Circuit Court upholds settlement; $43 million in attorney fees

Back to TopCommentsE-mailPrintBookmark and Share

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.


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
Subscribe to Indiana Lawyer
  1. I have an open CHINS case I failed a urine screen I have since got clean completed IOP classes now in after care passed home inspection my x sister in law has my children I still don't even have unsupervised when I have been clean for over 4 months my x sister wants to keep the lids for good n has my case working with her I just discovered n have proof that at one of my hearing dcs case worker stated in court to the judge that a screen was dirty which caused me not to have unsupervised this was at the beginning two weeks after my initial screen I thought the weed could have still been in my system was upset because they were suppose to check levels n see if it was going down since this was only a few weeks after initial instead they said dirty I recently requested all of my screens from redwood because I take prescriptions that will show up n I was having my doctor look at levels to verify that matched what I was prescripted because dcs case worker accused me of abuseing when I got my screens I found out that screen I took that dcs case worker stated in court to judge that caused me to not get granted unsupervised was actually negative what can I do about this this is a serious issue saying a parent failed a screen in court to judge when they didn't please advise

  2. I have a degree at law, recent MS in regulatory studies. Licensed in KS, admitted b4 S& 7th circuit, but not to Indiana bar due to political correctness. Blacklisted, nearly unemployable due to hostile state action. Big Idea: Headwinds can overcome, esp for those not within the contours of the bell curve, the Lego Movie happiness set forth above. That said, even without the blacklisting for holding ideas unacceptable to the Glorious State, I think the idea presented above that a law degree open many vistas other than being a galley slave to elitist lawyers is pretty much laughable. (Did the law professors of Indiana pay for this to be published?)

  3. Paul Hartman of Burbank, Oh who is helping Sister Fuller with this Con Artist Kevin Bart McCarthy scares Sister Joseph Therese, Patricia Ann Fuller very much that McCarthy will try and hurt Patricia Ann Fuller and Paul Hartman of Burbank, Oh or any member of his family. Sister is very, very scared, (YES, I AM) This McCarthy guy is a real, real CON MAN and crook. I try to totall flatter Kevin Bart McCARTHY to keep him from hurting my best friends in this world which are Carolyn Rose and Paul Hartman. I Live in total fear of this man Kevin Bart McCarthy and try to praise him as a good man to keep us ALL from his bad deeds. This man could easy have some one cause us a very bad disability. You have to PRAISAE in order TO PROTECT yourself. He lies and makes up stories about people and then tries to steal if THEY OWN THRU THE COURTS A SPECIAL DEVOTION TO PROTECT, EX> Our Lady of America DEVOTION. EVERYONE who reads this, PLEASE BE CAREFUL of Kevin Bart McCarthy of Indianapolis, IN My Phone No. IS 419-435-3838.

  4. Joe, you might want to do some reading on the fate of Hoosier whistleblowers before you get your expectations raised up.

  5. I had a hospital and dcs caseworker falsify reports that my child was born with drugs in her system. I filed a complaint with the Indiana department of health....and they found that the hospital falsified drug screens in their investigation. Then I filed a complaint with human health services in Washington DC...dcs drug Testing is unregulated and is indicating false positives...they are currently being investigated by human health services. Then I located an attorney and signed contracts one month ago to sue dcs and Anderson community hospital. Once the suit is filed I am taking out a loan against the suit and paying a law firm to file a writ of mandamus challenging the courts jurisdiction to invoke chins case against me. I also forwarded evidence to a u.s. senator who contacted hhs to push an investigation faster. Once the lawsuit is filed local news stations will be running coverage on the situation. Easy day....people will be losing their jobs soon...and judge pancol...who has attempted to cover up what has happened will also be in trouble. The drug testing is a kids for cash and federal funding situation.