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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. A traditional parade of attorneys? Really Evansville? Y'all need to get out more. When is the traditional parade of notaries? Nurses? Sanitation workers? Pole dancers? I gotta wonder, do throngs of admiring citizens gather to laud these marching servants of the constitution? "Show us your billing records!!!" Hoping some video gets posted. Ours is not a narcissistic profession by any chance, is it? Nah .....

  2. My previous comment not an aside at court. I agree with smith. Good call. Just thought posting here a bit on the if it bleeds it leads side. Most attorneys need to think of last lines of story above.

  3. Hello everyone I'm Gina and I'm here for the exact same thing you are. I have the wonderful joy of waking up every morning to my heart being pulled out and sheer terror of what DCS is going to Throw at me and my family today.Let me start from the !bebeginning.My daughter lost all rights to her 3beautiful children due to Severe mental issues she no longer lives in our state and has cut all ties.DCS led her to belive that once she done signed over her right the babies would be with their family. We have faught screamed begged and anything else we could possibly due I hired a lawyer five grand down the drain.You know all I want is my babies home.I've done everything they have even asked me to do.Now their saying I can't see my grandchildren cause I'M on a prescription for paipain.I have a very rare blood disease it causes cellulitis a form of blood poisoning to stay dormant in my tissues and nervous system it also causes a ,blood clotting disorder.even with the two blood thinners I'm on I still Continue to develop them them also.DCS knows about my illness and still they refuse to let me see my grandchildren. I Love and miss them so much Please can anyone help Us my grandchildren and I they should be worrying about what toy there going to play with but instead there worrying about if there ever coming home again.THANK YOU DCS FOR ALL YOU'VE DONE. ( And if anyone at all has any ideals or knows who can help. Please contact (765)960~5096.only serious callers

  4. He must be a Rethuglican, for if from the other side of the aisle such acts would be merely personal and thus not something that attaches to his professional life. AND ... gotta love this ... oh, and on top of talking dirty on the phone, he also, as an aside, guess we should mention, might be important, not sure, but .... "In addition to these allegations, Keaton was accused of failing to file an appeal after he collected advance payment from a client seeking to challenge a ruling that the client repay benefits because of unreported income." rimshot

  5. I am not a fan of some of the 8.4 discipline we have seen for private conduct-- but this was so egregious and abusive and had so many points of bad conduct relates to the law and the lawyer's status as a lawyer that it is clearly a proper and just disbarment. A truly despicable account of bad acts showing unfit character to practice law. I applaud the outcome.

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