Boyle v. Giral

• Decision Date: 10 April 2003
• Docket Number: No. 01-CV-600, 02-CV-305.,01-CV-600, 02-CV-305.
• Citation: 820 A.2d 561
• Parties: Joy BOYLE, et al., Appellants, v. Teresa Herminia GIRAL, et al., Appellees.
• Court: D.C. Court of Appeals

820 A.2d 561

Joy BOYLE, et al., Appellants, v. Teresa Herminia GIRAL, et al., Appellees.

No. 01-CV-600, 02-CV-305.

District of Columbia Court of Appeals.

Argued April 24, 2002.

March 25, 2003.

Decided April 10, 2003.

George A. Barton, with whom David Schertler and Lisa Fishberg were on the briefs, for appellants.

John M. Majoras, Washington, DC, with whom Julie E. McEvoy and Heather Guilette Walser were on the briefs, for appellee Settling Defendants. Jeffrey A. Bartos, Washington, DC, with whom Jonathan Rolfe and Timothy D. Battin were on the briefs, for appellee Class Plaintiffs.

Bennett Rushkoff, with whom Robert R. Rigsby, Corporation Counsel at the time the brief was filed for appeal No. 01-CV-600, Arabella W. Teal, Corporation Counsel at the time the brief was filed for appeal No. 02-CV-305, and Charles L. Reischel, Deputy Corporation Counsel, were on the briefs, for appellee District of Columbia.

Before TERRY, FARRELL and REID, Associate Judges.

REID, Associate Judge:

Before us are consolidated appeals involving challenges to the trial court's (1) denial of motions to intervene filed by appellants Joy Boyle, Daniel Owen and others (collectively "the consumer class member objectors") in a class action suit against various vitamin product manufacturers and distributors; and (2) final approval of the class action settlement agreement which, instead of a distribution to individual members of the consumer class, provides for a cy pres allocation to a fund administered by the District of Columbia "for the improvement of the health and/or nutrition of the citizens of the District [] and/or the advancement of nutritional, dietary or agricultural science in the District []."

We conclude that it is unnecessary to resolve the consumer class objectors' intervention arguments, because the objectors filed written statements in opposition to the settlement agreement and were permitted to make oral arguments during the trial court's final hearing to determine the fairness of the agreement. Thus, the denial of intervention has caused them no prejudice. Moreover, we assume, without deciding, that Devlin v. Scardelletti, 536 U.S. 1, 122 S.Ct. 2005, 153 L.Ed.2d 27 (2002), allows the consumer class member objectors to bring an appeal to this court without first achieving the status of an intervenor. On the merits, we reject the argument that class counsel had a conflict of interest in representing both the consumer and the commercial settlement classes. And we further hold that the trial court did not abuse its discretion in approving the final settlement agreement, and that a cy pres distribution on behalf of the District's consumer class is appropriate here, where there is no reasonable opportunity to award each individual member of the class an appropriate portion of the net monetary relief, amounting to the de minimis sum of approximately $1 per District resident.

FACTUAL SUMMARY

In September 1998, Teresa Herminia Giral, a resident of the District of Columbia, and an indirect purchaser of vitamin products, filed a class action antitrust complaint against F. Hoffman LaRoche, Ltd. (one of the settling defendants in this case) and other distributors and sellers of vitamin products.¹ She primarily alleged that the defendants engaged in a conspiracy in restraint of trade through a price-fixing and market allocation scheme, in violation of the District of Columbia Antitrust Act, D.C.Code §§ 28-4501 et seq. (1996), and the District of Columbia Consumer Protection Procedures Act, D.C.Code §§ 28-3901 et seq. (1996). Subsequently, Ms. Giral added plaintiffs, consumers and businesses, from various states, as well as other defendants. The Giral litigation was stayed in May 1999, to accommodate dispute resolution efforts. As a result of those efforts, the Giral plaintiffs filed a motion in December 2000, for preliminary approval of a partial settlement with seven primary defendants.

Also in December 2000, the District of Columbia successfully filed a motion to intervene on the side of the Giral plaintiffs, as parens patriae for District consumer residents.² Efforts to intervene made by commercial indirect purchasers of vitamin products who were residents of Minnesota, and by consumers led by Joy Boyle,³ were unsuccessful as the trial court denied their motions in March 2001.

One month later, the trial court granted preliminary approval of the proposed settlement agreement, and scheduled a hearing to address the fairness of the agreement. Prior to the Fairness Hearing, consumers Daniel Owen and Elizabeth Huybens sought to intervene for the purpose of objecting to the settlement agreement, but their motion was denied.⁴

Although the Boyle and Owen consumers' motions to intervene were denied, their opposition to the settlement agreement was conveyed through counsel at the February 2002 Fairness Hearing; and their written opposition was considered by the trial court. The trial court approved the settlement agreement on March 4, 2002, and the consumer class objectors noted an appeal.

ANALYSIS

The Boyle and Owen consumer class member objectors contend that the trial court erred in approving the settlement agreement, in part because: "All of the commercial class members have the opportunity to receive their proportionate shares of the commercial [c]lass settlement fund, but the consumer [c]lass members get nothing." They attribute the lack of a direct cash disbursement to members of the consumer class to "a clear conflict of interest" on the part of class counsel in their representation of the commercial class as well as the consumer class, and maintain that each class should have its own attorney "to ensure that the rights of each [c]lass member are adequately represented." The Giral consumers, who participated in the settlement negotiations, assert that the objectors' conflict of interest argument "is both legally and factually unsupportable."

The Conflict of Interest Issue

We note at the outset that before the consumer and commercial classes were certified, no objection was raised as to any actual or potential conflict on the part of class counsel. Indeed, the conflict of interest allegation did not surface until approximately one month prior to the February 2002 Fairness Hearing on the settlement agreement, long after the commencement of the case in 1998, and the settlement negotiations. The basis of the conflict alleged by the objectors appears to center on the distribution of settlement funds directly to commercial class members, and only indirectly to consumer class members.⁵ No disagreement with the amount of the settlement fund for the consumer class and for the commercial class has been raised; indeed the settlement funds have been divided equally between the consumer and the commercial classes.⁶

To determine the adequacy of representation by class counsel, which "factors in competency and conflicts of class counsel," Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 626 n. 20, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997), we apply the following legal principle: "`[A] class representative must be part of the class and possess the same interest and suffer the same injury as the class members." Id. at 625-26, 117 S.Ct. 2231 (quoting East Tex. Motor Freight Sys., Inc. v. Rodriguez, 431 U.S. 395, 403, 97 S.Ct. 1891, 52 L.Ed.2d 453 (1977) (internal quotation marks and other citation omitted)). In pressing their allegation of a conflict of interest, the consumer class member objectors rely on Amchem and Ortiz v. Fibreboard Corp., 527 U.S. 815, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999). Neither case supports the objectors' conclusory conflict of interest allegation.

Amchem and Ortiz, supra, concerned asbestos claims by persons who did not have the same interest or injury due to differing levels of exposure to asbestos, and differing levels of injury—from no manifestation of illness, which afforded time to seek maximum recovery of damages, to life-threatening conditions requiring immediate recovery of monetary relief. The record was replete with documentation of the differences in exposure and levels of injury. Here, in contrast to the claimants in Amchem and Ortiz, the consumer and commercial classes suffered similar injuries in that they both paid for overpriced vitamin products; and both classes have an interest not only in eliminating price-fixing and manipulation of market allocation in the sale and distribution of vitamin products, but also in deterring such conduct in the future. And, unlike Amchem and Ortiz, there is no factual record to support the objectors' conflict of interest allegation.

While the commercial class in the case before us is composed of indirect purchasers of vitamin products for resale, and the consumer class consists of indirect purchasers of the products for personal consumption, that distinction is insufficient, by itself, to overcome the presumption of adequate, conflict-free representation by class counsel. See Vale Props., Ltd., v. Canterbury Tales, Inc., 431 A.2d 11, 15 (D.C. 1981)

("A presumption of adequate representation will arise ... when an existing party seeks the same ultimate objective as the applicant"; and "`[A] slight difference in interests between the applicant and the supposed representative' will not suffice to show inadequacy of representation.") (citations omitted). Furthermore, no irregularity in the structure or process of the settlement negotiations, or the behavior of class counsel, has been called to our attention, which would justify the objectors' insistence on representation by "[class] counsel who were exclusively devoted to the interests of the [c]onsumer [c]lass members, and who would not be tempted to subordinate the interests of the [c]onsumer [c]lass in the pursuit of a satisfactory remedy for the [c]ommercial [c]lass members." Indeed the record on appeal is absolutely devoid of any hint of a conflict of interest by class counsel, and the allegation was...