Grant v. Bethlehem Steel Corp., AFL-CIO
| Decision Date | 30 June 1987 |
| Docket Number | AFL-CIO,AFL-CI,No. 697,D,697 |
| Citation | 823 F.2d 20 |
| Parties | 44 Fair Empl.Prac.Cas. 250, 44 Empl. Prac. Dec. P 37,385, 8 Fed.R.Serv.3d 469 Roysworth D. GRANT, Willie Ellis, On Behalf of Themselves and All Similarly Situated, Plaintiffs-Appellants, Louis Martinez, Plaintiff Intervenor-Appellant, v. BETHLEHEM STEEL CORPORATION, E. Richard Driggers, James Deavers & Thomas Connelly, Individually and as Agents of Bethlehem Steel Corp., the International Association of Bridge Structural & Ornamental Iron Workers, AFL- CIO; Local 40, Bridge Structural & Ornamental Iron Workers,; Ray Corbett, Ray Mullett, Jerry Place, Individually and as Officers of Local 40, Bridge Structural & Ornamental Iron Workers,efendants-Appellees, The Class of Iron Workers, Plaintiff-Appellee. ocket 86-7767. |
| Court | U.S. Court of Appeals — Second Circuit |
Willie Ellis, Roysworth D. Grant, Newark, N.J., pro se.
Louis Martinez, Newark, N.J., pro se.
Richard A. Levy, New York City (Eisner & Levy, P.C., New York City, Lewis M. Steel, Steel Bellman & Levine, P.C., New York City, of counsel) for plaintiffs-appellees.
Wayne A. Cross, Joseph J. Iarocci, Reboul, MacMurray, Hewitt, Maynard & Kristol, New York City, of counsel, for defendants-appellees.
Before KEARSE, MINER and MAHONEY, Circuit Judges.
Plaintiffs-appellants Roysworth D. Grant and Willie Ellis and plaintiff intervenor-appellant Louis Martinez appeal from an order of the United States District Court for the Southern District of New York (Knapp, J.) approving a $60,000.00 settlement of a class action suit instituted under the provisions of Title VII, 42 U.S.C. Secs. 2000e et On appeal, appellants contend primarily that the settlement should be set aside because all class members responding to the notice of proposed settlement opposed the settlement. We affirm.
seq. (1982), and 42 U.S.C. Sec. 1981 (1982) against defendant-appellee Bethlehem Steel Corporation and three of its supervisors.
The general background of the instant appeal is set forth in Grant v. Bethlehem Steel Corp., 635 F.2d 1007 (2d Cir.1980), cert. denied, 452 U.S. 940, 101 S.Ct. 3083, 69 L.Ed.2d 954 (1981) ("Grant I"), familiarity with which is assumed. Only those facts necessary for a discussion of the issues presented on this appeal will be set forth below.
On February 20, 1976, appellants commenced this class action in the district court against Bethlehem Steel and three of its supervisors. Appellants alleged that Bethlehem Steel had discriminated against blacks and Hispanics in its selection of ironwork foremen, in violation of 42 U.S.C. Secs. 2000e et seq. and 42 U.S.C. Sec. 1981.
After an eight-day bench trial, the district court found that appellants had failed to substantiate their claims of racial discrimination. On January 2, 1979, the district court dismissed their complaint. In Grant I, we reversed the district court's order of dismissal, holding that appellants had "made out a prima facie case of not only discriminatory treatment but discriminatory impact as well." Grant I, 635 F.2d at 1020. We remanded the case to the district court to permit Bethlehem Steel and its supervisors to introduce evidence that "their discriminatory conduct may have been justified by business necessity, and for any rebuttal testimony by the plaintiffs." Id.
On remand, Judge Knapp directed Magistrate Bernikow to explore with the parties the possibility of settlement or, in the alternative, to ensure that the parties were prepared fully for trial. Class counsel and Bethlehem Steel subsequently agreed to a settlement in the amount of $60,000.00. Under the terms of the settlement, Grant, Ellis and Martinez each would receive $2,000.00 apart from their shares of the settlement fund.
After notice of the proposed settlement was served on the class members, Magistrate Bernikow, on June 17, 1985, conducted a fairness hearing, at which the objections of appellants and others were heard. According to appellants, of the 126 members of the plaintiff class, 45 class members opposed the settlement and no responses were received from the remainder of the class. Appellants also claim that 33 letters notifying class members of the settlement were returned.
On July 24, 1986, Judge Knapp adopted Magistrate Bernikow's recommendation that the settlement be approved. This appeal followed the denial of appellants' request for reconsideration.
Appellants contend primarily that the district court abused its discretion in approving the settlement despite the objections of all responding class members. We disagree.
In approving a proposed class action settlement, the district court has a fiduciary responsibility to ensure that "the settlement is fair and not a product of collusion, and that the class members' interests were represented adequately." In re Warner Communications Sec. Litig., 798 F.2d 35, 37 (2d Cir.1986) (citing, inter alia, Plummer v. Chemical Bank, 668 F.2d 654, 658 (2d Cir.1982)). Our role in reviewing the approval of a settlement agreement "is limited to determining whether the district court abused its discretion." Id. (citation omitted). We consistently have accorded considerable deference to the district court's extensive knowledge of the litigants and of the strengths and weaknesses of their contentions. E.g., In re "Agent Orange" Product Liability Litigation MDL No. 381, 818 F.2d 145, 170-71 (2d Cir.1987). As we noted in Handschu v. Special Services Div., 787 F.2d 828 (2d Cir.1986), the district court "is in the best position to evaluate whether the settlement constitutes Appellants contend that the district court abused its discretion in approving the settlement because "the class opposing the settlement out numbered [sic] any group which the Court had any responsibility at this point to protect." It is true that opposition of a majority of a class can have independent significance when, as here, the objection is to the amount of a settlement, rather than to distribution of the fund. See TBK Partners, 675 F.2d at 462; cf. Pettway, 576 F.2d at 1216-17. It is clear, however, that the objectors do not constitute a class majority. Only 45 of 126 class members expressed opposition to the settlement--approximately 36% of the class. Were we to accept appellants' suggestion and discount the 33 letters that were returned, thus reducing the total class to 93, the objectors still would not constitute a majority: 48 class members received notice of the settlement and did not respond--52% of the class of 93. The objectors would represent only 48% of the recalculated class. Therefore, it is apparent that the "silent" class members constituted a majority of the class under either set of calculations. Even if we were to assume that the objectors represented a majority of the class, majority opposition is not a total bar to approval of a settlement. Preventing a settlement that a district court properly determines to be fair and reasonable solely because of majority opposition "not only deprives other class members of the benefits of a manifestly fair settlement and subjects them to the uncertainties of litigation, but ... [may] result[ ] in the eventual disappointment of the objecting class members as well." TBK Partners, 675 F.2d at 462-63 (footnote omitted).
a reasonable compromise." Id. at 833 (citations omitted). Moreover, it is well established that a settlement can be fair notwithstanding a large number of objectors. See, e.g., TBK Partners, Ltd. v. Western Union Corp., 675 F.2d 456 (2d Cir.1982) (approving settlement despite objections of approximately 56% of class); Equal Employment Opportunity Comm'n v. Hiram Walker & Sons, Inc., 768 F.2d 884 (7th Cir.1985) (approving consent decree over objections of 15% of class), cert. denied, --- U.S. ----, 106 S.Ct. 3293, 92 L.Ed.2d 709 (1986); Reed v. General Motors Corp., 703 F.2d 170 (5th Cir.1983) (approving settlement despite opposition of 40% of class); Cotton v. Hinton, 559 F.2d 1326 (5th Cir.1977) (approving settlement...To continue reading
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