Circuit Court upholds settlement; $43 million in attorney fees

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The 7th Circuit Court of Appeals has upheld a $180 million settlement and grant of $43.5 million in attorney fees in a dispute between retirement plan participants and their former employer. Some class members objected to the amount of attorney fees, but the 7th Circuit saw no reason to disturb the lower court’s decision.

This appeal comes nearly eight years after the original action began. A class-action lawsuit was filed in 2002 against the Rohm and Haas Co. Retirement Plan on behalf of all plan participants and beneficiaries who took a lump sum distribution after Jan. 1, 1976. Recipients believed they should have received payments that included the present value of future cost of living adjustments that would have been included had they chosen to receive pensions as an annuity.

The District Court and 7th Circuit concluded that a COLA is an accrued benefit, and the 7th Circuit remanded for a determination of damages. Then the issue arose regarding whether the early retirees were entitled to damages. The two sides reached a settlement that provided that each early retiree would receive roughly 3.5 percent of his or her original lump sum, unless the COLA on a normal-retirement-age-based annuity outweighed the early-retirement subsidy. Several groups objected, including the “Adamski Objectors,” who are a part of the appeal before the 7th Circuit in the instant case. They argued that early retirees should have received separate counsel and that the settlement was blatant discrimination. They also objected to the request for $43.5 million in attorney fees, which was nearly 25 percent of the total settlement of $180 million.  

The District Court had a fairness hearing and approved the settlement and attorney fee request. It also determined objector Mark Jackson was not allowed to opt out.

In Gary Williams and Nancy Meehan v. Rohm and Haas Pension Plan, Nos. 10-1978, 10-2175, 10-3713, the 7th Circuit found that the District Court adequately addressed the expected value of the early retirees’ claims, and it recognized that at the time, the early retirees’ claims rested on unsettled law. The District judge concluded that the early retirees’ success was uncertain and that the settlement reasonably compensated them for their claims.

“That conclusion was not so clearly erroneous as to make approval of the proposed settlement an abuse of discretion,” wrote Judge Michael Kanne.

The District Court also didn’t abuse its discretion by not creating a separately represented subclass of early retirees or by finding that the class counsel had adequately represented the early retirees. It also affirmed the denial of Jackson’s opt-out request.

Regarding the attorney fees, the appellate court found the District judge assessed the amount of work involved for the attorneys, the risks of nonpayment, and the quality of representation. The judge found that a pure percentage fee approach best replicated the market for ERISA class-action attorneys, and the objectors haven’t shown this finding to be an abuse of discretion, wrote Judge Kanne.

Regarding the risk of nonpayment, the objectors argued that rulings from District Courts in other circuits paved the way for the class’s victory on the COLA issue, thus minimizing the risk in this case. While those prior decisions bolstered the class’s argument that the plan’s damages calculation would violate ERISA, no appellate court had addressed the issue before the District Court approved this settlement.

“The district judge has become intimately familiar with this litigation over the past eight years, and we are confident that she properly assessed the litigation risks facing the early retirees. Although the Adamski Objectors urge us to remand and instruct the district court to perform a more thorough risk analysis, we recognize that the best we can hope for in awarding attorney’s fees is rough justice,” he wrote. “Accordingly, we see no reason to disturb the district court’s assessment of fees.


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  1. If a class action suit or other manner of retribution is possible, count me in. I have email and voicemail from the man. He colluded with opposing counsel, I am certain. My case was damaged so severely it nearly lost me everything and I am still paying dearly.

  2. There's probably a lot of blame that can be cast around for Indiana Tech's abysmal bar passage rate this last February. The folks who decided that Indiana, a state with roughly 16,000 to 18,000 attorneys, needs a fifth law school need to question the motives that drove their support of this project. Others, who have been "strong supporters" of the law school, should likewise ask themselves why they believe this institution should be supported. Is it because it fills some real need in the state? Or is it, instead, nothing more than a resume builder for those who teach there part-time? And others who make excuses for the students' poor performance, especially those who offer nothing more than conspiracy theories to back up their claims--who are they helping? What evidence do they have to support their posturing? Ultimately, though, like most everything in life, whether one succeeds or fails is entirely within one's own hands. At least one student from Indiana Tech proved this when he/she took and passed the February bar. A second Indiana Tech student proved this when they took the bar in another state and passed. As for the remaining 9 who took the bar and didn't pass (apparently, one of the students successfully appealed his/her original score), it's now up to them (and nobody else) to ensure that they pass on their second attempt. These folks should feel no shame; many currently successful practicing attorneys failed the bar exam on their first try. These same attorneys picked themselves up, dusted themselves off, and got back to the rigorous study needed to ensure they would pass on their second go 'round. This is what the Indiana Tech students who didn't pass the first time need to do. Of course, none of this answers such questions as whether Indiana Tech should be accredited by the ABA, whether the school should keep its doors open, or, most importantly, whether it should have even opened its doors in the first place. Those who promoted the idea of a fifth law school in Indiana need to do a lot of soul-searching regarding their decisions. These same people should never be allowed, again, to have a say about the future of legal education in this state or anywhere else. Indiana already has four law schools. That's probably one more than it really needs. But it's more than enough.

  3. This man Steve Hubbard goes on any online post or forum he can find and tries to push his company. He said court reporters would be obsolete a few years ago, yet here we are. How does he have time to search out every single post about court reporters and even spy in private court reporting forums if his company is so successful???? Dude, get a life. And back to what this post was about, I agree that some national firms cause a huge problem.

  4. rensselaer imdiana is doing same thing to children from the judge to attorney and dfs staff they need to be investigated as well

  5. Sex offenders are victims twice, once when they are molested as kids, and again when they repeat the behavior, you never see money spent on helping them do you. That's why this circle continues