In re Catfish Antitrust Litigation

• Decision Date: 12 August 1996
• Docket Number: MDL No. 928.,No. 2:92cv73-D-O,2:92cv73-D-O
• Citation: 939 F. Supp. 493
• Parties: In re CATFISH ANTITRUST LITIGATION. This Document Relates To: "All Actions".
• Court: U.S. District Court — Northern District of Mississippi

939 F. Supp. 493

In re CATFISH ANTITRUST LITIGATION This Document Relates To: "All Actions".

No. 2:92cv73-D-O, MDL No. 928.

United States District Court, N.D. Mississippi, Delta Division.

August 12, 1996.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Richard A. Lockridge, Schatz Paquin Lockridge Grindal & Holstein, Minneapolis, MN, Edward A. Moss, Holcomb, Dunbar, Connell, Chaffin & Willard, Oxford, MS, for Plaintiff.

Stephen Lee Thomas, Greenville, MS, for Defendant.

MEMORANDUM OPINION

DAVIDSON, District Judge.

After almost four years of litigation before the undersigned, the parties now come before the court seeking final approval of settlements between them which will terminate this cause. In addition, the petitioners seek approval of both an award of attorneys' fees and incentive awards for the named plaintiffs. The total amount of proceeds from the proposed settlements in this case is $27,525,000.00, and constitutes the sum of multiple settlement agreements with the various defendants.

I. APPROVAL OF THE SETTLEMENTS

Federal Rule of Civil Procedure 23(e) provides:

(e) Dismissal or Compromise. A class action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs.

Fed.R.Civ.P. 23(e). The rules do not provide, however, a standard by which to determine whether any settlement should be approved. Nonetheless, courts have determined that class action settlements should be approved when they are "fair, adequate and reasonable." In re Corrugated Container Antitrust Litig., 643 F.2d 195, 207 (5th Cir.1981), cert. denied, 456 U.S. 998, 102 S.Ct. 2283, 73 L.Ed.2d 1294, (1982); Parker v. Anderson, 667 F.2d 1204, 1209 (5th Cir. Unit A), cert. denied, 459 U.S. 828, 103 S.Ct. 63, 74 L.Ed.2d 65 (1982). In making this determination, this court is to consider six factors:

(1) whether the settlement was the product of fraud or collusion;

(2) the complexity, expense and likely duration of the litigation;

(3) the stage of the proceedings and the amount of discovery completed;

(4) the factual and legal obstacles to prevailing on the merits;

(5) the possible range of recovery and the certainty of damages; and

(6) the respective opinions of the participants, including class counsel, class representatives, and absent class members.

Reed v. General Motors Corp., 703 F.2d 170, 172 (5th Cir.1983); Parker, 667 F.2d at 1209; In re Prudential-Bache Energy Income Partnerships Sec. Litig., 815 F.Supp. 177, 180 (E.D.La.1993); In re Shell Oil Refinery, 155 F.R.D. 552, 559 (E.D.La.1993).

Other relevant factors may also be considered, such as whether the settlement amount is much less than that sought in the complaint, the defendant's inability to pay a greater amount, the number of objectors to the settlement, and whether any cogent objections have been raised to the settlement. Manual for Complex Litigation, (Third) § 30.42 (hereinafter "Manual"); In re Ford Motor Co. Bronco II Litig., 1995 WL 222177, *4 (E.D.La. April 12, 1995) (Memorandum and Order Denying Approval of Class Settlement).

A. EXISTENCE OF FRAUD OR COLLUSION

There is nothing before the court which indicates that fraud or collusion is involved in any way with the settlement agreements before the court. United States Magistrate Judge J. David Orlansky was intimately involved with the settlement negotiations among the parties in this action, and the undersigned firmly believes that without Judge Orlansky's diligent efforts, this case would have proceeded to a lengthy and arduous trial. As well, both Judge Orlansky and the undersigned conducted the final settlement conference wherein a settlement agreement was reached with regard to the only remaining defendant at that time, Delta Pride Catfish, Inc. This court has been kept well informed as to the progress of settlement negotiations in this case from multiple sources, and is of the opinion that all counsel involved vigorously represented the interests of their respective clients. Finally, the court notes that the matter of attorneys' fees was not negotiated in conjunction with the settlement agreements, but rather was left as a separate determination to be made by the court. In re Ford Motor Co. Bronco II Litig., 1995 WL 222177, *4 (E.D.La. April 12, 1995) ("Separate negotiation of the class settlement before an agreement on fees is generally preferable to avoid conflicts of interest between the attorneys and the class."). Application of this first factor favors approval of the settlement agreements.

B. COMPLEXITY OF CASE

This case involved allegations of price fixing which allegedly occurred over a ten year period. Due to the sheer size of evidence, the number of witnesses, and the reams of documentary evidence, this court can most assuredly state that this matter was factually complex. In addition, the plaintiffs faced some legal dilemmas which presented difficult questions for the parties and the court, not the least of which was the admissibility of the testimony of their proposed expert on damages, Dr. John C. Beyer. See, infra, § I(D). This case was sufficiently complex that resolution by settlement was a most favorable option for all involved. This factor favors approval of the settlements.

C. STAGE OF PROCEEDINGS; DISCOVERY

Settlement with the defendants in this cause was staggered throughout the course of litigation, with the plaintiff class reaching an agreement with the last settling defendant on December 20, 1995. Trial was set to begin in this matter on January 8, 1996 — approximately two weeks later. All discovery had been completed, and the parties had already submitted a voluminous final pretrial order to the undersigned. In addition, numerous motions had been made and this court had already ruled upon many of them, thereby more firmly establishing a legal framework for trial of this matter. E.g., In re Catfish Antitrust Litig., 908 F.Supp. 400 (N.D.Miss.1995) (Catfish III) (denying motions for summary judgment); In re Catfish Antitrust Litig., 164 F.R.D. 191 (N.D.Miss.1995) (Catfish II) (granting motion to release grand jury transcripts); In re Catfish Antitrust Litig., 826 F.Supp. 1019 (N.D.Miss.1993) (Catfish I) (certifying class). This court is fully confident that all involved knew the relative strengths and weaknesses of their respective positions, and that nothing was left to do except proceed to trial. In light of this fact, this factor favors approval of the settlements.

D. PROBABILITY OF SUCCESS

All in all, the court believes that the plaintiffs had a relatively good chance of prevailing on the merits of this cause. There was already evidence before the court with regard to numerous meetings of the defendants' representatives concerning price fixing, and some of this evidence was quite damning. Catfish III, 908 F.Supp. at 408-09. Nevertheless, the plaintiffs still faced some potentially difficult obstacles to recovery. Several viable legal defenses were still available to the defendants, such as application of the Clayton Act's statute of limitations and the protection of the corporate entity. Id. at 407-08, 411-13. The greatest threat to recovery, however, did not concern the establishment of liability but rather the matter of damages. This court held in abeyance any ruling on motions to exclude or limit the testimony of the plaintiffs' damages expert. Id. at 410. While the court has never decided the issue and it will not do so today, it is sufficient to note that the court had serious concerns about the admissibility of Dr. Beyer's testimony because of the apparent novelty of his economic theories in light of the dictates of Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). This court is of the opinion that this factor favors approval of the settlements.

E. RANGE OF POSSIBLE RECOVERY

Based upon the opinions of Dr. Beyer, the plaintiffs have previously argued to the court that the upward range of possible recovery in this matter is quite monumental. In the opinion of Dr. Beyer, the injury inflicted by this alleged conspiracy caused damage to the extent of artificially raising catfish prices approximately 8.3% over a ten year period. As one of the objectors to the approval of these settlements opined, "a simple extrapolation yields damage calculations in the range of several hundreds of millions of dollars." When considering the volume of catfish sold during the period of the alleged conspiracy, such a statement seems most accurate. In addition, the plaintiffs sought treble damages under the Clayton Act, and had the opportunity to recover attorneys' fees from the defendants. Catfish III, 908 F.Supp. at 404, 410; 15 U.S.C. § 15(a) (Supp. 1995).

However, a judgment against defendants who cannot pay is worthless. In the opinion of this court, it was also very likely that recovery could have been obtained against some, but not all, of the defendants in this case. The defendants who were the "deep pockets" in this cause were also those defendants who were most likely to avoid liability. Conversely, the defendant most likely to be found liable was Delta Pride. Due to the nature of Delta Pride's business organization as a cooperative, and in light of its financial condition, any judgment against it had a fair chance of being worthless as to amounts in excess of these settlement agreements. When the court considers not only the potential provable damages in this suit, but also 1) the possibility of a finding of liability against only some of the defendants and 2) the ability of the defendants to actually pay such a large award, it is apparent that this factor favors approval of the settlement agreements in this case.

F. OPINIONS OF PERSONS INVOLVED

The only persons who do not have a favorable view of these proposed settlements are, to the extent of the court's knowledge, the two...