ILNews

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.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
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
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Just an aside, but regardless of the outcome, I 'm proud of Judge William Hughes. He was the original magistrate on the Home place issue. He ruled for Home Place, and was primaried by Brainard for it. Their tool Poindexter failed to unseat Hughes, who won support for his honesty and courage throughout the county, and he was reelected Judge of Hamilton County's Superior Court. You can still stand for something and survive. Thanks, Judge Hughes!

  2. CCHP's real accomplishment is the 2015 law signed by Gov Pence that basically outlaws any annexation that is forced where a 65% majority of landowners in the affected area disagree. Regardless of whether HP wins or loses, the citizens of Indiana will not have another fiasco like this. The law Gov Pence signed is a direct result of this malgovernance.

  3. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  4. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  5. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

ADVERTISEMENT