55 F.3d 768 (3rd Cir. 1995), 94-1207, In re General Motors Corp. Pick-Up Truck Fuel Tank Products Liability Litigation

Docket Nº:Appellants in No. 94-1207.
Citation:55 F.3d 768
Party Name:In re GENERAL MOTORS CORPORATION PICK-UP TRUCK FUEL TANK PRODUCTS LIABILITY LITIGATION. Jack French, Robert M. West, Charles E. Merritt, Gary Blades, Dawn and Tracey Best, Gary and Jackie Barnes, Betty Marteny, John and Mary Southands, Edmund Berning, Dale W. Plummer, Edmund and Anneta Casey, John and Connie Yonki, Carl and Kathryn Corona, Dallas a
Case Date:April 17, 1995
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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55 F.3d 768 (3rd Cir. 1995)

In re GENERAL MOTORS CORPORATION PICK-UP TRUCK FUEL TANK

PRODUCTS LIABILITY LITIGATION.

Jack French, Robert M. West, Charles E. Merritt, Gary

Blades, Dawn and Tracey Best, Gary and Jackie Barnes, Betty

Marteny, John and Mary Southands, Edmund Berning, Dale W.

Plummer, Edmund and Anneta Casey, John and Connie Yonki,

Carl and Kathryn Corona, Dallas and Patricia Nelson, Mynard

and Mildred Duncan, Kirby L. Stegman, DeWayne Anderson,

Morris and Barbara Betzold, Appellants in No. 94-1064.

Rudolph Jenkins, William D. Cunningham, Mather Johnson,

Forrest Charles Ginn, Buren William Jones and

Martin D. Parkman, Appellants in No. 94-1194.

Parish of Jefferson, Appellant in No. 94-1195.

The State of New York, Appellant in No. 94-1198.

Elton Wilson, individually, and Frank I. Owen, individually

and on behalf of the residents of the State of

Alabama, Appellants in No. 94-1202.

City of New York, Appellant in No. 94-1203.

Betty Youngs, Barbara Phillips, Margaret Engel, Larry Swope,

Robbin Maxwell and Center for Auto Safety,

Appellants in No. 94-1207.

Betty Youngs, Barbara Phillips, Margaret Engel, Larry Swope,

Robbin Maxwell and Center for Auto Safety,

Appellants in No. 94-1208.

Commonwealth of Pennsylvania, Department of Transportation,

Appellant in No. 94-1219.

Nos. 94-1064, 94-1194, 94-1195, 94-1198, 94-1202, 94-1203,

94-1207, 94-1208 and 94-1219.

United States Court of Appeals, Third Circuit

April 17, 1995

Argued Aug. 11, 1994.

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James A. Schink, (argued), J. Andrew Lanagan, Robert B. Ellis, Kirkland & Ellis, Chicago, IL, George J. Lavin, Jr., Francis P. Burns, III, Lavin, Coleman, Finarelli & Gray, Philadelphia, PA, Lee A. Schutzman, Edward C. Wolfe, General Motors Corp., Detroit, MI, for General Motors Corp., appellee.

Andrew M. Hutton, Derek S. Casey, Paul Benton Weeks, III, Michaud, Hutton, Fisher & Anderson, Wichita, KS, for Jack French, Robert M. West, Charles E. Merritt, Gary Blades, Dawn Best, Tracey Best, Gary Barnes, Jackie Barnes, Betty Marteny, John Southards, Mary Southards, Edmund Berning, Dale W. Plummer, Edmund Casey, Anneta Casey, John Yonki, Connie Yonki, Carl Corona, Kathryn Corona, Dallas Nelson, Patricia Nelson, Mynard Duncan, Mildred Duncan, Kirby L. Stegman, Dewayne Anderson, Morris Betzold, Barbara Betzold, Dennis Acuma, appellants.

Diane M. Nast (argued), William E. Hoese, Kohn, Swift & Graf, P.C., Philadelphia, PA, Elizabeth J. Cabraser (argued), Michael F. Ram, Lieff, Cabraser & Heimann, San Francisco, CA, for Dennis Acuma, John E. Martin, plaintiff class/appellees.

John W. Barrett, Barrett Law Offices, Lexington, MS, for John Mayhall, Brendan Hayes, Jimmy Benson, Jimmy Haddock, Dennis Nabors, Marcia Baldwin, appellees.

William S. Lerach, Milberg, Weiss, Bershad, Hynes & Lerach, San Diego, CA, for William A. Lewis, David Grubbs, Raymond Carver, Johnny S. Martinez, Robert A. Flowers, Stone Ridge Agri, Inc., James McKinnish, Douglas A. Livingston, appellees.

Richard S. Schiffrin, Schiffrin & Craig, Bala Cynwyd, PA, for Johnny S. Martinez, Joseph St. Clair, appellees.

Patricia J. Clancy, Sr. Deputy County Counsel, County of Santa Barbara, Santa Barbara, CA, for City of Los Angeles, Alameda City, Santa Barbara City, Utah City, Washington City, amicus-appellee.

James E. Butler, Jr. (argued), Robert D. Cheeley, Peter J. Daughtery, Butler, Wooten, Overby & Cheeley, Columbus, GA, for Rudolph Jenkins, William D. Cunningham, Mather Johnson, Forrest Charles Ginn, Buren William Jones, Martin D. Parkman.

Hans J. Liljeberg, Jefferson Parish Atty.'s Office, Gretna, LA, Jeron J. LaFargue, Jefferson Parish Atty.'s Office, Harahan, LA, for Parish of Jefferson, appellant.

G. Oliver Koppell, Atty. Gen. of the State of N.Y., Peter H. Schiff, Deputy Sol. Gen., Nancy A. Spiegel, Andrea Oser, Asst. Attys. Gen., Albany, NY, for State of N.Y., appellant.

Michael J. Evans, Steven D. King, Longshore, Evans & Longshore, Birmingham, AL, for Elton Wilson, individually, Frank I. Owen, individually and on behalf of the residents of the State of Alabama, appellants.

John Hogrogian, New York, NY, for City of New York, appellant.

Brian S. Wolfman (argued), David C. Vladeck, Public Citizen Litigation Group, C. Ray Gold, Center for Auto Safety, Washington, DC, for Betty Youngs, Barbara Phillips, Margaret Engel, Larry Swope, Robbin Maxwell, Center for Auto Safety, appellants.

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Stephen F.J. Martin (argued), Asst. Counsel In-Charge, Steven I. Roth, Asst. Counsel, Robert J. Shea, Asst. Chief Counsel, John L. Heaton, Chief Counsel, Office of Chief Counsel, Dept. of Transp., Harrisburg, PA, for Com. of Pa., appellant.

Before BECKER, ALITO, and GIBSON, [*] Circuit Judges.

TABLE OF CONTENTS I. FACTS, PROCEDURAL HISTORY, AND STANDARD OF REVIEW .........................779 A. General Background .....................................................779 B. The Settlement Agreement ...............................................780 C. Approval of the Settlement and Fees ....................................781 D. The NHTSA Investigation ................................................782 E. Standard of Review .....................................................782 II. ANATOMY OF THE CLASS CLAIMS ...............................................783 III. RULE 23 — RELEVANT FUNDAMENTAL PRINCIPLES ...........................783 IV. SETTLEMENT CLASSES .......................................................786 A. Nature of the Device ..................................................786 B. Perceived Problems of Settlement Classes ..............................787 C. Arguments Favoring Settlement Classes .................................790 D. Are Settlement Classes Cognizable Under Rule 23? ......................792 E. Are the Rule 23(a) and (b) Findings Required for Settlement Classes? Does Finding the Settlement to Be Fair and Reasonable Serve as a Surrogate for the Findings? ...........................................794 F. Can There Be a Valid Settlement Class That Would Not Serve as a Valid Litigation Class? ...............................................797 V. IS THE SETTLEMENT CLASS PROPER HERE? .....................................800 A. Were There Adequate Findings Under Rule 23(a)? ........................800 B. Could the Class Requisites Have Been Met on the Current Record? .......800 1. Numerosity, Commonality, and Typicality ............................800 2. Adequacy of Representation .........................................800 a. The Situation of the Fleet Owners ...............................800 b. Did Counsel Adequately Represent the Interests of the Entire Class? ........................................................801 VI. IS THE SETTLEMENT FAIR, REASONABLE, AND ADEQUATE? ........................804 A. Adequacy of Settlement — General Principles .....................806 1. Valuation of the Settlement — Introduction ...................807 a. Plaintiffs' Witness Dr. Itmar Simonsen ..........................807 b. Inability of Class Members to Use Certificates ..................808 c. Value of the Transfer Option ....................................809 d. GM's Implicit Valuation of the Claim ............................810 2. Valuing this Settlement Relative to the Relief Requested ...........810 a. The Retrofit Issue ..............................................810 b. Availability of Other Remedies ..................................811 B. Complexity of the Suit ................................................812 C. Reaction of the Class .................................................812 D. Stage of Proceedings ..................................................813 E. Risks of Establishing Liability .......................................814 F. Risks of Establishing Damages .........................................816 G. Risks of Maintaining Class Status .....................................817 H. Ability to Withstand Greater Judgment .................................818

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  1. Summary ..............................................................818 VII. APPROVAL OF THE ATTORNEYS' FEE AWARD ....................................819 VIII. OTHER ISSUES; CONCLUSION ................................................823

OPINION

BECKER, Circuit Judge.

This is an appeal from an order of the District Court for the Eastern District of Pennsylvania approving the settlement of a large class action following its certification of a so-called settlement class. Numerous objectors challenge the fairness and reasonableness of the settlement. The objectors also challenge: (1) the district court's failure to certify the class formally; (2) its denial of discovery concerning the settlement negotiations; (3) the adequacy of the notice as it pertained to the fee request; and (4) the court's approval of the attorneys' fee agreement between the defendants and the attorneys for the class, which the class notice did not fully disclose, thereby (allegedly) depriving the class of the practical opportunity to object to the proposed fee award at the fairness hearing.

The class members are purchasers, over a 15 year period, of mid- and full-sized General...

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