algorithms have been published in many studies, and have been derived from statistical analyses
of cognitive test data from thousands of healthy subjects.”).
ii. List of Qualifying Diagnoses and their Maximum Awards
Objectors argue that the Settlement excludes dozens of other conditions associated with
repetitive mild traumatic brain injury, from pituitary hormonal dysfunction to epilepsy to sleep
disorders. 63 Objectors also argue that the maximum awards for each Qualifying Diagnosis
should be larger, and that the different maximum awards for each Qualifying Diagnosis are
arbitrary. However, the current Qualifying Diagnoses and their maximum awards are
reasonable.
Alzheimer’s Disease, Parkinson’s Disease, and ALS are all well-defined and robustly studied
conditions. Epidemiological study has associated each of these diseases with repetitive mild
traumatic brain injury. Dr. Fischer Decl. ¶¶ 6-7; Dr. Yaffe Decl. ¶ 13. Levels 1.5 and 2
Neurocognitive Impairment compensate a broad range of functional and neurocognitive
symptoms regardless of underlying pathology. 64 Dr. Fischer Decl. ¶ 9. These objectively
measurable symptoms have also been associated with concussions through epidemiological
study. Id.
63
See, e.g., Davis Obj. at 1-2, ECF No. 6354 (seeking to include hearing loss); Collier Obj. at 2-3, ECF
No. 6220 (seeking to include multiple sclerosis); Barber Obj. at 3, ECF No. 6226 (seeking to include
post-concussion syndrome); supra note 34. Most Objectors cite no record evidence that these symptoms
are associated with repetitive head trauma. Cf. Dr. Yaffe Decl. ¶ 91 (concluding that there is no link
between multiple sclerosis and repeated head trauma). Additionally, many Objectors argue that mood and
behavioral disorders, such as an increased propensity to commit suicide, should be compensated.
Because these objections are frequently tied to a lack of coverage for CTE, they are discussed supra
Section V.A.ii.
64
See infra Section V.D.ii.
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Tellingly, no Objector disputes that it is appropriate to include these conditions. Instead,
Objectors seek to revise the Settlement to include additional maladies. This type of objection
could be made to any class settlement. The essence of settlement is compromise; neither side
will achieve a perfect outcome. See GM Trucks, 55 F.3d at 806. A settlement need not
compensate every injury to be fair, especially where class members “not satisfied with the
benefits provided in the Settlement may opt out of the Settlement.” 65 Deepwater Horizon CleanUp Settlement, 295 F.R.D. at 158 (“It is well established that parties can settle claims without
providing compensation for every alleged injury.” (citing Maher v. Zapata Corp., 714 F.2d 436,
438 (5th Cir. 1983))).
Objectors also argue that maximum awards for the Qualifying Diagnoses should be greater.
Many contend that awards are insufficient to cover the cost of care for these conditions,
especially as Retired Players age. 66 Because class action settlements must be negotiated in the
shadow of what could be achieved through a lengthy and uncertain litigation process, they are
rarely able to make injured victims whole. See, e.g., In re AT&T Corp. Sec. Litig., 455 F.3d 160,
170 (3d Cir. 2006) (holding that “[t]he District Court did not abuse its discretion in concluding
that in light of the risks of establishing liability and damages, the $100 million settlement was an
‘excellent’ result,” despite the fact that the settlement likely provided compensation for only 4%
of the total damages claimed); Henderson v. Volvo Cars of N. Am., LLC, No. 09-4146, 2013 WL
1192479, at *9 (D.N.J. Mar. 22, 2013) (“A settlement is, after all, not full relief but an acceptable
compromise.” (internal quotation marks omitted)). Additionally, the maximum awards are in
line with other personal injury settlements. See, e.g., PPA Prods. Liab. Litig., 227 F.R.D. at 55665
A major benefit of the Settlement is that Retired Players retain their NFL CBA Medical and Disability
Benefits. See Settlement §§ 2.1(zzz), 18.1(a)(viii), 18.6. Some of the uncompensated conditions likely
trigger benefits under these benefit plans. The Settlement provides the certainty of compensation for
more serious conditions that Retired Players may develop.
66
See, e.g., Grimm Obj. at 1, ECF No. 6346; LaPlatney Obj. at 1, ECF No. 6390; Moore Obj. at 4-5.
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57 (approving class action settlement where class members asserted claims for “increased risk of
hemorrhagic stroke” and other injuries; settlement provided for awards ranging from $100 to $5
million); Serzone Prods. Liab. Litig., 231 F.R.D. at 229-30 (approving class action settlement
where class members asserted claims for “serious hepatic injuries,” including liver failure;
settlement provided for awards ranging from $100,000 to $3.5 million).
Moreover, the relative differences in maximum awards for the Qualifying Diagnoses ($1.5
million for Level 1.5 Neurocognitive Impairment, $3 million for Level 2 Neurocognitive
Impairment, $3.5 million for Alzheimer’s Disease and Parkinson’s Disease, and $5 million for
ALS) are supported by objective variations in the severity of symptoms and the scientific
understanding of each condition.
Level 1.5 Neurocognitive Impairment compensates objectively measurable cognitive decline
in five cognitive domains: complex attention and processing speed, executive functioning,
learning and memory, language, and spatial-perceptual. See supra Section V.B.i; infra Section
V.D.ii. Level 2 Neurocognitive Impairment compensates these same impairments when they
become more severe, justifying a higher award. See supra Section V.B.i.; infra Section V.D.ii.
Alzheimer’s Disease, Parkinson’s Disease, and ALS 67 also affect the five cognitive domains
compensated by Levels 1.5 and 2 Neurocognitive Impairment, but additional considerations
specific to each justify higher awards. See Dr. Hamilton Decl. ¶ 13.
Alzheimer’s Disease is well-defined and its clinical progression is well understood. See Dr.
Hovda Decl. ¶ 24; Dr. Schneider Decl. ¶ 42. The course of Alzheimer’s Disease, including the
timing and necessity of medical care, can be predicted with reasonable specificity. Dr. Schneider
Decl. ¶ 42 (noting that highly accurate initial clinical diagnosis of Alzheimer’s Disease is
possible). Unlike Alzheimer’s Disease, Levels 1.5 and 2 Neurocognitive Impairment
67
Compensation for Death with CTE is discussed supra Section V.A.iii.
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compensate a broad range of cognitive decline regardless of the link to any established disease or
syndrome. Thus, whether Retired Players’ symptoms for Levels 1.5 and 2 Neurocognitive
Impairment will worsen and what the cost of their care will be are difficult to predict. See Dr.
Fischer Decl. ¶ 9. Retired Players with Alzheimer’s Disease, on the other hand, would face an
easier task proving their injury is related to concussive hits and establishing their prospective
damages. Therefore, the Settlement justifiably provides higher awards for Retired Players with
Alzheimer’s Disease than for Retired Players with Levels 1.5 and 2 Neurocognitive Impairment.
Parkinson’s Disease and ALS cause debilitating neuromuscular impairment in addition to
cognitive impairment. Because people with Parkinson’s Disease and ALS must endure
additional symptoms, the Settlement justifiably provides higher awards for Retired Players with
these Qualifying Diagnoses than for Retired Players with Levels 1.5 and 2 Neurocognitive
Impairment. The additional symptoms of Parkinson’s Disease include tremors, rigidity, and
posture and gait disorders. See Ali Samii et al., Parkinson’s Disease, 363 The Lancet 1783,
1783-1784 (May 29, 2004). People with ALS experience rapid and sweeping degeneration of
the entire neuromuscular system. They watch their bodies decompose until they require a
feeding tube, ventilator, and 24-hour medical care merely to stay alive. 68 See Matthew C.
Kiernan et al., Amyotrophic Lateral Sclerosis, 377 The Lancet 942, 944-45 (Feb. 7, 2011)
(noting that 50% of victims die within three years of symptom onset). ALS’ horrific symptoms
explain why Retired Players with this Qualifying Diagnosis are eligible for the highest maximum
award.
In conclusion, the record demonstrates that Class Counsel negotiated at arm’s-length from
the NFL Parties for most of a year with the guidance of Mediator Judge Phillips and Special
68
Regrettably, Class Representative Kevin Turner has already begun to decline to this point. See supra
Section IV.B.i.
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Master Golkin. Class Counsel’s decision to seek compensation for the conditions underlying the
Qualifying Diagnoses at the levels specified in the Settlement is supported by scientific evidence.
The nature of the negotiations and the scientific evidence in the record establish that the
Qualifying Diagnoses and their maximum awards are reasonable.
C.
Objections to Offsets
i. Age Offset
Monetary Awards decrease as the age at which a Retired Player receives a Qualifying
Diagnosis increases. See Settlement Ex. 3. Some Objectors argue that this offset should be
eliminated. 69 Other Objectors argue that if age is relevant, then Class Members should have the
opportunity to prove Retired Players experienced symptoms before a formal diagnosis was made
in order to decrease their age bracket and increase their award. 70 Both the offset, and exclusive
reliance on the date of a Retired Player’s Qualifying Diagnosis, are reasonable.
The age offset has considerable scientific support. Epidemiologically, Retired Players’ most
significant risk factor for developing each of the Qualifying Diagnoses is age. Dr. Yaffe Decl.
¶ 50. For example, a 75 year old is 302 times more likely to have dementia than a 45 year old.
See Decl. of Thomas Vasquez ¶ 12, ECF No. 6423-21 (“Vasquez Decl.”); FJC Manual at 602.
As a Retired Player ages and becomes further removed from NFL Football, the likelihood that
NFL Football caused his impairment decreases. Because it would be more difficult for an older
Retired Player to prove specific causation at trial, this offset is justified.
69
See, e.g., Flint Obj. at 1 (“[A]s we get older the money goes down instead of up.”); Duncan Obj. at 2-3,
ECF No. 6357; Wilson Obj. at 1, ECF No. 6361; Alexander Stewart Obj. at 1, ECF No. 6392; Decl. of
Drs. Brent Masel & Gregory O’Shanick ¶ 18, ECF No. 6180-2 (“The consequences of a brain injury are
the same whether experienced in the past . . . or the future . . . .”).
70
See, e.g., Barber Obj. at 5-6; Duerson Obj. at 21-23; Daniel Obj. at 1, ECF No. 6367 (“Most people
with symptoms of Alzheimer’s [D]isease have suffered for a long time prior to diagnosis.”); Perfetto Obj.
at 2-5, ECF No. 6371.
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Additionally, it is reasonable to provide greater compensation to younger Retired Players.
Retired Players who did not become impaired until later in life enjoyed a longer life without
neurological injury. In the tort system, awards for the same condition tend to be smaller for
older plaintiffs. See Vasquez Decl. ¶ 15.
Objectors also argue that some Retired Players neglected to receive a Qualifying Diagnosis
until after they had already suffered for many years. See, e.g., Hawkins Obj. at 9, ECF No. 6373
(“[O]lder alumni are being penalized for the fact that the medical discoveries and the awareness
of neurodegenerative diseases related to head trauma did not exist decades ago, even though for
many players, their unrecognized and untreated symptoms were prevalent.”). Objectors argue
that NFL Football’s alleged culture of downplaying injury exacerbated this issue. Owens Obj. at
1, ECF No. 6210 (“The NFL [Parties] encouraged a warrior mentality, leading its players to
ignore pain and eventually, the damaging symptoms of brain disease.”). Objectors take issue
with the Settlement’s exclusive reliance on a Retired Player’s age at the time he received a
Qualifying Diagnosis for calculating compensation. They argue that a Retired Player should be
permitted to present evidence about the onset of his impairment in order to use his younger age
for calculating compensation. While these concerns may well be true, the Settlement is
nonetheless reasonable.
Only physicians with sufficient qualifications in the field of neurology may make Qualifying
Diagnoses. See Settlement §§ 6.3(b)-6.3(f) (noting that, with one exception to accommodate
deceased Retired Players, all physicians must be board certified). Objectors, in effect, wish to
expand this list to include friends, family members, and others without formal medical training
who may have observed symptoms in a Retired Player before he received a Qualifying
Diagnosis.
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The potential for wrongful manipulation of such an exception is too great. Even if an
appropriately credentialed physician subsequently confirms a diagnosis, it would be very
difficult to retrospectively determine with any certainty when the condition first manifested. See
Dr. Yaffe Decl. ¶ 93. Contemporaneous evaluation of a Retired Player’s symptoms by a
clinician is necessary. The formal diagnosis requirement incentivizes Retired Players to actively
seek the care they need, whether through the BAP or a Qualified MAF Physician.
ii. Severe TBI Offset
The Settlement offsets a Monetary Award by 75% if a Retired Player suffers a severe TBI
unrelated to NFL Football. See Settlement § 6.7(b)(iii). Objectors argue that a single severe TBI
should not have such a large effect on a Retired Player’s Monetary Award because the NFL
Parties allegedly exposed Retired Players to dozens of such hits over the course of their careers.
See, e.g., Morey Obj. at 32; Duerson Obj. at 25-27.
This objection stems from a misunderstanding of terms. 71 Retired Players were allegedly at
an increased risk of repetitive mild traumatic brain injuries, including concussions. After
suffering a mild traumatic brain injury, a Retired Player became impaired, but usually remained
conscious, allowing him to return to play and continue experiencing dangerous blows. See Dr.
Hovda Decl. ¶ 14. The traumatic brain injuries that trigger the offset are much more serious:
“open or closed head trauma resulting in a loss of consciousness for greater than 24 hours.” Dr.
Fischer Decl. ¶ 21; see also Settlement § 2.1(aaaaa) (defining “Traumatic Brain Injury”
consistent with World Health Organization’s International Classification of Diseases that are
used for severe TBIs). Severe TBI is well-studied, and a single severe TBI has a very strong
71
This is not necessarily Objectors’ fault. The medical community is still in the process of developing
uniform definitions for the severity of various TBIs: “[W]hen a study finds that a TBI is a risk factor for
or associated with a certain condition, it is often unclear whether the study means severe TBI, moderate
TBI, mild TBI, or repetitive TBI—or any mix of these combinations.” Dr. Yaffe Decl. ¶ 41.
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association with dementia, Alzheimer’s Disease, and Parkinson’s Disease. 72 Dr. Yaffe Decl.
¶ 90. This strong association justifies the 75% offset for Retired Players who suffered a severe
TBI.
Moreover, even if a Retired Player suffered a severe TBI, the Settlement still provides that
Retired Player with an opportunity to demonstrate by clear and convincing evidence that the
severe TBI did not cause his Qualifying Diagnosis. See Settlement § 6.7(d).
iii. Stroke Offset
Objectors similarly contend that the 75% offset for Stroke is unreasonable. See Morey Obj.
at 32-34; Barber Obj. at 6-8, ECF No. 6226.
Like severe TBI, Stroke is a well-known cause of the Qualifying Diagnoses. Indeed, the
medical community recognizes that Stroke is the second most common cause of dementia. Dr.
Yaffe Decl. ¶ 87. Doctors often refer to this particular type of dementia as vascular dementia.
Dr. Fischer Decl. ¶ 18.
Objectors do not dispute this, and instead argue that the repetitive mild TBI Retired Players
were exposed to also cause Stroke. See Morey Obj. 32-33; Decl. of Drs. Masel & O’Shanick
¶ 17. However, the studies they cite do not support this proposition. Two of the cited studies
examine the effects of moderate and severe TBI, not repetitive mild TBI, on Stroke. 73 Other
72
Objectors argue that CTE causes severe TBI because CTE impedes impulse control and increases the
risk of severe TBI through car accidents. See Morey Obj. at 32 n.33; Duerson Obj. at 26. Even if true,
this risk is too attenuated to render this offset unfair.
73
See James F. Burke et al., Traumatic Brain Injury May Be an Independent Risk Factor for Stroke, 81
Neurology 1, 2 (2013), ECF No. 6201-6 (limiting study to individuals with head injury so serious that it
required a visit to a hospital emergency room or inpatient admission); Yi-Hua Chen et al., Patients with
Traumatic Brain Injury: Population-Based Study Suggests increased Risk of Stroke, 42 Stroke 2733, 2734
(2011), ECF No. 6422-22 (limiting study to individuals “who had visited ambulatory care centers . . . or
had been hospitalized with a principal diagnosis of TBI” and finding a large portion of Stroke risk
occurred in the three months after experiencing severe TBI).
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studies do not address Stroke at all. 74 Objectors also argue that the NFL Parties’ alleged
administration of the drug Toradol to Retired Players increased the risk of Stroke, but cite no
studies in support of this claim. See Duerson Obj. at 26-27; see also Dr. Fischer Decl. ¶ 20 (“I
am not aware of any scientific support for [the contention that Toradol increases latent stroke
risk], and I have seen no such reference in any of the papers cited by the objectors.”). The Stroke
offset is reasonable.
Moreover, as with the severe TBI offset, any Retired Player has an opportunity to
demonstrate by clear and convincing evidence that the Stroke he suffered did not cause his
Qualifying Diagnosis. See Settlement § 6.7(d). 75
iv. Eligible Season Offset
Objectors argue that the offset for playing fewer than five Eligible Seasons is unfair because
“[a] single severe concussion in the first game of a player’s career could cause a player to suffer
dementia.” Armstrong Obj. at 16; see also Drs. Masel & O’Shanick Decl. ¶ 16 (“[A] single
concussion . . . is capable of generating debilitating physical, cognitive and behavioral
impairments . . . .”); Duncan Obj. at 2, ECF No. 6357 (“[B]rain damage is sustained from the
intensity and severity of the incident and could result from a single hit.”).
74
See Erin D. Bigler, Neuropsychology and Clinical Neuroscience of Persistent Post-Concussive
Syndrome, 14 J. Int’l Neuropsychological Soc’y 1 (2008), ECF No. 6201-6 (failing to mention Stroke).
Objectors also contend that repetitive mild TBI increases microbleeds, which increase Stroke. Although
the study they cite found that 4 out of 45 Retired Players had microbleeding, researchers were unable to
conclude that this percentage was any higher than what would be found in a control group. See Ira R.
Casson et al., Is There Chronic Brain Damage in Retired NFL Players? Neuroradiology,
Neuropsychology, and Neurology Examinations of 45 Retired Players, 6 Sports Health 384, 391 (2014),
ECF No. 6201-6 (“It is not yet known whether the 9% frequency of microbleeds is higher than what
might appear in an age-matched normal population . . . .”). Moreover, the study does not address Stroke.
75
Objectors contend that the NFL Parties should bear the burden of proving that the offsets for severe
TBI and Stroke are reasonable. See Barber Obj. at 6-8. Given the strength of the association between
these events and neurocognitive impairment, placing the burden of proof on a Retired Player is
reasonable.
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The Eligible Season offset serves as a proxy for the number of concussive hits a Retired
Player experienced as a result of playing NFL Football. See Drs. Masel & O’Shanick Decl. ¶ 16
(conceding it is “reasonable to assume that that exposure to mild TBI increases as playing time
increases”). Retired Players with brief careers endured fewer hits, making it less likely that NFL
Football caused their impairments. Research supports the claim that repeated mild TBI have an
association with Qualifying Diagnoses. See Dr. Fischer Decl. ¶¶ 6-7; Dr. Yaffe Decl. ¶ 13.
Objectors cite no authority for the assertion that a single mild TBI is enough to create long
lasting, permanent neurological damage. See Dr. Fischer Decl. ¶¶ 5-6 (noting “the critical
subgroup [is] those individuals who have sustained repeated clinical and subclinical traumatic
brain injuries over a significant period of time” and that Qualifying Diagnoses have been
associated with “repeated traumatic brain injury”). Short-term concussion symptoms—the
wooziness typically experienced after a hit—come from the release of the excitatory amino acid
glutamate. Dr. Hovda Decl. ¶ 15. An isolated concussion does not result in cell death or
structural damage to the brain and is a largely recoverable diagnosis. Dr. Giza Decl. ¶ 12.
However, permanent damage can occur if the brain continues to experience trauma before
making a full recovery, such as when people experience additional head injuries. Id. Thus, the
offset for playing fewer than five Eligible Seasons is reasonable.
A Retired Player receives an Eligible Season credit if he was on an NFL Member Club’s
Active List for at least three regular or postseason games, or if he was on a Member Club’s
Active List for at least one regular season or postseason game and spent two games on an
inactive list or injured reserve list due to a concussion or head injury. See Settlement § 2.1(kk).
A Retired Player receives half of an Eligible Season credit if he satisfied either of these criteria
playing for a team in the World League of American Football, NFL Europe League, or NFL
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Europa League (collectively, “NFL Europe”). A Retired Player receives half of an Eligible
Season credit if he was on an NFL Member Club’s practice, developmental, or taxi squad roster
for at least eight regular or postseason games. Id.
Objectors argue that the definition of an Eligible Season should derive from the definition of
“Credited Season” used in the Bert Bell/Pete Rozelle NFL Player Retirement Plan because the
latter credits seasons in which a Retired Player was placed on injured reserve at any time, for any
injury. See, e.g., Slack Obj. at 6-7, ECF No. 6223. Objectors contend that “[t]he basis for
limiting the injured reserve credit to players on injured reserve due to a concussion or head injury
is not explained in the proposed Settlement.” Andrew Stewart Obj. at 3, ECF No. 6175.
Eligible Seasons are a proxy for exposure to concussive hits. Retired Players on injured
reserve did not play or practice. A Retired Player on injured reserve because of a concussion
was almost certainly at a higher risk of long-term neurological damage than a Retired Player on
injured reserve for an injury unrelated to concussive hits. Limiting Eligible Season credit to
Retired Players placed on injured reserve with a head injury is reasonable.
Objectors also argue that Retired Players who played in NFL Europe should receive full
Eligible Season credit. As amended, the Settlement now allows Retired Players to earn half of
an Eligible Season credit for time spent on an active roster in NFL Europe. 76 See Settlement
§ 2.1(kk). A Retired Player may combine his half of a season credit with other Eligible Season
credit from time spent on a domestic Member Club’s roster, but may only earn one total Eligible
Season credit per year. 77 See id. § 6.7(c).
76
Previously, Retired Players received no Eligible Season credit for participation in NFL Europe. The
amendment addresses concerns raised by several Objectors. See, e.g., Morey Obj. at 34-36; Slack Obj. at
3-4, ECF No. 6223; Duff Obj. at 1, ECF No. 6348; Jones Obj. at 2-4; Zeno Obj. at 1-2, ECF No. 6386.
77
Seasons in NFL Europe occurred in the spring, and did not overlap with the domestic NFL Football
season. Without this limitation, a Retired Player who, in one year, played three games on an Active List
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NFL Europe had a shorter regular season than domestic NFL Football—10 games rather than
16—and held fewer practices. Decl. of T. David Gardi ¶ 14, ECF No. 6422-33. Additionally,
NFL Europe Retired Players face a litigation risk that other Retired Players do not. To play in
NFL Europe, Retired Players had to sign employment contracts that provided workers’
compensation benefits. Florida and Georgia law govern these agreements and mandate that
workers’ compensation is the exclusive remedy for work related injuries. See id. ¶¶ 5, 8-9, 12.
The NFL Europe Eligible Season credit is reasonable.
Lastly, Objectors challenge the exclusion of training camp and preseason games from the
calculation of Eligible Season credit. They argue that these activities exposed Retired Players to
concussive hits because many Retired Players had to play hard to ensure roster spots. See, e.g.,
Andrew Stewart Obj. at 4-5 (“Training camps were full contact, twice a day for 3.5 hours each
session.”); Moore Obj. at 2, ECF No. 6399 (noting that “the hitting in scrimmages and live
practices was (is) just as intense, if not more so, than in the regular season games”).
While training camp and preseason were undoubtedly brutal, so too were the regular and
postseason games that qualify a Retired Player for Eligible Season credit. It is reasonable to
assume that Retired Players who made the roster, and thus continued to play NFL Football that
season, were exposed to a greater number of potentially harmful hits. While the Settlement may
have been more generous if Retired Players received Eligible Season credit for training camp and
preseason participation, the lack of credit does not render the Settlement unfair.
In sum, the calculation of Eligible Season credit is reasonable.
for both NFL Europe and domestic NFL Football could have earned one-and-a-half Eligible Season
credits.
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v. BAP Offset
Retired Players who neglect to take a baseline assessment examination and who later develop
a Qualifying Diagnosis will see their awards reduced by 10%. See Settlement § 6.7(b)(iv).
Objectors challenge this provision as arbitrary. Morey Obj. at 74.
The offset is a reasonable means to encourage Retired Players to participate in the BAP.
Baseline assessment examinations either result in a Qualifying Diagnosis or produce a more
complete picture of a Retired Player’s neurocognitive profile. The latter makes a subsequent
Qualifying Diagnosis easier to render by providing a point of comparison. See infra Section
V.D.i. The scope of the offset confirms that its purpose is to incentivize baseline assessment
examinations. The offset does not apply to Retired Players who received Qualifying Diagnoses
before the Preliminary Approval Date or those without Qualifying Diagnoses who are still
eligible to participate in the BAP. See Settlement § 6.7(b)(iv).
D.
Objections to the Baseline Assessment Program
i. BAP Fund
The primary purpose of the BAP is to provide free, comprehensive neurological and
neuropsychological examinations to Retired Players. Retired Players may receive diagnoses of
Level 1 Neurocognitive Impairment and Qualifying Diagnoses of Levels 1.5 and 2
Neurocognitive Impairment through baseline assessment examinations. 78 Class Counsel’s
actuarial expert predicts that the cost of these exams will account for less than two thirds of the
$75 million BAP Fund. See Vasquez Decl. ¶¶ 23-24. Even if the costs of these exams exceed
the $75 million BAP Fund, the Parties amended the Settlement to guarantee that every eligible
78
Qualifying Diagnoses of Alzheimer’s Disease, Parkinson’s Disease, and ALS cannot be made through
baseline assessment examinations. See infra Section V.D.ii. Retired Players must visit Qualified MAF
Physicians to receive any of these Qualifying Diagnoses. Qualified MAF Physicians may also provide
Retired Players with Qualifying Diagnoses of Levels 1.5 and 2 Neurocognitive Impairment. See
Settlement § 6.3(b).
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Retired Player can receive an exam regardless of the total cost. See Parties’ Joint Amendment at
3-4.
Any remaining money in the BAP Fund will go toward BAP Supplemental Benefits for
Retired Players who are diagnosed with Level 1 Neurocognitive Impairment. See Settlement
§ 5.14(b) (noting that benefits per Retired Player will be calculated in light of the cost of
providing Retired Players with baseline assessment examinations). Objectors argue that these
benefits are insufficient because the annual cost of treating dementia is allegedly $56,000. See
Morey Obj. at 72. Objectors, however, compare apples to oranges. Level 1 Neurocognitive
Impairment is not early dementia; it is less severe. See Settlement Ex. 1, at 1-2; supra Section
V.B.i. If a Retired Player progresses to early dementia (Level 1.5 Neurocognitive Impairment),
he will be entitled to compensation from the uncapped Monetary Award Fund. See Settlement
§§ 23.1(a)-(b).
Moreover, Class Counsel’s actuary estimates that the average BAP Supplemental Benefit per
Retired Player will range from $35,000 to $52,000; the NFL Parties’ actuaries predict that there
may be an $11 million surplus in the BAP Fund even after payment of BAP Supplemental
Benefits to Retired Players. Vasquez Decl. ¶ 28; NFL Parties’ Actuarial Materials ¶ 10.
ii. Test Battery
Baseline assessment examinations subject Retired Players to a Test Battery that provides a
comprehensive neuropsychological and neurological examination. The Test Battery consists of
four components, all administered by a board-certified neurologist and an appropriately
credentialed neuropsychologist. First, the Advanced Clinical Solutions Test of Premorbid
Functioning (“TOPF”) is used to estimate a Retired Player’s basic pre-injury ability level. See
Settlement Ex 2. Second, a series of tests assesses a Retired Player’s level of functioning in five
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cognitive domains, including complex attention and processing speed, executive functioning,
learning and memory, language, and spatial-perceptual. Id. The series also includes tests of
functional impairment, such as a Retired Player’s ability to perform daily chores. Third, the Test
Battery includes two tests that focus on emotional functioning and aspects of personality, the
MMPI-2RF and the Mini International Neuropsychiatric Review (“Mini”). Id. Finally, there are
several “validity” measures, designed to ensure that test takers are not intentionally submitting
incorrect answers to seem impaired. Id.
Collectively, these tests provide Retired Players with a comprehensive baseline assessment of
their cognitive capabilities and their neuropsychological state. See Dr. Fischer Decl. ¶ 14.
Numerous empirical studies show that these tests are effective at identifying impairment,
especially in persons who have sustained brain injury. Id. ¶ 16. It would be very difficult for
any significant neurological abnormalities to escape an examination of this breadth. 79
Objectors argue that the Test Battery does not resemble exams typically given by
neuropsychologists in the field. 80 This is incorrect. The Parties and their experts did not
construct any test from scratch; each individual exam in the Test Battery is a well-established
and validated tool for diagnosing neurocognitive impairment in any age group and is supported
by extensive empirical testing to ensure its validity. See, e.g., Dr. Kelip Decl. ¶¶ 28, 33; Dr.
Millis Decl. ¶¶ 17-20, 24-25; Dr. Hamilton Decl. ¶ 14 (practicing physician noting that the Test
Battery includes exams that are “very similar (and, in many cases, identical)” to tests used in
every day practice for these types of diagnoses). The TOPF is a well-accepted exam for
79
See Dr. Fischer Decl. ¶ 14 (noting that the Test Battery will include “constitutional evaluation, mental
status testing, speech testing, full cranial nerve investigation, motor function, sensory function,
coordinative testing, reflex testing, back and neck evaluation, and gait and posture”).
80
See, e.g., Morey Obj. at 73 (“The testing protocols prescribed by the Settlement are generally
considered inappropriate for the evaluation of individuals with neurodegenerative diseases.”); Drs. Masel
& O’Shanick Decl. ¶ 12 (arguing for a “more holistic, human-based, and less linguistically reliant”
examination); Duerson Obj. at 24.
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estimating premorbid function. 81 Dr. Millis Decl. ¶ 17. The cognitive domains tested in the Test
Battery are those laid out in the Neurocognitive Disorders section of the DSM-5. See Dr. Kelip
Decl. ¶ 17. Functional impairment is measured by the National Alzheimer’s Coordinating
Center’s CDR scale, a validated and commonly-used scale for assessing the progression of
dementia symptoms. See Settlement Ex. 1; Dr. Kelip Decl. ¶ 35. A survey of 747 wellcredentialed psychologists “shows that the tests included in the Test Battery are among the most
widely used neuropsychological tests across all patient groups.” Dr. Millis Decl. ¶ 25.
Objectors also argue that the Test Battery’s five-hour length is excessive, and that many
genuinely impaired Retired Players will be unable to complete it. See Morey Obj. at 73; Dr.
Stern Decl. ¶ 44. The Test Battery contains countermeasures to ensure that this does not occur.
Most of the individual tests administered have “stopping rules” that allow the examiner to
shorten the exam based on how the participant is performing. See Dr. Millis Decl. ¶ 26. More
broadly, the neurologists and neuropsychologists who will administer the Test Battery will have
training and experience administering tests of this length to impaired subjects. See id.; Dr. Kelip
Decl. ¶ 40. Empirical evidence shows that patients suffering from dementia can tolerate tests of
this length. See Dr. Kelip Decl. ¶¶ 36, 40.
Objectors also challenge the Test Battery’s validity measures and argue that these exams will
produce false positives and exclude Retired Players who are legitimately impaired. See Dr. Stern
Decl. ¶ 46. Validity measures, however, are universally regarded as a necessary component of
any neurocognitive testing because they ensure the reliability of the data. Dr. Millis Decl. ¶ 28;
Dr. Kelip Decl. ¶ 43. They are particularly reasonable where, as here, test takers have a
81
Some Objectors argue that the TOPF disadvantages those with accents because one component asks
participants to read a list of words and pronounce them exactly. See Drs. Masel & O’Shanick Decl. ¶ 14.
The TOPF, however, also includes demographic formulas based on age, education, and gender that
provide an alternative means for assessing premorbid ability. Dr. Millis Decl. ¶ 37.
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significant financial incentive to appear impaired. The Test Battery incorporates wellestablished validity criteria that take into account the overall performance of the subject and how
that performance compares to known patterns of impairment. Dr. Millis Decl. ¶ 30; Dr. Kelip
Decl. ¶ 44.
Finally, many Objectors argue that the Test Battery provides insufficient testing for mood
and behavioral conditions allegedly associated with CTE. 82 Because the Settlement does not
compensate these conditions, more limited testing is reasonable. Nonetheless, the Test Battery
does include two tests, the Mini and MMPI-2RF, which exclusively test for mood and behavioral
abnormalities. These two tests include questions on irritability, lowered inhibitions, suicidal
thinking, and depression. See Dr. Kelip Decl. ¶ 39; Dr. Hamilton Decl. ¶ 22. Red flags on these
neuropsychological tests can become the focus of follow up care, including additional testing and
treatment.
iii. BAP Protocols
Objectors challenge the age cutoffs for baseline assessment examinations and the ten-year
length of the BAP. 83 See Morey Obj. at 74; Armstrong Obj. at 19-20; Alexander Obj. at 7.
These requirements are both reasonable and scientifically based.
A Retired Player who is younger than 43 has ten years or until his 45th birthday, whichever
happens first, to receive a baseline assessment examination. See Settlement § 5.3. A Retired
Player 43 or older has two years from the commencement of the BAP to receive an exam. Id. In
all circumstances, a Retired Player will have at least two years to receive a baseline assessment
82
See, e.g., Duerson Obj. at 23 (“The BAP does not test for the mood and behavioral disorders that plague
many individuals who suffer from CTE, effectively excluding a significant number of Class Members
from the possibility of compensation.”); Morey Supplemental Obj. at 3, ECF No. 6232.
83
Objectors also challenge the 180-day registration requirement. See Armstrong Obj. at 19. Because this
is a prerequisite to many settlement benefits, it is discussed infra Section V.E.ii.
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examination. Two years is a reasonable period of time for a Retired Player to complete a free,
five-hour exam.
Both the structure of the Settlement and neurological science justify these deadlines. The age
offset decreases the Monetary Awards for Qualifying Diagnoses rendered after age 45. See
Settlement Ex. 3. As discussed supra, this is because Retired Players’ most significant risk
factor for developing each Qualifying Diagnosis is age. See Vasquez Decl. ¶ 11; Dr. Yaffe Decl.
¶ 50. Timely baseline assessment examinations ensure that funds are most likely to be
distributed to Retired Players whose symptoms are a result of playing NFL Football. These
deadlines also work to the benefit of Retired Players. Earlier exams may lead to earlier
Qualifying Diagnoses and result in higher awards. Even if a Retired Player is not yet impaired,
an earlier exam will provide a more accurate picture of the Retired Player’s premorbid
functioning. The same reasoning justifies the ten-year limit on the BAP.
iv. Selection Process for Qualified BAP Providers
Only pre-selected Qualified BAP Providers may administer baseline assessment
examinations. Settlement § 5.2. The BAP Administrator will select these BAP Providers,
subject to limited veto rights of both the NFL Parties and Co-Lead Class Counsel. See id.
§ 5.7(a)(i) (providing for 20 vetoes each). Some Objectors argue that this unfairly slants the
process towards the NFL Parties because the neuropsychologists selected “are likely to be far
more conservative in ‘calling’ impairment than a neuropsychologist chosen by a player.”
Armstrong Obj. at 20; see also Alexander Obj. at 8.
The selection requirement is reasonable. Qualified BAP Providers must be well-trained and
credentialed. Neurologists must be board certified, and neuropsychologists must certified by the
American Board of Professional Psychology or the American Board of Clinical
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Neuropsychology. See Settlement § 5.2. A BAP Provider is ineligible if he has committed a
crime of dishonesty. Id. § 5.7(a)(ii). Co-Lead Class Counsel also have the ability to veto
potential Qualified BAP Providers, and an absolute right to exclude any BAP Provider with
some connection to the litigation as an expert witness or consultant. 84 Id. § 5.7(a)(i).
v. Use of Mail Order Pharmacy Vendors
The Qualified BAP Pharmacy Vendors that provide prescription drugs as part of BAP
Supplemental Benefits are all mail order pharmacies. See id. §§ 2.1(xxx); 5.7(b). Objectors
challenge this limitation, claiming that mail order pharmacies may be unable to deliver certain
necessary medications because of storage requirements and will “deprive Class Members of the
personal, face-to-face counseling available at local ‘brick and mortar’ pharmacies.” Armstrong
Obj. at 23.
The Claims Administrator intends to work with all potential mail order Qualified BAP
Pharmacy Vendors to ensure that each “offers the option to fill prescriptions at a local retail
pharmacy, when necessary, due to the transportation and storage requirements of required
therapies; the necessity of frequent medication dose adjustments . . . [and] the desire of Class
Members to avail themselves of ‘face-to-face’ counseling.” Garretson Aff. ¶ 15. Thus, there is
no reason for concern.
For all of the reasons discussed above, the Baseline Assessment Program is reasonable.
Objections to the BAP are overruled.
84
Some Objectors argue that this rule is unfair because it prejudices the ability of Opt Outs to retain
experts to prosecute their cases. Because a physician cannot be both an Opt Out’s expert witness and a
Qualified BAP Provider, Objectors imply that physicians will choose to become Qualified BAP Providers
rather than serve as experts for Opt Outs. See Morey Obj. at 86. However, Objectors lack standing to
assert the rights of Opt Outs because they are Class Members. Moreover, Objectors cite no evidence that
the pool of available physicians is small enough for this to be a burden.
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E.
Objections to the Claims Process
Objectors argue that the claims process is unduly burdensome. They fear that few Class
Members will submit claims, and that Class Members who do submit claims will be thwarted by
a “complex and burdensome administrative process.” Morey Obj. at 73; Heimburger Obj. at 18.
Objectors fail to consider that the claims process needs to be rigorous enough to deter
submission of fraudulent claims. Monetary Awards may amount to hundreds of thousands if not
millions of dollars to eligible Class Members. Settlement Ex. 3. The NFL Parties are entitled to
reasonable procedures and documentation to ensure that large awards go to deserving claimants.
In cases with large awards, an overabundance of fraudulent claims, rather than a dearth of valid
ones, is the main concern. Submission of fraudulent claims to class settlements is, unfortunately,
a documented phenomenon. See In re Diet Drugs (Phentermine/Fenfluramine/Dexfenfluramine)
Prods. Liab. Litig., 573 F. App’x 178, 180 (3d Cir. 2014) (noting that the settlement was
“inundated with fraudulent claims that included manipulated [medical] test results”); United
States v. Penta, No. 08-0550 (E.D. Pa. Sept. 11, 2008) (indictment charging five people, who all
ultimately pleaded guilty, with submitting $40 million in fraudulent claims to the Nasdaq
Market-Makers, Cendant, and BankAmerica Securities settlements); Oetting v. Green Jacobson,
P.C., No. 13-1148, 2014 WL 942952, at *1 (E.D. Mo. Mar. 11, 2014) (noting millions of dollars
of false claims submitted in BankAmerica Securities settlement).
Objectors also fail to consider the protections built into the Settlement to ensure that
deserving claims are approved. Specifically, the Claims Administrator responsible for
implementing the claims process is an independent entity subject to oversight by an independent
Special Master and, ultimately, this Court. See Settlement § 5.6(a)(iv) (“The Special Master . . .
will oversee the BAP Administrator, and may, at his or her sole discretion, request reports or
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information from the BAP Administrator”); id. § 10.2(a)(iii) (“The Court may, at its sole
discretion, request reports or information from the Claims Administrator.”); id. § 10.2(e) (Claims
Administrator may be replaced for cause upon order of the court, or by joint motion of the
Parties). This independent oversight will ensure that all claims are objectively evaluated.
Additionally, the NFL Parties have contracted to implement the Settlement in good faith, and
remain subject to this Court’s continuing jurisdiction and oversight. See id. §§ 20.1(n), 27.1
(“[T]he Court retains continuing and exclusive jurisdiction . . . to interpret, implement,
administer and enforce the Settlement . . . .”); id. § 30.11 (“Counsel for the NFL Parties will
undertake to implement the terms of this Settlement in good faith.”).
i. Cognitive Impairment of Certain Retired Players
Objectors argue that the claims process is unreasonable because Retired Players suffering
from cognitive impairment cannot be expected to keep track of forms, deadlines, and submission
requirements. See, e.g., Morey Obj. at 78 (“Someone laboring under [a Qualifying Diagnosis]
has little hope of navigating the procedural morass required to claim payment under the
Settlement.”); Carrington Obj. at 7.
The Settlement reasonably accommodates the needs of cognitively impaired Retired Players.
The Settlement allows any Class Member to use a representative to conduct the claims process
for him. Any Class Member may retain counsel to compile and submit any relevant forms on his
behalf. Settlement § 30.2(a). The Settlement provides an extension of the registration deadline
for good cause, and an opportunity for any Class Member to cure an incomplete Claim Package.
See id §§ 4.2(c)(i), 8.5. The Claims Administrator, who is experienced in administering claims
in personal injury settlements, will be especially sensitive to the needs of cognitively impaired
Retired Players. See Brown Decl. ¶ 57.
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ii. Registration Requirement
Class Members must register with the Claims Administrator within 180 days of receiving
notice that the Settlement has gone into effect. See Settlement § 4.2(c). Registration is a
prerequisite to Class Members’ receipt of most Settlement benefits, including receipt of
Monetary Awards and participation in the BAP. See id. §§ 5.1, 6.2. Objectors assert that this
creates an unfair “opt in” settlement. Morey Obj. at 74. The registration requirement is
reasonable, not onerous. See In re Orthopedic Bone Screw Prods. Liab. Litig., 246 F.3d 315, 316
(3d Cir. 2001) (“[D]eadlines are an integral component of effective consolidation and
management of the modern mass tort class action.”).
To register, a Class Member must only submit basic biographical information, including
name, contact information, and the dates and nature of a Retired Player’s employment with the
NFL Parties sufficient to determine that the registrant is a Class Member. 85 See Settlement
§ 4.2(b). In the event that a Class Member cannot register in the six-month window, the
Settlement provides an extension for good cause. Id. § 4.2(c). If the Claims Administrator
rejects a Class Member’s application, he has an opportunity to appeal. Id. § 4.3(a)(ii); see also
Diet Drugs, 2000 WL 1222042, at *20, 23-24 (describing various registration requirements for
benefits).
Class Members will receive ample reminders to complete the registration process. Within 30
days of the Effective Date of the Settlement, Class Members will be mailed materials reminding
them to register. Settlement § 14.1(d). An automatic telephone service established by the
Claims Administrator will likewise inform Class Members of upcoming deadlines. See id.
§§ 4.1(b), 10.2(b)(i)(2), 14.1(d).
85
Representative and Derivative Claimants must also identify the Retired Player through whom they have
a claim. See Settlement §§ 4.2(b)(i)-(ii).
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The registration requirement is not a meaningless exercise; rather, it enables the Settlement to
provide key services. The BAP Administrator and Claims Administrator must approve lists of
Qualified BAP Providers and Qualified MAF Physicians to provide baseline assessment
examinations and make Qualifying Diagnoses. Class Members’ contact information enables the
BAP Administrator to appoint physicians in sufficient quantity and geographical distribution to
ensure that all Class Members can access these benefits. See id. §§ 5.7(a)(ii), 6.5(b).
Registration also enables more effective communication between the Claims Administrator and
the Class, so that Class Members may remain abreast of deadlines and other relevant
information. See id. § 4.2(b) (asking registrants to choose between email, U.S. mail, and other
methods of communication); id. § 4.3(a)(i) (noting that, upon successful registration, Class
Members will receive access to a secure web-based portal that provides information regarding
the Claim Package and awards).
iii. Use of Qualified MAF Physicians
After the Effective Date, Retired Players must, at their own expense, visit Qualified MAF
Physicians to receive a Qualifying Diagnosis of Alzheimer’s Disease, Parkinson’s Disease, or
ALS. 86 See id. §§ 6.3(b), 6.5(a). Objectors argue that Class Members should be allowed to
choose their own physicians to reduce the burden of obtaining Qualifying Diagnoses. See Morey
Obj. at 76 (noting lack of hardship provision for Class Members geographically isolated from a
Qualified MAF Physician); Daniel Obj. at 1-2, ECF No. 6367; Erickson Obj. at 5, ECF No.
6380; Taylor Obj. at 2-3, ECF No. 6397.
Requiring Retired Players to visit a Qualified MAF Physician to receive certain Qualifying
Diagnoses is reasonable. Qualified MAF Physicians must be board certified and able to perform
86
Qualifying Diagnoses of Levels 1.5 and 2 Neurocognitive Impairment may be made by both Qualified
MAF Physicians and through the BAP by Qualified BAP Providers. See id. § 6.3(b). Compensation for
Death with CTE ends on the Final Approval Date. See supra Section V.A.iii.
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the exams necessary to render Qualifying Diagnoses. See Settlement §§ 2.1(www), 6.5(c). A
Retired Player’s primary care physician will not necessarily have this training. Moreover,
visiting a Qualified MAF Physician is not an undue burden. The Claims Administrator must take
into account geographic proximity to Retired Players when selecting Qualified MAF Physicians.
See id. § 6.5(b).
iv. Claim Package
To receive a Monetary Award, a Class Member must submit a Claim Package that includes a
signed Claim Form, records demonstrating employment with the NFL Parties, a Diagnosing
Physician Form, and medical records reflecting a Qualifying Diagnosis. Id. § 8.2(a). As
amended, the Settlement allows a Representative Claimant of a deceased Retired Player to
petition the Claims Administrator to excuse the latter two requirements if those records were lost
in a hurricane or other force majeure type event, and the Representative Claimant can produce a
death certificate referencing the Qualifying Diagnosis. 87 Id. § 8.2(a)(ii). To demonstrate that a
Retired Player participated in more than one Eligible Season, a Class Member must include
evidence beyond a Retired Player’s sworn statement attesting to his playing time. Id. § 9.1(a)(i).
A Claim Package “must be submitted to the Claims Administrator no later than two (2) years
after the date of the Qualifying Diagnosis or within two (2) years after the Settlement Class
Supplemental Notice is posted on the Settlement Website, whichever is later.” Id. § 8.3(a)(i).
The contents of the Claim Package are reasonable. “Class members must usually file claims
forms providing details about their claims and other information needed to administer the
settlement.” Manual for Complex Litigation § 21.66 (4th ed.). Only information necessary to
determine that a Retired Player played in the NFL and received a Qualifying Diagnosis is
87
The amendment addresses the concerns raised in the objection of Delano Williams. See D. Williams
Obj. at 4-6, ECF No. 6221.
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required. Objectors complain that the specific forms constituting the Claim Package have not
been disclosed, but cite no source requiring disclosure at this stage. See Morey Obj. at 75. Class
Members will receive “detailed information regarding the Claim Package” and application
process upon registration. Settlement § 4.3(a)(i).
Objectors challenge the requirement that a Retired Player needs to submit more than just a
sworn statement in order to receive more than one Eligible Season credit. See id. § 9.1(a)(i);
Morey Obj. at 75 (contending that there is “no possible justification for this procedural hurdle
because the NFL itself has this data”). This requirement, however, is reasonable as an initial
screen to weed out fraudulent claims. If a Class Member’s proffered evidence is insufficient, the
NFL Parties and individual Member Clubs are required to turn over, in good faith, any records
that they possess. See id. § 9.1(a); Varacallo, 226 F.R.D. at 243 (concluding that it is reasonable
to require submission of documents in support of a claim even though the defendant was also
required to submit a file that “may [have] contain[ed] information that would support” the
claim). Moreover, Retired Players likely retain employment records, especially because their
retirement and disability benefits similarly turn on the number of seasons played. See Andrew
Stewart Obj. at 7 (“The Term ‘Credited Season’ is familiar to all players and is routinely used to
determine eligibility pension and disability benefits.”); id. Ex. 6, ECF No. 6175-3 (Bert Bell/Pete
Rozelle NFL Player Retirement Plan).
Finally, Objectors challenge the two-year window the Settlement provides Class Members to
submit a Claim Package after a Retired Player has received a Qualifying Diagnosis. However,
courts in the Third Circuit have upheld far shorter periods. See In re Ins. Brokerage Antitrust
Litig., MDL No. 1663, 2007 WL 542227, at *10 (D.N.J. Feb. 16, 2007) (holding that five-month
period to submit claims forms is reasonable), aff’d, 679 F.3d 241 (3d Cir. 2009); Processed Egg
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Prods., 284 F.R.D. at 256 (approving settlement where class members had “127 days from the
postmark date that the notice of the settlement was mailed by first-class mail . . . to return a
completed Claim Form to make a claim for benefits”). Moreover, if a Class Member can
demonstrate substantial hardship, then this window may be expanded by an additional two years.
See Settlement § 8.3(a)(i).
v. Appeals Process
Class Members, Co-Lead Class Counsel, and the NFL Parties may each appeal the Claims
Administrator’s decision as to whether a Class Member is entitled to a Monetary Award. Id.
§ 9.5. To appeal, a Class Member must pay a $1,000 fee, which will be refunded if the appeal is
successful. Id. § 9.6(a). As amended, the Settlement allows the Claims Administrator to waive
the fee if a Class Member can show financial hardship. 88 Id. § 9.6(a)(i). Appeals are limited to
five single-spaced pages, and subject to proof by clear and convincing evidence. Id. §§ 9.7(a),
9.8. The Court is the ultimate arbiter of any appeal, and may consult a member of an Appeals
Advisory Panel for medical advice. Id. § 9.8.
Objectors contend that exempting the NFL Parties from an appeal fee is unfair, and that the
exemption will allow them to undertake unlimited appeals. Armstrong Obj. at 23-24; see also
Morey Obj. at 76. The NFL Parties may only undertake appeals in good faith, and Co-Lead
Class Counsel may petition this Court for appropriate relief if the NFL Parties subvert this
requirement. See Settlement § 9.6(b).
Objectors also argue that the five-page limit and the clear and convincing standard will make
successful appeals “extremely rare.” Armstrong Obj. at 24. These provisions, however, also
apply to the NFL Parties and thus protect favorable awards to Class Members. Moreover, the
88
This amendment addresses a concern raised by several Objectors. See, e.g., Morey Obj. at 76;
Armstrong Obj. at 23-24.
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five-page limit applies only to written statements; additional medical records and other evidence
in support of an appeal are exempted. See Settlement § 9.7(a). Furthermore, even if an appeal is
unsuccessful, a Class Member may submit another Claim Package. 89
vi. Anti-Fraud Provisions
To ensure that only Retired Players actually affected by neurocognitive or neuromuscular
impairment—and their Representative and Derivative Claimants—receive Monetary Awards, the
Settlement establishes an audit system. Objectors incorrectly contend that these are “antipayment provisions.” Morey Obj. at 77 (internal quotation marks omitted).
Audits are particularly appropriate in this case because the Settlement offers substantial cash
awards; Class Members will receive hundreds of thousands, if not millions of dollars. See
Manual for Complex Litigation § 21.66 (4th ed.) (“Large claims might warrant a field audit to
check for inaccuracies or fraud.”). Additionally, the proposed audits are reasonable in scope.
The Claims Administrator will randomly audit 10% of each month’s successful award
applications. See Settlement § 10.3(c). It will also audit claims that raise predetermined red
flags, such as those from Class Members who already submitted an unsuccessful Claim Package
in the last year. See id. § 10.3(d). Though an audit may require Class Members to submit
additional documentation, only those who unreasonably refuse to comply with the procedure will
forfeit their claims. See id. §§ 10.3(b)(ii), 10.3(e). While the NFL Parties may conduct their
own audits, they may only do so in good faith and at their expense. Id. § 10.3(a).
F.
Other Objections
i. Education Fund
Objectors argue that the Education Fund, which provides $10 million in funding to youth
football safety initiatives and programs educating Retired Players about their NFL CBA Medical
89
Repeated Claim Package submissions may trigger audits. See infra Section V.E.vi.
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and Disability Benefits, is an improper cy pres distribution and should be eliminated. See
Heimburger Obj. at 21-23; Armstrong Obj. at 29-34; Settlement § 12.1. The Education Fund is
not a cy pres distribution, and even if it were, it is reasonable.
Cy pres involves the distribution of unclaimed or residual settlement funds to third parties.
Klier v. Elf Atochem N. Am., Inc., 658 F.3d 468, 474 (5th Cir. 2011) (“[A] cy pres distribution is
designed to be a way for a court to put any unclaimed settlement funds to their next best
compensation use . . . .” (emphasis added) (internal quotation marks omitted)); In re Linerboard
Antitrust Litig., MDL No. 1261, 2008 WL 4542669, at *3 (E.D. Pa. Oct. 3, 2008) (noting that
federal courts create cy pres distributions based upon their “broad discretionary powers to shape
equitable decrees for distributing unclaimed class action funds” (emphasis added)); Schwartz v.
Dallas Cowboys Football Club, Ltd., 362 F. Supp. 2d 574, 576 (E.D. Pa. 2005) (“A court may
also utilize cy pres principles to distribute unclaimed funds from a class action settlement.”
(emphasis added)).
In this case, the Education Fund is a separate allocation distinct from the Monetary Award
Fund and the BAP Fund, and does not direct how unclaimed funds should be distributed.
Eliminating the Education Fund would not result in more Class Members receiving Monetary
Awards or baseline assessment examinations because the NFL Parties have already guaranteed
these benefits to eligible claimants. Moreover, Education Fund benefits inure in part directly to
Class Members; the Fund educates Retired Players about their medical and disability benefits
under their Collective Bargaining Agreements.
Even if the Education Fund were a cy pres distribution, it is nonetheless justified. In Baby
Products, the Third Circuit noted that cy pres provisions are appropriate if a settlement contains
sufficient direct benefit to the class. 708 F.3d at 174; see also id. at 176 (“We do not intend to
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raise the bar for obtaining approval of a class action settlement simply because it includes a cy
pres provision.”).
Direct distributions to Class Members constitute the vast majority of the Settlement.
Compare Settlement § 23.1(c) (noting Education Fund is $10 million), with Class Counsel’s
Actuarial Materials at 3 (estimating “total compensation of approximately $950 million”) and
NFL Parties’ Actuarial Materials ¶ 20 (estimating “approximately $900 million will be paid
out”). Additionally, by funding football safety initiatives, the Education Fund deals with the
chief harm alleged in the Class Action Complaint: the risks of head injury from football. See
Baby Prods., 708 F.3d at 172 (“We join other courts of appeals in holding that a district court
does not abuse its discretion by approving a class action settlement agreement that includes a cy
pres component directing the distribution of excess settlement funds to a third party to be used
for a purpose related to the class injury.”); Harlan v. Transworld Sys., Inc., No. 13-5882, 2015
WL 505400, at *10 (E.D. Pa. Feb. 6, 2015) (approving a settlement with a cy pres distribution
when it assisted “Class Members in knowing and protecting their rights”); cf. Schwartz, 362 F.
Supp. 2d at 577 (E.D. Pa. 2005) (rejecting a cy pres “distribution to either a law school’s legal
clinic or a charter school . . . [because it] does not touch upon the subject matter of the law suit
(football or sports-related activities)”).
The Education Fund is not a cy pres distribution. Even if it were, it is reasonable.
ii. Statutes of Limitations Waiver
Class Counsel negotiated a statutes of limitations waiver for any Representative Claimants of
Retired Players who died on or after January 1, 2006. Representative Claimants of Retired
Players who died prior to January 1, 2006 must demonstrate that their claims would not be
barred by the relevant state’s statute of limitations in order to be eligible for Monetary Awards.
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Settlement § 6.2(b). For statutes of limitations analyses, the Settlement deems Class Members
who have not commenced individual suits against the NFL Parties to have filed their claims on
June 25, 2014, the date Class Counsel moved for preliminary approval of the Settlement. See id.
§§ 2.1(pppp), 6.2(b).
Objectors challenge the 2006 cutoff date for any waiver of a statute of limitations. See D.
Williams Obj. at 1-4, ECF No. 6221. That additional Class Members may have benefitted from
a more generous rule does not render the 2006 cutoff date unfair. “[L]ines must be drawn
somewhere, and the objectors have failed to demonstrate that the line drawn here was not
reasonable.” Deepwater Horizon Economic Loss Settlement, 910 F. Supp. 2d at 949. Moreover,
that Class Counsel were able to negotiate any waiver represents a benefit to the Class.
Objectors also argue that the June 25, 2014 filing date—the date Class Counsel moved for
preliminary approval—is prejudicial. They claim that under American Pipe & Construction Co.
v. Utah, 414 U.S. 538 (1974), the statutes of limitations for their claims were tolled as of August
17, 2011, the date Class Counsel filed the Easterling putative class action, and that the date Class
Counsel moved for preliminary approval is irrelevant. See Kinard Obj. at 3-4, ECF No. 6219.
Contrary to Objectors’ assertion, if a state has adopted an analogue to the American Pipe
rule, 90 Class Members will be able to argue that their claims are timely. The Court will consider
all applicable state law—including tolling rules—to determine if a Class Member is eligible for a
Monetary Award. Moreover, the Parties recognize the Court’s authority to conduct a statute of
limitations analysis for each wrongful death or survival claim. See Settlement § 6.2(b)
(recognizing that a “Representative Claimant of a deceased Retired NFL Football Player will be
90
American Pipe itself does not apply because the doctrine deals only with federal statutes of limitations,
and the Class Action Complaint included only state law claims. See McLaughlin on Class Actions § 3:15
(11th ed.) (“American Pipe did not itself announce any tolling rule applicable to state law claims.”);
Vincent v. Money Store, 915 F. Supp. 2d 553, 561 (S.D.N.Y. 2013) (“The plaintiffs must look to any state
analogue to American Pipe tolling rather than American Pipe itself.”).
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eligible for a Monetary Award . . . if the Court determines that a wrongful death or survival
claim filed by the Representative Claimant would not be barred by the statute of limitations
under applicable state law”); Parties’ Joint Proposed Findings of Fact ¶ 414, ECF No. 6497.
iii. Releases
Objectors argue that the Releases are overbroad because they release CTE claims. This
position, however, is merely an extension of the argument that the Settlement does not
compensate CTE. See e.g., Morey Obj. at 28 (“Class Counsel and the NFL have offered no
justification for the Settlement’s failure to compensate current and future cases of CTE—while at
the same time requiring a release of all CTE claims.”); Alexander Obj. at 9-10. Because this is
incorrect, see supra Section V.A, this objection is overruled.
Indeed, failing to release CTE when its alleged symptoms are included in other Qualifying
Diagnoses would permit Class Members double recovery. See Prudential, 148 F.3d at 326
(holding that the settlement properly released all claims arising out of “a common scheme of
deceptive sales practices”). Moreover, a broad release that “achiev[es] global peace is a valid,
and valuable, incentive to class action settlements.” Sullivan, 667 F.3d at 311 (rejecting
dissenting colleagues’ suggestion to limit class to those with colorable claims because “those
ultimately excluded would no doubt go right back into court to continue to assert their claims”);
see also In re Prudential Ins. Co. of Am. Sales Practices Litig., 261 F.3d 355, 366 (3d Cir. 2001)
(noting that “permitting parties to enter into comprehensive settlements that prevent relitigation
of settled questions” serves an “important policy interest of judicial economy” (internal quotation
marks omitted)). 91
91
Objectors also argue that the Releases could be construed as a release of claims in Dent, a related
lawsuit against the NFL Parties. See Armstrong Obj. at 34. This objection is now moot. On December
17, 2014, the Dent court held that the plaintiffs’ claims were preempted by their Collective Bargaining
Agreements. Order, Dent, No. 14-2324, ECF No. 106 (N.D. Cal. Dec. 17, 2014); supra Section IV.B.iv.
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The Releases are fair and reasonable.
iv. NFL Parties’ Security
Objectors question whether sufficient funds will exist throughout the 65-year life of the
Monetary Award Fund to pay all valid claims. Specifically, they challenge the security that the
Statutory Trust provides. The Settlement’s security provisions, however, are adequate.
“No later than the tenth anniversary of the Effective Date,” 92 the NFL Parties will establish a
Statutory Trust that as of the tenth anniversary date “shall contain funds that, in the reasonable
belief of the NFL Parties . . . will be sufficient to satisfy the NFL Parties’ remaining anticipated
payment obligations.” Settlement § 25.6(d). The NFL Parties’ creditors will not be able to
access this fund, and its sole purpose will be to ensure that funds are available to pay Monetary
Awards. Id. (noting withdrawals will only be permitted to pay claims, maintain the Trust, return
excess security, and wind down the Trust when the Settlement expires).
Objectors argue that the NFL Parties’ “‘reasonable belief’” of what is sufficient is an illusory
protection because financial predictions decades in advance are unreliable. Utecht Obj. at 11
(quoting Settlement § 25.6(d)); see Utecht Supplemental Obj. at 7, ECF No. 6437. Several
factors, however, limit the uncertainty the NFL Parties will face when determining how much to
place into the Trust. The pool of Retired Players, and thus potential claimants, is finite.
Additionally, other than adjustments for inflation, Monetary Awards are fixed sums. Most
importantly, the Settlement delays creation of the Trust precisely to allow the NFL Parties to
After the plaintiffs failed to amend their complaint, the court dismissed the case. See Judgment, Dent,
No. 14-2324, ECF No. 107 (N.D. Cal. Dec. 31, 2014).
92
Objectors do not seriously question the security for the first ten years of the Settlement. The NFL
Parties promise to pay $120 million over the first six months of the Settlement. See Settlement § 23.3(b).
Thereafter, they will refill the Settlement Trust Account based on the Claims Administrator’s monthly
funding requests. Id. § 23.3(b)(ii). A targeted reserve will ensure a surplus over the life of the
Settlement. See id. § 23.3(b)(v). The NFL Parties also warrant that they will maintain an investment
grade rating on their Stadium Program Bonds during this ten-year period to serve as additional security.
See id. § 25.6(a).
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collect ten years of data regarding payouts from the Monetary Award Fund. The NFL Parties
will use this data to create a reasonable estimate of the financial needs of the MAF for its
remaining 55 years. Claims data from Retired Players who retired decades ago will provide a
useful estimate of the funds required to ensure that younger Retired Players will receive payment
as they age.
Moreover, independent of the Statutory Trust, the NFL Parties remain personally liable for
their payments under the Settlement. 93 In the event of material default, the Settlement provides
that the Court may nullify the Releases, allowing Class Members to return to the tort system.
See Settlement § 25.6(g). Though Objectors are correct that anything can happen over the course
of 55 years, the personal liability of the NFL Parties nonetheless provides real security. The
NFL Parties have substantial and reliable revenue streams. See, e.g., Morey Obj. at 58 (noting
that the NFL Parties have $10 billion in annual revenue in part because of renewable TV deals).
While the NFL Parties’ income is not projected to decline, the Settlement’s pool of potential
claimants will decrease in size as Class Members age. Thus, the Settlement becomes
comparatively less of a liability to the NFL Parties as time passes.
Finally, Objectors insist on a “fully collateralized guaranty,” but provide no legal precedent
in support of that requirement. 94 Utecht Final Obj. at 7, ECF No. 6454. In sum, the NFL
Parties’ proffered security is reasonable.
93
Objectors contend that the NFL Parties are not personally liable because they have “agreed only to pay
money into certain trusts from which awards may be paid.” Utecht Supplemental Obj. at 10, ECF No.
6437. This is incorrect. Independent of the provisions establishing the Statutory Trust, the Settlement
states that “the NFL Parties will pay . . . money sufficient to make all payments [in the Monetary Award
Fund.]” Settlement § 23.1. Moreover, trust law mandates the inclusion of the Settlement provision cited
by Objectors. Pursuant to trust law, after initial instructions, the entity that establishes a trust may not
order the trustee to make specific disbursements.
94
Objectors repeatedly allege that the NFL Parties and Co-Lead Class Counsel falsely represented the
security provisions of the Settlement. See Utecht Supplemental Obj. at 14-16; Utecht Final Obj. at 1,
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v. Objector Signature Requirement
Amici contend that requiring Class Members to personally sign their objections to the
Settlement is an unnecessary hurdle designed to deter filings. See Mem. of Public Citizen at 911. However, they cite no relevant support for their argument. Requiring Class Members to
personally sign their objections does not violate Federal Rule of Civil Procedure 23(c)(2)(B)(iv),
which allows Class Members to “enter an appearance through an attorney,” or 28 U.S.C. § 1654,
which allows parties to “plead and conduct their [] cases . . . by counsel.” See Moulton v. U.S.
Steel Corp., 581 F.3d 344, 355 (6th Cir. 2009) (holding that “the district court appropriately
exercised its power by requiring individually signed opt-out forms” and noting that the right in
the Michigan Constitution to prosecute a suit by an attorney did not save the objector’s
argument).
On the contrary, a class member’s signature is commonly required to object or opt out. See,
e.g., Georgine v. Amchem Prods., Inc., 160 F.R.D. 478, 501 n.43 (E.D. Pa. 1995) (noting denial
of requests “to permit attorneys’ signatures on exclusion request forms”); In re ChineseManufactured Drywall Prods. Liab. Litig., MDL No. 2047, 2012 WL 92498, at *15 (E.D. La.
Jan. 10, 2012) (“All objections must be signed by the individual Class Member . . . .”).
vi. Lien Resolution Program
Amici challenge the Lien Resolution requirements in the Settlement, claiming they “could
indefinitely block payments to [C]lass [M]embers.” Mem. of Public Citizen at 11. Amici argue
that payments will necessarily be delayed because the Settlement mandates satisfaction of a
Class Member’s governmental health insurance liens before the payment of any award. See
ECF No. 6454. This claim has no merit. The terms of the Settlement were readily available for Class
Members to inspect, and no evidence of fraudulent intent exists.
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Settlement § 11.3(g). Contrary to Amici’s characterization, however, the Lien Resolution
program that accompanies these provisions is a substantial benefit for Class Members.
The NFL Parties’ insistence on lien satisfaction as a precondition to disbursement of awards
is reasonable. Similar lien satisfaction provisions exist in virtually all mass tort and class action
personal injury settlements. Garretson Aff. ¶ 23. Federal law mandates Medicare’s secondary
payer status, and requires states to seek reimbursement as a condition of receiving Medicaid
funds. 42 U.S.C. § 1395y(b)(2)(B)(ii)-(iv); 42 U.S.C. § 1396a(a)(25). Settling tortfeasors that
fail to comply with these reimbursement requirements face significant penalties. See, e.g., 42
U.S.C. § 1395y(b)(2)(B)(iii) (authorizing the United States to sue for double damages);
Garretson Aff. ¶ 23.
The Lien Resolution program will streamline this necessary process and ensure that Class
Members receive Monetary Awards as quickly as possible. The Lien Resolution Administrator,
Garretson Resolution Group (“GRG”), pioneered the practice and has successfully administered
it in four other mass tort settlements. See In re Zyprexa Prods. Liab. Litig., 451 F. Supp. 2d 458,
461 (E.D.N.Y. 2006) (praising “unique series of agreements” that could “provide a model for the
handling of Medicare and Medicaid liens in future mass actions”); Garretson Aff. ¶ 25. GRG
intends to execute an aggregate resolution of many of Class Members’ claims, avoiding the
delays inherent in individual processing. See Garretson Aff. ¶¶ 28(a)(1)-(4). For the remaining
Class Members, GRG expects to be able to determine “holdback” amounts that will allow for
immediate disbursement. GRG will estimate the expected future costs of a particular Qualifying
Diagnosis, and withhold that sum from a Class Member’s Monetary Award, distributing the
remainder to the Class Member immediately. In the event that a Class Member’s medical costs
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ultimately fall short of this initial estimate, he will be entitled to a refund. See id. ¶¶ 28(b)(2),
29(a)(2).
vii. Parties’ Experts
Objectors argue that the scientific experts retained by the Parties cannot be trusted because
they received compensation for their services. See Morey Final Obj. at 3, 9-11 (arguing against
use of “bought-and-paid-for experts”). This argument has no merit.
The Parties’ experts have extensive qualifications. Included among them are professors of
psychology, neuropsychology, neurosurgery, neurology, psychiatry, and epidemiology, as well
as a board-certified neurologist with 39 years of clinical practice experience and a licensed
psychologist. Each expert deals routinely with neurodegenerative conditions or the effects of
traumatic brain injury. Collectively, the experts have authored over 850 peer-reviewed scientific
articles. 95 Several experts provided months of assistance throughout the negotiation process to
ensure that the Settlement was grounded in current science. It is unreasonable to expect any
expert to provide such a substantial contribution for free.
A presumption of bias does not arise merely because an expert receives compensation. See
Richardson v. Perales, 402 U.S. 389, 403 (1971). Moreover, that some of these experts work at
institutions that have received grants from the NFL Parties and their affiliates does not
compromise these experts’ objectivity. See Morey Final Obj. at 10-11. For example, the Boston
University CTE Center, with which Drs. McKee and Stern are associated, has received donations
from the NFL Parties. Yet the Objectors do not question the objectivity of Drs. McKee and
Stern, whose studies they rely upon. See Chronic Traumatic Encephalopathy, Boston University
95
See generally Dr. Millis Decl. ¶¶ 2-9; Dr. Schneider Decl. ¶¶ 2-12; Dr. Yaffe Decl. ¶¶ 2-8; Dr. Fischer
Decl. ¶¶ 2-3; Dr. Giza Decl. ¶¶ 2-9; Dr. Hovda Decl. ¶¶ 2-11; Dr. Kelip Decl. ¶¶ 2, 4; Dr. Hamilton Decl.
¶¶ 1, 2, 6.
129
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School of Medicine, http://www.bumc.bu.edu/supportingbusm/research/brain/cte/ (last accessed
Apr. 21, 2015) (noting Center is “[s]upported by grants from . . . the NFL”).
viii. Parties’ Disclosures
Objectors argue that they lacked the information to properly evaluate the Settlement because
they did not have access to materials the Parties relied on during negotiations. See Morey Obj. at
80-81 (claiming that “[C]lass [M]embers have been left in the dark”); Mot. for Disclosure of
Docs. Relevant to Fairness of Settlement, ECF No. 6461 (moving for access to documents
relating to CTE, and the NFL Parties’ insurance). These claims largely repeat those made in
prior requests for discovery. See, e.g., Mem. in Supp. of Mot. for Disc. at 8, ECF No. 6169-1
(requesting “information Class Counsel relied on in entering the preliminary settlement”). I have
already denied Objectors’ prior requests, with good reason. See Order Den. Mots. for Disc., ECF
No. 6245.
Objectors have no absolute right to discovery. Community Bank, 418 F.3d at 316. Though
discovery may be appropriate if the record is inadequate to support approval of a settlement or if
objectors are denied meaningful participation in a fairness hearing, neither circumstance exists
here. Id. The Parties, Objectors, and Amici collectively submitted dozens of scientific articles
and 22 expert declarations discussing the critical scientific issues underlying the Settlement.
Objectors’ concerns also materially impacted the Settlement—the Parties revised the agreement
to address deficiencies identified at the Fairness Hearing. See Parties’ Joint Amendment.
Objectors also argue that because “[b]rain damage from playing football is a public health
issue,” the NFL Parties must disclose what they knew about the dangers of concussions.
Alexander Obj. at 5; see also Pyka Obj. at 1, ECF No. 6359 (“I and every parent along with the
players had and have a right to know of the dangers of playing football . . . .”). Settlements,
130
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however, are private compromises, and the NFL Parties need not make this information public to
obtain approval. See, e.g., Ehrheart v. Verizon Wireless, 609 F.3d 590, 594 (3d Cir. 2010)
(holding that class action settlement that admitted no wrongdoing and denied all liability was a
“binding and enforceable contract”); Ripley v. Sunoco, Inc., 287 F.R.D. 300, 318 (E.D. Pa. 2012)
(approving class action settlement that admitted no wrongdoing). Nonetheless, the Settlement
contributes to the public’s knowledge on these issues. Subject to the consent of Retired Players,
data from baseline assessment examinations will be used in medical research about safety and
injury prevention in football. See Settlement § 5.10(a).
ix. Opt-Out Procedure
Objectors reiterate their unsuccessful request for an opportunity to opt out after the Fairness
Hearing. They claim their request is justified because being forced to choose between opting out
and objecting is coercive, and because notice was inadequate for Retired Players to understand
the ramifications of the Settlement. See Utecht Obj. at 3-6; Duerson Obj. at 28-29. I have
already denied this request, and these additional arguments do not demonstrate that the opt-out
structure was unfair. See Order, Oct. 9, 2014, ECF No. 6204.
Due process does not require a second opt-out period. In a class action, class members’
rights are sufficiently protected when there is: “(1) adequate notice to the class; (2) an
opportunity for class members to be heard and participate; (3) the right of class members to opt
out; and (4) adequate representation by the lead plaintiff(s).” Cobell v. Salazar, 679 F.3d 909,
922 (D.C. Cir. 2012) (citing Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 811-12 (1985)). As
discussed supra, each of these requirements is satisfied. Notice cogently described the key
elements of the Settlement, and Class Members had 90 days to review the agreement and either
opt out or object. See supra Section III. Class Counsel and the Class Representatives fought
131
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zealously for Class Members, and no fundamental conflicts of interest existed to undermine the
adequacy of their representation. See supra Section II.D.
The choice between opting out and objecting is not coercive. It is well established that “class
members may either object or opt out, but they cannot do both.” Newberg on Class Actions
§ 13:23 (5th ed.). Moreover, the Third Circuit has implicitly rejected Objectors’ position; it
would be impossible to consider “the reaction of the class to the settlement” for the purposes of
Rule 23(e)(2) if Class Members were allowed to opt out up until the point of final approval.
Girsh, 521 F.2d at 157 (internal quotation marks omitted); see also Olden v. LaFarge Corp., 472
F. Supp. 2d 922, 936 (E.D. Mich. 2007) (“There are several examples of federal cases where the
opt-out deadline matches the objection deadline.”). Thus, the opt-out procedure was reasonable,
and no additional opportunity to opt out was required.
VI. Conclusion
For the reasons set forth above, I will certify the proposed Class pursuant to Rule 23(a) and
23(b)(3). I will also approve the Settlement as fair, reasonable, and adequate pursuant to Rule
23(e).
s/ Anita B. Brody
__________________________
ANITA B. BRODY, J.
Copies VIA ECF on _________ to:
Copies MAILED on _______ to:
132
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157
THE AMERICAN LAW INSTITUTE
Continuing Legal Education
Ethical Issues in Class Actions and
Non-Class Aggregate Litigation
Cosponsored by The American Law Institute
May 17, 2015
Washington, D.C.
Class/Mass Tort Settlements:
Participation Requirements
By
John H. Beisner
Skadden, Arps, Slate, Meagher & Flom LLP
Washington, D.C.
Page 152
159
Class/Mass Tort Settlements: Participation Requirements
I.
THE SETTLEMENT CLASS ACTION

For many years, settlement class actions were used to resolve mass tort (personal injury)
litigation. During that era, courts generally “look[ed] to the settlement agreement as a
basis for meeting Rule 23 requirements.”1
o For example, in In re A.H. Robins Co., the U.S. Court of Appeals for the Fourth
Circuit noted the primacy of the settlement agreement itself in determining
whether a matter warranted class treatment to accommodate a proposed
settlement. According to that court, “if not a ground for certification per se,
certainly settlement should be a factor, and an important factor, to be considered
when determining certification.”2

All persons within the definition of the settlement class were bound by the terms of the
agreement. Typically, those terms specified that each class member would be
compensated (often as determined by formula) and would grant a full release of specified
claims. A class member could “opt out” of the settlement, but only if he/she took
affirmative steps to do so, as directed by the settlement agreement. Thus, full
participation was assumed, although agreements often contained provisions allowing the
defendant to void the entire settlement if more than a specified number/percentage of
class members opted out.

In 1997, this long-standing practice of using the class device to resolve mass tort
controversies was upended by the Supreme Court in Amchem Products, Inc. v. Windsor.3
In Amchem, the Supreme Court rejected application of less rigorous class certification
requirements to proposed settlement classes. The Court held that “undiluted, even
heightened, attention” must be paid to each of the Rule 23 certification requirements
(except trial manageability), essentially without regard to the settlement itself.4
1
Jimmy White, Amchem Products, Inc. v. Windsor: The Supreme Court Defines the Standard for Settlement
Class Action Certification, 49 Mercer L. Rev. 809, 814 (1998).
2
In re A.H. Robins Co., 880 F.2d 709, 740 (4th Cir. 1989).
3
Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997).
4
Id. at 619-22.
11
Page 153
160

Satisfying those certification prerequisites in the mass tort context is virtually impossible.
Most notably, the requirement that common questions of law and fact predominate over
individual questions is normally insurmountable, as individual claimant exposure,
causation, knowledge, and injury stories normally vary greatly.

Further, it is difficult to structure a compensation scheme that could fairly value widely
disparate mass tort personal-injury claim values without suggesting class treatment is
inherently inappropriate.

Indeed, in post-Amchem class settlements outside the mass tort context, courts have
stressed the need for formulas that ensure equitable treatment of all class members.
o For example, Ontiveros v. Zamora involved a wage-and-hour class settlement,
which was approved in 2014.5 The $2 million settlement was automatically
distributed on an individualized basis using a formula created by the parties. That
formula paid each class member a share of the settlement fund equivalent to the
number of weeks that individual worked during the class period divided by the
number of weeks worked by all class members over that period.

Claims processes are permitted, but must be relatively simple and straightforward.
o For example, in In re Hydroxycut Marketing & Sales Practices Litigation, the
plaintiffs initiated a putative class action alleging consumer fraud in connection
with their purchase of Hydroxycut products.6 Under the terms of the settlement,
without proof of purchase, class members may elect to receive cash payments of
$15 per product purchased for up to three purchases, or up to three free Product
Units (each with a retail price of at least $25).

“Courts generally are wary of settlement agreements where some class members are
treated differently than others.”7
5
Ontiveros v. Zamora, 2014 U.S. Dist. LEXIS 143462 (E.D. Cal. Oct. 8, 2014).
6
In re Hydroxycut Mktg. & Sales Practices Litig., 2014 U.S. Dist. LEXIS 162106 (S.D. Cal. Nov. 18, 2014).
7
True v. Am. Honda Motor Co., 749 F. Supp. 2d 1052, 1067 (C.D. Cal. 2010).
Page 154
161
o For example, in True v. American Honda Motor Co., the court rejected a proposed
class settlement that afforded class members “differential treatment.”8 There, the
plaintiffs commenced a putative class action against defendant automobile
manufacturer (“AMH”), alleging false and misleading advertising regarding fuel
economy. The settlement only provided monetary relief to a “sub-group” that was
“defined as those who filed complaints with AHM, those who filed complaints
with a Honda dealer who then passed the complaint along to AHM, or those who
complained to class counsel prior to March 2009.”9
o The court rejected the argument that “differential treatment” was justified because
these class members actually complained about the alleged problems with the
vehicles. That was not a “legitimate reason to depart from the presumption that
class members receive relief based on the type and extent of their damages.”10
II.
THE SHIFT TO PRIVATE SETTLEMENT AGREEMENTS

Due to the Amchem impediments, parties wishing to achieve “global” settlements have
resorted to the use of private settlement agreements between the defendant and plaintiffs’
counsel.

These agreements are not subject to Rule 23 and its class certification requirements, and
claimants are not deemed to be part of the settlement unless they opt out. Indeed, if they
wish to participate, plaintiffs must affirmatively enroll in a private settlement program to
participate.
o Typically, these “global” deals are negotiated by a subset of the plaintiffs’ counsel
involved in the controversy. At some point, those counsel not at the table are
consulted and provide their input.

The negotiations of a “global” settlement normally present multiple tensions – and
potential inconsistencies – regarding the status of the individual claimants in the mass tort
controversy.
8
Id. at 1067.
9
Id.
10
Id. (internal quotation marks and citation omitted).
33
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162
o Plaintiffs’ counsel normally use the collective nature of the claims to foster
judicial pressure for a settlement. Over time, many mass tort claims are filed,
often piling up in a federal multidistrict litigation (“MDL”) proceeding (and
sometimes simultaneously in parallel state court proceedings). Usually, the
strength of those claims varies widely. But plaintiffs’ counsel will normally urge
the court to ignore the individualized characteristics of the claims and contend
that there is only one way to deal with the cases – pressure the defendant to settle
all of them on a collective basis. (Indeed, at some point, counsel can be counted
on to observe that if each case is tried separately, it would take a lifetime, leaving
settlement as the only resolution option.) It is thus not uncommon for mass tort
MDL judges to insist at a relatively early stage that settlement negotiations
commence – and that all claims be settled as soon as possible.
o Once settlement discussions are underway, plaintiffs’ counsel will normally
continue to press a collective view of the claims. Normally, they will refuse to
discuss settlement of any cases in the litigation unless all are included – and some
level of payment is assured for all. In short, the defendant is told that it will not
be able to achieve settlement of the cases it most wants to settle (that is, the cases
that are the best trial candidates from plaintiffs’ perspective) unless it pays money
for cases it finds of little or no value (that is, cases it views as posing little or no
trial risk). In most aggregate mass tort litigation situations, the majority of claims
fall into the latter category.

In some “global” settlements, the parties agree to “gates,” which are
requirements intended to filter out claims that cannot be verified or fall
outside the mass tort definition.
o In most cases, this “all or nothing” approach – effectively a classic “tying”
demand – has three effects:

First, plaintiffs with weaker claims get paid when they otherwise might
not if their cases were negotiated individually.

Second, plaintiffs with stronger claims get paid less, because the demand
to pay weaker claims tempers the defendant’s willingness to pay for the
stronger claims.

Finally, plaintiffs’ counsel potentially receive more money than they
would if each claim were negotiated in isolation because they are
obtaining a recovery for weaker claims that otherwise might not be
compensated at all and will receive a 33-40 percent contingency payment
from that recovery.

In sum, the settlement is negotiated on a collective basis with limited (if
any) regard for the individual merit of the claims.
Page 156
163

Having been forced to negotiate a settlement on a collective, “all-or-nothing” basis that
assumes full participation, the defendant has concerns that a substantial portion of
eligible individual claimants will elect not to participate – that having negotiated a deal
on an “all-or-nothing” basis, some lawyers will renege on the “all” part of the deal. In
short, there is concern that plaintiffs will “cherry-pick” certain cases to withhold from the
settlement and continue litigating. Normally, those are the cases that the defendant most
wants to settle.

To limit these risks, some parties have structured aggregate settlements that require
plaintiffs’ attorneys to recommend settlement to all of their clients and/or require the
attorneys to withdraw from representing any of their clients who choose not to enroll in
the settlement.

These “recommendation” and “withdrawal” provisions were defining characteristics of
the $4.85 billion private settlement reached in connection with the pharmaceutical drug
Vioxx.
The 100% Recommendation Requirement/Ethical Concerns

Some questioned the propriety of requiring all counsel participating in the Vioxx
settlement to recommend enrollment to 100% of their eligible clients. These critics
contended that the provision raised ethical concerns because it required plaintiffs’
attorneys to recommend settlement to all of their clients even if some clients might be
better off pursuing their claims to trial.

But the concept of a 100% recommended-participation requirement has been used in
multiple settlements.
o For example, in the Zyprexa Master Settlement Agreement, each participating law
firm was required to “warrant[] and represent[] that it w[ould] recommend to each
of its Participating Claimants that they participate in a settlement process to be
jointly established by the Participating Law Firms and the Special Settlement
Masters.”11
o In the Propulsid litigation, the settlement required counsel for plaintiffs to enroll
100% of the plaintiffs they represented.12
11
Zyprexa Settlement Agreement § IV.A.
12
Propulsid Term Sheet § 3D (“Counsel for plaintiffs . . . shall not be permitted to enroll less than 100% of
the plaintiffs they represent in state and federal court cases and persons they represent under tolling agreements.”).
55
Page 157
164
o The Owens Corning Fibreboard Settlement Agreement was even more expansive,
requiring counsel to recommend the settlement to future claimants.13

The 100% recommendation requirement merely codified what the most experienced
Vioxx plaintiffs’ attorneys had already decided was best when negotiating the Agreement.
Other lawyers would similarly be able to conclude that the settlement was in the best
interests of their clients as well.

The settlement structure established a formula that offered different amounts of money to
plaintiffs depending on the strength of their claims and an administrative adjudicatory
process to make those determinations.

The American Bar Association’s (“ABA”) policies regarding ethical conduct for
settlement negotiations permit full participation requirements provided that claimants are
fully informed about the terms of the settlement agreement.
o “If [a] settlement involving multiple clients is an aggregate or global settlement
(defined as one where a lump sum is negotiated to settle a number of claims or
where a proffered settlement offer is contingent on another client’s acceptance of
another proffered settlement offer), then the provisions of Model Rule 1.8(g)
apply. That rule provides: ‘A lawyer who represents two or more clients shall not
participate in making an aggregate settlement of the claims of or against the
clients, . . . unless each client gives informed consent, in writing signed by the
client. The lawyer’s disclosure shall include the existence and nature of all the
claims or pleas involved and of the participation of each person in the
settlement.”14
The Withdrawal Provision

The withdrawal provision contained in the Vioxx Master Settlement Agreement (“MSA”)
provided that “to the extent permitted by Model Rules of Professional Conduct (“Model
Rules”) 1.16 and 5.6, any participating counsel must withdraw from representing any
eligible plaintiffs who choose not to enter into the settlement agreement.”15 The purpose
of this provision was to prevent plaintiffs’ attorneys from “cherry-picking” which cases
should be settled and which should be litigated.
13
See Samuel Issacharoff, Shocked: Mass Torts and Aggregate Asbestos Litigation After Amchem and Ortiz,
80 Tex. L. Rev. 1925, 1937 (2002).
14
Ethical Guidelines for Settlement Negotiations, A.B.A. Sec. Lit., at 27 (2002),
http://www.americanbar.org/content/dam/aba/migrated/2011_build/dispute_resolution/settlementnegotiations.authch
eckdam.pdf.
Page 158
165

Some expressed concern that this provision would force plaintiffs to participate in the
program if they were unable to find experienced Vioxx counsel to represent them.

But the agreement was faithful to the Model Rules, and courts have approved similar
provisions in other cases.
o The Vioxx MSA expressly provided that attorneys were not to take any action in
violation of Model Rules 1.16 or 5.6.

Model Rule 1.16 provides that a lawyer may withdraw from representing a
client if: “(1) withdrawal can be accomplished without material adverse
effect on the interests of the client [or] . . . (7) other good cause for
withdrawal exists.”16

Rule 5.6(b) states that “[a] lawyer shall not participate in offering or
making . . . an agreement in which a restriction on the lawyer’s right to
practice is part of the settlement of a client controversy.”17
o The Vioxx MSA provided an inherent procedural safeguard as well. The only
way Merck could enforce the “recommendation” and “withdrawal” requirements
was to seek a determination by the MDL judge (who had agreed to accept a role
as the Chief Administrator of the Resolution Program), that a plaintiffs’ lawyer in
fact violated this provision.
o A number of courts have also considered – and approved – similar provisions and
rejected rigid application of the model Rules.
15
Vioxx MSA § 1.2.8.2.
16
Model Rule 1.16(c).
17
Model Rule 5.6(b).
77
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166

For example, in Feldman v. Minars, the court considered the enforceability
of a provision that, as an “inducement to the settling defendants,” stated
that plaintiffs’ counsel would not “assist or cooperate” with other parties
or attorneys in other actions against the settling defendants.18 The court
upheld the provision under the applicable ethical rules, stating that “we
would conclude that an agreement by counsel not to represent similar
plaintiffs in similar actions against a contracting party is not against the
public policy of the State of New York.”19

In addition, the court noted that “[t]he prohibition on restrictive covenants
was adopted before the era of mass torts. Today, it can impede useful
settlements and foster needless litigation. Willing participants should be
able to agree as they wish.”20

In Lee v. Florida Department of Insurance, the court found that Florida’s
version of Rule 5.6 did not prohibit a similar provision in a settlement
agreement.21 The court found that since the purpose of the Rules of
Professional Conduct is to provide a framework for the ethical practice of
law, using a rule such as Florida’s Rule 4-5.6 “to invalidate or render void
a provision in a private contract . . . is beyond the scope and purpose of the
rules.”22 Moreover, Rule 4-5.6 did not reach agreements that “preclude the
lawyer’s representation of other persons with respect to cases that involve
the same facts, transactions, and events as does the case settled[.]”23
18
Feldman v. Minars, 320 A.D.2d 356, 375 (N.Y. Sup. Ct. 1997).
19
Id. at 361.
20
Id. at 360.
21
Lee v. Fla. Dep’t of Ins., 586 So. 2d 1185, 1188 (Fla. Dist. Ct. App. 1991).
22
Id. at 1188.
23
Id. at 1190.
Page 160
167

However, the flexibility afforded by the Model Rules is not unlimited.

The ABA issued an opinion, Formal Opinion 93-371, indicating that settlement
provisions containing restrictions on counsel’s ability to represent present and future
clients who do not participate in an aggregate settlement may violate Rule 5.6(b).
o “A restriction on the right of plaintiffs’ counsel to represent present clients and
future claimants against a defendant as part of a global settlement of some of
counsel’s existing clients’ claims against that same defendant represents an
impermissible restriction on the right to practice which may not be demanded or
accepted without violating Model Rule 5.6(b).”24
o According to the Opinion, these types of agreements “restrict access of the public
to lawyers who, by virtue of their background and experience, might be the very
best available talent to represent these individuals.”25

The ABA opinion suggests that enforcement of a “withdrawal” provision may violate
Rule 5.6(b). However, the opinion focuses on future representation, which is not what
the Vioxx MSA restricted. The Vioxx MSA only addressed then-current plaintiffs who
would have arguably different interests from those clients participating in the settlement
agreement.

It should be noted that in some mass tort settlements, negotiation of a “global” settlement
may be precluded by (a) the number of plaintiffs’ counsel involved (sometimes
numbering in the thousands) and/or (b) disparate views among those lawyers about the
strength of the claims at issue. In those instances, the parties often resort to “inventory”
settlements – deals in which the defendants separately negotiates settlements of the full
inventory of claims held by a particular attorney or group of attorneys.

Those negotiations normally involve the exercise of the same “all-or-nothing” leverage
and resulting effects outlined above. However, because a much smaller group of claims
is involved in such deals, the parties may be able to find ways to avoid the “cherrypicking” risks.
24
ABA Standing Committee on Ethics and Professional Responsibility, Formal Opinion 93-371, Restrictions
on the Right to Represent Clients in the Future, Apr. 16, 1993 (emphasis added).
25
Id.
99
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168

III.
On the other hand, these settlements often raise other ethical “red flags” because although
assumptions may be made about the various individual claims included in the settlement,
plaintiffs’ counsel often insist that the agreement not specify the amounts of payment to
any specific claimant – that they will handle that allocation without defendant’s
involvement.
POTENTIAL REFORM PROPOSALS

Greater transparency by plaintiffs’ counsel at the outset of representation could mitigate
some of the ethical concerns addressed above.
o Before taking on a representation, counsel should disclose the potential conflicts
of interest that may arise by virtue of multiple representations in the mass tort
setting.
o This should include a clear explanation that there may come a point at which an
aggregate settlement may be proposed that may require the client to seek different
counsel if they choose not to participate.

A sound solution may lie in the recommendation in the ALI’s Principles of Aggregate
Litigation that would allow individuals, before receiving a proposed settlement offer, to
enter into an agreement to be bound by a substantial-majority vote of all claimants
concerning an aggregate settlement proposal.26 This allows for the waiver of individual
approval and vests decision-making power in the claimants collectively or through some
pre-established voting structure.

The ALI proposal would help prospective clients become informed at the outset of a
representation that potential conflicts of interest may inevitably arise in the mass tort
litigation in which they would be asserting claims.
John Beisner
April 20, 2015
26
ALI Principles of Law Agg. Litg. § 3.17 (2010).
Page 162
169
May 17, 2015
Washington, D.C.
Incenti e Pa ments to Class Representati es:
Ethical Issues
By
Eli a eth Cham lee Burch
Uni ersity o eorgia School o La
Athens, eorgia
Page 163
171
Incentive Payments to Class Representatives: Ethical Issues
I.
Incentive payments
a. Incentive fees encourage named representatives to represent the class, invest
substantial amounts of time into the lawsuit, and face certain risks, but they can also
raise questions about adequate representation, collusion, and conflicts of interest.
b. In making incentive awards, courts consider:
b.i. “special circumstances such as the personal difficulties (if any) encountered
by the plaintiff-applicant in becoming and continuing as a litigant, the time
and effort encountered by the plaintiff-applicant in becoming and continuing
as a litigant, the time and effort expended by that plaintiff in assisting in the
prosecution of the litigation or in bringing to bear added value (e.g., factual
expertise), any other burdens shouldered by that plaintiff in lending himself
or herself to the prosecution of the claim (attending depositions and other
proceedings etc.), and the ultimate recovery.” MCLAUGHLIN ON CLASS
ACTIONS § 6:28 (11th ed. 2014).
c. When named plaintiffs merit extra compensation in return for serving the class and
that amount is not disproportionately large when compared with the settlement
award achieved, then some courts have approved incentive payments.
c.i. E.g., Espenschheid v. Directsat USA, LLC, 688 F.3d 872, 875-76 (7th Cir.
2012) (“One can imagine for example a case in which the representative
presses for an incentive award so large in relation to the judgment or
settlement that if awarded it would significantly diminish the amount of
damages received by the class.”); Morris v. Affinity Health Plan, Inc., 859 F.
Supp. 2d 611 (S.D.N.Y. 2012); McDonough v. Toys “R” Us., Inc., 834 F. Sup.
2d 329 (E.D. Pa. 2011); In re Puerto Rican Cabotage Antitrust Litig., 815 F.
Supp. 2d 448 (D.P.R. 2011); In re Kentucky Grilled Chicken Coupon Mktg. &
Sales Pract. Litig., 280 F.R.D. 364 (N.D. Ill. 2011); Wineland v. Casey’s Gen.
Stores, Inc., 267 F.R.D. 669 (S.D. Iowa 2009).
d. Incentive awards may create a conflict between named plaintiffs and absent class
members under some circumstances. Thus, the Ninth Circuit ruled that class
counsel should disclose ex ante agreements at the class certification stage.
d.i. Radcliffe v. Experian Information Solutions, Inc., 715 F.3d 1157 (9th Cir.
2013) (holding that conditional incentive awards in a class action settlement
caused disabling conflicts between representatives’ interests and absent class
members’ interest); Rodriguez v. West Publishing Corp., 563 F.3d 948, 959
(9th Cir. 2009); see also In re Continental Illinois Sec. Litig., 962 F.2d 566 (7th
Cir. 1992).
d.ii. Rodriguez v. Disner, 688 F.3d 645 (9th Cir. 2012) (holding that the district
court did not abuse its discretion in denying class counsel’s attorneys fees
because entering into incentive agreements with named representatives
created conflicted representation, violated counsel’s fiduciary duties to the
class, and violated counsel’s duty of candor to the court)
e. A minority of courts have held that plaintiffs, by bringing a class action, disclaim any
rights to preferred treatment.
e.i. E.g., In re Southern Ohio Correctional Facility, 24 Fec. Appx. 520 (6th Cir.
2001); In re Gould Sec. Litig., 727 F. Supp. 1201, 1209 (N.D. Ill. 1989).
Page 164
172
II.
III.
f. The PSLRA prohibits awarding additional compensation to lead plaintiffs, but does
allow an “award of reasonable costs and expenses (including lost wages) directly
relating to the representation of the class.”
f.i. 15 U.S.C. § 78-4(a)(4)
Potential Ethical Rules Implicated by Incentive Awards
a. Model Rules of Professional Conduct
a.i. 1.4(b): A lawyer shall explain a matter to the extent reasonably necessary to
permit the client to make informed decisions regarding the representation.
a.ii. 1.7(b) Conflict of Interest: Current Clients
a.ii.1.
Attorneys cannot represent clients if representation will
create concurrent conflicts of interest unless consent in writing is
given
a.ii.2.
Unnamed members of a class are not considered clients for
purposes of this rule (Comment 25).
a.iii. 5.4: Professional Independence of a Lawyer
Sources for Further Reading
a. Ann K. Wooster, Propriety of Incentive Awards or Incentive Agreements in Class Actions, 60
A.L.R.6th 295 (2010);
b. Theodore Eisenberg & Geoffrey P. Miller, Incentive Awards to Class Action Plaintiffs: An
Empirical Study, 53 U.C.L.A. L. REV. 1303 (2008) (finding that: incentive awards were
granted in about 28% of settled class actions in 374 opinions from 1993 to 2002;
those awards varied by case category with 59 % in consumer credit actions, 46% in
employment discrimination cases; 35% in antitrust cases; 10% in mass tort actions;
and 24% in securities cases before the PSLRA; when awarded, incentive payments
averaged 0.16% of the class recovery, with a median of 0.02%);
c. William B. Rubenstein et al., Newberg on Class Actions § 11:38 (4th ed. 2008);
d. Elisabeth M. Sperle, Here Today, Possibly Gone Tomorrow: An Examination of Incentive
Award and Conflicts of Interest in Class Action Litigation, 23 GEO. J. LEGAL ETHICS 873
(2010);
e. Richard M. Eittreim et al., Ethical Issues in the Settlement of Complex Litigation, 41 TORT
TRIAL & INS. PRACT. L.J. 21 (2005);
f. Nantiya Ruan, Bringing Sense to Incentives: An Examination of Incentive Payments to Named
Plaintiffs in Employment Discrimination Class Actions, 10 EMPLOYEE RTS. & EMP. POL’Y J.
395 (2006);
g. Donald Daucher, Fair and Adequate Representation Under Rule 23(a)(4), Independent and
Improper Relationships and Arrangements Between Named Representatives and Class Counsel,
35 W. ST. U. L. REV. 135 (2010);
h. 2 JOSEPH M. MCLAUGHLIN, MCLAUGHLIN ON CLASS ACTIONS § 6:28 (11th ed. 2014);
i. Gregory V. Mersol, Ethical Issues in Class Action Employment Litigation, 20 THE LABOR
LAWYER 55 (2004).
Page 165
173
May 17, 2015
Washington, D.C.
Radcliffe v. Experian Information Solutions Inc.
d
th Cir
Su mitted y
Eli a eth Cham lee Burch
Uni ersity o eorgia School o La
Athens, eorgia
Page 166
175
715 F.3d 1157
United States Court of Appeals,
Ninth Circuit.
Robert RADCLIFFE
,
v.
EXPERIAN INFORMATION SOLUTIONS INC.;
Nos. 11–56376, 11–56387, 11–56389, 11–56397, 11–56400, 11–56440, 11–56482. | Argued and Submitted
March 4, 2013. | Filed April 22, 2013. | Amended May 2, 2013.
Opinion by Judge GOULD; Concurrence by Judge HADDON.
OPINION
GOULD, Circuit Judge:
Several named plaintiffs and objectors appeal the district court’s approval of a class-action settlement. The
settlement agreement, like others we have approved in the past, granted incentive awards to the class
representatives for their service to the class. But unlike the incentive awards that we have approved before,
these awards were conditioned on the class representatives’ support for the settlement. These conditional
incentive awards caused the interests of the class representatives to diverge from the interests of the class
because the settlement agreement told class representatives that they would not receive incentive awards
unless they supported the settlement. Moreover, the conditional incentive awards significantly exceeded in
amount what absent class members could expect to get upon settlement approval. Because these
circumstances created a patent divergence of interests between the named representatives and the class, we
conclude that the class representatives and class counsel did not adequately represent the absent class
members, and for this reason the district court should not have approved the class-action settlement. We have
jurisdiction under 28 U.S.C. § 1291, and we reverse the district court’s approval of the settlement.
I
The plaintiffs below—consumers who have been through bankruptcy—allege that Defendants Experian
Information Systems, Inc., TransUnion LLC, and Equifax Information Services LLC issued consumer credit reports
with negative entries for debts already discharged in bankruptcy. In other words, Defendants allegedly issued
credit reports that stated that the plaintiffs were delinquent in making payments on debts that had been
extinguished in bankruptcy. A smaller subset of the plaintiffs also contends that the credit-reporting agencies
did not investigate these errors, even after the plaintiffs had notified the agencies of the errors on their reports.
Defendants allegedly violated the Fair Credit Reporting Act and its California state-law counterparts because (1)
they did not use “reasonable procedures to assure maximum possible accuracy” in reporting debts discharged
in bankruptcy, 15 U.S.C. § 1681e(b), and (2) after being informed of the credit-report errors, Defendants did not
“conduct a reasonable reinvestigation to determine whether the disputed information [was] inaccurate,” 15
U.S.C. § 1681i(a). See also Cal. Civ.Code §§ 1785.14(b), 1785.16; Cal. Bus. & Prof.Code § 17200.
The cases began as multiple lawsuits filed in 2005 and 2006. 1 The district court consolidated the suits, which
raised similar claims, and the parties began mediation. In April 2008, the parties reached a settlement for
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injunctive relief, which the district court approved in August 2008. As part of that settlement, Defendants
agreed to implement procedures that would presume the discharge of certain pre-bankruptcy debts. No
appellant challenges this settlement.
1
The procedural history of the litigation is complex but not relevant for our purposes because we reach
only one issue raised in this consolidated appeal—the effect of the conditional incentive awards to class
representatives.
In February 2009, the parties reached an agreement for monetary relief. The monetary settlement creates a
common fund of $45 million, $15 million contributed by each of the three defendants. After the costs of
settlement administration are deducted, the rest of the fund will be distributed as follows: First, the settlement
fund will pay “actual-damage awards” to class members who demonstrate that they were actually harmed by
Defendants’ conduct. Class members denied employment will receive $750, those denied a mortgage or
housing rental will receive $500, and those denied credit or auto loans will receive $150. About 15,000 class
members claimed actual-damage awards. Second, the settlement fund will pay the class representatives and
class counsel for their service in prosecuting the suit. The agreement provides for incentive awards:
On or before October 19, 2009, Proposed 23(b)(3) Settlement Class Counsel shall file an
application or applications to the Court for an incentive award, to each of the Named
Plaintiffs serving as class representatives in support of the Settlement, and each such award
not to exceed $5,000.00.
The agreement also states that class counsel should petition the court for an award of attorneys’ fees and costs,
to be paid out of the monetary-settlement fund. The agreement does not specify the amount of such fees and
costs. Third, the remainder of the fund will be distributed to the rest of the class as “convenience awards.”
Claimants simply need to attest that they qualify as class members to receive convenience awards.
Approximately 755,000 class members submitted these claims. Each claimant will receive about $26.
The court preliminarily approved the settlement and provisionally certified the settlement class on May 7,
2009. After two rounds of notice to the class, the district court held a series of fairness hearings on the
settlement. Several named plaintiffs—formerly class representatives—and objectors (collectively “Objecting
Plaintiffs”) challenged the settlement. The district court considered but rejected their objections and found that
the settlement was fair, reasonable, and adequate. The court issued an order granting final approval of the
monetary-relief settlement on July 15, 2011. White v. Experian Info. Solutions, Inc., 803 F.Supp.2d 1086
(C.D.Cal.2011). The court also awarded attorneys’ fees and costs to class counsel. Objecting Plaintiffs appealed.
On appeal, Objecting Plaintiffs give several arguments as to why the settlement was not fair, reasonable, and
adequate. But we only reach the issue of whether class representatives and class counsel are adequate where
the settlement agreement conditions payment of incentive awards on the class representatives’ support for the
settlement.
II
[1]
We review the district court’s approval of a class-action settlement for abuse of discretion. Rodriguez v. W.
Pub. Corp. (Rodriguez I ), 563 F.3d 948 (9th Cir.2009). Under abuse-of-discretion review we “must affirm unless
the district court applied the wrong legal standard or its findings of fact were illogical, implausible, or without
support in the record.” Rodriguez v. Disner (Rodriguez II ), 688 F.3d 645, 653 (9th Cir.2012) (citing United States
Page 168
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v. Hinkson, 585 F.3d 1247, 1262 (9th Cir.2009) (en banc)).
III
[2]
Objecting Plaintiffs contend that the settlement agreement, which provides for incentive awards to named
plaintiffs “in support of the [s]ettlement,” created a conflict of interest between the class representatives and
the class. Objecting Plaintiffs also assert that, as a result of this conflict, class counsel engaged in conflicted
representation by continuing to represent the settling class representatives (“Settling Plaintiffs” or “class
representatives”) and the class at large after the two groups developed divergent interests. Objecting Plaintiffs
thus contend that the class representatives and class counsel were inadequate to represent the absent class
members. See Fed.R.Civ.P. 23(a)(4), 23(g)(1)(B). Upon review of the record and reflection on our precedents, we
agree.
A
Incentive awards are payments to class representatives for their service to the class in bringing the lawsuit. See
Rodriguez I, 563 F.3d at 958–59; see also 2 McLaughlin on Class Actions § 6:28 (9th ed. 2012). In cases where
the class receives a monetary settlement, the awards are often taken from the class’s recovery. See id. Although
we have approved incentive awards for class representatives in some cases, we have told district courts to
scrutinize carefully the awards so that they do not undermine the adequacy of the class representatives. See
Staton v. Boeing Co., 327 F.3d 938, 977 (9th Cir.2003). Settling Plaintiffs misinterpret the scope of our precedent
about incentive awards, so we begin by reviewing that precedent.
In Staton v. Boeing Company, 327 F.3d at 975–78, we reversed the district court’s approval of a class-action
settlement because the settlement provided for disproportionately large payments to class representatives. The
settlement awarded the 29 class representatives up to $50,000 each. We noted that in some cases incentive
awards may be proper but cautioned that awarding them should not become routine practice: “[i]f class
representatives expect routinely to receive special awards in addition to their share of the recovery, they may
be tempted to accept suboptimal settlements at the expense of the class members whose interests they are
appointed to guard.” Id. at 975 (alteration in original) (quoting Weseley v. Spear, Leeds & Kellogg, 711 F.Supp.
713, 720 (E.D.N.Y.1989)). The settlement in Staton magnified the risks associated with incentive awards because
the awards there were much larger than the payments to individual class members, “eliminat[ing] a critical
check on the fairness of the settlement for the class as a whole.” Id. at 977. Where a class representative
supports the settlement and is treated equally by the settlement, “the likelihood that the settlement is
forwarding the class’s interest to the maximum degree practically possible increases.” Id. But if “such members
of the class are provided with special ‘incentives’ in the settlement agreement, they may be more concerned
with maximizing those incentives than with judging the adequacy of the settlement as it applies to class
members at large.” Id. We held that the awards in Staton were so disproportionate to the class’s recovery that
the district court abused its discretion in finding that the settlement agreement was fair, adequate, and
reasonable. Id. at 978.
In Rodriguez I, we again confronted improper incentive awards. At the start of the litigation, several class
representatives signed retainer agreements that required class counsel to request incentive awards that
increased on a sliding scale as the class’s monetary recovery increased. Rodriguez I, 563 F.3d at 957. The awards
maxed out at $75,000 if the total settlement amount was $10 million or more. Id. “We expressed disapproval of
these incentive agreements, and stated that [the agreements] ‘created an unacceptable disconnect between
the interests of the contracting representatives and class counsel, on the one hand, and members of the class
on the other.’ ” Rodriguez II, 688 F.3d at 651 (quoting Rodriguez I, 563 F.3d at 960). The named plaintiffs had no
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incentive to settle for anything other than monetary relief of $ 10 million, and they had no incentive to go to
trial and risk their incentive awards, even if going to trial was best for the class. More than a “typical” incentive
award, the provisions in the retainer agreements “ma[de] the contracting class representatives’ interests
actually different from the class’s interests.” Rodriguez I, 563 F.3d at 959. The class representatives thus did not
adequately represent the class. Rodriguez II, 688 F.3d at 656–57. Moreover, we held that the retainer
agreements “implicate[d] California ethics rules that prohibit representation of clients with conflicting
interests.” See Rodriguez I, 563 F.3d 948, 960; see also Rodriguez II, 688 F.3d at 656–60.2
2
In Rodriguez I, we remanded “for the district court to consider whether counsel could represent both the
class representatives with whom there was an incentive agreement, and absentee class members,
without affecting the entitlement to fees.” Rodriguez I, 563 F.3d at 968. In Rodriguez II, the case returned
to us after the district court, relying on Rodriguez I, found “that the incentive agreements gave rise to a
conflict of interest between the class representatives and the other members of the class that tainted
[class counsel’s] representation, and ... [therefore denied] attorneys’ fees.” Rodriguez II, 688 F.3d at 652
(internal quotation marks omitted). We affirmed. Id. at 960. The district court here did not have the
benefit of our decision in Rodriguez II.
B
As in Staton and Rodriguez I, the incentive awards here corrupt the settlement by undermining the adequacy of
the class representatives and class counsel. In approving the settlement agreement, the district court
misapprehended the scope of our prior precedents. We once again reiterate that district courts must be vigilant
in scrutinizing all incentive awards to determine whether they destroy the adequacy of the class
representatives. The conditional incentive awards in this settlement run afoul of our precedents by making the
settling class representatives inadequate representatives of the class.
The settlement agreement explicitly conditions the incentive awards on the class representatives’ support for
the settlement. This interpretation is clear from the language of the agreement. 3 Settling Plaintiffs contend that
the settlement agreement did not explicitly condition the incentive awards on support of the settlement but
was merely descriptive of those named representatives who were seeking judicial approval of the agreement.
We disagree that the language is susceptible to this interpretation. But if there were any doubt, the conduct
and communications of class counsel confirmed this interpretation. Counsel told a plaintiff below that he would
“not be entitled to anything” and that he would “jeopardize the $5,000 [he] would receive [under the
settlement]” if he did not support the settlement. Class counsel also told the district court that they had told
other plaintiffs that they “don’t see a way for people who don’t support the settlement to receive an incentive
award.” On appeal, Settling Plaintiffs’ argument for an alternative interpretation is unpersuasive.
3
We must presume that Settling Plaintiffs knew the contents of the settlement agreement that they
supported in the district court. See Bingham v. Holder, 637 F.3d 1040, 1045 (9th Cir.2011) (“[A] party who
signs a written contract ‘in the absence of fraud or other wrongful act on the part of another contracting
party, is conclusively presumed to know its contents and to assent to them.’ ” (quoting 27 Richard A. Lord,
Williston on Contracts § 70:113 (4th ed. 2009))).
With the prospect of receiving $5,000 incentive awards only if they supported the settlement, Settling Plaintiffs
had very different interests than the rest of the class. Like the agreements in Rodriguez, the conditional
incentive awards changed the motivations for the class representatives. Instead of being solely concerned
about the adequacy of the settlement for the absent class members, the class representatives now had a
$5,000 incentive to support the settlement regardless of its fairness and a promise of no reward if they
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opposed the settlement. The conditional incentive awards removed a critical check on the fairness of the classaction settlement, which rests on the unbiased judgment of class representatives similarly situated to absent
class members.
Although the conditional incentive awards themselves are sufficient to invalidate this settlement, the significant
disparity between the incentive awards and the payments to the rest of the class members further exacerbated
the conflict of interest caused by the conditional incentive awards. As the district court below noted,
“[c]oncerns over potential conflicts may be especially pressing where, as here, the proposed service fees greatly
exceed the payments to absent class members.” White, 803 F.Supp.2d at 1112. There is a serious question
whether class representatives could be expected to fairly evaluate whether awards ranging from $26 to $750 is
a fair settlement value when they would receive $5,000 incentive awards. Under the agreement, if the class
representatives had concerns about the settlement’s fairness, they could either remain silent and accept the
$5,000 awards or object to the settlement and risk getting as little as $26 if the district court approved the
settlement over their objections. The conditional incentive awards at issue here, like the disproportionately
large awards in Staton, fatally alter the calculus for the class representatives, pushing them to be “more
concerned with maximizing [their own gain] than with judging the adequacy of the settlement as it applies to
class members at large.” Staton, 327 F.3d at 977.
The class representatives’ divergent interests, as a result of the conditional incentive payments, undermined
their ability to “fairly and adequately protect the interests of the class.” Fed.R.Civ.P. 23(a)(4). This requirement is
rooted in due-process concerns—“absent class members must be afforded adequate representation before
entry of a judgment which binds them.” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir.1998).
[3]
Adequate representation depends upon “an absence of antagonism [and] a sharing of interests between
representatives and absentees.” Molski v. Gleich, 318 F.3d 937, 955 (9th Cir.2003), overruled on other grounds
by Dukes v. Wal–Mart Stores, Inc., 603 F.3d 571 (9th Cir.2010). Where, as here, the class representatives face
significantly different financial incentives than the rest of the class because of the conditional incentive awards
that are built into the structure of the settlement, we cannot say that the representatives are adequate. See
Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 627, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997) (“The settling parties,
in sum, achieved a global compromise with no structural assurance of fair and adequate representation....”).
Settling Plaintiffs counter this analysis through three arguments, but we reject each of these arguments. First,
Settling Plaintiffs claim that incentive awards for named plaintiffs are typical, so any distortion in the interest of
Settling Plaintiffs is common to all class actions. Although incentive awards may be common, see Rodriguez I,
563 F.3d at 958, explicitly conditioning incentive awards to named representatives on their support for the
settlement is not at all typical. Professor William Rubenstein, a class-action expert, testified before the district
court that in his experience such provisions are “not common” and that his research revealed “not one”
settlement agreement that “contain[ed] a restriction on an incentive award like the one here that permits
incentive awards be sought only for those representatives ‘in support of the settlement.’ ” Brad Seligman,
another expert witness, testified that he had “reviewed literally hundreds of class actions settlements” but
could “not recall ever seeing a class settlement that expressly states only that class representatives who
support the settlement are entitled to an incentive payment.” Thus, we are not confronted with run-of-the-mill
incentive awards, but rather a settlement provision that weighs on the class representatives’ independent
judgment on whether to support the settlement by calling for the denial of incentive awards if they do not
support it.
Second, Settling Plaintiffs point out that the district court—not the settlement agreement—determines who
receives incentive awards and in what amount and that Objecting Plaintiffs could have sought their own
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incentive awards from the district court. They therefore contend that the provision in the settlement
agreement is irrelevant. But this argument misapprehends the nature of the adequacy inquiry. That Objecting
Plaintiffs could have petitioned for incentive awards is irrelevant to the conflict created by the settlement
agreement. We are concerned about the destruction of the “shar [ed] ... interests between the representatives
and absentee[ ]” class members as a result of the conditional incentive awards. Rodriguez I, 563 F.3d at 960
(quoting Molski, 318 F.3d at 955). We examine the class representatives’ incentives based on both the
settlement agreement and the final awards approved by the district court. Here, our analysis focuses on the
agreement. There is a lack of congruent interests between Settling Plaintiffs and the class at large because the
class representatives would be expected to support the settlement so that class counsel would request awards
on their behalf. See id. That the award ultimately must come from the district court is of no moment because
the district court may want to rely on the judgment of the class representatives supporting a settlement. See
Staton, 327 F.3d at 977.
Third, Settling Plaintiffs contend that even if the conditional incentive awards created a potential conflict of
interest with the class, no actual conflict developed. To support this assertion, Settling Plaintiffs point to their
own testimony that their decisions to support the settlement were not influenced by the prospect of incentive
awards. Again, Settling Plaintiffs misapprehend our holding in Rodriguez I. Our inquiry in Rodriguez I was not
whether there was an actual injury to the class in the form of a lower settlement amount because of the
improper incentive-awards agreements. See Rodriguez I, 563 F.3d at 960; see also Rodriguez II, 688 F.3d at 658.
Rather, the adequacy of the Rodriguez plaintiffs’ representation was undermined by the presence of the
agreements that created the conflict of interest. In fact, the settlement in Rodriguez I—$49 million—was much
larger than the amount that would maximize the incentive awards under the incentive-awards agreements—
$10 million. See id. at 956–57. But that did not change the fact that the incentive agreements themselves
created a conflict of interest by tying the incentive awards to the settlement amount. That the ultimate
settlement amount was $49 million instead of $ 10 million did not eliminate the conflict of interest. The same is
true here. The conditional-incentive-awards provision in the settlement agreement made the interests of the
class representatives actually different than those of the rest of the class.
In Rodriguez I, after holding that the retainer agreements created a conflict of interest, we “conclude[d] that
the presence of conflicted representatives was harmless” because two other class representatives had retainer
agreements that did not contain the incentive-awards agreements that created the conflict. Rodriguez I, 563
F.3d at 961. Here, however, the conflict created by the conditional incentive awards in the settlement is not
harmless. It affected all class representatives who supported the settlement. We conclude that the settlement
must be reversed because the interests of class representatives who would get incentive awards diverged from
the interests of the absent class members. We reverse the district court’s approval of the monetary-relief
settlement.4 Because we reverse the settlement, we also reverse the awards of attorneys’ fees and costs. See In
re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 940 (9th Cir.2011).
4
Because we reverse based on the conditional incentive awards, we express no opinion on the
reasonableness and adequacy of the $45 million settlement presented.
C
Having determined that Settling Plaintiffs did not adequately represent the class, we now turn to the question
of whether the class representatives’ lack of adequacy—based on the conditional incentive awards—also made
class counsel inadequate to represent the class. We hold that it did.
Class counsel has a fiduciary duty to the class as a whole “and it includes reporting potential conflict issues” to
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the district court. Rodriguez I, 563 F.3d at 948; see also id. at 968 (“The responsibility of class counsel to absent
class members whose control over their attorneys is limited does not permit even the appearance of divided
loyalties of counsel.” (quoting Kayes v. Pac. Lumber Co., 51 F.3d 1449, 1465 (9th Cir.1995))). Under the district
court’s local rules, California law governs whether an ethical violation has occurred. See C.D. Cal. R. 83–3.1.2;
see also Rodriguez II, 688 F.3d at 656. California Rule of Professional Conduct 3–310(C) prohibits the
representation of clients with actual or potential conflicts of interest absent an express waiver. See Rodriguez II,
688 F.3d at 656–57 (collecting California cases); see also Image Tech. Serv., Inc. v. Eastman Kodak Co., 136 F.3d
1354, 1358 (9th Cir.1998) (noting that “[s]imultaneous representation of clients with conflicting interests (and
without informed written consent) is an automatic ethics violation in California”); Flatt v. Superior Court, 9
Cal.4th 275, 36 Cal.Rptr.2d 537, 885 P.2d 950, 955 (1994).
As soon as the conditional-incentive-awards provision divorced the interests of the class representatives from
those of the absent class members, class counsel was simultaneously representing clients with conflicting
interests. See Rodriguez I, 563 F.3d at 959; Rodriguez II, 688 F.3d at 656. Class counsel made no attempt to
obtain a waiver for the conflict or to contain the conflict by alerting the district court. See Rodriguez I, 563 F.3d
at 959. Instead, class counsel took the position that a conflict did not even exist. Moreover, the conditionalincentive-awards provision affected all settling class counsel. Cf. Rodriguez I, 563 F.3d at 961. Class counsel thus
was not adequate and could not settle the case on behalf of the absent class members. Conflicted
representation provides an independent ground for reversing the settlement. Cf. id. (citing Fed.R.Civ.P. 23(a)(4),
(g)(4)). Because we reverse the settlement, we must also reverse the awards of attorneys’ fees and costs. See In
re Bluetooth, 654 F.3d at 940. Additionally, we reverse the awards because the district court abused its
discretion by not considering “whether class counsel has properly discharged its duty of loyalty to absent class
members” in its award of attorneys’ fees and costs. 5 Cf. Rodriguez II, 688 F.3d at 655.
5
To be clear, we reverse both awards of attorneys’ fees and both awards of costs.
But this case is different than Rodriguez I and Rodriguez II because the conditional incentive awards at issue
here did not create a conflict “from day one.” Rodriguez I, 563 F.3d at 959. Rather, the conflict developed late in
the course of representation. On remand, the district court should determine when the conflict arose and if the
conflict continues under any future settlement agreement. Should the district court approve such an
agreement, it may then exercise its discretion in deciding whether, and to what extent, class counsel are
entitled to fees under the common-fund doctrine. 6 See Rodriguez II, 688 F.3d at 657; Rodriguez I, 563 F.3d at
967–68.
6
Because we reverse the settlement and the awards of fees and costs based on the conditional incentive
awards, we do not reach the issue of whether the subset of class counsel who brought the Acosta and
Pike suits, which were consolidated with this case, faced an independent conflict of interest because of
the fee-sharing agreement they executed with the rest of class counsel. The district court should revisit
that issue in light of our holding.
IV
In sum, we hold that the district court abused its discretion in approving this settlement where the class
representatives and class counsel did not adequately represent the interests of the class. We must be vigilant in
guarding against conflicts of interest in class-action settlements because of the “unique due process concerns
for absent class members” who are bound by the court’s judgments. In re Bluetooth, 654 F.3d at 946 (quoting
Hanlon, 150 F.3d at 1026). And where, as here, the “settlement agreement is negotiated prior to formal class
certification ..., there is an even greater potential for a breach of fiduciary duty owed the class.” Id. “Accordingly,
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such agreements must withstand an even higher level of scrutiny for evidence of collusion or other conflicts of
interest than is ordinarily required under Rule 23(e) before securing the court’s approval as fair.” Id. We hold
that the settlement at issue here cannot withstand this scrutiny, and it was therefore an abuse of discretion for
the district court to approve the settlement. 7 Although this case does not go back to square one, the settlement
cannot be approved. The case is remanded for further proceedings consistent with this opinion.
7
Because we reverse the settlement and the award of attorneys’ fees and costs on account of the
conditional incentive awards, we do not reach the other arguments raised in this appeal. In particular, we
decline to review Attorney–Appellant Charles Juntikka’s challenge to the district court’s order restricting
his ability to contact his former clients. The issue is moot because we reverse the order approving the
settlement that Juntikka opposes and the issue may not arise again on remand. If it does, the district court
should address whether any new restrictions on speech comply with Gulf Oil Co. v. Bernard, 452 U.S. 89,
101 S.Ct. 2193, 68 L.Ed.2d 693 (1981), and Domingo v. New England Fish Co., 727 F.2d 1429, 1439–42,
modified, 742 F.2d 520 (9th Cir.1984).
REVERSED AND REMANDED.
HADDON, District Judge, concurring:
I join in the decision to reverse approval of the settlement for the reasons clearly stated in Judge Gould’s wellwritten opinion. However, class counsels’ actions in orchestrating and advocating the disparate incentive award
scenario without any concern for, or even recognition of, the obvious conflicts presented underscore, in my
opinion, that class counsel were singularly committed to doing whatever was expedient to hold together an
offer of settlement that might yield, as it did, an allowance of over $16 million in lawyers’ fees. 1
1
The
total
fees
$16,747,147.68.
approved
were
Such adherence to self-interest, coupled with the obvious fundamental disregard of responsibilities to all class
members—members who had little or no real voice or influence in the process—should not find favor or be
rewarded at any level. Although within the discretion of the district court in the first instance, I conclude that
class counsel should be disqualified from participation in any fee award ultimately approved by the district
court upon resolution of the case on the merits.
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May 17, 2015
Washington, D.C.
The Aggregate Settlement Rule
By
Ho ard M. Erichson
Fordham Uni ersity School o La
Ne
ork, Ne
ork
Page 175
303
4/21/2015
Delete
DELETE
ALI Ethics Panel
May 17, 2015
Howard M. Erichson
Aggregate Settlement Rule
ABA Model Rule of Professional Conduct 1.8g
“A lawyer who represents two or more clients shall not participate in making an
aggregate settlement of the claims … unless each client gives informed
consent, in a writing signed by the client. The lawyer’s disclosure shall include
the existence and nature of all the claims or pleas involved and of the
participation of each person in the settlement.”
Convergence of 3 ethical precepts:
Client autonomy over settlement decision. RPC 1.2a.
Lawyer’s duty to inform and advise client. RPC 1.4.
Lawyer’s duty to avoid conflicts of interest, tempered by possibility of client’s
informed consent. RPC 1.7.
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Aggregate Settlement Rule: Plaintiffs & Defendants
RPC 1.8g applies to both, but issues arise largely in plaintiff representation
Defendants (criminal, civil), plaintiffs
Why defense lawyers should care about a rule aimed at plaintiffs’ lawyers
Enforceability (analogy: adequate representation for class action settlement)
Ethics: A lawyer may not assist or induce another to violate rules. RPC 8.4(a)
Disclosure & Informed Consent
The rule requires disclosure of the terms of the aggregate settlement.
It does not suffice that client agreed to amount she would get.
It does not suffice that client gave lawyer authority to settle.
ABA Ethics Op. 06-438: Model RPC 1.8(g) requires disclosure of
Total amount of the settlement
Amount/nature of each client’s participation
Fees & costs; method of apportioning costs
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What is an “aggregate settlement”?
ALI Principles of the Law of Aggregate Litigation §3.16
“A non-class aggregate settlement is a settlement of the claims of two or more
individual claimants in which the resolution of the claims is interdependent.”
Collective conditions
All-or-nothing, walkaway, etc.
Collective allocation
Matrix, allocation process, lump-sum, per capita, etc.
Criticism of Aggregate Settlement Rule
Criticism
Peace premium. Giving each client power to accept/reject settlement individually
deprives the group of a higher potential recovery.
Hold-outs. Giving each client “veto power” invites extortion.
Burden of disclosure; confidentiality
Defense
Conflicts of interest, or lawyer indifference. Incentive to treat individuals fairly in
allocating funds.
Address hold-out problem by avoiding all-or-nothing deals. Address confidentiality
problem by disclosing terms without naming individuals.
Client’s right to accept/reject settlement. Whose claim is it, anyway?
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ALI Reform Proposal: Advance Consent
ALI Principles of the Law of Aggregate Litigation§3.17(b)
Advance consent to aggregate settlements
Current law: RPC 1.8(g) cannot be satisfied in advance; clients must consent to
aggregate settlement after terms are known.
ALI Principles§ 3.17(b): “In lieu of [informed consent after the settlement terms
are known], individual claimants may, before the receipt of a proposed
settlement offer, enter into an agreement in writing through shared counsel
allowing each participating claimant to be bound by a substantial-majority vote
of all claimants concerning an aggregate-settlement proposal …”
Under ALI proposal, settlement’s enforceability would depend on whether
“substantively fair and reasonable.” Proposal would permit claimants to
challenge fairness of settlement in court.
DELET THIS
ENTIRE
BOX
ALI Ethics Panel
May 17, 2015
Howard M. Erichson
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A A ormal pinion : La er Proposing to Ma e or Accept an
Aggregate Settlement or Aggregated Agreement e
Su mitted y
Ho ard M. Erichson
Fordham Uni ersity School o La
Ne
ork, Ne
ork
Copyright
y the American Bar Association
Page 180
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Erichson, Howard 4/16/2015
For Educational Use Only
LAWYER PROPOSING TO MAKE OR ACCEPT AN..., ABA Formal Op....
ABA Formal Op. 06-438
American Bar Association Formal Ethics Opinion 06-438
American Bar Association
LAWYER PROPOSING TO MAKE OR ACCEPT AN
AGGREGATE SETTLEMENT OR AGGREGATED AGREEMENT
February 10, 2006
Copyright (c) by the American Bar Association
In seeking to obtain the informed consent of multiple clients to make or accept an offer of an aggregate settlement or
aggregated agreement of their claims as required under Model Rule 1.8(g), a lawyer must advise each client of the total amount
or result of the settlement or agreement, the amount and nature of every client's participation in the settlement or agreement,
the fees and costs to be paid to the lawyer from the proceeds or by an opposing party or parties, and the method by which the
costs are to be apportioned to each client.
Unlike Model Rule 1.7 of the Model Rules of Professional Conduct [FN1] which is a general rule governing conflicts
of interest relating to a lawyer's current clients, Rule 1.8 provides specific rules regarding eleven types of conflicts of
interest. As noted throughout the comments to Rule 1.8, the rule supplements duties set forth in Rule 1.7. Each of Rule 1.8's
subparagraphs (a) through (j) describes a different and specific circumstance in which a lawyer's self-interest might jeopardize
the representation of a client. [FN2] This opinion considers the subject of aggregate settlements or aggregated agreements
addressed in Rule 1.8(g). [FN3]
Rule 1.8 (g) pertains to the conflicts of interest that arise when a lawyer or law firm (collectively referred to as “lawyer”)
represents multiple clients, some or all of whose claims or defenses are to be resolved under a single proposal (in a civil case)
or plea agreement (in a criminal case). In such situations, subparagraph (g) supplements Rule 1.7 by requiring an additional
level of disclosure by the lawyer and by requiring that his clients' informed consent to the settlement be in writing.
As noted in Comment [13] to Rule 1.8, differences in the willingness of each represented client to make or accept an offer
of settlement are among the risks that should be considered when a lawyer undertakes to represent multiple clients in matters
where a settlement or plea agreement proposal could create a conflict among them. Rule 1.8(g) provides a focused application
of Rule1.2(a), which protects a client's right in all circumstances to have the final say in deciding whether to accept or reject
an offer of settlement or to enter a plea; Rule 1.6, which requires that the lawyer have his clients' consent to reveal information
relating to his representation of each of them to all other clients affected by the aggregate settlement or plea agreement; and
Rule 1.7, which requires consent of all affected clients when the representation of one or more of them will be materially limited
by the lawyer's responsibilities to the others.
Because the terms “aggregate settlement” and “aggregated agreement” are not defined in the Model Rules of Professional
Conduct, it first is necessary to explain those terms before identifying the disclosures required to satisfy Rule 1.8(g). An
aggregate settlement or aggregated agreement occurs when two or more clients who are represented by the same lawyer together
resolve their claims or defenses or pleas. It is not necessary that all of the lawyer's clients facing criminal charges, having
claims against the same parties, or having defenses against the same claims, participate in the matter's resolution for it to be
an aggregate settlement or aggregated agreement. The rule applies when any two or more clients consent to have their matters
resolved together. [FN4]
© 2015 Thomson Reuters. No claim to original U.S. Government Works.
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The claims or defenses to be settled in an aggregate settlement or aggregated agreement may arise in the common
representation of multiple parties in the same matter, for example, when damages are claimed by passengers on a bus that rolls
over, or by purchasers of a fraudulently issued stock, or when pleas are offered by criminal defendants alleged to be part of a
drug ring. They also may arise in separate cases. For example, the rule would apply to claims for breach of warranties against a
home builder brought by several home purchasers represented by the same lawyer, even though each claim is filed as a separate
lawsuit and arises with respect to a different home, a different breach, and even a different subdivision. [FN5]
Aggregate settlements or aggregated agreements not only arise in a variety of situations, but they also may take a variety
of forms. For example, a settlement offer may consist of a sum of money offered to or demanded by multiple clients with or
without specifying the amount to be paid to or by each client. Aggregate settlements or aggregated agreements can occur both
in the civil context, for example, when a claimant makes an offer to settle a claim for damages with two or more defendants,
and in the criminal context, when, for example, a prosecutor accepts pleas from two or more criminal defendants as part of
one agreement. [FN6]
Rule 1.8(g) deters lawyers from favoring one client over another in settlement negotiations by requiring that lawyers reveal
to all clients information relevant to the proposed settlement. [FN7] That information empowers each client to withhold consent
and thus prevent the lawyer from subordinating the interests of the client to those of another client or to those of the lawyer.
[FN8] Rule 1.8(g) thereby supplements the lawyer's duties under Rule 1.2(a) to defer to his clients' roles as ultimate decisionmakers concerning the objectives of the representation, and to abide by his clients' decisions whether to settle a matter. [FN9] In
acknowledgment of the heightened conflicts risks encountered when multiple clients are represented in an aggregate settlement
or aggregated agreement, Rule 1.8(g) also requires that the clients' consent to the settlement or agreement be in writing, a
requirement more strict than that imposed in the general rule on conflicts, Rule 1.7. The lawyer's duty to make disclosures
under Rule 1.8(g) reinforces the lawyer's duty under Rule 1.4 to provide information reasonably necessary to permit the client
to decide to engage in the proposed settlement or agreement. [FN10]
In order to ensure a valid and informed consent to an aggregate settlement or aggregated agreement, Rule 1.8(g) requires
a lawyer to disclose, at a minimum, [FN11] the following information to the clients for whom or to whom the settlement or
agreement proposal is made:
• The total amount of the aggregate settlement or the result of the aggregated agreement.
• The existence and nature of all of the claims, defenses, or pleas involved in the aggregate settlement or aggregated
agreement. [FN12]
• The details of every other client's participation in the aggregate settlement or aggregated agreement, whether it be
their settlement contributions, their settlement receipts, the resolution of their criminal charges, or any other contribution or
receipt of something of value as a result of the aggregate resolution. For example, if one client is favored over the other(s)
by receiving non-monetary remuneration, that fact must be disclosed to the other client(s).
• The total fees and costs to be paid to the lawyer as a result of the aggregate settlement, if the lawyer's fees and/or
costs will be paid, in whole or in part, from the proceeds of the settlement or by an opposing party or parties. [FN13]
• The method by which costs (including costs already paid by the lawyer as well as costs to be paid out of the settlement
proceeds) are to be apportioned among them. [FN14]
These detailed disclosures must be made in the context of a specific offer or demand. Accordingly, the informed consent
required by the rule generally cannot be obtained in advance of the formulation of such an offer or demand. [FN15]
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If the information to be disclosed in complying with Rule 1.8(g) is protected by Rule 1.6, the lawyer first must obtain
informed consent from all his clients to share confidential information among them. The best practice would be to obtain this
consent at the outset of representation if possible, or at least to alert the clients that disclosure of confidential information might
be necessary in order to effectuate an aggregate settlement or aggregated agreement. [FN16] If the lawyer seeks permission
to share confidential information among his clients, and receives that permission, he should explain to his clients that if a
dispute arises between any of the clients subsequent to his sharing their confidential information, the attorney-client privilege
may not be available for assertion by any of them against the other(s) on issues of commonly given advice. [FN17] Finally,
in representations where the possibility of an aggregate settlement or aggregated agreement exists, clients should be advised
of the risk that if the offer or demand requires the consent of all commonly-represented litigants, the failure of one or a few
members of the group to consent to the settlement may result in the withdrawal of the offer or demand.
Conclusion
Rule 1.8(g) is a prophylactic rule designed to protect clients who are represented by the same lawyer and whose claims
or defenses are jointly negotiated and resolved through settlement or by agreement. Unique and difficult conflicts between the
clients and their lawyer, and between the clients themselves, are possible. By complying with Rule 1.8(g), the lawyer protects
his clients and himself, and helps to assure the finality and enforceability of the aggregate settlement or agreement into which
those clients have chosen to enter.
[FN1]. This opinion is based on the Model Rules of Professional Conduct as amended by the ABA House of Delegates in August
2003 and, to the extent indicated, the predecessor Model Code of Professional Responsibility of the American Bar Association.
The laws, court rules, regulations, rules of professional conduct, and opinions promulgated in the individual jurisdictions are
controlling.
[FN2]. See ANNOTATED MODEL RULES OF PROFESSIONAL CONDUCT 146 (5th ed. 2002).
[FN3]. Rule 1.8(g) states:
[FN4]. Rule 1.8(g) does not address obligations to other clients having such similar claims or defenses who are not included
in the aggregate settlement or aggregated agreement. See Rule 1.7(a)(2).
[FN5]. Comment [13] to Rule 1.8 discusses subparagraph (g) in the context of common representation of multiple clients
by a single lawyer. “Common representation” is discussed in Rule 1.7 Comments [29] through [33] solely in the context of
the representation of multiple clients “in the same matter.” Neither the rule nor its comment, however, explicitly restricts the
application of Rule 1.8(g) to common representation of multiple clients in the same matter. Yet, as a practical matter, the more
disparate the claims included in an aggregate settlement proposal, the more likely it is that the proposal will run afoul of other
provisions of the Model Rules. For example, if a lawyer representing clients with factually and legally dissimilar claims receives
an aggregate settlement proposal, the lawyer may find it difficult to obtain the informed consent of each of his clients to the
disclosure of confidential client information necessary to satisfy Rule 1.8(g), including the consent required even to disclose
the fact that one client's settlement is conditioned on another's. See discussion of Rule 1.6 infra. The lawyer also may find it
more difficult to satisfy Rule 1.7, particularly Rules 1.7(a)(2) and 1.7(b)(1).
[FN6]. The requirements to be met when a lawyer undertakes such multiple representations in a criminal matter, and the
implications of an accused's constitutional right to effective assistance of counsel, are beyond the scope of this opinion.
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[FN7]. See, e.g., In re Hoffman, 883 So.2d 425, 432 (La.), reh'g denied (2004) (“Once the joint representation … commenced, …
respondent owed each of his clients an equal degree of loyalty, and he could not favor the interests of one client over another.”)
[FN8]. One risk posed by aggregate settlements is that the lawyer may be motivated to settle a group of many claims and
reap a substantial fee without the trouble of diligent development of the clients' claims. That is likely to be a greater risk in an
aggregate settlement than in the settlement of an individual claim, as the sheer number of clients may make the potential fee
much greater. As the Texas Court of Appeals stated:
[FN9]. Several courts have concluded that fee agreements that allowed for a settlement based upon a “majority vote” of the
clients represented violated Rule 1.8(g). See, e.g., The Tax Authority, Inc. v. Jackson Hewitt, Inc., 873 A. 2d 616, 627 (N.J.Super.
Ct. App. Div.), cert. granted, 878 A.2d 855 (N.J. 2005) (applying New Jersey's Rule 1.8(g) which, at the time, was practically
identical to the pre-2002 ABA Model Rule); Hayes v. Eagle-Picher Industries, Inc., 513 F.2d 892, 894-95 (10th Cir. 1975)
(applying Kansas's version of Model Code DR 5-106). Cf., Abbott v. Kidder Peabody & Co., 42 F. Supp. 2d 1046, 1050-51
(D. Colo. 1999) (applying Colorado's Rule 1.7(b) (2) and (c)).
[FN10]. See, e.g., Quintero v. Jim Walter Homes, Inc., 709 S.W.2d 225, 229 (Tex. Ct. App. 1985, writ ref'd n.r.e.) (applying
Model Code DR 5-106).
[FN11]. The unique facts and circumstances of any particular settlement may require additional disclosures other than those
outlined here.
[FN12]. See, e.g., State ex rel. Oklahoma Bar Ass'n v. Weeks, 897 P. 2d 246, 253 (Okla., Mar. 22, 1994) (interpreting DR 5-106).
[FN13]. See, e.g., In re Hoffman, 883 So. 2d at 433 (“[D]uring the negotiation of the aggregate settlement, the lawyer must
confer with all of his clients and fully disclose all details of the proposed settlement….”) When the amounts of fees and costs
to be paid to the lawyer as a result of the aggregate settlement are not yet determined at the time of the settlement, the lawyer
will need to disclose to each of his clients the process by which those amounts will be established and who will pay them, and
the amount he will be requesting to be paid. To the extent that the lawyer will receive compensation from someone other than
each client, the lawyer will need to comply with the requirements of Rule 1.8(f).
[FN14]. For example, in cases where the clients are defendants with the same relative risk of an adverse judgment in a civil
suit, or if the clients are plaintiffs with similar claims of ascertainable and equal or comparable value, then a sharing of the costs
on a per capita basis may be appropriate. On the other hand, if the clients are plaintiffs who were injured to various degrees in
a common accident, and are executing a contingency fee agreement where costs are not paid until a settlement is effectuated,
a pro rata cost distribution may be more equitable. Best practices would include the details of the necessary disclosures in the
writings signed by the clients.
[FN15]. See, e.g., In re Hoffman, supra note 13 (“The requirement of informed consent cannot be avoided by obtaining
client consent in advance to a future decision by the attorney or by a majority of the clients about the merits of an aggregate
settlement.”)
[FN16]. See Comment [13] to Rule 1.8, which states in pertinent part:
[FN17]. Rules 1.6(a) and 1.4. See also Rule 1.7 Comments [30] and [31] for further discussion of the subject of the treatment
of confidential information in formulating and conducting a common representation.
ABA Formal Op. 06-438
End of Document
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457
May 17, 2015
Washington, D.C.
reative
ontessori earnin
d
enters v. s ford ear
th Cir
Su mitted y
Diane P. Wood
U.S. Court o Appeals, Se enth Circuit
Chicago, Illinois
Page 185
459
In the
United States Court of Appeals
For the Seventh Circuit
No. 11-8020
C REATIVE M ONTESSORI L EARNING C ENTERS,
on its own behalf and that of a class,
Plaintiff-Respondent,
v.
A SHFORD G EAR LLC,
Defendant-Petitioner.
Petition for Permission to Appeal from the
United States District Court for the
Northern District of Illinois, Eastern Division.
No. 09 C 3963—Robert W. Gettleman, Judge.
S UBMITTED S EPTEMBER 9, 2011—D ECIDED N OVEMBER 22, 2011
Before E ASTERBROOK, Chief Judge, and C UDAHY and
P OSNER, Circuit Judges.
P OSNER, Circuit Judge. The defendant has asked us
for permission to appeal from the district judge’s certification of a class in a suit under the Telephone Consumer Protection Act (as amended by the Junk Fax Prevention Act of 2005), 47 U.S.C. § 227. See Fed. R. Civ.
Page 186
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2
No. 11-8020
P. 23(f). The Act imposes, on anyone who sends an unsolicited fax advertisement, statutory damages of $500 per
fax, which can be trebled if the court finds that the violation was willful or knowing. 47 U.S.C. §§ 227(b)(1)(C),
(b)(3). Such “junk faxes” consume the recipient’s
paper and ink without his consent and are thus a source
of justified though usually minor irritation to recipients
not interested in the advertised product or service.
Resource Bankshares Corp. v. St. Paul Mercury Ins. Co., 407
F.3d 631, 639 (4th Cir. 2005). The named plaintiff in
this case is complaining about two one-page faxes that,
as we’ll see, it may never even have received. Anyway,
the statute, with its draconian penalties for multiple
faxes, is what it is.
The plaintiff hasn’t responded to the petition for leave
to appeal even though the petition presents issues of
class action practice that deserve our consideration. The
petition presents two questions. The first is whether “only
the most egregious misconduct” by the law firm representing the class “could ever arguably justify denial of
class status”—the unattainable standard that the
district judge invoked to reject the firm’s misconduct as
a ground for denying class certification. The second
question, which bears more directly on the specifics of
this case, is whether the judge gave proper weight to
the firm’s misleading statements and the risk that the
firm is in this case purely for itself and not for the benefits that the suit if successful might confer on the class.
The resolution of these issues cannot feasibly be postponed to an appeal from a final judgment, as there is
Page 187
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No. 11-8020
3
unlikely to be an effectively appealable judgment. Class
actions, unless dismissed at an early stage, are typically
settled rather than litigated to judgment. The settlement
must be approved by the district court, and objectors
can appeal the settlement to the court of appeals, but
it is unlikely that the particular issue raised in
this petition to appeal would be raised in an appeal from
approval of a settlement.
Certification as a class action can “coerce the
defendant into settling on highly disadvantageous terms,
regardless of the merits of the suit,” and in this case is
“highly likely to because of the magnitude of the
potential damages.” 1998 Committee Notes to Fed. R.
Civ. P. 23(f); see also CE Design Ltd. v. King Architectural
Metals, Inc., 637 F.3d 721, 723 (7th Cir. 2011). As explained
in Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 675
(7th Cir. 2001) (citation omitted), “the class certification
turns a $200,000 dispute (the amount that Szabo claims
as damages) into a $200 million dispute. Such a claim
puts a bet-your-company decision to Bridgeport’s managers and may induce a substantial settlement even if
the customers’ position is weak. This is a prime occasion
for the use of Rule 23(f), not only because of the pressure
that class certification places on the defendant but also
because the ensuing settlement prevents resolution of the
underlying issues. Accepting an appeal in a big-stakes
case is especially appropriate when the district court’s
decision is problematic, as it is here.” See also West v.
Prudential Securities, Inc., 282 F.3d 935, 937 (7th Cir. 2002)
(“the effect of a class certification in inducing settlement
to curtail the risk of large awards provides a powerful
Page 188
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No. 11-8020
reason to take an interlocutory appeal”); Blair v. Equifax
Check Services, Inc., 181 F.3d 832, 834 (7th Cir. 1999) (“this
interaction of procedure with the merits justifies an
earlier appellate look. By the end of the case it will be
too late—if indeed the case has an ending that is subject to
appellate review”); In re New Motor Vehicles Canadian
Export Antitrust Litigation, 522 F.3d 6, 8 (1st Cir. 2008);
Prado-Steiman ex rel. Prado v. Bush, 221 F.3d 1266, 1274-75
(11th Cir. 2000); Janet Cooper Alexander, “Do the Merits
Matter? A Study of Settlements in Securities Class Actions,” 43 Stan. L. Rev. 497 (1991).
These observations are pertinent to the present case
because the Telephone Consumer Protection Act
imposes potentially very heavy penalties on its violators—many of whom, quite possibly including tiny Ashford Gear, have never heard of this obscure statute. The
only difference between Szabo v. Bridgeport Machines, Inc.,
supra, and this case is that while in Szabo class certification turned a $200,000 dispute (the amount that Szabo
claimed as damages) into a $200 million dispute—a
thousandfold increase—this case turns a dispute of at
most $3,000 (the maximum statutory penalty for the
two unsolicited fax advertisements allegedly, though, as
we’ll note, probably not, received by the plaintiff) into
an $11.11 million suit (assuming no trebling)—an
almost four-thousand-fold increase—against a homefurnishings wholesaler in California that has three employees and annual sales of half a million dollars.
w w w .pow erprofiles.com/profile/00005150131254/
ASHFORD+GEAR,+LLC-GARDENA-CA-(310)+327-4670
(visited Nov. 17, 2011); Dun & Bradstreet Market Identifiers, “Ashford Gear LLC” (2011) (available on Westlaw).
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No. 11-8020
5
A class may be certified only if “the trial court is satisfied, after a rigorous analysis, that the prerequisites of
Rule 23(a) have been satisfied.” Wal-Mart Stores, Inc. v.
Dukes, 131 S. Ct. 2541, 2551 (2011), quoting General Telephone Co. v. Falcon, 457 U.S. 147, 161 (1982) (emphasis
added); see also, e.g., CE Design Ltd. v. King Architectural
Metals, Inc., supra, 637 F.3d at 723; In re Schering Plough
Corp. ERISA Litigation, 589 F.3d 585, 595-96 (3d Cir.
2009). A rigorous analysis was not conducted.
Class counsel, mainly lawyers from the law firm of
Bock & Hatch, the class counsel in the CE Design case
(a Telephone Consumer Protection Act case in which
we ordered the class decertified), specialize in bringing
class action suits under the Act. The class certified in
this case consists of 14,574 persons, who are alleged
to have received a total of 22,222 unsolicited faxed advertisements from the defendant.
The lawyers learned about these faxes not from a recipient, but from a fax broadcaster (Caroline Abraham,
who conducts her business under the name B2B)—a
company that faxes advertisements as an agent of the
advertiser. The lawyers asked her for transmission
reports of faxes that she had sent and information on
how to communicate with the intended recipients, but
promised not to disclose any of this material to a third
party. On the basis of this assurance of confidentiality
she turned over material that evidenced (or so it is alleged) faxes of advertisements that Ashford Gear had
sent to the 14,574 persons constituting the class. One of
the recipients was the Creative Montessori Learning
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No. 11-8020
Center, a private school. www.creativemontessori.com/
about_us.html (visited Nov. 17, 2011). The lawyers
notified Creative Montessori that “during our investigation, we have determined that you are likely to be a
member of the class. You might not remember receiving
the junk faxes, but if the lawsuit is successful, you would
receive compensation (up to $1,500) for each junk fax
sent. We would like to discuss this issue with you.
Please call me [telephone number].” Which it seems
Creative Montessori did—though actually it seems that
the junk faxes supposedly sent to Creative Montessori
were images from Abraham’s computer of advertisements that never had been sent. Nevertheless Creative
Montessori became the named plaintiff and (therefore)
class representative.
This class action suit is one of more than 50 similar
class action suits based on information from Abraham’s
records concerning firms that used her faxing services
and the recipients of the faxes.
The defendant urged the district court to deny class
certification, arguing that class counsel’s misconduct
showed that counsel would not adequately represent
the class. The district judge found that there had
indeed been misconduct by the lawyers. The misconduct
had taken two forms: obtaining material from Abraham’s
files on the basis of a promise of confidentiality that
concealed the purpose of obtaining the material, a
purpose inconsistent with maintaining confidentiality
and likely to destroy Abraham’s business; and implying
in the letter to Creative Montessori that there already
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No. 11-8020
7
was a certified class to which the school belonged. (This
second allegation would constitute misconduct not
because the lawyers communicated with a potential class
action plaintiff personally, but because the communication was misleading.) But the judge ruled that the
proper sanction for these wrongful acts was discipline
by the bar authorities, and that the acts cast no shadow
on the adequacy of class counsel to represent the class.
But class counsel have demonstrated a lack of integrity
that casts serious doubt on their trustworthiness as representatives of the class. Fed. R. Civ. P. 23(a)(4), (g). There
is no basis for confidence that they would prosecute
the case in the interest of the class, of which they are the
fiduciaries, Culver v. City of Milwaukee, 277 F.3d 908, 913
(7th Cir. 2002); In re Pharmaceutical Industry Average Wholesale Price Litigation, 588 F.3d 24, 36 n. 12 (1st Cir. 2009);
Rodriguez v. West Publishing Corp., 563 F.3d 948, 968
(9th Cir. 2009); Sondel v. Northwest Airlines, Inc., 56 F.3d
934, 938 (8th Cir. 1995), rather than just in their interest
as lawyers who if successful will obtain a share of any
judgment or settlement as compensation for their efforts.
Class counsel owe a fiduciary obligation of particular
significance to their clients when the class members are
consumers, who ordinarily lack both the monetary stake
and the sophistication in legal and commercial matters
that would motivate and enable them to monitor the
efforts of class counsel on their behalf. Culver v. City of
Milwaukee, supra, 277 F.3d at 913; In re Cendant Corp.
Securities Litigation, 404 F.3d 173, 186-87 (3d Cir. 2005);
Samuel Issacharoff, “Governance and Legitimacy in the
Page 192
466
8
No. 11-8020
Law of Class Actions,” 1999 S. Ct. Rev. 337, 371-72; Jonathan R. Macey & Geoffrey P. Miller, “The Plaintiffs’ Attorney’s Role in Class Action and Derivative Litigation:
Economic Analysis and Recommendations for Reform,”
58 U. Chi. L. Rev. 1, 19-20 (1991). That is why settlements
of class actions require approval by the district court,
Fed. R. Civ. P. 23(e); Reynolds v. Beneficial National Bank,
288 F.3d 277, 279-80 (7th Cir. 2002); In re Cendent Corp.
Litigation, 264 F.3d 201, 282 (3d Cir. 2001); United States v.
City of Miami, 614 F.2d 1322, 1330-31 (5th Cir. 1980), while
settlements of suits that are not class actions do not,
with a few exceptions, such as shareholder derivative
suits (which resemble class actions). The court takes
the place, as monitor of counsel, of the nominal clients.
That is a difficult role for a court to play—accustomed
as judges in our system are to playing the role of arbiter
of an adversary proceeding rather than imitating a
Continental-style investigating magistrate—when faced
with an alliance of the supposed adversaries (unless
there is an objector). Alleghany Corp. v. Kirby, 333 F.2d
327, 347 (2d Cir. 1964) (Friendly, J., dissenting); Edward
Brunet, “Class Action Objectors: Extortionist Free Riders
or Fairness Guarantors,” 2003 U. Chi. Legal Forum 403, 40506; Samuel Issacharoff, “Class Action Conflicts,” 30 U.C.
Davis L. Rev. 805, 829 (1997); John C. Coffee, Jr., “Understanding the Plaintiff’s Attorney: The Implications of
Economic Theory for Private Enforcement of Law through
Class and Derivative Actions,” 86 Colum. L. Rev. 669, 714
(1986). As Professor Coffee put it in another article, “the
trial court’s approval is a weak reed on which to rely
once the adversaries have linked arms and approached
Page 193
467
No. 11-8020
9
the court in a solid phalanx seeking its approval.” Coffee,
“The Unfaithful Champion: The Plaintiff as Monitor
in Shareholder Litigation,” 48 Law & Contemp. Probs. 5, 2627 (Summer 1985).
We and other courts have often remarked the incentive
of class counsel, in complicity with the defendant’s counsel, to sell out the class by agreeing with the defendant
to recommend that the judge approve a settlement involving a meager recovery for the class but generous
compensation for the lawyers—the deal that promotes
the self-interest of both class counsel and the defendant
and is therefore optimal from the standpoint of their
private interests. Reynolds v. Beneficial National Bank,
supra, 288 F.3d at 279; Culver v. City of Milwaukee, supra,
277 F.3d at 910; Greisz v. Household Bank (Illinois), N.A., 176
F.3d 1012, 1013 (7th Cir. 1999); Duhaime v. John Hancock
Mutual Life Ins. Co., 183 F.3d 1, 7 (1st Cir. 1999); In re
General Motors Corp. Pick-Up Truck Fuel Tank Products
Liability Litigation, 55 F.3d 768, 805 (3d Cir. 1995); Plummer
v. Chemical Bank, 668 F.2d 654, 658 (2d Cir. 1982). When
class counsel have demonstrated a lack of integrity, a
court can have no confidence that they will act as conscientious fiduciaries of the class. 7A Charles Alan
Wright, Arthur R. Miller & Mary Kay Kane, Federal
Practice and Procedure § 1769.1, pp. 468-69 (3d ed. 2005); see,
e.g., Wagner v. Lehman Bros. Kuhn Loeb Inc., 646 F. Supp.
643, 661-62 (N.D. Ill. 1986); Stavrides v. Mellon National
Bank & Trust Co., 60 F.R.D. 634, 637 (W.D. Pa. 1973); see
also Kirkpatrick v. J.C. Bradford & Co., 827 F.2d 718, 726
(11th Cir. 1987); cf. Howard v. Ray’s LLC, No. 1:08-cv-627RLY-MJD, 2011 WL 4625735, at *5 (S.D. Ind. Sept. 30, 2011).
Page 194
468
10
No. 11-8020
To suggest as the district court did that “only the
most egregious misconduct” by class counsel should
require denial of class certification on grounds of lack
of adequate representation was bad enough. To rule that
only the most egregious misconduct “could ever arguably
justify denial of class status,” as the court went on to
hold, would if taken literally condone, and by condoning
invite, unethical conduct. Misconduct by class counsel
that creates a serious doubt that counsel will represent
the class loyally requires denial of class certification. See
Culver v. City of Milwaukee, supra, 277 F.3d at 913.
It is true that the language we quoted from the district
judge comes originally from one of our own opinions—Halverson v. Convenient Food Mart, Inc., 458 F.2d 927,
932 (7th Cir. 1972). But it was a throwaway line in
that opinion. The court had already decided that class
counsel had committed only a “slight,” and in fact harmless, breach of ethics. Id. at 931. It cited with apparent
approval two district court decisions that had “denied
class status to plaintiffs whose attorneys were guilty of
misconduct,” noting that the misconduct had been “serious.” Id. at 931-32, citing Taub v. Glickman, No. 67 Civ. 3447,
1970 WL 210, at *2-3 (S.D.N.Y. Dec. 1, 1970); Korn v.
Franchard Corp., No. 67 Civ. 3445, 1970 WL 3481, at *3
(S.D.N.Y. Oct. 22, 1970), though adding that “there were
other circumstances pointing to denial of class status,”
id. at 932, and noting noncommittally that “in Kronenberg
v. Hotel Governor Clinton, Inc., 281 F. Supp. 622 (S.D.N.Y.
1968), where the misconduct was serious, the court took
a liberal view of Rule 23,” 458 F.3d at 921, and refused to
revoke its certification of the class represented by the
Page 195
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No. 11-8020
11
lawyers who had engaged in the misconduct. A serious
or, equivalently, a “major” ethical violation, Busby v.
JRHBW Realty, Inc., 513 F.3d 1314, 1324 (11th Cir. 2008),
should place on class counsel a heavy burden
of showing that they are adequate representatives of
the class.
Moreover, Halverson dates from an era before
concerns with the adequacy of representation by class
counsel had become acute, despite Judge Friendly’s
prescient dissent in Alleghany Corp. v. Kirby, supra, warning
of the problem. In response to growing concerns with
the adequacy of representation by class counsel,
Rule 23 was amended in 2003—long after Halverson—by
the addition of a new subsection, (g), “to guide the court
in assessing proposed class counsel as part of the certification decision.” Committee Note to 2003 Amendments
to Rule 23, Subdivision (g). The new subsection emphasizes that class counsel must “fairly and adequately”
represent the entire class. Fed. R. Civ. P. 23(g)(1)(B). There
is reason to doubt that class counsel in this case will
do that. The certification of the class is therefore vacated
and the case remanded with directions that the district
court, applying the Culver standard rather than the
“egregious misconduct” standard, re-evaluate the
gravity of class counsel’s misconduct and its implications for the likelihood that class counsel will adequately
represent the class.
V ACATED AND R EMANDED,
WITH D IRECTIONS.
11-22-11
Page 196
503
May 17, 2015
Washington, D.C.
Eu an v. ella orporation
d
th Cir
Su mitted y
Diane P. Wood
U.S. Court o Appeals, Se enth Circuit
Chicago, Illinois
Page 197
505
In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 13-2091, -2133, -2136, -2162, -2202
KENT EUBANK, et al.,
Plaintiffs-Appellants,
and
LEONARD E. SALTZMAN, et al.,
Plaintiffs-Appellees,
v.
PELLA CORPORATION and PELLA WINDOWS
AND DOORS, INC.,
Defendants-Appellees.
APPEALS OF: RON PICKERING and MICHAEL J. SCHULZ,
Objecting class members.
____________________
Appeals from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 06 C 4481 — James B. Zagel, Judge.
____________________
ARGUED APRIL 22, 2014 — DECIDED JUNE 2, 2014
____________________
Page 198
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2
Nos. 13-2091, -2133, -2136, -2162, -2202
Before POSNER, WILLIAMS, and TINDER, Circuit Judges.
POSNER, Circuit Judge. The class action is an ingenious
procedural innovation that enables persons who have suffered a wrongful injury, but are too numerous for joinder of
their claims alleging the same wrong committed by the same
defendant or defendants to be feasible, to obtain relief as a
group, a class as it is called. The device is especially important when each claim is too small to justify the expense of
a separate suit, so that without a class action there would be
no relief, however meritorious the claims. Normally only a
few of the claimants are named as plaintiffs (sometimes only
one, though there are several in this case). The named plaintiffs are the representatives of the class—fiduciaries of its
members—and therefore charged with monitoring the lawyers who prosecute the case on behalf of the class (class
counsel). They receive modest compensation, in addition to
their damages as class members, for their normally quite
limited services—often little more than sitting for a deposition—as class representatives. Invariably they are selected
by class counsel, who as a practical matter control the litigation by the class. The selection of the class representatives by
class counsel inevitably dilutes their fiduciary commitment.
The class action is a worthwhile supplement to conventional litigation procedure, David L. Shapiro, “Class Actions:
The Class As Party and Client,” 73 Notre Dame L. Rev. 913,
923–24 (1998); Arthur R. Miller, “Of Frankenstein Monsters
and Shining Knights: Myth, Reality, and the ‘Class Action
Problem’,” 92 Harv. L. Rev. 664, 666–68 (1979), but it is controversial and embattled, see Robert H. Klonoff, “The Decline of Class Actions,” 90 Wash. U. L. Rev. 729, 731–33
(2013), in part because it is frequently abused. Martin H. Re-
Page 199
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Nos. 13-2091, -2133, -2136, -2162, -2202
3
dish, Wholesale Justice: Constitutional Democracy and the Problem of the Class Action Lawsuit 1–2 (2009); Jonathan R. Macey
& Geoffrey P. Miller, “The Plaintiffs’ Attorney’s Role in
Class Action and Derivative Litigation: Economic Analysis
and Recommendations for Reform,” 58 U. Chi. L. Rev. 1, 3–4
(1991); John C. Coffee, Jr., “Rethinking the Class Action: A
Policy Primer on Reform,” 62 Ind. L.J. 625, 627 (1987). The
control of the class over its lawyers usually is attenuated, often to the point of nonexistence. Except for the named plaintiffs, the members of the class are more like beneficiaries
than like parties; for although they are authorized to appeal
from an adverse judgment, Smith v. Bayer Corp., 131 S. Ct.
2368, 2379 (2011); Devlin v. Scardelletti, 536 U.S. 1, 9–10 (2002),
they have no control over class counsel. In principle the
named plaintiffs do have that control, but as we’ve already
hinted this is rarely true in practice. Class actions are the
brainchildren of the lawyers who specialize in prosecuting
such actions, and in picking class representatives they have
no incentive to select persons capable or desirous of monitoring the lawyers’ conduct of the litigation.
A high percentage of lawsuits is settled—but a study of
certified class actions in federal court in a two-year period
(2005 to 2007) found that all 30 such actions had been settled.
Emery G. Lee III et al., “Impact of the Class Action Fairness
Act on the Federal Courts” 2, 11 (Federal Judicial Center
2008). The reasons that class actions invariably are settled are
twofold. Aggregating a great many claims (sometimes tens
or even hundreds of thousands—occasionally millions) often
creates a potential liability so great that the defendant is unwilling to bear the risk, even if it is only a small probability,
of an adverse judgment. At the same time, class counsel, ungoverned as a practical matter by either the named plaintiffs
Page 200
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4
Nos. 13-2091, -2133, -2136, -2162, -2202
or the other members of the class, have an opportunity to
maximize their attorneys’ fees—which (besides other expenses) are all they can get from the class action—at the expense of the class. The defendant cares only about the size of
the settlement, not how it is divided between attorneys’ fees
and compensation for the class. From the selfish standpoint
of class counsel and the defendant, therefore, the optimal
settlement is one modest in overall amount but heavily tilted
toward attorneys’ fees. As we said in Creative Montessori
Learning Centers v. Ashford Gear LLC, 662 F.3d 913, 918 (7th
Cir. 2011), “we and other courts have often remarked the incentive of class counsel, in complicity with the defendant’s
counsel, to sell out the class by agreeing with the defendant
to recommend that the judge approve a settlement involving
a meager recovery for the class but generous compensation
for the lawyers—the deal that promotes the self-interest of
both class counsel and the defendant and is therefore optimal from the standpoint of their private interests. Reynolds v.
Beneficial National Bank, [288 F.3d 277, 279 (7th Cir. 2002)];
Culver v. City of Milwaukee, [277 F.3d 908, 910 (7th Cir. 2002)];
Greisz v. Household Bank (Illinois), N.A., 176 F.3d 1012, 1013
(7th Cir. 1999); Duhaime v. John Hancock Mutual Life Ins. Co.,
183 F.3d 1, 7 (1st Cir. 1999); In re General Motors Corp. Pick-Up
Truck Fuel Tank Products Liability Litigation, 55 F.3d 768, 805
(3d Cir. 1995); Plummer v. Chemical Bank, 668 F.2d 654, 658
(2d Cir. 1982).”
Fortunately the settlement, including the amount of attorneys’ fees to award to class counsel, must be approved by
the district judge presiding over the case; unfortunately
American judges are accustomed to presiding over adversary proceedings. They expect the clash of the adversaries to
generate the information that the judge needs to decide the
Page 201
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Nos. 13-2091, -2133, -2136, -2162, -2202
5
case. And so when a judge is being urged by both adversaries to approve the class-action settlement that they’ve negotiated, he’s at a disadvantage in evaluating the fairness of
the settlement to the class. In re General Motors Corp. Pick-Up
Truck Fuel Tank Products Liability Litigation, supra, 55 F.3d at
789–90; Redish, supra, at 188.
Enter the objectors. Members of the class who smell a rat
can object to approval of the settlement. See, e.g., Reynolds v.
Beneficial National Bank, supra, 288 F.3d at 287–88; Edward
Brunet, “Class Action Objectors: Extortionist Free Riders or
Fairness Guarantors,” 2003 U. Chi. Legal F. 403, 411–12. If
their objections persuade the judge to disapprove it, and as a
consequence a settlement more favorable to the class is negotiated and approved, the objectors will receive a cash award
that can be substantial, as in In re Trans Union Corp. Privacy
Litigation, 629 F.3d 741 (7th Cir. 2011).
In this case, despite the presence of objectors, the district
court approved a class action settlement that is inequitable—
even scandalous. The case underscores the importance both
of objectors (for they are the appellants in this case—without
them there would have been no appellate challenge to the
settlement) and of intense judicial scrutiny of proposed class
action settlements.
The suit was filed in the summer of 2006, almost eight
years ago. Federal jurisdiction was based on the Class Action
Fairness Act’s grant of federal jurisdiction over class actions
in which there is at least minimal (as distinct from complete)
diversity of citizenship. 28 U.S.C. § 1332(d)(2)(A). The defendants are Pella Corporation and an affiliate that we can
ignore. Pella is a leading manufacturer of windows. The suit
alleges that its “ProLine Series” casement windows (a case-
Page 202
510
6
Nos. 13-2091, -2133, -2136, -2162, -2202
ment window is a window attached to its frame by hinges at
the side) manufactured and sold between 1991 and 2006 had
a design defect that allowed water to enter behind the window’s exterior aluminum cladding and cause damage to the
window’s wooden frame and to the house itself. Pella’s sale
of the defective windows is alleged to have violated the
product-liability and consumer-protection laws of a number
of states in which the windows were sold.
The district judge certified two separate classes: one for
customers who had already replaced or repaired their defective windows, the other for those who hadn’t. The latter
class sought only declaratory relief and so was nationwide,
but the former sought damages and was limited to customers in six states, with a separate subclass for each state. We
upheld the certifications over Pella’s objections in Pella Corp.
v. Saltzman, 606 F.3d 391 (7th Cir. 2010) (per curiam).
Class counsel negotiated a settlement of the class action
with Pella in the fall of 2011. The district judge gave final
approval to the settlement in 2013, precipitating the objectors’ appeals. The settlement agreement ignores the certification of the two classes and purports to bind a single nationwide class consisting of all owners of Pella ProLine windows
containing the defect, whether or not the owners have already replaced or repaired the windows. This provision is
the first of many red flags that the judge failed to see: “the
adversity among subgroups requires that the members of
each subgroup cannot be bound to a settlement except by
consents given by those who understand that their role is to
represent solely the members of their respective subgroups.”
In re Joint Eastern & Southern District Asbestos Litigation, 982
F.2d 721, 743 (2d Cir. 1992); see also Amchem Products, Inc. v.
Page 203
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Nos. 13-2091, -2133, -2136, -2162, -2202
7
Windsor, 521 U.S. 591, 627–28 (1997); Smith v. Sprint Communications Co., 387 F.3d 612, 614–15 (7th Cir. 2004).
Initially there was only one named plaintiff, a dentist
named Leonard E. Saltzman. His son-in-law, Paul M. Weiss,
was lead counsel for the class, continuing in that role
throughout the district court proceedings that culminated in
the approval of the settlement. Technically the law firm of
which he is the founder and senior partner (Complex Litigation Group LLC) is a lead class counsel too, along with two
of his partners in the firm. The settlement agreement designates still another firm as a lead class counsel as well; but the
fee petition describes that firm as merely a class counsel. The
agreement gave lead class counsel “sole discretion” to allocate the award of attorneys’ fees to which the parties had
agreed among the class counsel, and Weiss proposed to allocate 73 percent of the fees to his own firm. Realistically he
was the lead class counsel.
Weiss’s wife—Saltzman’s daughter—is a lawyer too, and
a partner in her husband’s firm. Both spouses are defendants
in a lawsuit charging them with misappropriation of the assets of their former law firm, Freed & Weiss LLC, and other
misconduct relating to that firm. Freed v. Weiss, No. 2011CH-41529 (Ill. Cook County Ch. Div.). Weiss is also a defendant in a second, similar suit, Lang v. Weiss, No. 2012-CH05863 (Ill. Cook County Ch. Div.). (The two suits are discussed in Sarah Zavala, “Cook County Suits Involve Alleged
Takeover at Freed and Weiss,” Madison-St. Clair Record,
March 7, 2012, pp. 1, 8.) The Freed & Weiss firm was still another class counsel in the present case; and one of the objectors points out that “the dissolution and descent into open
warfare that consumed Freed & Weiss in 2011 and 2012
Page 204
512
8
Nos. 13-2091, -2133, -2136, -2162, -2202
clearly rendered that firm inadequate class counsel, especially in light of the articulated financial needs of the partners
that drove the settlement of this case.” And six weeks ago
the Hearing Board of the Illinois Attorney Registration and
Disciplinary Commission recommended in a 94-page report
that the Supreme Court of Illinois suspend Weiss from practicing law for 30 months because of repeated misconduct. In
re Paul M. Weiss, No. 08 CH 116 (Ill. Att’y Registration &
Disciplinary Commission Hearing Board, Apr. 17, 2014). The
recommended penalty is severe by Illinois standards; the
state allows lawyers sanctioned with “disbarment” to apply
for reinstatement to the bar after 60 (in some cases just 36)
months. Ill. S. Ct. R. 767(a); Illinois Attorney Registration &
Disciplinary Commission, Annual Report of 2013, at 21, 25.
The impropriety of allowing Saltzman to serve as class
representative as long as his son-in-law was lead class counsel was palpable. See Greisz v. Household Bank (Illinois), 176
F.3d 1012, 1014 (7th Cir. 1999); Petrovic v. Amoco Oil Co., 200
F.3d 1140, 1155 (8th Cir. 1999); Zylstra v. Safeway Stores, Inc.,
578 F.2d 102, 104 (5th Cir. 1978); Turoff v. May Co., 531 F.2d
1357, 1360 (6th Cir. 1976) (per curiam); “Developments in the
Law—Class Actions,” 89 Harv. L. Rev. 1318, 1585–86 n. 29
(1976). Weiss may have been desperate to obtain a large attorney’s fee in this case before his financial roof fell in on
him.
Early in the case four other class members had been added as plaintiffs, making a total of five including Saltzman.
When the settlement was presented to the district court for
preliminary approval, the four class members who had been
added as named plaintiffs opposed it, leaving only Saltzman
among the original class members to support it. But pursu-
Page 205
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Nos. 13-2091, -2133, -2136, -2162, -2202
9
ant to a motion filed by George Lang, who at the time was a
partner of Weiss, four other class members were added as
named plaintiffs. (Lang says that Weiss rather than he
picked them.)
Weiss removed the original four class members who had
opposed the settlement; naturally their replacements joined
Saltzman in supporting it.
Lang now represents the defrocked named plaintiffs,
who are four of the six objectors. A lawyer’s switching sides
in the same lawsuit would normally be considered a fatal
conflict of interest, but the courts are lenient when it is a
class action lawyer. E.g., Bash v. Firstmark Standard Life Ins.
Co., 861 F.2d 159, 161 (7th Cir. 1988). For often “only the attorneys who have represented the class, rather than any of
the class members themselves, have substantial familiarity
with the prior proceedings, the fruits of discovery, the actual
potential of the litigation. And when an action has continued
over the course of many years, the prospect of having those
most familiar with its course and status be automatically
disqualified whenever class members have conflicting interests would substantially diminish the efficacy of class actions as a method of dispute resolution.” In re “Agent Orange” Product Liability Litigation, 800 F.2d 14, 18–19 (2d Cir.
1986).
As finally approved by the district judge, the settlement
directed Pella to pay $11 million in attorneys’ fees to class
counsel. The basis of this figure was the plaintiffs’ claim that
the settlement was worth $90 million to the class. Were that
so, then considering the multistate scope of the suit and perhaps the length of time that elapsed between its filing and
the approval of the settlement by the district court in May
Page 206
514
10
Nos. 13-2091, -2133, -2136, -2162, -2202
2013 (our “perhaps” reflecting doubt that the time was well
spent), the fee award, equal to 12 percent of the amount of
the settlement earmarked for the class members, would have
been defensible. But the settlement did not specify an
amount of money to be received by the class members as
distinct from class counsel. Rather it specified a procedure
by which class members could claim damages. So there was
an asymmetry: class counsel was to receive its entire award
of attorneys’ fees up front; class members were to obtain
merely contingent claims, albeit with a (loosely) estimated
value of $90 million (actually far less, as we’ll see).
The named plaintiffs were each awarded compensation
(an “incentive award,” as it is called) for their services to the
class of either $5,000 or $10,000, depending on their role in
the case. Saltzman, being the lead class representative, was
slated to be a $10,000 recipient.
Although the judge rightly made incentive awards to the
class representatives who had opposed the settlement as
well as to those who had approved it, the settlement agreement itself had provided for incentive awards only to the
representatives who supported the settlement. This created a
conflict of interest: any class representative who opposed the
settlement would expect to find himself without any compensation for his services as representative. Still another
questionable provision of the settlement, which the judge
refused to delete, made any reduction in the $11 million attorneys’ fee award revert to Pella, rather than being added to
the compensation of the class members.
Not only did the settlement agreement not quantify the
benefits to the class members, but the judge approved it before the deadline for filing claims. He made no attempt to
Page 207
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Nos. 13-2091, -2133, -2136, -2162, -2202
11
estimate how many claims were likely to be filed, though
without such an estimate no responsible prediction of the
value of the settlement to the members of the class could be
made. Furthermore, the judge’s approval of the settlement
(over the objection of the former class representatives and
other class members) is squeezed into two two-page orders
(the second addressed to the attorneys’ fee award) that ignore virtually all the objections to the settlement. Unheeded
was our warning that “because class actions are rife with potential conflicts of interest between class counsel and class
members, district judges presiding over such actions are expected to give careful scrutiny to the terms of proposed settlements in order to make sure that class counsel are behaving as honest fiduciaries for the class as a whole.” Mirfasihi v.
Fleet Mortgage Corp., 356 F.3d 781, 785 (7th Cir. 2004) (citations omitted).
The settlement should have been disapproved on multiple grounds. To begin with, it was improper for the lead
class counsel to be the son-in-law of the lead class representative. Class representatives are, as we noted earlier, fiduciaries of the class members, and fiduciaries are not allowed to have conflicts of interest without the informed consent of their beneficiaries, which was not sought in this case.
Only a tiny number of class members would have known
about the family relationship between the lead class representative and the lead class counsel—a relationship that created a grave conflict of interest; for the larger the fee award
to class counsel, the better off Saltzman’s daughter and sonin-law would be financially—and (which sharpened the conflict of interest) by a lot. They may well have had an acute
need for an infusion of money, in light not only of Weiss’s
ethical embroilment, which cannot help his practice, but also
Page 208
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Nos. 13-2091, -2133, -2136, -2162, -2202
of the litigation against him by his former law partners and
his need for money to finance his new firm. The appellees
(primarily Saltzman, who is still a named plaintiff, and Pella)
point out that Saltzman was one of five class representatives,
and the other four didn’t have a conflict of interest. But the
four other original class representatives had opposed the settlement, whereupon they had been replaced by new named
plaintiffs—selected by the conflicted lead class counsel.
Weiss’s ethical embroilment was another compelling reason for kicking him and Saltzman off the case. The disciplinary proceeding against Weiss was already under way when
the settlement agreement was negotiated. It was very much
in his personal interest, as opposed to the interest of the class
members, to get the settlement signed and approved before
the disciplinary proceeding culminated in a sanction that
might abrogate his right to share in the attorneys’ fee award
in this case. He could negotiate a quick settlement only by
giving ground to Pella, which upon discovering the box that
Weiss was in would have stiffened its terms (it plays hardball, as its conduct throughout this litigation has demonstrated).
So Weiss’s ethical troubles should have disqualified him
from serving as class counsel even if his father-in-law hadn’t
been in the picture. Another suspicious feature of the settlement, doubtless also related to Weiss’s woes, was Pella’s
agreeing to a $2 million advance of attorneys’ fees to lead
class counsel before notice of the settlement was sent to the
members of the class.
Counsel for a certified class is appointed by the district
judge presiding over the class action, and in deciding to appoint a lawyer to be class counsel the court “may consider,”
Page 209
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13
besides the lawyer’s competence, experience, and related
professional qualifications, “any other matter pertinent to
counsel’s ability to fairly and adequately represent the interests of the class.” Fed. R. Civ. P. 23(g)(1)(B), (g)(4). “When
class counsel have demonstrated a lack of integrity, a court
can have no confidence that they will act as conscientious
fiduciaries of the class.” Creative Montessori Learning Centers
v. Ashford Gear LLC, supra, 662 F.3d at 918. Weiss was unfit to
represent the class.
Rule 23(a)(4) of the Federal Rules of Civil Procedure requires that “the representative parties will fairly and adequately protect the interests of the class.” This both Saltzman
and the other class representatives who approved the settlement failed to do. The settlement that the district judge
approved is stacked against the class. Pella itself estimates
the value of the settlement to the class at only $22.5 million—and that is an overestimate. The settlement strews obstacles in the path of any owner of a defective ProLine Series
casement window. A member of the class may either file a
claim with Pella, period, or file a claim that he must submit
to arbitration with Pella. If he chooses the first option, he is
limited to a maximum damages award of $750 per “Structure,” confusingly defined not as a window but as the entire
building containing the window. There’s also a per-window
damages cap that ranges from $60 to $100 (with an additional $0 to $250 for the cost of installation), depending on when
the class member purchased his window and when he replaced it. And the cap falls to zero unless he gave “notice” to
Pella before replacing the defective window.
A class member who chooses arbitration can receive up
to $6000 per “Structure” (defined the same way), and doesn’t
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Nos. 13-2091, -2133, -2136, -2162, -2202
have to prove that his window or windows were in fact defective, only that they were in the category of Pella windows
that contained the design defect. But if Pella convinces the
arbitrator that the damage the claimant is seeking compensation for was not caused by the defect or by “any other defect
in the structure” (whatever that means), or that the claimant
was compensated for the damage from some other source,
the claimant gets nothing; and likewise if Pella successfully
interposes a complete defense, such as that the statute of limitations had run. The settlement allows Pella to assert ten
categories of defenses, including “natural weathering.” And
the limitations periods applicable to the class members’
claims vary from three to five years and involve different
accrual and tolling rules. Statutes of repose are also in the
picture.
Pella also reserved in the settlement agreement the right
to plead and prove partial defenses such as comparative
fault and failure to mitigate damages. And some claimants
are entitled only to “coupons” (discounts on future purchases of Pella windows, discounts that may be worth very little
to current owners of Pella’s defective windows)—a warning
sign of a questionable settlement. Synfuel Technologies, Inc. v.
DHL Express (USA), Inc., 463 F.3d 646, 654 (7th Cir. 2006); In
re HP Inkjet Printer Litigation, 716 F.3d 1173, 1179–80 (9th Cir.
2013); Christopher R. Leslie, “The Need to Study Coupon
Settlements in Class Action Litigation,” 18 Geo. J. Legal Ethics
1395, 1396–98 (2005); Geoffrey P. Miller & Lori S. Singer,
“Nonpecuniary Class Action Settlements,” Law & Contemp.
Probs., vol. 60, Autumn 1997, pp. 97, 108; cf. 28 U.S.C. § 1712
(Coupon Settlements).
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Nos. 13-2091, -2133, -2136, -2162, -2202
15
Some class members may be entitled only to an extension
of warranty, under a program (the “ProLine Service Enhancement Program”) that Pella had adopted before the settlement and that requires class members to deduct $100 per
window from the cost of installation or other labor services
required to replace it. The $90 million estimate of the value
of the settlement to the class includes the value of these warranty extensions even though they were a contractual entitlement that preceded the settlement rather than being conferred by it and thus were not part of the value created by
the settlement, although the settlement does forbid Pella to
revoke the extensions, which confers a bit of extra value.
The claim forms are long—12 pages for the “simple”
claim with its $750 ceiling, 13 pages for the claim that has the
higher ceiling ($6000) but requires the claimant to run the
gauntlet of arbitration, doubtless without assistance of counsel or expert witnesses, because the legal fees and experts’
fees would quickly mount to or above $6000, leaving the
claimant with nothing or even less than nothing: additional
bills to pay. There is no provision for shifting the legal or expert-witness costs of a victorious claimant in the arbitration
proceeding to Pella.
Both forms require a claimant to submit a slew of arcane
data, including the “Purchase Order Number,” “Glass Etch
Information,” “Product Identity Stamp,” and “Unit ID Label” of each affected window. The claim forms are so complicated that Pella could reject many of them on the ground
that the claimant had not filled out the form completely and
correctly.
And that’s assuming that class members even attempt to
file claims. The notice of settlement that was sent to them is
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16
Nos. 13-2091, -2133, -2136, -2162, -2202
divided into 27 sections, some with a number of subsections.
For example, the section on eligibility for benefits under the
settlement lists nine criteria that must be satisfied while the
section on “How Do I Get Out of the Settlement?” specifies
six requirements that must be met for a class member to be
allowed to opt out of the settlement. And to object to the settlement the class member must satisfy seven other criteria,
one of which is again multiple, as it requires listing “each
specific reason for your objection.”
Considering the modesty of the settlement, the length
and complexity of the forms, and the unfamiliarity of the average homeowner with arbitration, we’re not surprised that
only 1276 claims (of which only 97 sought arbitration) had
been filed as of February 2013, out of the more than 225,000
notices that had been sent to class members. The claims
sought in the aggregate less than $1.5 million and were likely to be worth even less because Pella would be almost certain to prevail in some, maybe most, of the arbitration proceedings. It’s been found that on average consumers prevail
in arbitration roughly half the time, and those who win are
awarded roughly half of what they seek. Christopher R.
Drahozal & Samantha Zyontz, “An Empirical Study of AAA
Consumer Arbitrations,” 25 Ohio St. J. Dispute Resolution 843,
898–900 (2010). The implication is that Pella would be able to
knock 75 percent off the damages sought by class members
who filed claims that were submitted to arbitration.
A class recovery of little more than $1 million is a long
way from the $90 million that the district judge thought the
class members likely to receive were the suit to be litigated.
It’s true that another 9500 or so simple claims were filed after
the district court entered its final judgment, plus another
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Nos. 13-2091, -2133, -2136, -2162, -2202
17
1387 claims that would require arbitration. But Pella’s estimate that the class will recover $22.5 million assumes against
all reason that every one of the claims will reap the maximum authorized benefits—$750 for the simple claims and
$6000 for the claims that go to arbitration. And that recovery
would be only $17 million, not $22.5 million (Pella contends,
however, that the extension of its warranty is worth another
$5.5 million to the class). There is no evidence that Pella
would pay the maximum benefits on all, or indeed on any,
of the claims.
If the average payment were half the amount of the
claim—a very generous assumption given the estimate of a
75 percent success rate for Pella—the aggregate value of the
settlement to the class ($8.5 million) would be less than the
attorneys’ fees ($11 million). Even the $8.5 million figure is
an exaggeration, because the settlement subtracts from the
award compensation received from any other source—and
one of the other sources is the warranty program.
We don’t understand the judge’s valuing the settlement
at $90 million or thinking the feeble efforts of class counsel
led by Weiss to obtain benefits for the class (as distinct from
benefits for themselves in the form of generous attorneys’
fees) worth $11 million. The restrictions that Pella was allowed to place on the settlement would, if upheld, enormously reduce the class members’ recovery of their losses,
and the residue is to be returned to Pella. Class counsel sold
out the class.
The class as we said could not expect to receive more
than $8.5 million from the settlement, given all the obstacles
that the terms of the settlement strewed in the path of the
class members. And even that figure seems too high. For if
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18
Nos. 13-2091, -2133, -2136, -2162, -2202
the class received that amount, this would indicate that Pella
had agreed to pay attorneys’ fees equal to 56 percent of the
total settlement ($11 million = .56 × ($8.5 million + $11 million)) in order to induce class counsel to settle the case on
terms that would minimize Pella’s overall liability.
We note the remarkable statement in Saltzman’s brief defending the settlement that “in comparison to this $90 million independent valuation of the Settlement, a trial of the
certified claims here, even with a complete victory, would
result in an award of $0.” Zero? But if Pella has no liability,
why would it agree to a $33.5 million settlement ($22.5 million in estimated damages plus the $11 million in attorneys’
fees)? Saltzman appears to believe that the alternative of litigating the class action to judgment would be infeasible because the court would go crazy trying to determine the
damages of each of several, maybe many, thousand class
members. He neglects to mention that we rejected this argument when we approved class certification. Pella Corp. v.
Saltzman, supra, 606 F.3d at 395–96; see also 1966 Advisory
Committee Notes to Fed. R. Civ. P. 23; Butler v. Sears, Roebuck
& Co., 727 F.3d 796, 801 (7th Cir. 2013); In re Whirlpool Corp.
Front-Loading Washer Products Liability Litigation, 722 F.3d
838, 860–61 (6th Cir. 2013); Tardiff v. Knox County, 365 F.3d 1,
6–7 (1st Cir. 2004); 2 Newberg on Class Actions § 4:54, pp. 205–
10 (5th ed. 2012). Pella argues that it would fight the individual damages claims if the case were litigated. But the settlement agreement allows it to fight the damages claims
submitted to it pursuant to the agreement.
In the district court Saltzman valued the case if it went to
trial at $50 million. If he was lying and actually thinks the
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Nos. 13-2091, -2133, -2136, -2162, -2202
19
case worthless, how could he have been an effective class
representative even if he had had no conflict of interest?
The mystery deepens: Pella thinks the case if tried would
be worth only $14.5 million to the class members. If that is
so, why has it agreed to a settlement that it claims will cost it
$33.5 million? Because it would incur legal fees and other
expenses of more than $19 million ($14.5 million + $19 million = $33.5 million)? But if the case were tried, class counsel
would incur heavy expenses as well, which would induce it
to settle for less than $14.5 million. The truth must be that,
protected by the bristling technicalities of the settlement
agreement, Pella does not believe that the settlement will
cost it anywhere near $14.5 million.
If Saltzman is right and damages if the case were tried
would be zero, a settlement of $90 million would be a remarkable achievement. (Also an inexplicable one.) But the
district judge did not find that the trial would yield zero
damages. He didn’t estimate the likely outcome of a trial, as
he should have done in order to evaluate the adequacy of
the settlement. Reynolds v. Beneficial National Bank, supra, 288
F.3d at 285.
Saltzman as we said defends the $90 million figure as an
“independent valuation” of the settlement. But the only evidence we can find supporting that valuation is the affidavit
of an accountant—hired and paid by Weiss’s law firm, so
hardly independent. Maybe by “independent” Saltzman is
referring (though he doesn’t say so) to the fact that the settlement was mediated by two retired judges. One, however,
stopped mediating (we don’t know why) before the negotiations were completed and the other limited his mediation to
issues of attorneys’ fees.
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Nos. 13-2091, -2133, -2136, -2162, -2202
Saltzman and Pella argue that the objectors did not present an expert witness to support their estimate of the value
of the litigation, and Saltzman did: the brother of one of
Saltzman’s lawyers! Anyway Saltzman has implicitly repudiated his expert, who did not testify that the value of the
suit if litigated was $0.
Saltzman and Pella point out that the notice of the settlement sent to the class members provoked few objections.
Of course not; it was not intended to; it was incomplete and
misleading. It failed to mention that four of the five original
class representatives had opposed the settlement and been
promptly replaced by other persons, selected by class counsel; that the only original representative who had supported
the settlement was the father-in-law of the lead class counsel
who was both in financial trouble and ethically challenged;
that up to half the recipients of the notice would if they filed
a claim and it was accepted receive only a coupon discount
on a future purchase of a Pella window; and that four of the
original class representatives believed the notice of the settlement misleading because it implied that class members
would be guaranteed at least $750 or $6000 in response to
their claim, whereas these were ceilings and were not even
potential payments to those class members entitled only to
coupons. The judge was informed of these objections to the
notice but declined to order it modified. He said that the notice was “fair,” that it was “a neutral communication from
the court.” It was not neutral and it did not provide a truthful basis for deciding whether to opt out. The judge said the
objectors could send their own notice to the class members.
But what would the recipient of two conflicting notices do?
And it wouldn’t be just two. For if the objectors sent their
own notice class counsel would send out a rebuttal notice.
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Nos. 13-2091, -2133, -2136, -2162, -2202
21
Better for the court to make sure that the single notice it sent
would be a responsible communication rather than an uncandid communication from class counsel than to subject the
class members to a blizzard of conflicting notices.
All this is academic, however, because opting out of a
class action is very rare. Virtually no one who receives notice
that he is a member of a class in a class action suit opts out.
He doesn’t know what he could do as an opt-out. He’s unlikely to hire a lawyer to litigate over a window. In fact the
opt-outs in this case were only one twentieth of one percent
of the recipients of the notice of approved settlement. A
study of other product-liability class actions found that the
average opt-out percentage was less than one tenth of one
percent. Theodore Eisenberg & Geoffrey Miller, “The Role of
Opt-Outs and Objectors in Class Action Litigation: Theoretical and Empirical Issues,” 57 Vand. L. Rev. 1529, 1549 (2004);
see also Mars Steel Corp. v. Continental Illinois National Bank &
Trust Co. of Chicago, 834 F.2d 677, 680–81 (7th Cir. 1987). Contrary to the statement in Pella’s brief, a low opt-out rate is no
evidence that a class action settlement was “fair” to the
members of the class.
In sum, almost every danger sign in a class action settlement that our court and other courts have warned district
judges to be on the lookout for was present in this case. See,
e.g., Synfuel Technologies, Inc. v. DHL Express (USA), Inc., supra, 463 F.3d at 654; Smith v. Sprint Communications Co., 387
F.3d 612, 614 (7th Cir. 2004); Mirfasihi v. Fleet Mortgage Corp.,
supra, 356 F.3d at 785–86; Reynolds v. Beneficial National Bank,
supra, 288 F.3d at 282–83; Crawford v. Equifax Payment Services, Inc., 201 F.3d 877, 880 (7th Cir. 2000); In re Bluetooth
Headset Products Liability Litigation, 654 F.3d 935, 946–47 (9th
Page 218
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22
Nos. 13-2091, -2133, -2136, -2162, -2202
Cir. 2011); Weinberger v. Great Northern Nekoosa Corp., 925
F.2d 518, 525 (1st Cir. 1991). Most were not even mentioned
by the district judge, and those that were received a brushoff. The settlement flunked the “fairness” standard by the
one-sidedness of its terms and the fatal conflicts of interest
on the part of Saltzman and Weiss. This is a case in which
“the lawyers support the settlement to get fees; the defendants support it to evade liability; the court can’t vindicate the
class’s rights because the friendly presentation means that it
lacks essential information.” Kamilewicz v. Bank of Boston
Corp., 100 F.3d 1348, 1352 (7th Cir. 1996) (dissent from denial
of rehearing en banc).
A couple of loose ends remain to be tied up:
1. Saltzman has moved to dismiss the appeals on the
ground that the appellants—objectors to the settlement approved by the district judge—lack standing to litigate their
objections. Since absent objectors have standing to appeal
from an adverse judgment, Devlin v. Scardelletti, supra, 536
U.S. at 14, named objectors must as well. Even named plaintiffs who settle nevertheless have standing to appeal a denial
of class certification. Espenscheid v. DirectSat USA, LLC, 688
F.3d 872, 876 (7th Cir. 2012).
2. Objector Schulz asks us to sanction Saltzman’s lawyers
for filing the motion on standing. Saltzman’s removal as lead
plaintiff and his lawyers’ removal as class counsel are sanction enough; because the motion on standing was indeed
frivolous, little time was spent on it either by us judges or by
the objectors’ lawyers. Both motions (standing and sanctions) are therefore denied.
To conclude:
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Nos. 13-2091, -2133, -2136, -2162, -2202
23
After eight largely wasted years, much remains to be
done in this case. For starters, Saltzman, Paul Weiss, and
Weiss’s firm, Complex Litigation Group, must be replaced as
class representative (Saltzman), and as class counsel (Weiss
and his firm), respectively. And since we are rejecting the
settlement agreement, the plaintiffs named in the third
amended complaint, whom that agreement caused to be
substituted for the original named plaintiffs (other than
Saltzman), must be discharged and the four original named
plaintiffs (whom we’ve called the “defrocked” plaintiffs) reinstated.
The judgment is reversed and the case remanded for further proceedings in conformity with this opinion.
REVERSED AND REMANDED.
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U.S. Supreme Court
Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981)
Gulf Oil Co. v. Bernard
No. 80-441
Argued March 30, 1981
Decided June 1, 1981
452 U.S. 89
CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
Syllabus
Petitioner Gulf Oil Co. and the Equal Employment Opportunity Commission entered into a
conciliation agreement involving alleged discrimination against black and female employees at
one of Gulf's refineries. Under this agreement, Gulf undertook to offer backpay to alleged
victims of discrimination and began to send notices to employees eligible for backpay, stating the
amount available in return for execution of a full release of all discrimination claims.
Respondents then filed a class action in Federal District Court against Gulf and petitioner labor
union, on behalf of all black present and former employees and rejected applicants for
employment, alleging racial discrimination in employment and seeking injunctive, declaratory,
and monetary relief. Gulf then filed a motion seeking an order limiting communications from the
named plaintiffs (respondents) and their counsel to class members. Ultimately, over respondents'
objections, the District Court issued an order, based on the form of order in the Manual for
Complex Litigation, imposing a complete ban on all communications concerning the class action
between parties or their counsel and any actual or potential class member who was not a formal
party, without the court's prior approval. The order stated that, if any party or counsel asserted a
constitutional right to communicate without prior restraint and did so communicate, he must file
a copy of the communication with the court. The court made no findings of fact, and did not
write an explanatory opinion. The Court of Appeals reversed, holding that the order limiting
communications was an unconstitutional prior restraint on expression accorded First Amendment
protection.
Held: The District Court in imposing the order in question abused its discretion under the
Federal Rules of Civil Procedure. Pp. 452 U. S. 99-104.
(a) The order is inconsistent with the general policies embodied in Federal Rule of Civil
Procedure 23, which governs class actions in federal district courts. It interfered with
respondents' efforts to inform potential class members of the existence of the lawsuit, and may
have been particularly injurious -- not only to respondents but to the class as a whole -- because
employees at that time were being pressed to decide whether to accept Gulf's backpay offers. In
addition, the order made it more difficult for respondents to obtain information about the merits
of the case from the persons they sought to represent. Pp. 452 U. S. 99-101.
(b) Because of these potential problems, such an order should be based on a clear record and
specific findings reflecting a weighing of the need for a limitation and the potential interference
with the parties' rights. Only such a determination can ensure that the court is furthering, rather
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than hindering, the policies embodied in the Federal Rules, especially Rule 23. Moreover, such a
weighing should result in a carefully drawn order that limits speech as little as possible,
consistent with the parties' rights. Pp. 452 U. S. 101-102.
(c) Here, there is no indication of a careful weighing of competing factors, and the record
discloses no grounds on which the District Court could have determined that it was necessary or
appropriate to impose the order. The fact that the order involved serious restraints on expression,
at a minimum, counsels caution on the District Court's part in drafting the order and attention to
whether the restraint was justified by a likelihood of serious abuses. Pp. 452 U. S. 102-104.
(d) The mere possibility of abuses in class action litigation does not justify routine adoption of a
communications ban that interferes with the formation of a class or the prosecution of a class
action in accordance with the Federal Rules. And certainly there was no justification for adopting
the form of order recommended by the Manual for Complex Litigation, in the absence of a clear
record and specific findings of need. P. 452 U. S. 104.
619 F.2d 459, affirmed. POWELL, J., delivered the opinion for a unanimous Court.
JUSTICE POWELL delivered the opinion of the Court.
This is a class action involving allegations of racial discrimination in employment on the part of
petitioners, the Gulf Oil Co. (Gulf) and one of the unions at its Port Arthur, Tex., refinery. We
granted a writ of certiorari to determine the scope of a district court's authority to limit
communications from named plaintiffs and their counsel to prospective class members, during
the pendency of a class action. We hold that, in the circumstances of this case, the District Court
exceeded its authority under the Federal Rules of Civil Procedure.
I
In April, 1976, Gulf and the Equal Employment Opportunity Commission (EEOC) entered into a
conciliation agreement involving alleged discrimination against black and female employees at
the Port Arthur refinery. Gulf agreed to cease various allegedly discriminatory practices, to
undertake an affirmative action program covering hiring and promotion, and to offer backpay to
alleged victims of discrimination based on a set formula. Gulf began to send notices to the 643
employees eligible for backpay, stating the exact amount available to each person in return for
execution within 30 days of a full release of all discrimination claims dating from the relevant
time period. [Footnote 1]
Approximately one month after the signing of the conciliation agreement, on May 18, 1976,
respondents filed this class action in the United States District Court for the Eastern District of
Texas, on behalf of all black present and former employees, and rejected applicants for
employment, at the refinery. [Footnote 2] They alleged racial discrimination in employment and
sought injunctive, declaratory, and monetary relief, based on Title VII of the Civil Rights Act of
1964, 42 U.S.C. § 2000e et seq., and the Civil Rights Act of 1866, 42 U.S.C. § 1981. The
defendants named were Gulf and Local 4-23 of the Oil, Chemical, and Atomic Workers
International Union. Plaintiffs' counsel included three lawyers from the NAACP Legal Defense
and Education Fund. [Footnote 3] Through this lawsuit, the named plaintiffs sought to vindicate
the alleged rights of many of the employees who were receiving settlement offers from Gulf
under the conciliation agreement.
On May 27, Gulf filed a motion in the District Court seeking an order limiting communications
by parties and their counsel with class members. An accompanying brief described the EEOC
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conciliation agreement, asserting that 452 of the 643 employees entitled to backpay under that
agreement had signed releases and been paid by the time the class action was filed. Gulf stated
that, after it was served in the case, it ceased sending backpay offers and release forms to class
members. It then asserted that a lawyer for respondents, Ulysses Gene Thibodeaux, had attended
a meeting of 75 class members on May 22, where he had discussed the case and recommended
that the employees not sign the releases sent under the conciliation agreement. Gulf added that
Thibodeaux reportedly had advised employees to return checks they already had received, since
they could receive at least double the amounts involved through the class action.
The court entered a temporary order prohibiting all communications concerning the case from
parties or their counsel to potential or actual class members. The order listed several examples of
communications that were covered, but stated that it was not limited to these examples. It was
not based on any findings of fact.
On June 8, Gulf moved for a modification of the order that would allow it to continue mailings to
class members, soliciting releases in exchange for the backpay amounts established under the
conciliation agreement. Respondents filed a brief in opposition, arguing that the ban on their
communications with class members violated the First Amendment. On June 11, the court heard
oral argument, but took no evidence. Gulf then filed a supplemental memorandum proposing that
the court adopt the language of "Sample Pretrial Order No. 15" in the Manual for Complex
Litigation App. § 1.41. [Footnote 4] Respondents replied with another memorandum
accompanied by sworn affidavits of three lawyers. In these affidavits, counsel stated that
communications with class members were important in order to obtain needed information about
the case and to inform the class members of their rights. Two affidavits stated that lawyers' had
attended the May 22 meeting with employees and discussed the issues in the case, but neither
advised against accepting the Gulf offer nor represented that the suit would produce twice the
amount of backpay available through the conciliation agreement.
On June 22, another District Judge issued a modified order adopting Gulf's proposal. [Footnote
5] This order imposed a complete ban on all communications concerning the class action
between parties or their counsel and any actual or potential class member who was not a formal
party, without the prior approval of the court. It gave examples of forbidden communications,
including any solicitation of legal representation of potential or actual class members, and any
statements "which may tend to misrepresent the status, purposes and effects of the class action"
or "create impressions tending without cause, to reflect adversely on any party, any counsel, this
Court, or the administration of justice." The order exempted attorney-client communications
initiated by the client, and communications in the regular course of business. It further stated
that, if any party or counsel "assert[ed] a constitutional right to communicate . . . without prior
restraint," and did so communicate, he should file with the court a copy or summary of the
communication within five days. The order, finally, exempted communications from Gulf
involving the conciliation agreement and its settlement process. The court made no findings of
fact, and did not write an explanatory opinion. The only justification offered was a statement in
the final paragraph of the order:
"It is Plaintiff's [sic] contention that any such provisions as hereinbefore stated that limit
communication with potential class members are constitutionally invalid, citing Rodgers v.
United States Steel Corporation, 508 F.2d 152 (3rd Cir.1975), cert. denied, 420 U.S. 969 (1975).
This Court finds that the Rodgers case is inapplicable, and that this order comports with the
requisites set out in the Manual for Complex Litigation . . . which specifically exempts
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constitutionally protected communication when the substance of such communication is filed
with the Court."
On July 6, pursuant to the court's order, respondents submitted for court approval a proposed
leaflet to be sent to the class members. [Footnote 6] This notice urged the class to talk to a
lawyer before signing the releases sent by Gulf. It contained the names and addresses of
respondents' counsel and referred to this case. Respondents argued that the notice was
constitutionally protected and necessary to the conduct of the lawsuit. Gulf opposed the motion.
The court waited until August 10 to rule on this motion. On that date, 2 days after the expiration
of the 45-day deadline established by the court for acceptance of the Gulf offer by class
members, [Footnote 7] the court denied the motion in a one-sentence order containing no
explanation. As a result, the named plaintiffs and their counsel were prevented from undertaking
any communication with the class members prior to the deadline.
On appeal from a subsequent final order, [Footnote 8] respondents argued that the limitations on
communications imposed by the District Court were beyond the power granted the court in
Federal Rule of Civil Procedure 23(d) and were unconstitutional under the First Amendment. A
divided panel of the United States Court of Appeals for the Fifth Circuit affirmed the District
Court. 596 F.2d 1249 (1979).
The panel majority reasoned that orders limiting communications are within the extensive
powers of district courts in managing class litigation. It held that the District Court could easily
have concluded that the need to limit communications outweighed any competing interests of
respondents, especially since the order merely required prior approval of communications, rather
than prohibiting them altogether. Id. at 1259-1261. Turning to respondents' First Amendment
argument, the majority held that the order was not a prior restraint, because it exempted
unapproved communications whenever the parties or their counsel asserted a constitutional
privilege in good faith. The court also found no serious "chill" of protected speech. Id. at 12611262.
Judge Godbold wrote a dissenting opinion arguing that the order limiting communications was
not "appropriate" within the meaning of Federal Rule of Civil Procedure 23(d), because the court
did not make any finding of actual or imminent abuse. He reasoned that Gulf's unsworn
allegations of misconduct could not justify this order, and that a court could not impose such a
limitation routinely in all class actions. Id. at 1267-1268. He added that it was improper in this
context for the District Court to encourage compliance with the conciliation agreement through
such an order. Id. at 1269-1270. Judge Godbold also found that the order violated respondents'
First Amendment rights. Id. at 1270-1275.
The Fifth Circuit granted a rehearing en banc, and reversed the panel decision concerning the
order limiting communications. 619 F.2d 459 (1980). A majority opinion joined by 13 judges
held that the order was an unconstitutional prior restraint on expression accorded First
Amendment protection. [Footnote 9] The court held that there was no sufficient particularized
showing of need to justify such a restraint, that the restraint was overbroad, and that it was not
accompanied by the requisite procedural safeguards. Id. at 466-478. Eight judges concurred
specially on the theory that it was unnecessary to reach constitutional issues, because the order
was not based on adequate findings, and therefore was not "appropriate" under Federal Rule of
Civil Procedure 23(d). Id. at 478, 481. One judge would have affirmed the District Court.
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101
We granted a writ of certiorari to review the question whether the order limiting communications
was constitutionally permissible. 449 U.S. 1033 (1980).
II
Rule 23(d) of the Federal Rules of Civil Procedure provides:
"(d) ORDERS IN CONDUCT OF ACTIONS. In the conduct of actions to which this rule
applies, the court may make appropriate orders: . . . (3) imposing conditions on the representative
parties or on intervenors . . . [and] (5) dealing with similar procedural matters. [Footnote 10]"
As the concurring judges below recognized, 619 F.2d at 478, 481, prior to reaching any
constitutional questions, federal courts must consider nonconstitutional grounds for decision. See
Ashwander v. TVA,297 U. S. 288, 297 U. S. 347 (1936) (Brandeis, J., concurring). As a result, in
this case, we first consider the authority of district courts under the Federal Rules to impose
sweeping limitations on communications by named plaintiffs and their counsel to prospective
class members.
More specifically, the question for decision is whether the limiting order entered in this case is
consistent with the general policies embodied in Rule 23, which governs class actions in federal
court. Class actions serve an important function in our system of civil justice. [Footnote 11] They
present, however, opportunities for abuse as well as problems for courts and counsel in the
management of cases. [Footnote 12] Because of the potential for abuse, a district court has both
the duty and the broad authority to exercise control over a class action and to enter appropriate
orders governing the conduct of counsel and parties. But this discretion is not unlimited, and
indeed is bounded by the relevant provisions of the Federal Rules. Eisen v. Carlisle &
Jacquelin,417 U. S. 156 (1974). Moreover, petitioners concede, as they must, that exercises of
this discretion are subject to appellate review. Brief for Petitioners 21, n. 15; see Eisen, supra;
Oppenheimer Fund, Inc. v. Sanders,437 U. S. 340, 437 U. S. 359 (1978).
In the present case, we are faced with the unquestionable assertion by respondents that the order
created at least potential difficulties for them as they sought to vindicate the legal rights of a class
of employees. [Footnote 13] The order interfered with their efforts to inform potential class
members of the existence of this lawsuit, and may have been particularly injurious -- not only to
respondents but to the class as a whole -- because the employees at that time were being pressed
to decide whether to accept a backpay offer from Gulf that required them to sign a full release of
all liability for discriminatory acts. [Footnote 14] In addition, the order made it more difficult for
respondents, as the class representatives, to obtain information about the merits of the case from
the persons they sought to represent.
Because of these potential problems, an order limiting communications between parties and
potential class members should be based on a clear record and specific findings that reflect a
weighing of the need for a limitation and the potential interference with the rights of the parties.
[Footnote 15] Only such a determination can ensure that the court is furthering, rather than
hindering, the policies embodied in the Federal Rules of Civil Procedure, especially Rule 23.
[Footnote 16] In addition, such a weighing -- identifying the potential abuses being addressed -should result in a carefully drawn order that limits speech as little as possible, consistent with the
rights of the parties under the circumstances. As the court stated in Coles v. Marsh, 560 F.2d 186,
189 (CA3), cert. denied, 434 U.S. 985 (1977):
Page 225
102
"[T]o the extent that the district court is empowered . . . to restrict certain communications in
order to prevent frustration of the policies of Rule 23, it may not exercise the power without a
specific record showing by the moving party of the particular abuses by which it is threatened.
Moreover, the district court must find that the showing provides a satisfactory basis for relief,
and that the relief sought would be consistent with the policies of Rule 23 giving explicit
consideration to the narrowest possible relief which would protect the respective parties."
III
In the present case, one looks in vain for any indication of a careful weighing of competing
factors. Indeed, in this respect, the District Court failed to provide any record useful for appellate
review. The court made neither factual findings nor legal arguments supporting the need for this
sweeping restraint order. Instead, the court adopted in toto the order suggested by the Manual for
Complex Litigation -- on the apparent assumption that no particularized weighing of the
circumstances of the case was necessary.
The result was an order requiring prior judicial approval of all communications, with the
exception of cases where respondents chose to assert a constitutional right. Even then,
respondents were required to preserve all communications for submission to the court within five
days. [Footnote 17] The scope of this order is perhaps best illustrated by the fact that the court
refused to permit mailing of the one notice respondents submitted for approval. See supra at 452
U. S. 96-97. This notice was intended to encourage employees to rely on the class action for
relief, rather than accepting Gulf's offer. The court identified nothing in this notice that it thought
was improper and indeed gave no reasons for its negative ruling.
We conclude that the imposition of the order was an abuse of discretion. The record reveals no
grounds on which the District Court could have determined that it was necessary or appropriate
to impose this order. [Footnote 18] Although we do not decide what standards are mandated by
the First Amendment in this kind of case, we do observe that the order involved serious restraints
on expression. This fact, at minimum, counsels caution on the part of a district court in drafting
such an order, and attention to whether the restraint is justified by a likelihood of serious abuses.
We recognize the possibility of abuses in class action litigation, and agree with petitioners that
such abuses may implicate communications with potential class members. [Footnote 19] But the
mere possibility of abuses does not justify routine adoption of a communications ban that
interferes with the formation of a class or the prosecution of a class action in accordance with the
Rules. There certainly is no justification for adopting verbatim the form of order recommended
by the Manual for Complex Litigation, in the absence of a clear record and specific findings of
need. Other, less burdensome remedies may be appropriate. [Footnote 20] Indeed, in many cases,
there will be no problem requiring remedies at all.
In the present case, for the reasons stated above, we hold that the District Court abused its
discretion. [Footnote 21] Accordingly, the judgment below is affirmed.
It is so ordered.
[Footnote 1]
The letter stated that, "[b]ecause this offer is personal in nature, Gulf asks that you not discuss it
with others." It added, however, that those who did not understand the offer could request that a
company official arrange an interview with a Government representative. Brief for United States
et al. as Amici Curiae 1a.
Page 226
103
[Footnote 2]
Three of the named plaintiffs, Bernard, Brown, and Johnson, had filed individual charges before
the EEOC in 1967. The Commission pursued conciliation efforts based on these charges until
February, 1975, when these three persons received letters stating that Gulf and the union no
longer wished to entertain conciliation discussions. The letters stated that the three could request
"right to sue" letters at any time, and would have 90 days from the receipt of such letters to file
suit under Title VII. Bernard and Brown received notices of right to sue from the Commission on
June 11, 1976.
The conciliation agreement between Gulf and the EEOC was premised on a separate charge filed
against Gulf by the Commission itself in 1968.
[Footnote 3]
Two other attorneys also assisted in the representation.
[Footnote 4]
The Manual, containing an important compilation of suggested procedures for handling complex
federal cases, was published under the supervision of a distinguished group of federal judges. It
is printed in full in Part 2 of 1 J. Moore, J. Lucas, H. Fink, D. Weckstein, J. Wicker, Moore's
Federal Practice (1980).
In its proposed order, Gulf added language allowing it to continue paying backpay and obtaining
releases under the conciliation agreement. It suggested that the Clerk of the Court should send a
notice to class members informing them that they had 45 days in which to decide to accept the
Gulf offer.
[Footnote 5]
The June 22 order stated, in part:
"In this action, all parties hereto and their counsel are forbidden directly or indirectly, orally or in
writing, to communicate concerning such action with any potential or actual class member not a
formal party to the action without the consent and approval of the proposed communication and
proposed addresses by order of this Court. Any such proposed communication shall be presented
to this Court in writing with a designation of or description of all addressees and with a motion
and proposed order for prior approval by this Court of the proposed communication. The
communications forbidden by this order include, but are not limited to, (a) solicitation directly or
indirectly of legal representation of potential and actual class members who are not formal
parties to the class action; (b) solicitation of fees and expenses and agreements to pay fees and
expenses from potential and actual class members who are not formal parties to the class action;
(c) solicitation by formal parties to the class action of requests by class members to opt out in
class actions under subparagraph (b)(3) of Rule 23, F.R.Civ.P.; and (d) communications from
counsel or a party which may tend to misrepresent the status, purposes and effects of the class
action, and of any actual or potential Court orders therein which may create impressions tending,
without cause, to reflect adversely on any party, any counsel, this Court, or the administration of
justice. The obligations and prohibitions of this order are not exclusive. All other ethical, legal
and equitable obligations are unaffected by this order."
"This order does not forbid (1) communications between an attorney and his client or a
prospective client, who has on the initiative of the client or prospective client consulted with,
Page 227
104
employed or proposed to employ the attorney, or (2) communications occurring in the regular
course of business or in the performance of the duties of public office or agency (such as the
Attorney General) which do not have the effect of soliciting representation by counsel, or
misrepresenting the status, purposes or effect of the action and orders therein."
"If any party or counsel for a party asserts a constitutional right to communicate with any
member of the class without prior restraint and does so communicate pursuant to that asserted
right, he shall within five days after such communication file with the Court a copy of such
communication, if in writing, or an accurate and substantially complete summary of the
communication if oral."
This section of the order was drawn word-for-word from the Manual for Complex Litigation
App. § 1.41. The order then went on to authorize Gulf to continue with the settlement process
under the terms of the conciliation agreement, and to direct the Clerk of Court to send the notice
described in n 4, supra. A paragraph near the end of the order then reiterated the proscription on
communications:
"(8) [It is ordered that] any further communication, either direct or indirect, oral or in writing
(other than those permitted pursuant to paragraph (2) above) from the named parties, their
representatives or counsel to the potential or actual class members not formal parties to this
action is forbidden."
[Footnote 6]
The proposed notice stated:
"ATTENTION BLACK WORKERS OF GULF OIL"
"The Company has asked you to sign a release. If you do, you may be giving up very important
civil rights. It is important that you fully understand what you are getting in return for the
release. IT IS IMPORTANT THAT YOU TALK TO A LAWYER BEFORE YOU SIGN. These
lawyers will talk to you FOR FREE: [names and addresses sf respondents' counsel]."
"These lawyers represent six of your fellow workers in a lawsuit titled Bernard v. Gulf Oil Co.,
which was filed in Beaumont Federal Court on behalf of all of you. This suit seeks to correct
fully the alleged discriminatory practices of Gulf."
"Even if you have already signed the release, talk to a lawyer. You may consult another attorney.
If necessary, have him contact the above-named lawyers for more details. All discussions will be
kept strictly confidential."
"AGAIN, IT IS IMPORTANT THAT YOU TALK TO A LAWYER. Whatever your decision
might be, we will continue to vigorously prosecute this lawsuit in order to correct all the alleged
discriminatory practices at Gulf Oil."
[Footnote 7]
This order had effected a substantial change in the procedure mandated by the conciliation
agreement, which provided that "failure on the part of any member to respond within thirty days
shall be interpreted as acceptance of back pay" (emphasis added). App. 59.
[Footnote 8]
On January 11, 1977, the District Court granted summary judgment to petitioners, dismissing the
complaint as untimely. On appeal, respondents argued that their claims had been presented in
Page 228
105
timely fashion. Both the Fifth Circuit panel, 596 F.2d 1249, 1254-1258 (1979), and the en banc
court, 619 F.2d 459, 463 (1980), held for respondents on this issue, and therefore ordered a
remand for further proceedings.
[Footnote 9]
In holding that the order restricted protected speech, the court relied both on cases involving
essentially political litigation, NAACP v. Button,371 U. S. 415 (1963); In re Primus,436 U. S.
412 (1978), and on cases that may be closer to the present case, involving collective efforts to
gain economic benefits accorded a specific group of persons under federal law, United
Transportation Union v. Michigan Bar,401 U. S. 576 (1971); Mine Workers v. Illinois Bar
Assn.,389 U. S. 217 (1967); Railroad Trainmen v. Virginia State Bar,377 U. S. 1 (1964).
[Footnote 10]
Rule 83 provides a more general authorization to district courts, stating that in "all cases not
provided for by rule, the district courts may regulate their practice in any manner not inconsistent
with these rules."
[Footnote 11]
Respondents in this case were performing the customary role of named plaintiffs, who seek to
"vindicat[e] the rights of individuals who otherwise might not consider it worth the candle to
embark on litigation in which the optimum result might be more than consumed by the cost."
Deposit Guaranty Nat. Bank v. Roper,445 U. S. 326, 445 U. S. 338 (1980). Rule 23 expresses
"a policy in favor of having litigation in which common interests, or common questions of law or
fact prevail, disposed of where feasible in a single lawsuit."
Rodgers v. United States Steel Corp., 508 F.2d 152, 163 (CA3), cert. denied, 423 U.S. 832
(1975).
Although traditional concerns about "stirring up" litigation remain relevant in the class action
context, seen 12, infra, such concerns were particularly misplaced here. Respondents were
represented by lawyers from the NAACP Legal Defense and Education Fund -- a nonprofit
organization dedicated to the vindication of the legal rights of blacks and other citizens. See In re
Primus, supra, at 436 U. S. 422, 436 U. S. 426-431 (distinguishing, with respect to First
Amendment protections, between solicitation of clients intended to advance political objectives
and solicitation of clients for pecuniary gain).
[Footnote 12]
The class action problems that have emerged since Rule 23 took its present form in 1966 have
provoked a considerable amount of comment and discussion. See, e.g., Manual for Complex
Litigation; Developments in the Law: Class Actions, 89 Harv.L.Rev. 1318 (1976); Miller,
Problems of Administering Judicial Relief in Class Actions under Federal Rule 23 (b) (3), 54
F.R.D. 501 (1972).
The potential abuses associated with communications to class members are described in Waldo v.
Lakeshore Estates, Inc., 433 F.Supp. 782 (ED La.1977). That court referred, inter alia, to the
"heightened susceptibilities of nonparty class members to solicitation amounting to barratry as
well as the increased opportunities of the parties or counsel to 'drum up' participation in the
proceeding."
Page 229
106
Id. at 790. The court added that
"[u]napproved communications to class members that misrepresent the status or effect of the
pending action also have an obvious potential for confusion and/or adversely affecting the
administration of justice."
Id. at 790-791. See also Manual for Complex Litigation App. § 1.41.
[Footnote 13]
See generally Comment, Judicial Screening of Class Action Communications, 55 N.Y.U.L.Rev.
671, 699-704 (1980); Note, 88 Harv.L.Rev. 1911, 1917-1920 (1975).
[Footnote 14]
In Title VII, Congress expressed a preference for voluntary settlements of disputes through the
conciliation process. E.g., Alexander v. Gardner-Denver Co.,415 U. S. 36, 415 U. S. 44 (1974).
But, as the en banc majority stated, it is not appropriate to promote such a policy by restricting
information relevant to the employee's choice:
"The choice between the lawsuit and accepting Gulf's back pay offer and giving a general release
was for each black employee to make. The court could not make it for him, nor should it have
freighted his choice with an across-the-board ban that restricted his access to information and
advice concerning the choice."
619 F.2d at 477.
[Footnote 15]
As noted infra, we do not reach the question of what requirements the First Amendment may
impose in this context. Full consideration of the constitutional issue should await a case with a
fully developed record concerning possible abuses of the class action device.
[Footnote 16]
Cf. In re Halkin, 194 U.S.App.D.C. 257, 274, 598 F.2d 176, 193 (1979) ("To establish good
cause' for a protective order under [Federal Rule of Civil Procedure] 26 (c), `[t]he courts have
insisted on a particular and specific demonstration of fact, as distinguished from stereotyped and
conclusory statements'") (quoting 8 C. Wright & A. Miller, Federal Practice and Procedure §
2035, p. 265 (1970)).
[Footnote 17]
The order contains a serious ambiguity concerning the response that the court could make if it
found no merit in respondents' assertion of a constitutional right with respect to a particular
communication. Arguably, this "constitutional" exception was not a realistic option for
respondents, because they could be exposed to the risk of a contempt citation if the court
determined that a communication submitted after-the-fact was not constitutionally protected. See
619 F.2d at 471 (referring to "the omissions and ambiguities of the order and possible differing
constructions as to when, if at all, one is protected against contempt"). At the very least, parties
or their counsel would be required to defend their good faith, at the risk of a contempt citation.
Because of this fact, and the practical difficulties of the filing requirement, see id. at 470-471,
this exception for constitutionally protected speech did little to narrow the scope of the limitation
on speech imposed by the court.
[Footnote 18]
Page 230
107
We agree with the Court of Appeals' refusal to give weight to Gulf's unsworn allegations of
misconduct on the part of respondents' attorneys:
"We can assume that the district court did not ground its order on a conclusion that the charges of
misconduct made by Gulf were true. Nothing in its order indicates that it did, and, if it did, such
a conclusion would have been procedurally improper and without evidentiary support. Rather the
court appears to have acted upon the rationale of the Manual that the court has the power to enter
a ban on communications in any actual or potential class action as a prophylactic measure
against potential abuses envisioned by the Manual."
Id. at 466 (footnote omitted).
[Footnote 19]
Seen 12, supra.
[Footnote 20]
For example, an order requiring parties to file copies of nonprivileged communications to class
members with the court may be appropriate in some circumstances.
[Footnote 21]
In the conduct of a case, a court often finds it necessary to restrict the free expression of
participants, including counsel, witnesses, and jurors. Our decision regarding the need for careful
analysis of the particular circumstances is limited to the situation before us -- involving a broad
restraint on communication with class members. We also note that the rules of ethics properly
impose restraints on some forms of expression. See, e.g., ABA Code of Professional
Responsibility, DR 7-104 (1980).
Page 231
View the online version at http://us.practicallaw.com/5-582-9285
Key Issues in Consumer Data Breach
Litigation
PAUL G. KARLSGODT, BAKERHOSTETLER, WITH PRACTICAL LAW INTELLECTUAL PROPERTY & TECHNOLOGY
This Practice Note examines the current trends
in consumer data breach class actions and the
ongoing difficulties plaintiffs face establishing
their claims in court. In particular, this Note
addresses the types of breach incidents that
have resulted in class action litigation, the
applicable law and theories of recovery, the role
of standing and actual harm, class certification
and settlement considerations, and issues on
the horizon for data breach class actions.
With the prevalence of internet and mobile technology, companies
have nearly unlimited capacity to collect and store information,
but only a limited ability to secure the information from loss, theft
and hacking. Data breaches affecting the personally identifiable
information (PII) of individuals provide an attractive target for class
action litigation because they often arise out of a single event of data
exposure and provide a large pool of people for a potential class,
which increases the settlement value of a case. Additionally, data
breaches incite anxiety and fear in potential class members.
This Practice Note reviews the current trends in data breach class
actions, highlighting the issues that appear to be solidifying and
those that remain to be addressed. In particular, it examines:
The types of breach incidents that have resulted in class action
litigation (see Types of Data Breach Class Actions).
Applicable law and theories of recovery (see Applicable Law).
The role of standing and actual harm (see Standing and the Injury
Requirement and Overcoming the Injury Requirement).
Class certification and settlement considerations (see Class
Certification and Settlement Considerations).
Issues on the horizon for data breach class actions (see Looking
Ahead).
© 2016 Thomson Reuters. All rights reserved.
TYPES OF DATA BREACH CLASS ACTIONS
While there are numerous types of data breaches, and each has the
potential to result in litigation, most data breach class actions can be
put into one of three categories:
Stolen or lost computer cases.
Hacking incidents.
Publication of personal information.
Each of these scenarios brings about a particular set of issues in
litigation.
STOLEN OR LOST COMPUTER CASES
A stolen or lost computer (or other electronic device) containing PII
is one of the most common fact patterns underlying data breach
litigation. Factual issues in these cases include:
Whether the data was encrypted. A stolen computer containing
unencrypted PII makes the breach a prime target for class action
litigation. The loss of encrypted data is much less likely to result
in litigation in the first place, and encryption provides a stronger
factual defense to claims that the defendant was negligent in
losing the equipment or allowing it to be stolen, though there are
examples of cases involving encrypted data when the encryption
keys were also stolen or lost.
A lack of information about why the computer was stolen or
what happened to the computer after it was stolen or lost.
There is often a lack of evidence about whether a computer was
stolen for the data it contained or the value of the hardware, or
whether anyone accessed the data at all after the loss. Plaintiffs
therefore face significant hurdles alleging harm where the missing
computer simply increases the possibility that a person whose
data was on the device could be the victim of some future identity
theft or other financial crime (see Risk of Future Harm).
The type of information exposed. A separate set of issues may
arise when stolen or lost data is medical or of a similar sensitive
nature. In these cases, an affected person could argue that the
mere access to this information by strangers would create an
invasion of the person's privacy interests.
Page 232
Key Issues in Consumer Data Breach Litigation
HACKING CASES
There are several subcategories of hacking cases, including:
Payment card system hacking.
Password theft.
Theft of financial data.
Unknown intrusions.
Hacking of payment card processing systems has been the most
common of these cases. In these cases, the hackers target credit or
debit card numbers that they can sell on a black market. The most
widely-known recent example of this type of incident is the 2013
Target Corporation breach, which has resulted in scores of class
action lawsuits. Following several other massive corporate data
breaches, recently, The Home Depot became the latest large retailer
to have customers' card information compromised by hackers.
The obvious motive in payment card hacking cases is to steal and
use financial information, which solves, in part, a key evidentiary
problem that arises in stolen computer cases. However, individual
cardholders still have difficulty proving any actual loss as a result of
these incidents because the payment card system in the US protects
consumers from any personal liability for card fraud. Instead, a
contractual and regulatory framework divides the risk between the
retailers, the banks who issue the payment cards, the companies who
process cards and the card brands. Following the Target breach, in
addition to the consumer class actions, numerous class actions were
filed on behalf of putative classes of issuing banks against Target.
With other types of hacking, it is often much more difficult to
determine the hacker's intention in accessing the system. Identity
theft or fraud might be the motive, but it could instead be corporate
or government-sponsored espionage or simple mischief. The forensic
evidence might provide clues, but it is often far from definitive. As
a result, in many hacking cases, there can be great uncertainty
about the true potential for any possible financial harm to affected
individuals, just as there is in stolen or lost computer cases. The
recent spate of attacks against health insurers is a good example,
as is the attack on the extramarital affairs dating website, Ashley
Madison.
For more information on cyber attacks, see Practice Note, Cyber
Attacks: Prevention and Proactive Responses (http://us.practicallaw.
com/3-511-5848).
PUBLICATION OF PERSONAL INFORMATION CASES
Instances in which a company publishes, often on the internet, private
financial or healthcare information about customers, patients or other
individuals have also given rise to class actions. The act of publication
can lead to a different set of potential causes of action, particularly
common law invasion of privacy claims. As compared to stolen or
lost computer cases, it may be easier in these cases to determine
forensically whether anyone actually viewed the information after it
was published.
However, in many publication cases, there are still often factual
questions about whether anyone with an improper motive has
accessed or done something improper with the information in a way
that has caused, or could cause, any harm. This is especially true
when there is no argument that the viewing of the information, by
itself, could create embarrassment or other intrinsic harm. Even in
cases involving publication of sensitive or embarrassing information,
there are still usually difficult questions about whether the law
provides a remedy for that embarrassment.
APPLICABLE LAW
There is no common set of laws governing civil liability for data
breaches. As a result, plaintiffs rely on a patchwork of federal and
state statutory and common law claims in seeking relief for alleged
data security breaches (for information on key privacy and data
security laws, see Practice Note, US Privacy and Data Security Law:
Overview (http://us.practicallaw.com/6-501-4555)).
FEDERAL LAW
Privacy law at the federal level is sector-specific, and there is no federal
data breach statute or overriding set of laws that otherwise govern
liability for data breaches. However, plaintiffs have been creative in
their attempts to extend federal law to cover the data breach scenario
and commonly plead theories of recovery under, for example:
The Health Insurance Portability and Accountability Act of 1996
(HIPAA) and the Health Information Technology for Economic and
Clinical Health Act (HITECH).
The Stored Communications Act (SCA).
The Fair Credit Reporting Act
(FCRA).
The Gramm-Leach-Bliley Act (GLBA).
These claims rarely pass the motion to dismiss stage because courts
find they do not apply to the facts associated with a typical consumer
data breach, the statutes lack a private right of action, or both.
STATE LAW
Although most US states and territories have generally applicable
data breach or data security statutes, many do not contain private
rights of action. For those that do, the right of action is frequently
limited to the execution of the notice of the breach itself and may
not extend to the actual loss of the data (for more information,
see Practice Note, Privacy and Data Security: Breach Notification
(http://us.practicallaw.com/3-501-1474) and State Agency Notice
Requirements for Data Breaches Chart (http://us.practicallaw.
com/5-501-9110)). As a result, in addition to alleging claims under
any available data breach or security law, plaintiffs frequently allege
novel applications of claims under theories of:
Consumer protection or unfair trade practices, pursuant to state
statutes.
Negligence.
Invasion of privacy.
Breach of implied or express contract.
Unjust enrichment.
2
Page 233
STANDING AND THE INJURY REQUIREMENT
Failure to establish an injury-in-fact sufficient to support Article III
standing in federal court has been the largest impediment to data
breach class actions to date. Injury-in-fact is an invasion of a legally
protected interest that is both:
Concrete and particularized.
Actual or imminent and not conjectural or hypothetical.
Allegations of possible future injury do not satisfy the standing
requirement. Rather, a threatened injury must be certainly
impending. Even if the case is pled as a class action, the named
plaintiffs must allege and show that they personally have been
injured. They may not rely on assertions that other members of the
class have been injured. The court may hear evidence on the issue
of standing, and plaintiffs must plead or prove facts that make
the existence of an injury plausible. (See In re Sci. Applications Int'l
Corp. (SAIC) Backup Tape Data Theft Litig., MDL No. 2360, 2014 WL
1858458, at *5-9 (D.D.C. May 9, 2014).)
Data breach plaintiffs commonly assert standing based on the risk
of future injury and the expenses they incurred to mitigate that risk,
along with a host of emerging alternative theories of harm.
RISK OF FUTURE HARM
Frequently in data breach litigation, there is little or no evidence
about what happened to the PII once it left the defendant's control.
Plaintiffs therefore often cannot plead any actual financial harm or
identity theft arising from the loss of data, either because of the lack
of evidence or the nature of the information accessed, or because the
plaintiffs were reimbursed for any financial loss that occurred within
the payment card system. Accordingly, plaintiffs' principal theory of
harm is that the loss of PII puts them at higher risk of future identity
theft.
Most federal courts agree that the mere possibility of future harm is
not enough to create an injury-in-fact sufficient to confer standing,
and courts frequently disposed of early data breach cases on these
grounds. A minority of district courts, however, have found facts
falling short of actual financial loss to be sufficient to confer standing
(see, for example, Moyer v. Michaels Stores, Inc., No. 14-561, 2014 WL
3511500, at *4-6 (N.D. Ill. July 14, 2014) (relying on Pisciotta v. Old Nat'l
Bancorp., 499 F.3d 629 (7th Cir. 2007)); Claridge v. RockYou, Inc., 785
F. Supp. 2d 855, 860-61 (N.D. Cal. 2011)).
In 2013, the US Supreme Court decided Clapper v. Amnesty
International USA (133 S. Ct 1138, 1143 (2013)). Clapper involved
claims that a warrantless surveillance program of the National
Security Agency required individuals to incur expenses to protect the
confidentiality of their communications. The Supreme Court held that
the possibility of unauthorized access was not sufficiently imminent
to support injury-in-fact standing.
Although Clapper was not itself a data breach case, most courts to
address the standing issue in data breach cases since have relied
on Clapper to conclude that potential future harm is not enough to
confer Article III standing (see, for example, In re Sci. Applications Int'l
Corp., 2014 WL 1858458, at *5-9 (theft of data tapes); In re Barnes &
Noble Pin Pad Litig., No. 12-8617, 2013 WL 4759588, at *3-5 (N.D. Ill.
Sept. 3, 2013) (payment card hacking); Polanco v. Omnicell, Inc., 988
F. Supp. 2d 451, 466-71 (D.N.J. 2013) (laptop theft); see also Hammer
v. Sam's East, Inc., No. 12-2618, 2013 WL 3756573, at *2-3 (D. Kan. July
16, 2013) (citing Clapper in finding no standing where the plaintiffs
alleged that the defendants' misrepresentations on their website
exposed their customers to increased risk of fraud and identity theft
by failing to adequately protect customers' personal information, but
no data breach had occurred); but see In re Adobe Sys., Inc. Privacy
Litig., No. 66 F.Supp.3d 1197 (N.D. Cal., Sept. 4, 2014) (distinguishing
Clapper to find that hacking that resulted in theft of payment card
data created sufficiently imminent risk to support standing)).
However, in July 2015, the US Court of Appeals for the Seventh
Circuit issued an opinion in Remijas v. Neiman Marcus, LLC, reversing
the district court's dismissal of the plaintiffs' claims in the Neiman
Marcus credit card data breach litigation for lack of standing based
on claims of future harm (No. 14-3122, 2015 WL 4394814, (7th Cir., July
20, 2015)). Citing Clapper, the court noted that allegations of future
harm can establish standing if that harm is certainly impending,
though allegations of possible future injury are not sufficient.
The court distinguished Clapper, noting that the plaintiffs alleged
that the hackers deliberately targeted Neiman Marcus to obtain
their credit card information, while in Clapper there was no evidence
that any of respondents' communications either had been or would
be monitored. Thus, unlike in Clapper, the court noted, there is "no
need to speculate as to whether [the Neiman Marcus customers']
information has been stolen and what information was taken"
(quoting In re Adobe Sys., 66 F.Supp.3d at 1215 (citing Clapper, 133
S.Ct. at 1148)). The court held that under the facts at hand, the
plaintiffs had an objectively reasonable fear of future harm that was
sufficient to establish standing.
Even where standing has been found, however, often courts still
dismiss the complaint at the pleading stage based on the plaintiffs'
failure to allege sufficient injury to establish the elements of their
claims, or based on a failure to satisfy other necessary elements of
a claimIn Neiman Marcus, the court declined to decide the issue of
whether the alleged injuries stated a claim for procedural reasons.
However, in its earlier decision in Pisciotta, the Seventh Circuit had
found that the named plaintiffs had alleged injury sufficient to support
standing, but had not alleged injury sufficient to state a claim for
relief on the merits. Similarly, in Tierney v. Advocate Health & Hospitals
Corp., No. 14-3168, 2015 WL 4718875, at *1 (7th Cir. Aug. 10, 2015), the
Seventh Circuit found that two plaintiffs had alleged injury sufficient
to support standing, but nonetheless affirmed a lower court's
decision dismissing claims under the Fair Credit Reporting Act for
failure to plead the required elements of a claim under that statute.
MITIGATION EXPENSES
To bolster their injury claims after early attempts to demonstrate
standing were unsuccessful, plaintiffs began alleging not only an
increased risk of identity theft, but also that they incurred expenses
to mitigate that risk, for example by purchasing credit monitoring
services or identity theft insurance. This theory found some favor with
courts, though not universally.
Page 234
3
Clapper also addressed mitigation expenses, noting that they were
essentially a form of manufactured standing, that is, an injury created
by the plaintiffs' own actions in the face of a future harm (133 S. Ct.
1138, 1143 (2013)). Based on Clapper, most courts have since declined
to accept mitigation expenses as a basis for the standing injury
requirement.
In In re Sony Gaming Networks & Customer Data Security Breach
Litigation, however, a California district court rejected the narrow
application of Clapper in the data breach context, concluding that the
plaintiffs had alleged sufficient facts to find that injury was "certainly
impending" (996 F. Supp. 2d 942, 960-62 (S.D. Cal. 2014)). In Neiman
Marcus, the court held likewise, taking pains to distinguish Clapper.
The court reasoned that in Clapper, the plaintiffs incurred expenses
protecting from a speculative harm that could possibly arise from
conduct that may not have even affected them, whereas in the data
breach context, it was reasonable for plaintiffs who had been notified
that their information was at risk to believe that they needed to take
measures to protect themselves.
The court went even further, characterizing Neiman Marcus's offer of
free credit monitoring services to all customers who may have been
affected by the breach an admission that the fear of the risk was
reasonable. Offering credit monitoring services to affected customers
is a common practice in data breach response, mostly as a matter
of customer and public relations. It remains to be seen whether the
Seventh Circuit's sweeping characterization of these offers will affect
practice or subsequent case law.
ALTERNATIVE THEORIES OF HARM
Early failures to establish standing in data breach cases have also
led plaintiffs to experiment with several alternative theories of harm,
in addition to the mitigation theory, with varying degrees of success.
These include:
Lost time and inconvenience. This theory is particularly relevant
in payment card breach cases, where a card holder may have
been reimbursed for charges, but may have spent time, for
example, calling customer service lines to change stored credit
card numbers. Courts typically reject this theory as ordinary
inconvenience that is not legally compensable. (See, for example,
In re Hannaford Bros. Co. Customer Data Sec. Breach Litig., 671 F.
Supp. 2d 198, 201 (D. Me. 2009) (certifying questions to the Maine
Supreme Judicial Court as answered in In re Hannaford Bros. Co.
Customer Data Sec. Breach Litig., 4 A.3d 492, 496-98 (Me. 2010)).)
However, the Neiman Marcus court seemed to accept that this type
of allegation was sufficient at least to support standing (see 2015
WL 4394814, at *4).
Emotional distress. This theory has likewise met with little
success because, in many jurisdictions, emotional distress
damages are often recoverable only where there is a physical
impact or a medically diagnosable injury. Although being victim
to a data breach can be extremely disconcerting, it is not likely to
rise to the level of emotional distress as defined under most states'
common law.
4
Decreased economic value of PII. While generally courts have
rejected this novel theory, which is premised on the argument that
PII has economic value, at least one court has accepted it at the
motion to dismiss stage while expressing doubts that the plaintiffs
would be able to actually prove any damages. (See Claridge, 785 F.
Supp. 2d at 861.)
Denied the benefit of the bargain. Plaintiffs in multiple data
breach cases have argued that they were denied the benefit of
their bargain with the defendant because the defendant's security
was not as safe as it was made out to be in a privacy policy,
disclosure or agreement. The success of these theories has varied
based on the facts of the case, the court involved and local law.
In In re LinkedIn User Privacy Litigation, for example, the court
rejected the plaintiffs' theory that they were denied the benefit
of their bargain when the defendant did not provide the level of
security that it had promised to users of its free service (932 F.
Supp. 2d 1089, 1093-94 (N.D. Cal. 2013)). However, in a later ruling
addressing a plaintiff's amended complaint, the court denied a
motion to dismiss the plaintiff's fraud claim that she had been
misled into using the defendant's services in the first place after
reading its privacy policy (No. 12-3088, 2014 WL 1323713, at *7-9
(N.D. Cal. Mar. 28, 2014)). In Resnick v. AvMed, Inc., the US Court
of Appeals for the Eleventh Circuit, applying Florida law, held that
the plaintiffs had stated claims for unjust enrichment and breach
of contract based on allegations that portions of their insurance
premiums were consideration for an insurer's promises to provide
data security (693 F.3d 1317, 1327-28 (11th Cir. 2012)). Despite these
preliminary successes, it remains to be seen whether the benefit
of the bargain will succeed as a theory that merits class-wide
treatment.
For an overview of the issues relating to many of these novel theories
of injury, see In re Barnes & Noble, 2013 WL 4759588, at *2-6.
OVERCOMING THE INJURY REQUIREMENT
In cases where plaintiffs have plausibly alleged identity theft or
direct financial harm, they have survived standing challenges (see,
for example, Resnick, 693 F.3d at 1323, 1330). However, limiting a
proposed class to the victims of actual identity theft significantly
diminishes the size of a potential class, even in a large breach (see,
for example, In re Sci. Applications Int'l Corp., 2014 WL 1858458,
at *1 (dismissing the claims of all but two plaintiffs and noting the
diminishment of the class)). Further, identity theft claims seeking
actual compensatory damages are not very susceptible to class
treatment (see Class Certification). Plaintiffs have tried several
approaches to overcome the standing barrier without destroying
their ability to certify the case as a class action, including by alleging
statutory violations or bringing suit in state court.
SEEKING STATUTORY DAMAGES
One common way in which plaintiffs seek to overcome the injury
hurdle in data breach cases is to sue under statutes that provide for
statutory damages or penalties without proof of actual damages.
Some courts have held that an actual monetary or other concrete
injury does not have to be alleged to support standing to sue under
a statute that provides for statutory damages (see, for example, In
Page 235
re LinkedIn User Privacy Litig., 2014 WL 1323713, at *4-6; see also In
re iPhone Application Litig., 844 F. Supp. 2d 1040, 1055 (N.D. Cal.
2012) (in a data tracking case, holding that violations of the Wiretap
Act or the SCA can constitute concrete injury sufficient to support
standing)). Others have disagreed (see, for example, Sterk v. Best Buy
Stores, L.P., No. 11-1894, 2012 WL 5197901, at *5-6 (N.D. Ill. Oct. 17,
2012) ("a plaintiff must plead an injury beyond a statutory violation to
meet the standing requirement")).
"Injury" used in this context is distinguishable from "damages." Even
where a statute does not require proof of a measurable financial
loss, courts have required the plaintiff to show that there has been a
concrete invasion of his statutory rights, for example, that misuse of his
information supports that confidentiality was actually breached (see, for
example, In re Sci. Applications Int'l Corp., 2014 WL 1858458, at *9-10).
The statutes under which data breach plaintiffs seek redress are often
older statutes enacted before large electronic data breaches became
common. As a result, much of the litigation in this context has focused
on statutory interpretation. For example, different divisions of the
California Courts of Appeal recently issued a series of decisions
clarifying when a patient has a right to sue for statutory "nominal"
damages under the provisions of the California Confidentiality of
Medical Information Act (CMIA) that were originally enacted in the
1990s. In each of these cases, the court interpreted specific statutory
language in denying statutory damages in situations where there was
no actual breach of medical privacy or where it was impossible to know
whether any breach of confidentiality had even occurred. For example:
In Sutter Health v. Superior Court, the court held that nominal
damages were not available because the CMIA imposes liability
only for an actual breach of confidentiality, not for merely
increasing the risk of a confidentiality breach (174 Cal. Rptr. 3d 653,
658-61 (Cal. Ct. App. 2014)).
In Eisenhower Medical Center v. Superior Court, the court found that
"under the CMIA a prohibited release by a health care provider
must include more than individually identifiable information but
must also include information relating to medical history, mental
or physical condition, or treatment of the individual" (172 Cal. Rptr.
3d 165, 170 (Cal. Ct. App. 2014), review denied (Aug. 13, 2014)).
In Regents of University of California v. Superior Court, the court
held that "release" under the CMIA requires an actual breach of
confidentiality (163 Cal. Rptr. 3d 205, 208 (Cal. Ct. App. 2013), as
modified on denial of reh'g (Nov. 13, 2013)).
Courts have also applied common sense to limit the overly creative
use of statutory damages and penalties as an alternative to actual
injury. For example, even where there is language that, if applied
literally, might entitle a plaintiff to statutory damages, courts have
been willing to evaluate whether the plaintiff is within the zone of
persons to be protected before allowing him to rely on that statute
in prosecuting a privacy claim (see, for example, Starbucks Corp. v.
Superior Court, 86 Cal. Rptr. 3d 482, 490 (Cal. Ct. App. 2008), review
denied (Feb. 25, 2009) ("Where civil liability is predicated upon a
legislative provision, plaintiffs must establish that they fall within the
class of persons for whose protection the legislative provision was
enacted. The statute must be designed to protect against the kind of
harm which occurred.") (internal citations and quotations omitted)).
BRINGING SUIT IN STATE COURT
The standing limitations in Article III of the US Constitution do not apply
to state courts and, perhaps recognizing the possibility that standing
will be viewed more liberally, plaintiffs have been filing cases in state
courts more frequently over the last several years. Although state court
standing principles may be less stringent than Article III, state courts
have also reached the conclusion that the risk of future injury alone
is insufficient to support a claim, even though they often address the
question of injury on the merits of a claim rather than as a matter of
standing to sue (see, for example, Paul v. Providence Health Sys.-Or.,
273 P.3d 106, 108, 111 (Or. 2012) (noting that every court to address the
issue has concluded that the cost of credit monitoring that results
from the risk of possible future harm following the theft of personal
information, absent wrongful use of that information, is insufficient
to state a negligence claim)). At least one state appellate court has
interpreted the state law standing requirement in a way that is arguably
more restrictive than Article III (compare Maglio v. Advocate Health
and Hospitals Corp., 2015 IL App (2d) 140782, with Neiman Marcus).
In a one case, however, a West Virginia state court addressing the
disclosure of medical information agreed that the plaintiff had
standing despite the lack of any financial injury, relying on the idea that
patients have a legal interest in protecting the privacy of their medical
information and that disclosure itself was an actual injury (Tabata
v. Charleston Area Med. Ctr., Inc., 759 S.E.2d 459, 464 (W. Va. 2014)).
While Tabata may embolden plaintiffs to further seek out state courts,
it is important to remember that Tabata involved publication of medical
information on the internet. In cases not involving medical information
or in cases where it is not clear that anyone saw information that was
lost or disclosed, this same reasoning would not apply.
Even if they bring their cases in state court, however, plaintiffs may
not stay there, or they may have to significantly limit their proposed
classes to do so. Under the Class Action Fairness Act of 2005 (CAFA),
most large data breach cases can be removed to federal court
because of the amount in controversy and the diversity of the class
(see 28 U.S.C. §§ 1332(d), 1453(b)). On the other hand, a plaintiff can
avoid CAFA removal if, for example, the plaintiff sues a defendant
in its home state and seeks certification of a class consisting only
of individuals who reside in the forum state. For more information,
see Practice Note, Class Action Fairness Act of 2005 (CAFA): Overview
(http://us.practicallaw.com/6-527-3431) and Article, CAFA Mass
Actions: Will Courts Continue to Permit Plaintiffs to Game the System?
(http://us.practicallaw.com/8-537-7705).
CLASS CERTIFICATION
The few cases that have survived initial motions to dismiss have
been unable to overcome the next hurdle, class certification. As
in any other class action seeking monetary relief, to obtain class
certification, the named plaintiff must establish that:
The class is so numerous that joining each individual plaintiff to
the lawsuit is not practical (numerosity).
There are common questions of law or fact (commonality).
His claims are typical of those of the class (typicality).
His interests are aligned with those of the class (adequacy of
representation).
Page 236
5
Common questions of law and fact predominate over individual
questions particular to each plaintiff (predominance).
The class action procedure is superior to other methods of
resolving the dispute (superiority).
(See FRCP 23(a), (b)(3).) For more information, see Practice Notes,
Class Actions: Certification (http://us.practicallaw.com/2-542-7567)
and Class Actions: Class Certification Discovery (http://us.practicallaw.
com/8-556-9766).
Data breach cases are attractive targets for class action lawsuits
because they usually have one indisputably common issue: whether
the defendant was at fault for the breach itself. However, the
existence of that common question does not justify certification. Put
simply, the question often comes down to whether the existence of
some class-wide injury can be resolved by reference to a single body
of common evidence.
Individual variations about whether a specific individual's information
was actually accessed and whether he suffered injury present serious
impediments to establishing predominance of common issues.
Moreover, in many cases, even if the named plaintiff can allege actual
injury, it is difficult or impossible to know how many other individuals
also suffered that injury. This raises questions about whether the
plaintiff can satisfy the other required elements of class certification.
In light of these issues, the same creative theory of injury that may
allow a plaintiff to survive a motion to dismiss often dooms the
case when it comes to certification. For example, while allegations
and proof of severe emotional stress due to unauthorized access
to a person's private medical information may be sufficient injury
for an individual claim, it is unlikely that the claim can be proven
by reference to common evidence showing injuries to the class. In
any event, the inquiry would require an individual evaluation of the
mental state of each person affected.
Data breach plaintiffs have raised several theories to overcome these
certification challenges, including:
Statutory damages (see Statutory Damages).
Statistical sampling (see Statistical Sampling).
Benefit of the bargain (see Benefit of the Bargain).
Price inflation and fraud on the market (see Price Inflation and
Fraud on the Market).
Issue certification (see Issue Certification).
STATUTORY DAMAGES
Perhaps the most common strategy is to pursue one or more claims
for statutory damages under a statute that provides a private right of
action to recover a specific statutory amount without any requirement
that the plaintiff prove an actual financial loss (see Seeking Statutory
Damages). However, even though statutory damages may help
eliminate issues about the amount of damages that can be awarded,
they do not eliminate all individualized issues in many class actions.
For example, variations in the types of information that were subject
to the breach may lead to individualized questions about whether
a particular statutory remedy is available where the statute at issue
6
protects only limited types of personal or medical information.
Similarly, there may be individualized questions about whether the
information compromised was otherwise publicly available or not
confidential for reasons that are individual to each class member.
STATISTICAL SAMPLING
In Hannaford, the plaintiffs proposed that they would present expert
testimony, based on statistical sampling, about the likely number of
total accounts affected by a payment card hacking incident and the
average amount of loss for each person affected. The court rejected
this theory and denied class certification because the plaintiffs
had not actually presented any expert testimony but had merely
postulated its future submission. The court left open the question of
whether the theory would have been viable if the promised expert
testimony had been presented. (In re Hannaford Bros. Co. Customer
Data Sec. Breach Litig., 293 F.R.D. 21, 31-33 (D. Me. 2013).)
However, even where a plaintiff presents specific statistical evidence,
ultimately trying to prove a data breach case using this evidence
may constitute the type of "trial by formula" that the Supreme Court
disapproved of in Wal-Mart Stores, Inc. v. Dukes (131 S. Ct. 2541, 2561
(2011)).
BENEFIT OF THE BARGAIN
Data breach plaintiffs have also pursued theories sounding in
contract. Asking a jury to select a percentage to attribute to data
security as a portion of what a consumer paid to buy a product
or service would be a convenient way to simplify the problem
of individualized injuries. However, the law of contract in most
jurisdictions does not provide this sort of remedy for breach of
contract, even if the plaintiff could show that there was an enforceable
contractual promise to secure data in the first place. Instead, actual
damages are an element of a breach of contract claim and, therefore,
a plaintiff who could not show any tangible injury resulting from the
breach would have the same problem recovering in contract as in tort.
PRICE INFLATION AND FRAUD ON THE MARKET
To avoid individualized issues of reliance present when alleging
certain claims, plaintiffs have been borrowing from the securities
context, arguing that if the data security risk would have been known,
the entire market for the products or services would have been
reduced and all buyers would have paid less for the defendant's
product. This is generally known as the fraud on the market theory
in the securities context and is sometimes referred to as the price
inflation theory in the consumer context. For more information on
the fraud on the market theory in the securities litigation context,
see Expert Q&A on the Fraud on the Market Presumption (http://
us.practicallaw.com/3-575-6746).
This theory has been repeatedly rejected in the consumer fraud context,
primarily because it requires the assumption that there is an "efficient"
market, or a market where all material information is available to all
participants at the same time, and prices change as a result of any
change in information. As contrasted with financial markets, markets
for consumer products and services are generally not efficient.
Page 237
ISSUE CERTIFICATION
Rule 23 of the Federal Rules of Civil Procedure (FRCP) has long
permitted a court to certify a class for the purpose of resolving
discrete legal or factual issues rather than an entire case. The theory
has taken on new life in recent years, however, sparked by a pair
of decisions authored by Judge Richard Posner of the US Court of
Appeals for the Seventh Circuit, which granted class certification
on efficiency grounds despite significant individualized issues of
damages (see Butler v. Sears, Roebuck & Co., 702 F.3d 359, 362-63
(7th Cir. 2012), cert. granted, judgment vacated, 133 S. Ct. 2768 (2013),
judgment reinstated, 727 F.3d 796 (7th Cir. 2013), cert. denied, 134 S. Ct.
1277 (2014); McReynolds v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
672 F.3d 482, 490-91 (7th Cir. 2012), cert. denied, 133 S. Ct. 338 (2012)).
In the data breach context, the prospect of certifying a class to
resolve a single issue, or set of issues, such as whether the defendant
was negligent in not preventing the breach, may have some surface
appeal. However, the question becomes whether resolution of that
issue would materially move the class action forward, since the court
would still have to resolve countless individual issues like causation
and injury before reaching a decision on the defendant's liability to
any individual class member. As a result, despite its surface appeal,
issue certification probably has limited practical usefulness in most
data breach class actions.
SETTLEMENT CONSIDERATIONS
Notwithstanding numerous barriers to successfully prosecuting a
class, plaintiffs continue to file class actions in droves following highprofile data breaches. Defendants frequently decide to settle these
cases, motivated in part by:
The desire to avoid years of litigation that can result in negative
publicity and lasting reputational impact that outweighs any
actual monetary exposure.
The expense of defending these cases. A recent study found
that the average cost to defend a data breach litigation is about
$575,000 (NetDiligence, Cyber Liability & Data Breach Insurance
Claims, A Study of Actual Claim Payouts, at 6 (2013)), even though
a vast majority of data breach class actions are resolved either by
dismissal or settlement early in the case.
Counsel must pay careful attention when structuring these
settlements to propose a structure that will address certain fairness
concerns and gain court approval. For more information on class
action settlements generally, see Practice Note, Settling Class Actions:
Process and Procedure (http://us.practicallaw.com/3-541-8765).
STRUCTURE OF SETTLEMENTS
Commonly, data breach class action settlements include provisions
for one or more of the following:
Free credit monitoring or identity theft insurance services for class
members.
A claims fund for class members who may file claims under certain
circumstances, such as proven financial loss.
Coupons or services.
A cy pres fund.
Injunctive relief.
Additionally, class action settlements include provisions for class
counsels' fees and class administration expenses.
Perhaps the most common settlement benefit included in data
breach settlements to date is credit monitoring or identity theft
services. These benefits are costly to the defendant, and while they
may be an appropriate remedy in cases where there is a possibility of
future identity theft but no strong evidence that it has yet occurred,
identity theft insurance provides little meaningful protection to
consumers in many cases.
For example, in a typical payment card breach case, the only
information compromised is the card information, so the only threat
of identity theft is in the form of a potential fraudulent charge on
the card itself. Credit monitoring services do not typically provide
monitoring within a given credit card account. Moreover, since most
consumers have zero-liability fraud protection on their credit cards,
additional identity theft insurance does not provide any meaningful
value. Still, plaintiffs' counsel continue to demand these services as
part of settlements and defendants continue to acquiesce.
Finally, it may be possible in some cases to resolve a data breach
class action on an individual basis rather than through a class-wide
settlement. For example, in the Adobe class action litigation, the parties
ultimately resolved the case, not through a class action settlement,
but rather through an individual settlement, after the defendant was
able to demonstrate to the satisfaction of plaintiffs' counsel that there
was no evidence that hackers actually used or exploited any of the
information. The disadvantage to a resolution of the type reached in
Adobe is that the settlement is only binding on the individual plaintiffs
and would not prevent future litigation by other individuals affected
by the breach. However, in a case where there is only one group of
plaintiffs with an interest in pursuing litigation, this type of settlement
can still allow the defendant to buy peace as a practical matter,
because others are not interested in pursuing litigation.
COURT REVIEW OF SETTLEMENTS
Under FRCP 23, the court must approve any class action settlement.
Courts have closely scrutinized data breach settlements. This is
partly because data breach class actions have come to prominence
during a time when courts are more heavily scrutinizing class action
settlements. However, it is also because of the variation in class
members' potential injuries. In a data breach where some class
members have suffered only a risk of future harm and others may
have suffered thousands of dollars of financial losses due to identity
theft, data breach class action settlements can raise some of the
same fairness and due process issues that led to the rejection of class
action settlements in tobacco and asbestos cases (see, for example,
Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 597, 606 (1997)).
Further, while cy pres awards to non-profit organizations have been
frequently employed in privacy settlements, both in informational privacy
cases and data breach cases, courts have become increasingly wary of
them because of their lack of benefit to the consumer, and Supreme
Court guidance limiting their use may be forthcoming (see Marek v. Lane,
134 S. Ct. 8, 9 (2013) (Roberts, J., statement respecting the denial of
certiorari) (in an informational privacy case, noting concerns over the
use of cy pres awards in class action settlements and that the Supreme
Court "may need to clarify the limits on the use of such remedies")).
Page 238
7
LOOKING AHEAD
Despite the significant hurdles to prosecuting consumer data breach
class actions, they show no signs of abating. As with any new area
of litigation, there will be changes in how these cases are litigated
as the law develops. Moreover, changes in technology are likely to
affect the types of data breaches that occur. For example, as more
companies and healthcare providers begin to employ encryption
technology, fewer litigations are likely to be filed over stolen and lost
computers. By contrast, cases involving hacking and publication of
sensitive data seem likely to increase given the ever-expanding use of
networking technologies.
Other possible developments on the horizon include:
Causation challenges. Should plaintiffs begin to surmount the
injury and damages issues, causation may be the next front on
which data breach battles are fought, whether at the standing,
class certification or summary judgment stage. Even in a case
where a plaintiff can show a concrete injury, such as financial
loss resulting from identity theft, the plaintiff has an additional
challenge in proving that the injury was caused by the defendant's
actions (see, for example, In re Sci. Applications Int'l Corp., 2014 WL
1858458, at *11-13).The Neiman Marcus court addressed causation
in the standing context and held it was sufficient for standing
purposes that Neiman Marcus admitted that 350,000 cards might
have been exposed and that it contacted members of the class to
tell them they were at risk (see 2015 WL 4394814, at *7).
Greater selectivity. As the law in this area develops, weaker cases,
especially those involving only potential future injury, will likely be
less common. At the same time, more creativity can be expected in
applying existing laws, causes of action and legal theories to data
breach cases that involve significant consumer injury or egregious
conduct by a defendant.
International issues. With ever-increasing globalization, issues
concerning classes consisting of both US and international class
members are likely to be litigated. This includes issues relating to
which courts have jurisdiction to adjudicate data breach claims
and the coordination of parallel data breach lawsuits pending in
multiple countries, particularly the US and Canada.
New legislation. Failures to use current laws to vindicate
consumer rights will likely lead to new privacy legislation.
However, many efforts to draft significant data breach legislation
have failed in recent years, so it remains to be seen if and when
this will happen and what the scope of any legislation will be.
More coordination with regulators. Regulation in this area
continues to evolve. In addition to being a likely target for class
action litigation, a company that is the victim of a data breach
faces a wide range of potential regulatory exposure. Greater
cooperation between regulators and the private bar is likely. Also,
state attorneys general may file more parens patriae cases seeking
relief on behalf of state residents. Notably, the Supreme Court
recently ruled that these cases are not subject to the protections of
CAFA (see Mississippi ex rel. Hood v. AU Optronics Corp., 134 S. Ct.
736, 739 (2014)).
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Page 239
Appendix
Further Information On Participants:
Robert Klonoff; Jordan D. Schnitzer Professor of Law:
https://law.lclark.edu/live/profiles/310-robert-klonoff
Christopher A. Seeger; SeegerWeiss LLP:
http://www.seegerweiss.com/attorneys/partners/christopher-a-seeger#horizontalTab1
Richard C. Godfrey, P.C.; Kirkland & Ellis LLP:
http://www.kirkland.com/sitecontent.cfm?contentID=220&itemID=7870
Lexi J. Hazam; Lieff, Cabraser, Heimann & Bernstein:
http://www.lieffcabraser.com/Attorneys/Lexi-J-Hazam.shtml
Paul G. Karlsgodt; BakerHostetler:
http://www.bakerlaw.com/PaulGKarlsgodt
David F. Sugerman; Attorney P.C.:
http://www.davidsugerman.com/about/
Lois Rosenbaum; Stoel Rives LLP:
http://www.stoel.com/lrosenbaum
Matthew Preusch; Keller Rohrback LLP:
http://www.kellerrohrback.com/attorney/matthew-preusch/
Meredith Price; Perkins Coie LLP:
https://www.perkinscoie.com/en/professionals/meredith-m-price.html
Page 240
Appendix
Robert Klonoff
Jordan D. Schnitzer Professor of Law
Moderator:
Education:
•
J.D., Yale University, 1979 A.B., University
of California, Berkeley, 1976, Majored in
Political Science/Economics (Highest Honors)
•
Work Experience: Current Position: Jordan D. Schnitzer Professor of Law, Lewis &
Clark Law School
•
Prior Positions: Dean of the Law School, Lewis & Clark Law School (2007-2014)
•
Douglas Stripp/Missouri Endowed Professor of Law, University of Missouri
•
Kansas City School of Law (2003-2007)
•
Jones Day, Washington, D.C. (Partner, 1991-July 2003; Of Counsel, 1989-1991, 20032007)
•
Adjunct Professor of Law, Georgetown University Law Center (class action law and
practice) (1999-2003) Visiting Professor of Law, University of San Diego School of
Law (1988-1989)
•
Assistant to the Solicitor General of the United States (1986-1988)
•
Assistant United States Attorney (Criminal Division, District of Columbia) (19831986)
•
Associate, Arnold
&
Porter, Washington, D.C. (1980-1983) Law Clerk to the
Honorable John R. Brown, Chief Judge, United States Court of Appeals for the Fifth
Circuit (1979-1980).
•
Summer Associate, Baker & Botts, Houston, and Arent, Fox, Kintner, Plotkin & Kahn,
Washington, D.C.
(1978) Summer Associate, Sidley
& Austin, Washington,
D.C.
(1977).
Special Honors and Achievements:
•
Elected Member, International Association of Procedural Law
•
Selected in November 2013 for the J. William Fulbright Specialist Roster
•
Recipient, Oregon Consular Corps Award for Individual Achievement in International
Outreach, Portland, Oregon (May 2013)
Page 241
Appendix
•
Member, United States Judicial Conference Advisory Committee on Civil Rules
(appointed by Chief Justice John G. Roberts, Jr., in 2011 as the sole voting member
from the law school academy; reappointed May 2014 for a second three-year term)
•
Associate Reporter, American Law Institute’s Principles of the Law of Aggregate
Litigation (class action project; drafts presented at several annual meetings; final
version approved by full ALI in May 2009 annual meeting and published in May 2010)
•
Fellow, American Academy of Appellate Lawyers
•
Fellow, American Bar Foundation
•
Elected Member, American Law Institute
•
Recipient, 2007 Award for Outstanding UMKC Law Professor (based on vote of 3d
year class)
•
2007 UMKC Law School Commencement Speaker (based on vote of 3d year class)
•
Recipient, 2006 UMKC Law School Elmer Pierson Teaching Award for Most
Outstanding Teacher in the Law School (selected by the Dean)
•
Recipient, 2005 President’s Award for Outstanding Service from the UMKC Law School
Foundation
•
Reporter, 2005 National Conference on Appellate Justice (co-sponsored by the
Federal Judicial Center, National Center for State Courts, and other organizations)
•
Co-Recipient, District of Columbia Bar’s Frederick B. Abramson Award for Superior
Service to the Community (June 1998) Attorney General’s Special Achievement Award
for Outstanding Work as an Assistant to the Solicitor General of the United States
(1986, 1987)
•
Attorney General’s Special Achievement Award for Outstanding Work as an Assistant
United States Attorney (1984, 1985)
•
The Benjamin N. Cardozo Prize for Best Moot Court Brief for Academic Year 19781979, Yale Law School
•
Semi-Finalist, Moot Court Oral Argument, Yale Law School (Fall, 1978)
•
Phi Beta Kappa
•
U.C. Berkeley’s Most Outstanding Political Science Student (1976)
•
The Edward Kraft Award for Outstanding Work as a Freshman Student, U.C. Berkeley
(1974)
Memberships:
•
U.S. Supreme Court Bar
•
Various Federal Circuit and District Courts District of Columbia Bar
•
Missouri State Bar
•
Oregon State Bar
•
Multnomah County Bar
Page 242
Appendix
•
American Law Institute
•
•
American Bar Association Committee on Class Actions & Derivative Suits (Section of
Litigation)
PUBLICATIONS: Books:
•
Klonoff, Introduction to the Study of U.S. Law: Cases and Materials (West Publishing
Co. 2016) (forthcoming)
•
Castanias & Klonoff, Federal Appellate Practice in a Nutshell (West Publishing Co. 2d
ed. 2016) (forthcoming)
•
Klonoff, Class Actions and Other Multi-Party Litigation in a Nutshell (West 5th ed.
2016) (forthcoming)
•
Klonoff, Class Actions and Other Multi-Party Litigation: Cases and Materials (West 4th
ed. 2016) (forthcoming)
•
Klonoff, Class Actions and Other Multi-Party Litigation in a Nutshell (Thomson West
4th ed.) (2012)
•
Klonoff, Bilich & Malveaux, Class Actions and Other Multi-Party Litigation: Cases and
Materials (West 3d ed.) (2012 and 2013 update) (with teacher’s manual)
•
Klonoff ( associate reporter), Principles of the Law of Aggregate Litigation, American
Law Institute Publications (2010)(along with Samuel Issacharoff, reporter, and
associate reporters Richard Nagareda and Charles Silver)
•
Castanias & Klonoff, Federal Appellate Practice and Procedure in a Nutshell (Thomson
West) (2008)
•
Klonoff & Colby, Winning Jury Trials: Trial Tactics and Sponsorship Strategies (NITA 3d
ed.) (2007)
•
3d ed.) (2007)
•
Klonoff, Bilich & Malveaux, Class Actions and Other Multi-Party Litigation: Cases and
Materials (Thomson West 2d ed.) (2006) (with teacher’s manual)
•
2d ed.) (2004)
•
Klonoff & Colby, Winning Jury Trials: Trial Tactics and Sponsorship Strategies (Lexis
Nexis 2d ed.) (2002)
•
Klonoff & Bilich, Class Actions and Other Multi-Party Litigation: Cases and Materials
(West Group 2000)
•
Klonoff, Class Actions and Other Multi-Party Litigation in a Nutshell (West Group
1999)
Page 243
Appendix
•
Klonoff & Colby, Sponsorship Strategy: Evidentiary Tactics for Winning Jury Trials
(Michie Co. 1990)
Articles and Book Chapters:
•
Class Actions in the Year 2025: A Prognosis, __ Emory L.J. __ (2016) (forthcoming)
•
Why Most Nations Do Not Have U.S.-Style Class Actions, 16 BNA Class Action
Litigation Report, Vol. 16, No. 10, at 586 (May 22, 2015) (selected for presentation at
the May 2015 World Congress of the International Association of Procedural Law,
Istanbul, Turkey)
•
Federal Rules Symposium: A Tribute to Judge Mark R. Kravitz -- Introduction to the
Symposium, 18 Lewis & Clark L. Rev. 583 (2014) (co-author)
•
Class Actions for Monetary Relief Under Rule 23(b)(1)(A) and (b)(1)(B): Does Due
Process Require Notice and Opt-Out Rights?, 82 Geo. Wash. L. Rev. 798 (2014)
•
The Decline of Class Actions, 90 Wash. U. (St. Louis) L. Rev. 729 (2013)
•
Reflections on the Future of Class Actions, 44 Loy. U. Chi. L.J. 533 (2013)
•
Richard Nagareda: In Memorium, 80 U. Cin. L. Rev. 289 (2012)
•
Introduction and Memories of a Law Clerk, 47 Houston L. Rev. 529, 573 (2010)
•
ALI’s Aggregate Litigation Project Has Global Impact, 33 ALI Reporter 7 (Fall 2010)
•
Book Review, In the Public Interest, 39 Env. Law 1225 (2009)
•
The Public Value of Settlement, 78 Fordham L. Rev. 1177 (2009)(co-author)
•
Making Class Actions Work: The Untapped Potential of the Internet, 69 U. Pitt. L. Rev.
727 (co-author)(2008), adapted and published in 13 J. Internet Law 1 (2009)
•
The Class Action Fairness Act: An Ill-Conceived Approach to Class Settlements, 80 Tul.
L. Rev. 1695 (co-author) (2006)
•
The Twentieth Anniversary of Phillips Petroleum v. Shutts, Introduction to the
Symposium, 74 UMKC L. Rev. 433 (2006)
•
The Adoption of a Class Action Rule: Some Issues for Mississippi to Consider, 24 Miss.
C. L. Rev. 261 (2005)
•
Antitrust Class Actions: Chaos in the Courts, 11 Stan. J. L. Bus. & Fin. 1 (2005),
reprinted in Litigation Conspiracy: An Analysis of Competition Class Actions (Stephen
G.A. Pitel ed. Irwin Law 2006), and 3 Canadian Class Action Review 137 (2006)
•
The Judiciary's Flawed Application of Rule 23's “Adequacy of Representation”
Requirement, 2004 Mich. St. L. Rev. 671 (2004)
•
Class Action Rules — Are They Driven by Substance?, 1 Class Action Litigation Report
504 (Nov. 10, 2000) (co-author)
•
Response to May 2000 Article on Sponsorship Strategy, 63 Tex. B.J. 754 (Sept. 2000)
(co-author)
Page 244
Appendix
•
A Look at Interlocutory Appeals of Class Certification Decisions Under Rule 23(f), 1
Class Action Litigation Report 69 (May 12, 2000) (co-author)
•
The Mass Tort Class Action Gamble, 7 Metro. Corp. Counsel 1, 8 (Aug. 8, 1999) (coauthor)
•
“Legal Approaches to Sex Discrimination” (co-author), in H. Landrine & E. Klonoff,
Discrimination Against Women: Prevalence, Consequences, Remedies (Sage Pub. 1997)
•
Sponsorship Strategy: A Reply to Floyd Abrams and Professor Saks, 52 Md. L. Rev. 458
(1993) (co-author)
•
A Trial Lawyer’s Roadmap for Handling Bad Facts: The Role of Credibility, 16 Trial
Diplomacy Journal 139 (July/Aug. 1993) (co-author)
•
Opening Statement, 17 Litigation 1 (ABA Spring 1991) (co-author) Contributing Editor,
Criminal Practice Institute Trial Manual, Young Lawyers
•
Section, Bar Ass’n of D.C. (1986)
•
The Congressman as Mediator Between Citizens and Government Agencies: Problems
and Prospects, 15 Harv. J. Legis. 701 (1979)
•
A Dialogue on the Unauthorized Practice of Law, 25 Villanova L. Rev. 6 (1979) (coauthor)
•
The Problems of Nursing Homes: Connecticut’s Non Response, 31 Admin. L. Rev. 1
(1979)
Significant Legal Experience:
•
Argued eight cases before the U.S. Supreme Court
•
Authored dozens of U.S. Supreme Court filings (certiorari petitions, certiorari
oppositions, merits briefs, reply briefs)
•
Briefed and argued numerous cases before various U.S. circuit and district courts and
state trial and appellate courts
•
Tried dozens of cases (primarily jury trials)
•
Handled more than 100 class action cases as counsel
•
Worked extensively with testifying and consulting experts on class action issues,
including economists, securities experts, medical and scientific experts, and leading
academics
•
Served as a class action expert witness in numerous federal and state cases, including
the British Petroleum Deepwater Horizon oil spill class settlement and the National
Football League Concussion class action settlement
•
Presented more than 100 cases to the grand jury while serving as an Assistant U.S.
Attorney
•
Handled hundreds of sentencing hearings, preliminary hearings, and probation
revocation hearings
Page 245
Appendix
Significant Teaching And Speaking Engagements
•
Invited Participant, Conference on Class Actions, Duke Law School, Arlington, Virginia
(July 23-24, 2015)
•
Invited Participant, Conference on Class Actions, Defense Research Institute,
Washington, D.C. (July 23-24, 2015)
•
Invited Participant, Civil Procedure Workshop, Seattle University Law School, Seattle,
Washington (July 17, 2015)
•
Panelist on Class Actions, Annual Meeting, American Association for Justice, Montreal,
Canada (July 12, 2015)
•
Speaker on Class Actions, International Association of Procedural Law, Istanbul, Turkey
(May 28, 2015)
•
Panelist, Subcommittee on Class Actions of U.S. Judicial Conference Advisory
Committee on Civil Rules, American Law Institute Annual Meeting, Washington, D.C.
(May 17, 2015)
•
Moderator, Ethical Issues in Class Actions and Non-Class Aggregate Litigation,
American Law Institute Annual Meeting, Washington, D.C., (May 17, 2015)
•
Visiting Professor of Law, University of Trento, Trento, Italy (March 2015) (taught U.S.
Class Actions)
•
Speaker on Class Actions, European University Institute, Fiesole, Italy (February 23,
2015)
•
Visiting Professor of Law, University of Notre Dame, Fremantle Australia (January
2015) (taught course on U.S. Civil Rights and Civil Liberties)
•
Visiting Professor of Law, Universidad Sergio Arboleda, Bogota and Santa Marta,
Colombia (December 2014) (taught course on Introduction to United States Law)
•
Visiting Professor of Law, National Taiwan University, Taipei, Taiwan (November 2014)
(taught course on Introduction to United States Law)
•
Visiting Professor of Law, East China University of Political Science and Law, Shanghai,
China (October 2014) (taught U.S. Class Actions)
•
Visiting Professor of Law, Herzen State Pedagogical University of Russia, St.
Petersburg, Russia (September 2014) (taught U.S. Class Actions)
•
Visiting Professor of Law, Royal University of Law and Economics, Phnom Penh,
Cambodia (July 2014) (taught Introduction to United States Law)
•
Speaker on U.S. Legal Education, Universidad Sergio Arboleda School of Law, Bogota,
Colombia (June 3 and 5, 2014)
•
Speaker on Class Actions, Superintendencia de Industria y Comercio, Bogota,
Colombia (June 3, 2014)
Page 246
Appendix
•
Speaker on Class Actions and the Fukushima Nuclear Accident, Waseda University
School of Law, Tokyo, Japan (January 24, 2014)
•
Speaker on Class Actions, Osaka Bar Association, Osaka, Japan (January 23, 2014)
•
Speaker on Class Actions, East China University of Political Science and Law, Shanghai,
China (January 15, 2014)
•
Speaker on Class Actions, AmCham Shanghai, Shanghai, China (January 14, 2014)
•
Panelist, American Bar Association, National Institute on Class Actions, Chicago, Illinois
•
(October 23, 2014)
•
Speaker on Development of Animal Law in the Legal Academy, 2013 Animal Law
Conference, Stanford Law School, Palo Alto, California (November 25, 2013)
•
Speaker on U.S. Law and Legal Education, Royal University of Law and Economics,
Phnom Penh, Cambodia (October 1, 2013)
•
Speaker on U.S. Law and Legal Education, Paññāsāstra University of Cambodia, Phnom
Penh, Cambodia (October 1, 2013)
•
Speaker
on
U.S.
Legal
Education,
International
Association
of
Law
Schools
International Deans’ Forum, National University of Singapore Law School, Singapore
(September 26, 2013)
•
Speaker on Class Actions, Japan Federation of Bar Associations, Tokyo, Japan
(September 19, 2013)
•
Speaker on Class Actions, Waseda University School of Law, Tokyo, Japan (September
19, 2013)
•
Speaker on Ethics of Aggregate Settlements, American Association for Justice Annual
Meeting, San Francisco, California (July 22, 2013)
•
Speaker on the British Petroleum Class Action Settlement, International Water Law
Conference, National Law University of Delhi, Delhi, India (May 31, 2013)
•
Speaker on U.S. Supreme Court Confirmation Process, Jewish Federation of Greater
Portland’s Food for Thought Festival, Portland, Oregon (April 21, 2013)
•
Speaker on Class Actions, Class Action Symposium, George Washington University
Law School, Washington, D.C. (March 8, 2013)
•
Speaker on Class Actions, Impact Fund Class Action Conference, Oakland, California
(March 1, 2013)
•
Speaker on Class Actions, Hong Kong University Department of Law (November 15,
2012)
•
Speaker on Class Actions, Fudan University Law School (Shanghai, China) (November
13, 2012)
•
Keynote Speaker, National Consumer Law Center Symposium, Seattle, Washington
(October 28, 2012)
Page 247
Appendix
•
Speaker, American Bar Association, National Institute on Class Actions, Chicago,
Illinois (October 25, 2012)
•
Speaker, Conference on Class Actions, Washington University St. Louis School of Law
and the Institute for Law and Economic Policy (April 27, 2012)
•
Speaker, Conference on Class Actions, Loyola Chicago School of Law (April 13, 2012)
•
Panelist on leadership and world peace with Former South African President F.W. De
Klerk, University of Portland (February 29, 2012)
•
Panelist on class actions before the Standing Committee on Rules of Practice and
Procedure, Phoenix, Arizona (January 5, 2012)
•
Speaker on Class Actions Lawsuits in the U.S., University of the Philippines, College of
Law, Quezon City, Philippines (August 2011)
•
Speaker on Environmental Class Actions, Kangwon University Law School, Chuncheon,
South Korea (August 2011)
•
Speaker on Class Actions, Federal Judicial Center Conference on Class Actions, Duke
University School of Law (May 20, 2011)
•
Speaker, Conference on Aggregate Litigation, University of Cincinnati College of Law
(April 1, 2011)
•
Speaker on Class Actions, Seoul National University School of Law (May 18, 2010)
•
Keynote Speaker (addressing US Supreme Court confirmation process), Alaska Bar
Annual Meeting (April 28, 2010)
•
Speaker, Conference on the Future of Animal Law, Harvard Law School (April 11,
2010)
•
Speaker,
Conference
on
Aggregate
Litigation:
Critical
Perspectives,
George
Washington University Law School (Mar. 12, 2010)
•
Speaker,
U.S.
Supreme
Court
Confirmation
Process,
Multnomah
County
Bar
Association and City Club of Portland, (Sept. 30, 2009)
•
Speaker on Class Actions, American Legal Institutions, and American Legal Education
at National Law Schools of India in Bangalore, Hyderabad, Calcutta, Jodhpur, and
Delhi (August 2009)
•
Speaker, China/U.S. Conference on Tort and Class Action Law, Renmin University of
China School of Law, Beijing, China (July 11-12, 2009)
•
Speaker on Class Actions, Southeastern Association of Law Schools annual meeting,
Palm Beach, Florida (August 1, 2008)
•
Speaker on Class Actions, National Foundation for Judicial Excellence (meeting of 150
state appellate court judges), Chicago, Illinois (July 12, 2008)
•
Speaker on Class Actions, Practising Law Institute, New York, NY (July 10, 2008)
Page 248
Appendix
•
Speaker at Conference on Class Actions in Europe and North America, sponsored by
New York University School of Law, the American Law Institute, and the European
University Institute, Florence, Italy (June 13, 2008)
•
Speaker on Class Actions at the American Bar Association Tort and Insurance Section
Meeting, Washington, D.C. (Oct. 26, 2007)
•
Speaker on Antitrust Class Actions at the American Bar Association’s Annual Antitrust
Meeting, Washington D.C. (April 18, 2007)
•
Chair, Organizer, and Moderator of Class Action Symposium at UMKC School of Law
(April 7, 2006) (other speakers (26 in all) included, e.g., Professors Arthur Miller,
Edward Cooper, Sam Issacharoff, Geoffrey Miller, and Linda Mullenix, as well as
several prominent federal judges and practicing lawyers)
•
Speaker on Class Actions, Missouri CLE (Nov. 18, 2005)
•
Speaker on Class Actions, Practising Law Institute (July 29, 2005)
•
Speaker on Class Actions, Kansas CLE (June 23, 2005)
•
Speaker on Class Actions at Bureau of National Affairs Seminar on the Class Action
Fairness Act of 2005 (June 17, 2005)
•
Visiting Lecturer on Class Actions, Peking University (May 30-June 3, 2005)
•
Speaker on Oral Argument, American Bar Association 2005 Section of Litigation
Annual Conference (April 22, 2005) (part of panel including Second Circuit Chief
Judge Walker and several others)
•
Speaker on Class Actions, Federal Trade Commission/Organization for Economic Cooperation and Development, Workshop on Consumer Dispute Resolution and Redress
in the Global Marketplace (April 19, 2005)
•
Speaker at Antitrust Class Action Symposium, University of Western Ontario College
of Law (April 1, 2005)
•
Speaker at Class Action Symposium, Mississippi College of Law (February 18, 2005)
•
Visiting Lecturer on Class Actions, Peking University (June 2004)
•
Visiting Lecturer on Class Actions, Tsinghua University (June 2004)
•
Speaker at Class Action Symposium, Michigan State University (April 16-17, 2004)
•
Speaker on U.S. Supreme Court advocacy, David Prager Advanced Appellate Institute
(Kansas City Metropolitan Bar Association) (Feb. 27, 2004)
•
Speaker on Class Actions, Institute of Continuing Legal Education in Georgia (Oct. 24,
2003)
•
•
Speaker on Class Actions, Practising Law Institute (Aug. 5, 2002)
•
Speaker on Class Actions, Practising Law Institute (Aug. 16, 2001)
Page 249
Appendix
•
Speaker on many occasions throughout the country on “Sponsorship Strategy” (1990present) and advocacy before the U.S. Supreme Court (1988-present)
Other Legal Activities:
•
Advisory Board Consulting Editor, Class Action Litigation Report (BNA)
•
Member, Advisory Committee, Lawyers’ Campaign for Equal Justice (Portland, Oregon)
•
Advisory Board, The Flawless Foundation (an organization that serves troubled
children)
•
Member, Board of Directors, Citizens’ Crime Commission (Portland, Oregon) (20072011)
•
Served on numerous UMKC School of Law committees, including Programs (Chair),
Promotion and Tenure, Appointments, and Smith Chair Appointment
•
Chair of pro bono program for all 27 offices of Jones Day (2000-2004); also previously
Chair of Washington office pro bono program (1992-2003)
•
Member, Board of Directors, Bread for the City (a D.C. public interest organization
providing medical, legal, and social services) (2001-2003)
•
Master, Edward Coke Appellate Practice Inn of Court in Washington, D.C. (other
participants include Ted Olson, Seth Waxman, Ken Starr, Walter Dellinger, and several
sitting appellate judges) (2001-2003)
•
Member, Board of Directors, Washington Lawyers’ Committee for Civil Rights and
Urban Affairs (2000-2003); Advisory Board Member (2003-present)
•
Member, D.C. Court of Appeals Committee on Unauthorized Practice of Law (19972000)
•
Handled and supervised numerous pro bono matters (e.g., death penalty and other
criminal defense, civil rights, veterans’ rights)
•
Helped to develop walk-in free legal clinic in Washington, D.C.’s Shaw neighborhood
•
VOLUNTEER WORK:
•
Frequent guest speaker at public schools and retirement homes; volunteer at local
soup kitchen; volunteer judge for Classroom Law Project.
Page 250
Appendix
Christopher A. Seeger
Seiger Weiss LLP
•
On July 31, 2013, Judge Matthew Kennelly of Northern District of Illinois appointed
Chris Seeger as co-lead counsel to represent the interests of clients who were injured
by their use of testosterone medications.
•
Serves as Co-Lead Counsel in Concussion Lawsuit against the National Football
League. In December 2011, Mr. Seeger filed lawsuits on behalf of several retired NFL
players in the Eastern District of Pennsylvania alleging that the NFL failed to take the
necessary precautions to protect its players from long-term brain injuries. Following
months of intense negotiations led by Mr. Seeger, the parties announced in August
2013 a global settlement in the amount of $765 million. After the judge and some
former players raised concerns about the scope of the proposed settlement, Mr.
Seeger worked with the court-appointed Special Master and all parties to address
those concerns, and in June 2014 reached a revised settlement ensuring that players
suffering neurological damage and disease will have access to an uncapped amount
of funds for their treatment.
•
Unanimous selection by the Vioxx plaintiffs’ lawyers to co-lead the federal Vioxx MDL.
Eastern District of Louisiana Judge Eldon E. Fallon of the affirmed that choice when he
appointed Mr. Seeger to co-lead the Plaintiff’s Steering Committee and to be one of
only three members of the Executive Committee.
This appointment enabled Mr.
Seeger to develop the overall litigation strategy for the approximately 27,000 separate
cases against Merck & Co., as well as select witnesses, gather evidence, choose expert
witnesses, and meet regularly with the judge and opposing counsel. Following several
years of contentious litigation, Mr. Seeger and his colleagues secured a settlement for
the injured class totaling $4.85 billion.
•
Representation of Frederick “Mike” Humeston and his wife Mary in a Vioxx related
personal injury lawsuit in Atlantic City, New Jersey received national attention during
the course of the case, which began in September 2005, and resulted in a 2007 jury
verdict of compensatory and punitive damages against Merck & Co. in the amount of
$47.5 million. Mr. Humeston, an ex-marine and twice-decorated Vietnam veteran, had
suffered a heart attack after using Vioxx for a short period of time.
Originally, in
October 2005 the jury sided with Merck but after Mr. Seeger uncovered evidence that
had been withheld, in August 2006 Judge Carol E. Higbee vacated Merck’s jury win
and granted Mr. Humeston a new trial.
Page 251
Appendix
•
Lead Counsel in the consolidated action on behalf of the International Union of
Operating Engineers Local #68 Welfare Fund and other similarly-situated third-party
payors in their suit against Merck to recover money that they paid for Vioxx
prescriptions. Following years of rigorous litigation, the parties announced an $80
million global resolution.
•
Serves as Chair of the Trial Committee in the Chinese-Manufactured Drywall Products
Liability MDL filed in the Eastern District of Louisiana. This litigation, which includes
thousands of claimants asserting property damage and personal injury, concerns
approximately 30,000 homes and commercial properties that were either repaired or
constructed with the Chinese drywall between 2005 and 2006. This product is
reported to contain high levels of hydrogen sulfides, compounds that when exposed
to prolonged heat or humidity, release sulfur gases resulting in terrible odors, metal
corrosion, and physical injuries. The litigation was centralized in the Eastern District of
Louisiana in June 2009 by order of the United States Judicial Panel on Multidistrict
Litigation. Mr. Seeger tried the first defective Chinese-manufactured drywall case in
the country, resulting in a $2.6 million verdict for seven Virginia families. Mr. Seeger
also tried the second bellwether case, which determined whether manufacturers were
responsible for damages the drywall’s toxic fumes cause to plumbing, electronics, and
appliances, securing a $164,049 judgment for the Hernandez family. Mr. Seeger chairs
a second committee of national trial teams pursuing Chinese-manufactured drywall
cases.
•
Appointed to Multidistrict Litigation (MDL) Actos Product Liability Plaintiffs’ Steering
Committee filed in the Eastern District of Louisiana. In June 2011, a European study
found that Actos, produced by Takeda Pharmaceutical Co., was linked to an increased
incidence of bladder cancer. However, the health warnings that accompany the
prescription fail to alert users of this risk. The governments of France and Germany
have now banned the type-2 diabetes medication, and the FDA has issued warnings
to American doctors who prescribe the drug. Takeda, Asia’s largest pharmaceutical
company, may face up to as many as 10,000 claims.
•
Appointed to the Plaintiffs’ Executive Committee (PEC) in the In Re: Depuy
Orthopaedics, Inc. ASR Hip Implant Products Multidistrict Litigation (MDL) in the
Northern District of Texas. In August 2010, DePuy recalled two acetyabular cups hip
replacement systems because of their high rate of failures. By the time of the recall,
more than 93,000 patients worldwide were fitted with an ASR hip implant. Roughly a
third of those were patients in the United States. Thousands of lawsuits have been
filed against Johnson & Johnson, the pharmaceutical giant that is also the parent
company of Depuy Orthopaedics, Inc.
Page 252
Appendix
•
Served as a member of the Yasmin and Yaz MDL Plaintiffs’ Steering Committee (PSC)
in the Southern District of Illinois. Yaz, Yasmin, and Ocella are three brands of birth
control pills that pose a much greater risk of health complications than other oral
contraceptives currently on the market. Yaz, Yasmin, and Ocella significantly increase
the risk of severe health complications. The Food and Drug Administration issued
several warnings to Bayer, the maker of Yaz and Yasmin, for false advertising and
below-standard manufacturing plants. As a member of the PSC, Mr. Seeger helped
guide the direction of the litigation.
•
Served as member of the Gadolinium-based contrast dyes (GBCAs) MDL Executive
Committee and Plaintiffs’ Steering Committee in the Northern District of Ohio. The
FDA identified a link between GBCAs used during Magnetic Resonance Imaging
(“MRI”) and Magnetic Resonance Angiography (“MRA”) procedures, and a debilitating
and potentially fatal skin disorder known as Nephrogenic Systemic Fibrosis or
Nephrogenic Fibrosing Dermopathy (“NSF/NFD”). Mr. Seeger was also appointed
Liaison Counsel in connection with the consolidated mass tort litigation against
manufacturers of GBCAs in New Jersey.
•
Served as lead trial counsel in the first case to be tried in New York against the
manufacturer of Rezulin. In this trial, Mr. Seeger won a $2 million verdict against
Pfizer on behalf of a Brooklyn resident who had sustained liver injuries following her
Rezulin use. Mr. Seeger was also appointed to the Rezulin MDL Plaintiffs’ Steering
Committee, which was assigned to Judge Lewis A. Kaplan in the Southern District of
New York. He was also a member of the Plaintiffs’ Steering Committee in the Rezulin
New Jersey state and the New York state litigation; these cases were settled.
•
Served as Liaison Counsel and chief negotiator in connection with a national $700
million settlement from Eli Lilly & Co. for patients who claimed that they had
developed diabetes or gained weight while taking Zyprexa.
•
Served as principal negotiator and Co-Lead Counsel in the nationwide settlement of
all PPA (phenylpropanolamine) related injuries resulting from the ingestion of
Dexatrim. Mr. Seeger was involved in the litigation against numerous manufacturers
of pharmaceutical products containing PPA, and served on the PPA MDL Plaintiffs’
Steering Committee in the Western District of Washington and the PPA New York
state court litigation before Judge Helen Freedman. In the New York matter Mr.
Seeger also served as Liaison Counsel.
•
Served on the Propulsid Plaintiffs’ Steering Committee in both the federal MDL case
in the Eastern District of Louisiana and the New Jersey state litigation in Middlesex
County.
Page 253
Appendix
•
Representation of children and property owners pursuing serious lead poisoning
claims as a result of living within one of the nation’s most notorious hazardous waste
sites, known as Tar Creek, in the former Picher Mining Field in Northeast Oklahoma.
The children suffered irreversible brain damage as a result of exposure to the lead left
behind by the mining companies.
•
Served as Policyowner Representative for a class of more than 3.2 million New York
Life Insurance policyowners who suffered damages as the result of allegedly improper
sales practices; negotiated the first settlement on the issue of “vanishing premium”
policies; and, as Attorney Representative in the In re Prudential Life Insurance Sales
Practices Litigation, settled nearly 53,000 separate claim arbitrations.
Page 254
Appendix
Richard C. Godfrey, P.C.
Kirkland & Ellis LLP
Illustrative matters in which Mr. Godfrey has represented companies or individuals over the
last several years include:
•
MDL 2543: In re General Motors LLC Ignition Switch Litigation (S.D.N.Y. 2014) (Counsel
for General Motors LLC in litigation relating to vehicle recalls)
•
City Of Neodesha, Kansas v. BP Corporation North America, et al., aff’d No. 109-111
(Kan. App., August 22, 2014) (trial court jury verdict for BP affirmed); see prior Kansas
Supreme Court decision, 287 P.3d 214 (Kan. 2012) (Represent BP party defendants on
appeals involving certified class in an environmental remediation and cleanup case)
•
MDL 2179: In re Oil Spill by the Oil Rig Deepwater Horizon (E.D. La. 2010); see also In
re United States Coast Guard - Bureau of Ocean Energy Management Joint
Investigation into the Deepwater Horizon Casualty (Counsel for BP)
•
Romero v. A Leading Property and Casualty Insurance Company, consolidated; No.
01-3894, 2014 WL 796005 (E.D. Pa. Apr. 7, 2014) (Summary Judgment Opinion &
Opinion on Motions for Reconsideration with respect to alleged private plaintiffs’
claims); 1 F.Supp. 3d 219 (E.D. Pa.) (EEOC Summary Judgment Opinion in favor of
defendant company in claims brought by the EEOC); see also 2007 WL 906158 (E.D.
Pa., Mar. 21, 2007); 2007 WL 1811197 (E.D. Pa., June 20, 2007), reversed, 2009 WL
2255817 (3d Cir. 2009) (Counsel for client in consolidated cases brought by the EEOC
and a putative class of former employee insurance agents alleging age discrimination
and breach of contract claims, among others); see also earlier decision in related case
reported at 404 F.3d 212 (3d Cir. 2005)
•
Nettles, et al. v. A Leading Property and Casualty Insurance Company, No. 02-CH14426 (Circuit Court Cook County, July 6, 2010), aff’d, Slip Op. No. 1-10-2247 (1st
Dist. Ill. App., May 29, 2012), Nettles’ petition for leave to appeal denied (Counsel for
insurance company in certified class action trial alleging violations of Illinois and
Washington state wage and hours laws with respect to client’s adjusters)
•
United States v. Debra Hills, 618 F.3d 619 (7th Cir. 2010) (Represented Ms. Hills as
appointed counsel (pro bono) on appeal of Hills’ criminal conviction for (i) an alleged
conspiracy to defraud the IRS, and (ii) for allegedly filing a false tax return. On appeal,
the Court ruled in Ms. Hills’ favor, vacated her conviction, and remanded for a new
trial on the basis of prosecutorial misconduct)
•
Siegel v. Shell Oil Co., 612 F.3d 932 (7th Cir. 2010), petition for rehearing denied (7th
Cir., July 30, 2010); 656 F.Supp.2d 825, 2009 WL 2905552 (N.D. Ill., Sept. 4, 2009); 2009
Page 255
Appendix
U.S. Dist. LEXIS 13520, 2009 WL 449073 (N.D. Ill., Feb. 23, 2009); 2008 U.S. Dist. LEXIS
72314 (N.D. Ill., Sept. 23, 2008) (class certification denied); 2008 U.S. Dist. LEXIS 72314,
2008 WL 4378399 (Sept. 23, 2008); 480 F.Supp.2d 1034 (N.D. Ill. 2007) (Represented
BP in putative consumer class action challenging gasoline pricing)
•
BP Amoco Chemical Co. v. Flint Hills Resources, LLC, 697 F.Supp.2d 1001 (N.D. Ill.
2010); 615 F.Supp.2d 765 (N.D. Ill. 2009); 2009 U.S. Dist. LEXIS 32708, 2009 WL
1033373 (N.D. Ill., April 17, 2009); 2009 U.S. Dist. LEXIS 13524, 600 F.Supp.2d 976,
2009 WL 449081 (N.D. Ill. 2009); 2008 WL 487689 (N.D. Ill., Aug. 28, 2008); 500
F.Supp.2d 957 (N.D. Ill. 2007); 489 F.Supp.2d 853 (N.D. Ill. 2007); 2006 WL 2505691
(N.D. Ill., Aug. 25, 2006) (Represented BP Amoco in a case alleging breach of contract
and fraud arising out of the sale of a chemical plant)
•
ExxonMobil Corp. v. Gill, 221 S.W.3d 841, 2007 Tex. App. LEXIS 2819, 2007 WL
1080655 (Tex. App. 2007), reversed in favor of Exxon, 299 S.W.3d 124 (Tex. S. Ct.
2009), petition for rehearing denied (Jan. 15, 2010) (Represented ExxonMobil in
putative
statewide
class
action
alleging
breach
of
contract
and
fraudulent
concealment over gasoline pricing); see also Flagler Automotive, Inc., et al. v.
ExxonMobil Corp., appeal dismissed (2d Cir., Feb. 2009), 582 F.Supp.2d 367, 2008 WL
4604085 (E.D.N.Y. 2008), 67 U.C.C. Rep. Serv. 2d (Callaghan) (Represented ExxonMobil
in putative nationwide class action with respect to gasoline pricing)
•
In re General Growth Properties, Inc., 409 B.R. 43, 51 Bankr.Ct.Dec. 280 (S.D.N.Y. 2009)
(Represented General Growth project-level debtors at trial in challenge to Chapter 11
filings; bench trial opinion in favor of clients)
•
MDL 1532: In re New Motor Vehicles Canadian Exp. Antitrust Litig., 632 F.Supp.2d 42
(D. Me. 2009) (Summary judgment ruling in favor of defendants in multidistrict
litigation antitrust case); 2009 WL 861485 (D. Me., March 26, 2009). See also 522 F.3d
6 (1st Cir. 2008), motion for rehearing denied (1st Cir., May 2008); 533 F.3d 1, 2008
WL 2568457, 2571402 (1st Cir. 2008), and other opinions reported at: 307 F.Supp.2d
136 (D. Me. 2004); 490 F.Supp.2d 12 (D. Me. 2007); 2006 U.S. Dist. LEXIS 10240 (D.
Me., Mar. 10, 2006); 235 F.R.D. 127 (D. Me. 2006); 236 F.R.D. 53 (D. Me. 2006); 466
F.Supp.2d 364 (D. Me. 2006); 241 F.R.D. 77 (D. Me. 2007); 243 F.R.D. 17, 20 (D. Me.
2007); 244 F.R.D. 70 (D. Me. 2007); 2008 WL 583548 (D. Me., Jan. 29, 2008); 2008 WL
1924993 (Apr. 29, 2008); 2009 WL 861485 (March 26, 2009); 2009 U.S. Dist. LEXIS
30260 (April 2, 2009) (Represented General Motors in putative class action alleging
antitrust conspiracy)
•
Nolan v. Weil-McLain, 233 Ill.2d 416, 910 N.E.2d 549, 331 Ill. Dec. 140 (Ill. 2009),
petition for rehearing denied (June 11, 2009), and reversing, 365 Ill.App.3d 963, 851
N.E.2d 281, 303 Ill. Dec. 383 (Ill. App. Ct., 4th Dist. 2006) (Counsel on appeal for Weil-
Page 256
Appendix
McLain; Illinois Supreme Court reversed lower court’s entry of adverse jury verdict and
judgment in an asbestos case, and reversed the Court of Appeals to set aside what
was known as the "Lipke" rule)
•
Daniel v. Aon Corp., No. 1-06-0240, Slip Op. (1st Dist. Ill. App., June 19, 2008), petition
for rehearing denied (Represented the Aon parties in putative class action involving
allegations of breach of fiduciary duty, constructive trust, and claimed violations of
consumer fraud statutes); see also related cases in MDL 1663: In re Ins. Brokerage
Antitrust Litig., 2008 U.S. Dist. LEXIS 2818 (D.N.J., Jan. 14, 2008); 2007 U.S. Dist.LEXIS
74711 (D.N.J., Oct. 5, 2007); 2007 U.S. Dist. LEXIS 73220 (D.N.J., Sept. 28, 2007); 2007
U.S. Dist. LEXIS 65037 & 64767 (D.N.J., Aug. 31, 2007); 2007 U.S. Dist. LEXIS 47659
(D.N.J., June 29, 2007); 2007 U.S. Dist. LEXIS 40729 (D.N.J., June 5, 2007); 2007 WL
1062980 (D.N.J., Apr. 5, 2007); 2009 U.S. Dist. LEXIS 17019 (March 3, 2009); 2008 U.S.
Dist. LEXIS 63633, 2008 WL 3887616 (Aug. 20, 2008); 2009 U.S. Dist. LEXIS 17754;
17755 (Feb. 17, 2009)
•
UAW v. General Motors Corp., 235 F.R.D. 383, 2006 WL 1071904 (E.D. Mich. 2006);
2006 WL 891151 (E.D. Mich. 2006), aff’d, 497 F.3d 615 (6th Cir. 2007) (Represented
GM in class action involving retiree health care benefits; class settlement resulted in
restructuring of union retiree health care benefits); see also Int’l Union v. General
Motors Corp., 2008 U.S. Dist. LEXIS 92590, 2008 WL 2968408, 156 Lab.Cas. ¶ 11,098
(E.D. Mich., July 31, 2008); 2008 U.S. Dist. LEXIS 16767 (E.D. Mich., Mar. 5, 2008); see
also Int’l Union v. General Motors Corp., 2008 U.S. Dist. LEXIS 92590, 2008 WL
2968408, 156 Lab.Cas. 11,098 (E.D. Mich., July 31, 2008); 2008 U.S. Dist. LEXIS 16767
(E.D. Mich. Mar. 5, 2008) (Represented GM in case involving retiree health care
benefits alleging class action claims under ERISA and LMRA)
•
MDL 1510: In re Daewoo Motor Co., Ltd. Dealership Litig., and Daewoo Motor
America, Inc. v. General Motors Corp., 315 B.R. 148 (M.D. Fla. 2004), aff’d, 459 F.3d
1249 (11th Cir. 2006), cert. denied, 127 S. Ct. 2032 (2007) (Represented GM in putative
class action litigation arising out of the sale of Korean automobile manufacturer’s
assets)
Memberships & Affiliations
•
Trustee, Augustana College (Rock Island, IL; 1996–2003, 2005–2012, 2015–2019)
•
Trustee, Boston University; also Member, Dean's Advisory Board, Boston University
School of Law
•
Trustee, Chicago Symphony Orchestra
•
Member, Board of Directors, Chicagoland Chamber of Commerce
•
Member, Board of Directors, The Appleseed Foundation (Washington, D.C.)
Page 257
Appendix
•
Member, Board of Directors, The Churchill Centre; formerly a Trustee, American
Friends of the Churchill Museum (War Cabinet Rooms, London)
•
Member, Board of Governors, The Mid-America Club (IL)
•
Member of the Civic Committee, The Commercial Club of Chicago
•
Former Member, Board of Directors, National Center for State Courts (2009-2015);
also formerly Co-Chair, Lawyer’s Committee, National Center for State Courts
(Williamsburg, VA)
•
Former Member, Kirkland Worldwide Management Committee (1999-2015)
•
Member of the American, Illinois, Chicago, 5th and 7th Circuit Bar Associations;
Member, Rocky Mountain Mineral Law Foundation; and Fellow, The American Bar
Foundation
•
Member, Chicago Inn of Court
•
Fellow, American Bar Association
•
Fellow, Litigation Counsel of America
Other Distinctions
•
Chambers USA profile (2003–2015)
•
Band 1, Litigation: General Commercial: Illinois (2011–2015)
•
Benchmark Litigation
•
National: General Commercial (2008–2016)
•
Illinois (2008–2016)
•
The Best Lawyers in America, U.S. News and World Report, Best Lawyers®
•
Bet-the-Company Litigation (2015–2016)
•
Commercial Litigation (2006, 2010–2016)
•
Litigation: Antitrust (2011–2014, 2015–2016)
•
Litigation: Environmental (2011)
•
Litigation: Labor & Employment (2011)
•
The BTI Client Service “All Stars” Survey (2006, 2013, 2014)
•
Chicago’s Best Lawyers
•
Commercial Litigation (2006, 2010–2016)
•
Litigation: Antitrust (2011–2014)
•
Litigation: Environmental (2011)
•
Litigation: Labor & Employment (2011)
Page 258
Appendix
•
Lawdragon 500 Leading Lawyers in America (2008–2009, 2014–2015)
•
Lawdragon Guide to World-Class Lawyers (2005–2007 and 2010–2013)
•
Legal 500 U.S.
•
Industry Focus: Energy: Litigation (2010–2015)
•
Industry Focus: Environment: Litigation (2011–2012)
•
Commercial Litigation (2015)
•
Litigation: Product Liability and Mass Tort Defense: Toxic Tort (2012-2015)
•
Supreme Court and Appellate (2011)
•
Antitrust (2010)
•
Leading Lawyers (2003–2015)
•
Civil Appellate Law
•
Commercial Litigation
•
Who’s Who Legal: Illinois (2006, 2008)
•
Illinois Super Lawyers (2005–2016)
•
Business Litigation
•
Appellate
•
Martindale-Hubbell (2000–2016)
•
Commercial Litigation, AV Preeminent 5/5 Rating
•
PLC Which Lawyer? (2011–2012)
•
Illinois: Dispute Resolution
•
Pillars of Justice Award, Appleseed Foundation (2013)
•
10 for 10: Ten Attorneys Who Raised the Bar Over the Last Decade, Law Bulletin
Publishing Company (2010)
•
Member, Warren E. Burger Society, National Center for State Courts (Williamsburg,
VA)
Law360 Distinctions
•
Law360 Practice Group of the Year — Class Action (2012, 2014)
•
Mr. Godfrey’s inclusion in the 2013 BTI Client Service “All Stars” Survey was
highlighted in “GCs Name Cream of the Crop Litigators,” Law360, February 15, 2013.
•
Mr. Godfrey was recognized for his “…responsiveness, his analytical mind, and his
ability to think quickly on his feet” in “5 Insights From ADM General Counsel Cameron
Page 259
Appendix
Findlay,” Law360, May 6, 2014.
•
Mr. Godfrey’s representation of BP in the Deepwater Horizon case was highlighted in
“Product Liability Cases to Watch in 2012,” Law360, January 1, 2012.
Press Mentions
•
Excerpt from the May 1, 2015, Bloomberg BNA publication, “Archer Daniels Midland
GC: Be Responsive, Keep the Steak,”
•
Q. [To Cameron Findlay] With your background you’ve had the chance to be around
some very talented people. Who is someone you looked up to?
•
A.…on the litigation and investigation side, there’s a guy named Rick Godfrey at
Kirkland. I got to see him in action during our Spitzer matter. He is just 100 per cent
client responsive, brilliant, hard-working, and always precise and to the point in terms
of his advice.
•
Excerpt from the May 6, 2014, Law360 publication, “5 Insights From Archer Daniels
Midland GC Cameron Findlay,”
•
Q. Outside your own company, name an attorney who has impressed you and tell us
why.
•
…We were given a very short deadline to seek guidance on this question [relating to
the possible interaction between a proposed settlement and a pending class action
litigation being handed by Kirkland], and so over the lunch break we managed to
reach Rick Godfrey of Kirkland, who might have been distracted because he was
himself on a lunch break from a multiweek trial for a different client. Without any
opportunity to prepare, Rick calmly set forth a proposed solution to our complicated
legal problem. The solution satisfied both Aon’s needs and the AG’s needs, and we
were able to wrap up the settlement very quickly after that. I have always been
impressed by Rick’s responsiveness, his analytical mind, and his ability to think quickly
on his feet.
Courts
•
Member of the bars of the United States Supreme Court and United States Court of
Claims
•
Member of the bars of the First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth,
Ninth, Tenth, Eleventh, and D.C. Circuit Courts of Appeal
Member of the bars of the United States District Courts for the District of Colorado, the
Northern District of Illinois, the Central District of Illinois, the Northern District of Indiana, the
Eastern and Western Districts of Michigan, and the United States Tax Court
Page 260
Appendix
Lexi J. Hazam
Lieff, Cabraser, Heimann & Bernstein
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Areas of Practice
False Claims Act
Aviation Accidents
Personal Injury
Education
University of California at Berkeley, Boalt Hall School of Law, Berkeley, California
o
J.D. - 2001
o
Law Review: California Law Review, Articles Editor
o
Law Journal: La Raza Law Journal, Articles Editor
Stanford University, Stanford, California
o
B.A. - 1995
Stanford University, Stanford, California
 M.A. – 1996
Bar Admissions
California, 2003
U.S. Court of Appeals 2nd Circuit, 2008
U.S. Court of Appeals 7th Circuit, 2006
U.S. Court of Appeals 8th Circuit, 2008
U.S. District Court Northern District of California, 2003
U.S. District Court Southern District of California, 2013
Professional Associations and Memberships
American Association for Justice (Vice Chair, Section on Toxic, Environmental, and
Pharmaceutical Torts, 2015)
Bar Association of San Francisco (Court Funding and Litigation Challenge Group Task
Force)
Board of Governors, Consumer Attorneys of California, 2015
San Francisco Trial Lawyers Association (Diversity Committee)
State Bar of California
Honors and Awards
Selected for inclusion by peers in The Best Lawyers in America in fields of “Mass Tort
Litigation/Class Actions - Plaintiffs” and “Qui Tam Law,” 2015-2016
“California Future Star,” Benchmark Litigation, 2015
“Consumer Attorney of the Year Finalist,” Consumer Attorneys of California, 2015
“Super Lawyer for Northern California,” Super Lawyers, 2015
Legal 500 recommended lawyer, LegalEase, 2013
“Rising Star for Northern California,” Super Lawyers, 2009 - 2011, 2013
Past Employment Positions
o Mexican American Legal Defense and Education Fund, Law Clerk, 1999
Judge Henry H. Kennedy, Jr., U.S. District Court for the District of Columbia, Law Clerk,
2001 - 2002
Lieff Cabraser, Heimann & Bernstein, LLP, Associate, 2002 - 2006
 Lieff Global LLP, Partner, 2006 – 2008
Classes/Seminars
"Technology-Assisted Review," Sedona Conference Working Group 1 Drafting Team,
2015
"The Benicar Litigation," Mass Torts Made Perfect, Las Vegas 2015
"The Benicar Litigation," HarrisMartin's MDL Conference, San Diego 2015
"Now You See Them, Now You Don't: The Skill of Finding, Retaining, and Preparing
Page 261
Appendix
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Expert Witnesses For Trial," Women En Mass, Aspen 2014
In the News
January 20, 2016
Lexi Hazam Speaks at Third Annual Innovation in eDiscovery Conference
October 9, 2015
Lexi Hazam Elected to CAOC Board of Governors
September 1, 2015
Lawsuit Charges Pentax & Hospital Negligence Led to Fatal Superbug Infection
August 26, 2015
Lieff Cabraser Attorneys Recognized as Consumer Attorney of the Year Finalists
July 29, 2015
Lexi Hazam Discusses Benicar Drug at HarrisMartin MDL Conference
Representative Cases
ATK Launch Systems
DePuy ASR Hip Implant Recall
Kindred Nursing Facilities
State Street Corporation
Page 262
Appendix
Paul G. Karlsgodt
BakerHostetler
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Paul has significant experience defending class actions in the complex and cutting edge
area of data privacy. Paul has also played a lead role in defending class actions arising out
of three of the top four largest healthcare breaches in history, as well as various other
healthcare breach class actions arising out of hacking, theft, and inadvertent disclosure.
Paul led a cross-office team in the successful defense of a California hospital in one of the
largest data breach class actions ever filed under the California Confidentiality of Medical
Information Act. The client, which initially faced more than $500 million in potential
statutory damages exposure, ultimately prevailed in all aspects of the case and the case
was finally dismissed by the plaintiff with no payment by the defendant.
Paul coordinated the defense in state and federal courts in Missouri and Illinois in a
multidistrict litigation against a grocery store chain arising out of a payment card data
breach. The case was ultimately resolved by a nationwide settlement, which was finally
approved over the significant efforts of objectors to block it.
Capitalizing on his experience in the courtroom, Paul obtained a denial of class certification
after serving as lead counsel in a multi-day evidentiary hearing in a consumer class action
involving the sale of uninsured motorist insurance coverage.
Paul played a central role in a nationwide class action against a telecommunications
company, mitigating the effects of discovery sanctions that had been imposed against the
client prior to retaining BakerHostetler. The cutting-edge electronic discovery case
ultimately was settled favorably for the client.
As lead counsel for an insurer in a putative class action in California involving auto body
shop labor rate surveys and direct repair programs, Paul obtained an order granting
judgment on the pleadings and was able to settle the case on an individual basis while an
appeal of that judgment was pending.
Paul obtained an order denying class certification in a putative class action against an
insurer involving demands for reimbursement of medical payments benefits. He was able
to settle the case on an individual basis during an appeal of that order.
In several threatened class actions involving communication privacy issues, Paul resolved
the individual claims due to his willingness to connect with the plaintiff’s counsel before the
cases were filed. Millions of dollars of potential exposure were settled for significantly less
cost to multiple clients.
Recognitions
Chambers USA: Recognized Practitioner: Litigation: General Commercial in Colorado
(2014, 2015)
Law360 Privacy MVP (2014, 2015)
National Law Journal "CyberSecurity & Data Privacy Trailblazer" (2015)
Colorado “Super Lawyer” (2011 to 2015)
o Colorado Super Lawyers “Rising Star” (2009 to 2010)
Law Week Colorado (2013)
o People's Choice: Best Class Action/Mass Torts - Defense
Memberships
American Bar Foundation: Fellow
Rhone-Brackett Inn of Court: President-Elect
o Section of Litigation
o Class Actions and Derivative Suits Committee
 Social Media Subcommittee
Page 263
Appendix
•
•
•
•
•
•
•
•
•
•
Colorado Bar Association
o Litigation Section
o Derivative Suits and Mass Torts Subsection: Founder and Former Chair
Washington Bar Association
Denver Bar Association
Articles
11/16/2015
Karlsgodt, Dow Article in Akron Law Review Analyzes Supreme Court Rulings
Regarding Class Litigation
6/4/2015
Karlsgodt, Matthews Examine Proposed Changes to Rule 23 for ABA Litigation
Section
10/17/2014
Paul Karlsgodt Authors Article on "Key Issues in Consumer Data Breach
Litigation" for Practical Law The Journal
Page 264
Appendix
David F. Sugerman
Attorney, P.C.
•
In Scharfstein v. BP West Coast Products, LLC, State of Oregon, Multnomah County
Circuit Court Case No. 112-17046, David Sugerman and his co-counsel won a
stunning class action victory over BP. The Oregon jury found that BP illegally charged
consumers debit card fees at Oregon ARCO and ampm minimarkets over a 32 month
period. BP illegally charged debit card fees on gas purchases 13,000 times every day
in Oregon. The verdict allows recovery of $200 per person for more than 2 million
consumers. Consumes will recover $340 million based on claims made to date. An
additional sum of unclaimed money–an estimated $60 million–will likely be allocated
between Oregon Legal Aid and a fund to provide benefits to affected consumers. The
total recovery is expected to exceed $400 million. The case is continuing.
•
Bixby v. KBR, Inc. U.S. District Court Case No. 3:09-cv-632-PK (D. Or.): Case pending.
On Friday November 2, 2012, a unanimous jury found in favor of the first 12 Oregon
Qarmat Ali veterans and assessed the group’s total damages at $85 million. We are
pleased with this result for our veteran clients. The case is a landmark on many fronts.
We are honored to continue our work on behalf of these veterans as the case
continues forward. On appeal to the Ninth Circuit Court of Appeals, the case was sent
back for retrial because of a change in jurisdiction rules. The case will continue in
Texas.ver of $200 per person for more than 2 million consumers. Consumes will
recover $340 million based on claims made to date. An additional sum of unclaimed
money–an estimated $60 million–will likely be allocated between Oregon Legal Aid
and a fund to provide benefits to affected consumers. The total recovery is expected
to exceed $400 million. The case is continuing.
•
Stewart v. Horizon Air, State of Oregon, Multnomah County Circuit Court Case No.
0102-01506: Captain Richard “Buddy” Stewart refused to fly a Horizon Air jet that had
repeated vibration problems. For acting to protect Horizon passengers, his crew and
the company, Horizon management suspended and demoted Captain Stewart. The
CEO of Horizon Air then made false statements about Captain Stewart to the media.
David Sugerman represented Captain Stewart against Horizon Air and George Bagley,
the former CEO. The matter settled shortly before trial with a payment of a
confidential amount
Page 265
Appendix
•
In BC v. State of Oregon, State of Oregon, Lane County Circuit Court Case No.
161002466, David Sugerman served as lead counsel and successfully settled a case for
a minor child who suffered grave abuse while in foster care.
•
Scharfstein v. BP West Coast Products, State of Oregon, Multnomah County Circuit
Court Case No. 112-17046: Oregon ARCO stations were charging consumers who
bought gas with their debit cards a debit card fee. The fees were not properly
disclosed and were illegally added on top of the price of gas. David Sugerman and
his co-counsel won a stunning class action victory over BP. The jury found that BP
illegally charged consumers debit card fees at Oregon ARCO and ampm minimarkets
over a 32 month period. BP illegally charged debit card fees on gas purchases 13,000
times every day in Oregon. The verdict allows more than 2 million consumers to claim
$200 per person. The case is continuing.
•
Bradley v. Chicago Pneumatic Tool Co., U.S. District Court Case No. CV 01-1162-KI: As
lead counsel, David Sugerman obtained a $2.3 million dollar verdict for five workers
who suffered disabling vibration injuries to their hands caused by a dangerous
product manufactured by Chicago Pneumatic Tool Company. The case settled on
appeal.
•
Daggett v. Blind Enterprises of Oregon, U.S. District Court Case No. 3:95-cv-00421-STDavid Sugerman led a team of talented Oregon lawyers who represented a class of
blind and visually-impaired workers, claiming disability discrimination in how they
were treated in the work place and seeking payment of unpaid wages. The case
successfully settled after class certification.
Page 266
Appendix
Lois Rosenbaum
Stoel Rives LLP
Representative Work
Representative Securities Class Action and Derivative Litigation
•
In re Mentor Graphics Corporation Litigation - Prevailed on behalf of Mentor Graphics
and its Board of Directors against plaintiff class in securities class action claiming
breach of fiduciary duties to shareholders in rejecting acquisition bid from Carl Icahn.
Plaintiff did not appeal.
•
Gonzales v. Farmers Insurance Company of Oregon - Defeated class certification in
breach of contract and duty of fair dealing case filed by insureds.
•
In re Digimarc Securities Litigation - Prevailed on behalf of public company and
officers and directors in securities class action; judgment in favor of corporation and
individual defendants upheld by Ninth Circuit Court of Appeals.
•
Cohns v. Mastercraft Furniture, Inc. - Prevailed at trial on behalf of plaintiff
shareholder in oppression lawsuit; obtained buy-out of 49% shareholder.
•
Florida Eye Institute v. Minotty - Prevailed at trial on behalf of plaintiff shareholders in
breach of fiduciary duty action; obtained multi-million dollar damages and punitive
damages award.
•
Avia Securities Litigation – Prevailed on behalf of CEO of public company at trial of
class action alleging breach of fiduciary duties.
•
Bodtker v. Forest City Trading Group - Obtained dismissal with prejudice of RICO class
action and defeated class certification motion.
•
In re Cray Inc. Securities Litigation - Obtained dismissal with prejudice of class action.
•
Cray Inc. Derivative Litigation - Obtained dismissal with prejudice of class action.
•
In re Eagle Hardware & Garden, Inc. - Represented defendant public company in
securities class action; negotiated settlement within insurance limits and without fees
to plaintiffs' counsel.
•
In re Epitope Securities Litigation - Represented public company in securities class
action; settled by issuing warrants.
•
Protocol Systems Securities Litigation - Obtained dismissal with prejudice of class
action.
•
Rolex v. Mentor Graphics Securities Litigation - Obtained dismissal with prejudice of
class action.
•
Sequent Computer Securities Litigation - Defeated class certification in securities class
action.
Page 267
Appendix
•
Steiner v. Tektronix, Inc. Securities Litigation - Obtained summary judgment in class
action.
•
Zidell v. Zidell, et al. - Prevailed at trial of shareholder derivative litigation.
•
Polonitza v. White, et al.- Represented individual board members of ITEX Corporation
in shareholder breach of fiduciary duty action. After extensive briefing and motions,
negotiated favorable settlement of the action.
•
Representative Tainted Food Litigation
•
Crowson v. QFC, Inc. - Obtained summary judgment for defendant grocery chain in
tainted food (BSE) class action.
•
Galego v. Fred Meyer, Inc. - Obtained summary judgment for defendant grocery chain
in weights and measures consumer class action.
•
Krupp v. The Kroger Co. - Obtained dismissal with prejudice of salmon mislabeling
class action.
•
In re Tainted Strawberry Litigation - National coordinating counsel for defendant
public company in lawsuit alleging sale of strawberries tainted with Hepatitis B;
obtained dismissal of class actions and individual lawsuits.
•
Professional Honors & Activities
• Selected by Best Lawyers® as Litigation-Mergers & Acquisitions Lawyer of the Year,
Portland, 2014 and 2016
• Listed in Best Lawyers in America© (currently: Commercial Litigation, Litigation-Mergers &
Acquisitions, Litigation-Securities), 2006-2016
• Selected as one of "America's Leading Lawyers for Business" (Oregon) by Chambers USA
(currently: Litigation: General Commercial), 2006-2015
• 2012 Lawyer of the Year, Litigation-Mergers & Acquisitions Oregon Best Lawyers
• Listed Tier 1 in Chambers USA: America's Leading Lawyers for Business (2005-2015)
• Selected as one of Oregon's top 25 Women Lawyers in Oregon Super Lawyers
• Listed in Oregon Super Lawyers® (Business Litigation, Securities Litigation, Class
Action/Mass Torts), 2006-2015
• Fellow, American Bar Association
• Former Chair, District of Oregon Lawyer Representatives, Ninth Circuit Judicial Conference
• Federal Court Mediation Panel
• Former Chair, Federal Bar Practice and Procedure Committee
• Former Chair, Multnomah Bar Association Professionalism Committee
•
Presentations
Page 268
Appendix
• Frequent speaker at securities conferences, including Northwest Securities Conference and
Willamette Securities Conference
•
Civic Activities
• Board of Directors, Legacy Good Samaritan Medical Center Foundation (2014-present)
• Board of Directors, Big Brothers Big Sisters, Columbia Northwest (2005-2013)
• Board of Directors, Providence Hospital Foundation (2005-2013)
•
Education
• Stanford Law School, J.D., 1974
• Wellesley College, A.B., 1971
Page 269
Appendix
Matthew Preusch
Keller Rohrback LLP
Practice Emphasis
•
Complex Litigation
•
Environmental Litigation
Education
•
Pomona College B.A., 2000, Politics, Philosophy, and Economics
•
Lewis & Clark Law School J.D., magna cum laude, 2013, Environmental & Natural
Resources Law Certificate
Bar/Court Admissions
•
2014, California
•
2014, U.S. District Court for the Central District of California
•
2014, U.S. District Court for the Eastern District of California
•
2014, U.S. District Court for the Northern District of California
•
2014, U.S. District Court for the Southern District of California
•
2014, U.S. Court of Appeals for the Ninth Circuit
•
2013, Oregon
•
2013, U.S. District Court for the District of Oregon
Professional and Civic Involvement
•
Oregon State Bar Association, Environmental and Natural Resources Section, Case
Notes Editor
•
Federal Bar Association, Member
Articles & Presentations
•
Don’t Say, “No Comment”: How To Ethically and Effectively Talk to Reporters, Santa
Barbara County Bar Association (Sep. 16, 2015)
•
Oregon State Bar Environmental & Natural Resources Section Case Notes (July 2015)
•
Matthew Preusch, Tim Weaver, Yakama Tribes’ Salmon Champion, Says His
Goodbyes, The Oregonian (Jan. 1, 2010).
•
Matthew Preusch, DEQ to Help Polluter Seek Federal Break on Mercury Emission, The
Oregonian (Aug. 19, 2009).
•
Matthew Preusch, Amid Forests Ashes, A Debate Over Logging Profits is Burning
On, The New York Times (Apr. 15, 2004)
Page 270
Appendix
Meredith Price
Perkins Coie LLP
Bar and Court Admissions
• Oregon
• U.S. District Court for the District of Oregon
• U.S. Court of Appeals for the Third Circuit
Publications
• Comment, The Proper Application of Daubert to Expert Testimony in Class
Certification, 16 Lewis & Clark L. Rev. 1349 (2012)
• Supreme Court Leaves Door Open to Class Action Settlement Offer PickOff Defense, Updates, Feb. 5, 2016, available at
https://www.perkinscoie.com/en/news-insights/supreme-court-leavesdoor-open-to-class-action-settlement-offer.html
Education
• Lewis & Clark Law School, J.D., Certificate in Environmental and Natural
Resources Law, summa cum laude, Cornelius Honor Society, Lead Article
Editor, Lewis & Clark Law Review, 2013
• Lewis & Clark, B.A., International Affairs, 2007
Related Employment
• Earthrise Law Center, Portland, OR, Law Clerk, 2012 - 2013
• Perkins Coie LLP, Portland, OR, Summer Associate, 2012
• Schwabe Williamson & Wyatt, Portland, OR, Summer Associate, 2011
• Intel Corporation, Hillsboro, OR, Licensing Analyst, 2007 – 2010
Clerkships
• Hon. D. Brooks Smith, U.S. Court of Appeals for the Third Circuit, 2014 2015
• Hon. Michael H. Simon, U.S. District Court for the District of Oregon, 2013
- 2014
Community Involvement
• St. Andrew Legal Clinic, Race for Justice Planning Committee, 2016
• Oregon State Bar Association, Environmental and Natural Resources
Section, Case Notes Editor, 2016 - Present
• Washington County Oregon Law Center & Intel Corporation Law Clinic
volunteer, 2008–2013
• Lewis & Clark Board of Alumni, June 2007–June 2010, and active
volunteer, 2007–Present
Page 271
All proceeds support the Public Interest Law Project, a
student run organization at Lewis & Clark Law School that
funds summer stipends for students to work in the public
interest field. Wholly apart from the CLE, donations are
welcome:
DONATE AT:
https://law.lclark.edu/student_groups/public_interest_law_project/
All speakers have generously incurred their
own expenses to support this charitable cause.
1
Page 272
Oregon State Bar
Minimum Continuing Legal Education
Recordkeeping Form
Pursuant to MCLE Rule 7.2, every active member shall maintain records of participation in
accredited CLE activities. You may wish to use this form to record your CLE activities. Do not
send this form to the Oregon State Bar or the Oregon Law Institute. This form should be
retained in your own MCLE file.
Name: _________________________________________ Bar No.__________________
Sponsor of CLE Activity:
Title of CLE Activity:
PUBLIC INTEREST LAW PROJECT:
CUTTING-EDGE BET THE COMPANY MEGA CLASS ACTION CLE
Date and Location:
Tuesday, February 16, 2016
Mark O. Hatfield Federal Courthouse, Portland, Oregon
Video Date and Location:
Full Credit
I attended the entire program and the total authorized credits are:
2
General, and
1
Ethics
Partial Credit
I attended
credits*:
hours of the program and am entitled to the following
General and
Ethics
*Credit Calculation:
One (1) MCLE credit may be claimed for each sixty (60) minutes of actual participation. Do not
include registration or introductions. The Oregon Law Institute, Lewis & Clark Law School is
an accredited sponsor of CLE activities for the Oregon State Bar. CAVEAT: If the actual program
length varies from the credit hours approved, Bar members are responsible for making the
appropriate adjustments in their compliance reports. Adjustments must also be made for late
arrival, early departure, or other periods of absence or nonparticipation.
Please keep this copy for your records. All MCLE records are to be kept by each member for a period of
twelve months after the member’s reporting period. MCLE compliance report forms are obtained through
the OSB MCLE Administrator.
Page 273

Cutting-Edge Bet the Company Mega Class Action CLE

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