IN THE CIRCUIT COURT OF THE 11TH
JUDICIAL DISTRICT IN AND FOR DADE COUNTY, FLORIDA
GENERAL JURISDICTION DIVISION
NORMA R. BROIN, et al.,
OBJECTIONS TO CLASS ACTION SETTLEMENT
AND NOTICE OF INTENT TO APPEAR OF
CLASS MEMBERS ANGELA WILLIAMS, ET AL.
Case No.: 91-49738 CA(22)
PHILIP MORRIS INCORPORATED, et al.
Class members Angela Williams, Robert Eric Levine, and Jean E.
Golem (the "Williams Objectors") hereby object to the proposed class action
settlement and gives notice of their intent to appear through counsel (Alan
B. Morrison) at the fairness hearing scheduled for January 26, 1998.
As we explain further below, the Williams Objectors oppose the
settlement for two basic reasons. First, the settlement violates
fundamental tenets of fairness and adequate representation because the
principal benefit obtained by the named representatives--$300 million in
cash--is paid not to the class members, but to a medical research
foundation named in honor of the lead plaintiff Norma Broin. Second,
class counsel have signalled their intention to seek $46 million in fees.
Although those fees appear grossly excessive, at this juncture the main
problem is that class counsel have yet to submit their fee application
so that the Court and the class members can evaluate the reasonableness
of the request. See Kuhnlein v. Department of Revenue, 662 So.2d
309 (Fla. 1995).
Indeed, the problem in responding to the $46 million feerequest
permeates this entire proceeding. Despite specific requests, class counsel
have refused to provide copies of pleadings and other case documents, even
at objectors' expense. In addition, although the burden of establishing
the fairness of the settlement rests squarely on its proponents, Newberg
on Class Actions, ¶ 11.42 (3d ed. 1992), the settling parties
have chosen to await the filing of objections before putting forth their
evidentiary and other support for the settlement, which they will file
just four business days prior to the fairness hearing. Assuming that objectors
are served promptly, they will be hard pressed to digest, let alone respond
to, the settling parties' arguments, as well as to prepare for the fairness
hearing. Thus, we reserve the right to supplement these objections and
to take any necessary discovery after we have reviewed the settling parties'
submissions in support of the settlement.
In the pages that follow, we begin with a brief introduction
and then explain in greater detail why the settlement should be rejected.
Finally, we make suggestions for amendments to the settlement that would
cure its current crippling deficiencies.
Because the Court is aware of the lengthy history of this case,
we set forth here only those facts necessary to understand the settlement
and its deficiencies. This settlement arises out of a class action filed
by Norma R. Broin and other named plaintiffs on behalf of a class of non-smoking
flight attendants who have worked or are working for U.S.-based airlines.
Second AmendedComplaint, ¶ 48. The defendants are the major tobacco
companies and affiliated trade groups. The class includes only flight attendants
who are currently suffering from a tobacco-related illness and specifically
excludes flight attendants who may contract such illnesses in the future.
Settlement Agreement, ¶ 1.
The plaintiffs assert that, as a result of breathing second-
hand smoke as flight attendants, they suffer from many diseases, ranging
from cancer to heart disease to infertility to general respiratory ailments.
Second Amended Complaint, ¶ 82(b). The plaintiffs seek recovery under
Florida law on theories of strict liability, breach of implied warranty,
negligence, fraud and misrepresentation, and conspiracy to misrepresent
and commit fraud. Id. ¶ 142. The second amended complaint--under
which the settlement occurred--seeks only traditional damages relief. Thus,
on behalf of the class, the class representatives sought compensatory damages
for bodily injury, pain and suffering, disability, disfigurement, loss
of life's enjoyment, medical expenses, loss of earnings, and mental anguish.
Id. The plaintiffs also demanded punitive damages on account of
the defendants' "outrageous conduct." Id. ¶ 144.
This Court certified the class on December 12, 1994, Thereafter,
a notice was sent to the class members in January, 1997, pursuant to Rule
1.220(c)(2). The notice explained, among other things, that this case was
a class action for damages against the tobacco companies, and that the
class members had the right to exclude themselves from the class on or
before May 1, 1997. To thebest of our knowledge, the notice did not indicate
that the case might settle for relief not sought in the complaint, let
alone for hundreds of millions of dollars payable to a research foundation
rather than to the plaintiff class.
After the opt-out period ended, a "Stage I" trial began, focusing
on general causation and other common issues regarding the defendants'
conduct. On October 10, 1997, during the defendants' case-in-chief, the
parties informed the Court that they had reached a settlement.
The basic provisions of the settlement are straightforward.
The defendants will provide $300 million, payable in three equal installments,
to establish a non-profit research foundation, whose purpose will be to
improve early detection of, and find cures for, tobacco-related diseases.
Settlement Agreement, ¶ ¶ 7-8. The foundation will be named in
honor of the lead plaintiff, Norma Broin, and will be directed by a board
of trustees, including flight attendants, nominated by class counsel. Id.
¶ 8. The defendants also agree to support the enactment of "appropriate
federal legislation" to prohibit smoking on regularly scheduled international
flights (or segments of international flights) originating or terminating
in the United States. Id. ¶ 11.
Under the settlement, class members retain the right to sue
the tobacco companies individually to collect damages for their smoking-related
injuries, and the defendants agree to waive, for one year after final approval
of the settlement, any applicable statute of limitation or repose. In those
individual suits, thedefendants would have the burden of proof regarding
general causation, i.e. that second-hand smoke causes tobacco-related
illness, but only with respect to some of the smoking-related diseases
alleged in the complaint. Id. ¶ 12(d). Class members have the
right to use evidence submitted in the Stage I trial before this Court,
"subject to all objections by any party," and the defendants shall provide
individual claimants a copy of the video testimony from the Stage I trial.
Id. ¶ 12(e).
Finally, the settlement provides that class members bringing
individual suits may sue in the Eleventh Judicial District of Florida (where
Florida substantive law will apply), as well as in any other forum where
venue is proper. Id. ¶ 12(c). The class notice, but not the
settlement agreement, indicates that "Class Counsel and other independent
counsel will be available to represent Class Members" in individual cases,
but the notice does not state who those lawyers will be and what they will
charge for their services. See Notice of Proposed Class-Action Settlement
and Final Settlement Hearing, Part V (Oct. 31, 1997).
In exchange, the defendants retain certain rights and obtain
certain benefits. First, the defendants obtain a release from all class
members concerning any matters relating to the causes of action set forth
in the second amended complaint. Settlement Agreement, ¶¶ 14-15.
Second, although plaintiffs retain the right to bring individual
litigation as described above, that litigation is circumscribed in several
important respects: (a) no class membermay seek punitive damages (or any
other type of non-compensatory damages); (b) no class member may seek recovery
on any fraud, misrepresentation, RICO, suppression, or concealment theory,
or any theory based on defendants' willful or intentional conduct; and
(c) no class member may seek joinder with any other plaintiff in a suit
against the defendants, and thus is barred from participating in any form
of aggregated litigation. Id. ¶¶ 12(a), 12(g).
Third, the defendants are not obligated to pay any money to
any class member in settlement of the class members' claims, nor do they
admit liability concerning any of the conduct alleged in the second amended
Fourth, although the defendants have the burden of proof on
general causation, the individual plaintiffs retain the burden of proof
on all other issues, including specific causation, i.e., that second-hand
tobacco smoke caused their particular diseases. Id. ¶ 12(d).
Finally, the settlement provides that class counsel Stanley
Rosenblatt and Susan Rosenblatt will seek an attorney's fee of $46 million
and that the defendants will not oppose that request. Id. ¶
10; Notice of Proposed Class-Action Settlement and Final Settlement Hearing,
Part IV(l). The defendants also will pay the Rosenblatts' expenses, estimated
at $3 million. Id.
A. The Payment of $300 Million
to a Research Foundation, Rather Than to the Class Members, Demonstrates,
As a Matter of Law, That the Settlement is Unfair and That the Class Representatives
Have Not Adequately Represented the Class.
This case involves a settlement in which the defendants have
agreed to a limited set of arguable procedural advantages to members of
the plaintiff class who wish to bring individual suits against the tobacco
industry, in exchange for the surrender of the most potent tools in tobacco
litigation. Eliminating the class members' rights to seek punitive damages
and to sue for any fraud- related and intentional torts, and abrogating
all future class or aggregated litigation, has been, for years, the ultimate
litigation wish-list of the tobacco industry. Class counsel obviously believes
that this trade-off alone would not provide sufficient consideration for
their clients since they bargained for and obtained defendants' payment
of $300 million. Even with that payment, there is, in our view, serious
doubt as to the adequacy of the total settlement package, in large part
because the non- monetary components of the settlement may only benefit
a few class members.
Nonetheless, we assume for the sake of these objections that
the combined value of the benefits to the class ($300 million, plus various
arguable future litigation advantages) roughly equal the costs to the class
(various future litigation disadvantages, such as the waiver of punitive
damages). We also assume, without conceding, that a $300 million cash payment
to the class members themselves would be a reasonable settlement in light
of the risks of litigating the class action to final judgment. The fundamental
problem is not the amount of the payment, but that it is going to a research
foundation, and not to the class members.
The class representatives and class counsel have decided to
trade the most significant components of the class members' claims (punitive
damages, fraud-based and intentional torts, the right to aggregate) for
a research foundation. If Norma Broin and the other class members want
to sell their claims in that fashion, they are, of course, free to do so,
but neither Florida law nor the Constitution of the United States allow
them to trade the Williams Objectors' or the other absentees' claims in
There is reason to doubt whether the Broin Foundation will be
of any value to any class member. After all, tens of billions
of dollars have been spent to date to treat and cure cancer, with little
discernible affect on cancer rates. But even assuming that the $300 million
will be put to good use, the money must be used exclusively for the benefit
of the class. For example, Ms. Williams has early-onset asthma, which requires
medication and has dramatically altered her life style. Williams Affidavit,
¶¶ 3-6 (attached as Exh. 1). Similarly, Mr. Levine suffers from
severe sinusitis. Levine Affidavit, ¶¶ 3-5 (attached as Exh.
2). Any foundation money spent for "early detection" of tobacco-related
disease simply will not assist Ms. Williams, Mr. Levine, or any other class
member since, under the class definition, they already are suffering from
some tobacco-related disease. Moreover, for class members who already have
serious, terminal ailments, such as many of those listed in the second
amended complaint (e.g., stomach cancer), a research foundation
directed to cure future disease cannot conceivably benefit those class
members. Indeed, the classincludes the survivors of former flight
attendants who have already succumbed to tobacco-related illness and for
whom a research foundation is of no possible benefit. In sum, the core
component of the settlement--the $300 million research foundation--renders
the settlement fundamentally unfair because the foundation will not benefit
the persons on whose behalf the class action was filed. See Eisen
v. Carlisle & Jacquelin, 479 F.2d 1005, 1018 (2d Cir. 1973), vacated
and remanded on other grounds, 417 U.S. 156 (1974) (fluid recovery
that doesn't benefit class would violate due process).See
Nor can the settlement be justified on a cy pres theory.
In some circumstances, a limited portion of a class action fund could be
directed to a charity, under the close supervision of the court, whose
purposes directly relate to the relief sought in the complaint. See,
e.g., In re Agent Orange Prod. Liab. Litig., 818 F.2d 179, 184-86 (2d
Cir. 1987). Such cy pres disbursements are permissible when there
is left-over money following distribution of a cash fund and further distribution
is impractical or impossible. But the settling parties here "do not claim
that a cy pres settlement is appropriate because it would be impossible
ordifficult to locate class members, or because each individual class member's
recovery would be so small as to make an individual distribution economically
impossible." In re Matzo Food Prods. Litig., 156 F.R.D. 600, 606
(D.N.J. 1994)(rejecting settlement because payment went to charity rather
than to class members).
To the contrary, most or all of the class members have already
been located and notified, and the class members' recoveries, if the $300
million were paid to them, would be quite substantial. If we assume, quite
generously and in the absence of proof of class size from class counsel,
that 1,000 individuals meet the class definition (non-smoking flight attendants
who currently suffer tobacco-related injuries), each would receive, on
average, $300,000 in exchange for giving up their rights to punitive damages,
etc. Some class members with life-threatening illnesses would receive far
more, and those with less serious illnesses would receive less. But whatever
they received, they could each then make an individual decision whether
to contribute all or some of their recoveries to combat tobacco-related
The conclusion that a "charitable giving" theory is unacceptable
here is underscored by the jarring disconnect between the damages sought
in the second amended complaint and the establishment of the Broin Foundation.
The second amended complaint seeks actual monetary damages, such as lost
wages and medical expenses. Ms. Williams, for instance, has ongoing medical
expenses relating to her adult-onset asthma. If we assume that Ms. Williams'
expenses will come to $10,000 over her lifetime, it isdifficult to see
how a $10,000 charitable contribution to combat tobacco-related disease
will get Ms. Williams one step closer to recovering those expenses. See
Jewish Guild for the Blind v. First Nat'l Bank in St. Petersburg, 226
So.2d 414 (Fla. App. 2d Dist. 1969)(where testamentary trust provided for
acquisition or construction of separate building for blind children, cy
pres doctrine did not permit installation of facilities in existing
building, even though trust principal was inadequate for acquisition or
construction of separate building); In re Ford Bronco II Prod. Liab.
Litig., 1995 U.S. Dist. Lexis 3507, *19 (E.D. La. 1995)(rejecting class
action settlement in part because settlement provided only a non-monetary
package of benefits and none of the damages relief sought in complaint).
The class representatives' decision to direct the settlement's
benefits to a charitable foundation also demonstrates a lack of adequate
representation under Rule 1.220(a)(4). As noted above, the second amended
complaint seeks only compensatory and punitive money damages to
pay for the class members' personal injuries. When notified of the class
certification and their right to opt out in January 1997, the class members
were told the same thing: that this class action sought damages for tobacco-related
injuries. And later, when the plaintiffs tried their case in chief, as
the notice of this settlement clearly states, the plaintiffs were attempting
to establish the defendants' liability, so that the class members could
come forward in "Stage II" and prove their money damages.
Little did the absent plaintiffs know that lead plaintiffNorma
Broin's chief goal in this class action was not to collect the money
damages that she demanded in the complaint or proclaimed in the January
1997 notice, but to prove a point:
We have accomplished a huge amount of what we
set out to do. This [lawsuit] was never about money to me. It was
about exposing the lies, deception, and fraud [of the tobacco industry].
"Ex-Utahn Sought Truth, Not Money," The Salt Lake Tribune (Oct.
11, 1997)(quoting Norma Broin)(emphasis added)(attached as Exh. 3). Thus,
plaintiff Broin was never seeking the money damages that the Williams Objectors
have every reason to believe was the central-- indeed, the only--goal
of this lawsuit.
The inadequate representation that upended the settlement involved
in Amchem Prods., Inc. v. Windsor, 117 S. Ct. 2231 (1997), pales
in comparison to the inadequate representation here. In Amchem,
the named plaintiffs who had been exposed to the defendants' asbestos products
entered into a settlement that would provide them cash payments if and
when they contracted certain asbestos-related diseases. The Court ruled
that the named plaintiffs were not adequate representatives under Fed.
R. Civ. P. 23(a)(4)--the federal counterpart to Rule 1.220(a)(4)--because
they sought to represent both currently-injured class members and those
who might be injured in the future. Amchem, 117 S. Ct. at 2250-51.
As the Court pointed out, the interests of these two groups were divergent,
because currently injured plaintiffs would be seeking to maximize current
benefits, while those seeking insurance against future injuries might want
protections against inflation, a future opt-out right, and other benefits
that the settlement did notprovide. Id. at 2251.
Although the global settlement in Amchem failed miserably
to protect the absentees, at least there was some nexus between what the
plaintiffs sought in the complaint and what the settlement was intended
to provide. Thus, from the beginning, the class representatives in Amchem
sought cash recoveries for their present or future asbestos-related injuries.
And despite the settlement's crippling intra-class conflicts, the settlement
did, in fact, provide cash recoveries. Here, by contrast, the complaint
has Norma Broin leading the charge to collect money damages for class members
such as the Williams Objectors, but she now proclaims that "[t]his [case]
was never about money to me." Thus, the settlement establishes a research
foundation named after Mrs. Broin, but pays no money to the Williams Objectors
or any other class member. Indeed, it tells the Williams Objectors and
their fellow class members that their only chance at recovering damages
is in individual litigation that has not even commenced--the very type
of litigation that the class action was filed to avoid.
One additional point bears mention. As the Supreme Court has
said repeatedly, the requirement of adequate representation in state-court
class actions has it roots in the Fourteenth Amendment's Due Process Clause.
See, e.g., Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 812 (1985);
Hansberry v. Lee, 311 U.S. 32, 42-43 (1940); see also Matsushita
Elec. Indus. Co. v. Epstein, 116 S. Ct. 873, 889 (1996)(Ginsburg, J.,
concurring). Because the causes of action held by absent class members
are a form ofproperty protected by state law, see Logan v. Zimmerman
Brush Co., 455 U.S. 422, 428-29 (1982), they cannot be compromised
unless the named plaintiffs have provided adequate representation. Shutts,
472 U.S. at 712. And although, the Florida Supreme Court has yet to develop
a due process class action jurisprudence, we have no doubt that Article
I, section 9 of the Florida Constitution--which is modeled on the Fourteenth
Amendment's due process clause-- incorporates the same principles enunciated
by the Supreme Court of the United States.
Here, it is uncontested that the named representatives have
drastically altered the nature of the class members' rights in their causes
of action. They can no longer seek punitive damages. They can no longer
bring any claim based on fraud, misrepresentation, concealment, or any
other intentional tort theory, which is quite troubling since, according
to Ms. Broin, the class action was principally "about exposing the lies,
deception and fraud" of the tobacco industry. Absent class members like
the Williams Objectors can no longer join with other plaintiffs in fighting
the tobacco industry. And the $300 million extracted from the defendants
in compromise of the plaintiffs' claims is going not to the injured flight
attendants but to the Broin Foundation. For the reasons stated above, the
settlement must be rejected on non- constitutional grounds. Moreover, given
these facts, the near- complete abandonment of the interests of absent
class members such as the Williams Objectors also constitutes a violation
of the dueprocess clauses of the Florida and United States Constitutions.See
B. The $46 Million
Attorney's Fees Request Should Not Be Approved.
At this juncture, there is no basis for approving class counsel's
gargantuan $46 million fee request. Not only is the amount greatly in excess
of even the most generous estimates of the time and risk involved, but
class counsel has yet to come forward with evidence to substantiate any
fee as required by law. See Kuhnlein v. Dep't of Revenue, 662 So.2d
309 (Fla. 1995). We acknowledge that class counsel has spent many years
and invested considerable resources on this litigation and, therefore,
if the settlement were one that the Court could approve, a generous fee
would be justified. That fee could properly take into account both the
Rosenblatts' time, monetary investment, and a reasonable enhancement for
the risk of non-recovery.
More so than with respect to the settlement itself, it is fundamentally
unfair for class counsel to require class members to object to the fee
request before class counsel has even filed a fee application. Thus,
class members will not have access to theRosenblatts' claimed lodestar,
proposed fee enhancements, or any other rationales for the $46 million
fee when their initial objections are due. As we understand it, the fee
application need not even be filed until the close of business on January
19, 1997. And given the lack of cooperation we have encountered from class
counsel in obtaining other documents, we may not see the application until
just before the fairness hearing. Thus, we reserve the right make further
objections and to take discovery relevant to the fee request after we have
had a full opportunity to review the application. Nonetheless, there are
several basic observations that we can make regarding the fee request,
even on the current record.
First, the Court should not reach the fee question
at all because the settlement does not warrant approval; the following
points apply only if the Court decides to approve the settlement.
Second, class counsel may not avoid scrutiny of
their fee request on the ground that the defendants have agreed to pay
the fee "separate" from the $300 million payment to the Broin Foundation.
Any defendant, particularly the highly sophisticated litigation-tested
defendants here, are well aware that a class action settlement involves
both payments (or other consideration) for the merits and payments for
fees. Settlement of both elements are generated by the value of the plaintiffs'
claims, and it is up to the Court, not the settling parties, to
determine what portion of the entire settlement proceeds are to be paid
to the plaintiffs' attorneys.
In In re General Motors Corp. Pick-up Truck Fuel Tank Prods.
Liab. Litig., 55 F.3d 768 (3d Cir.), cert. denied, 116 S. Ct.
88 (1995), the settlement provided that class members would be awarded
coupons toward the purchase of a new General Motors truck. In addition,
the plaintiffs' attorneys sought, and the lower court awarded, a $9.5 million
fee to be paid by the defendants. Class counsel argued that, because, under
the settlement, the fee was to be paid "separately" by the defendant apart
from the coupon distribution, objecting class members did not have standing
to contest the fees on appeal. The Third Circuit rejected that argument
as "patently meritless" because the settlement's fee component was "for
all practical purposes, a constructive common fund." Id. at 820;
accord General Motors Corp. v. Bloyed, 916 S.W.2d 949, 957-58 (Tex.
1996); see also Weinberger v. Great Northern Nekoosa Corp., 925
F.2d 518, 522-24 (1st Cir. 1991)(even where defendant agrees to pay fee,
judicial scrutiny is necessary to police potential conflict between class
members' interests and those of fee-seeking attorneys).
Thus, there can be no argument here that the class members have
no interest in the Rosenblatts' fee award, as a smaller fee for the Rosenblatts
may well have led to a more favorable settlement for the class members.
Indeed, the class members' interest in opposing the fee request is even
greater here than was the class members' interest in General Motors.
There, the defendant had, in the settlement agreement, reserved the right
to oppose any fee request, see In re General Motors Corp. Pick-upTruck
Fuel Tank Prods. Liab. Litig., 846 F. Supp. 330, 352 (E.D. Pa. 1994)
(quoting attorney's fees provision of settlement), thus arguably retaining
the right to minimize its fee liability by arguing that class counsel had
not earned the requested fee. Here, just the opposite is true; the defendant
has already agreed--in a so-called "clear sailing" provision--that $46
million is a reasonable fee and has pledged not to oppose a request
for that amount. Settlement Agreement, ¶ 10. As the U.S. Court of
Appeals for the First Circuit has held, "the very existence of a clear
sailing provision increases the likelihood that class counsel has bargained
away something of value to the class ... mak[ing] heightened judicial oversight
... highly desirable." See Great Northern Nekoosa, 925 F.2d at 525.
Indeed, since the defendants have disclaimed any interest in the $46 million
fee, to the extent that the fee award is less than $46 million, the "savings"
should be retained by the class members.
Third, class counsel's evidentiary burden here
is considerable. Under Kuhnlein, supra, class counsel may
only obtain a fee on a lodestar basis and, therefore, they must provide
the Court with billing records, describing their work on a task-by-task
basis. This will enable the Court and the objectors to determine whether
$46 million, or some lower amount, is the proper fee.
Fourth, the fee request appears to be grossly excessive.
See Florida Bar Rule 4-1.5. Apparently, Stanley and Susan Rosenblatt
are the principal, if not the only, attorneys who will share in the fee.
At $250 per hour, the Rosenblatts would have had to put in184,000 hours
(or 23,000 eight-hour days) on this case to earn $46 million. Even assuming
a multiplier of three (i.e., $750 per hour), that would mean 7,667
eight-hour days (or more than twenty- five years of 300 days each) devoted
solely to this litigation.
Fifth, as noted earlier, assuming that the Court
approves the settlement, a reasonable contingency multiplier should be
added to a reasonable lodestar fee. However, any multiplier should be tempered
by one factor peculiar to this settlement. In most class actions, a settlement
terminates the claims of the class and thus ends all related litigation.
Here, however, the Rosenblatts have structured the settlement so that the
class members get no money now, but may file individual suits at
a later date. Part V of the class notice states that the Rosenblatts intend
to offer representation in many of those cases, which they will presumably
handle under percentage retainer agreements yielding them between one-third
and 40% of any recovery. Although we acknowledge that those future individual
cases will bear their own risks, the Rosenblatts will stand to gain considerable
additional fees. However, the size of the multiplier in a class action
like this depends, in part, on the quality of the results obtained. See
Kuhnlein, 662 So.2d at 315. Here, that "quality" depends largely on
whether individual litigants such as Norma Broin and the Williams Objectors
will be able to obtain reasonable settlements or judgments without the
right to seek punitive damages or the right to recover on the basis of
fraud, concealment, and other intentional misconduct perpetrated by the
tobacco industry. Therefore, part of class counsel's multiplier should
be deferred to the individual litigation, to be collected in the form of
contingent fees if that litigation is successful.
C. Renegotiation of the Settlement.
As explained above, we believe that the settlement suffers from
one fundamental defect: It trades the plaintiffs' valuable claims for a
research fund named in honor of the lead plaintiff, without paying a penny
to the injured class members. Our criticisms of the settlement are not
an attack on the altruism exhibited by Norma Broin or by any other flight
attendant who wishes to advance medical research. That altruism is highly
admirable. But no one--especially class counsel or the named representatives
in a class action--has the right to demand altruism of others. In short,
the Williams Objectors and the other class members have been forced, through
the compromise of their valuable claims, to make a charitable contribution
to the Broin Foundation.
The defendants have determined that $300 million is a reasonable
purchase price for elimination of the class members' rights to punitive
damages and intentional torts and to aggregate their cases. If that $300
million were placed in a fund to be divided in a reasonable manner among
the class members, we would have no objection to such a settlement. We
recognize that this Court is not empowered to remake the parties' agreement,
Levenson v. American Laser Corp., 438 So.2d 179, 183 (Fla. App.
2d Dist. 1983); Evans v. Jeff D., 475 U.S. 717, 726-27 (1986), but
it can reject the current agreement and suggest what changes would benecessary
for approval. See id. at 726; Bowling v. Pfizer, 143 F.R.D.
138 (S.D. Ohio 1992)(court suggested changes later incorporated in Bowling
v. Pfizer, 143 F.R.D. 141 (S.D. Ohio 1992)). We urge the Court to take
that approach here.
There is another possibility that the Court may wish to consider.
Class counsel have indicated that the class members overwhelmingly support
this settlement and its $300 million payment to the Broin Foundation. Perhaps
the class members agree with Norma Broin that this case "hasn't been about
money. It's been about education and getting the truth." Associated Press
News Report (attached as Exh. 4). Perhaps many of the absentees are willing,
therefore, to trade the value of their claims to promote tobacco-related
medical research. That proposition could easily be tested by allowing the
class members to designate in writing whether they wish to contribute their
share of the $300 million settlement fund to the Broin Foundation or whether
they wish to keep that amount for themselves. Of course, if the class members
opt to make a donation, they would also keep the other alleged benefits
of the settlement, such as the waivers of the statutes of limitations and
repose, the altered burden of proof, etc. For class members who do not
make such a donation, it would be reasonable to require them to sign an
appropriate release. If class counsel are correct about the class members'
support for the settlement, they should support our proposal, because the
result would be roughly the same as it would be under the current plan,
while preserving the class members' autonomy.
For the reasons stated above, the proposed class action settlement
should not be approved. We ask the Court to consider the alternative solutions
Alan B. Morrison
Attorneys for Class Members
Angela Williams, et al.
January 5, 1998
1 This settlement stands in stark contrast to Bowling v. Pfizer,
143 F.R.D. 141 (S.D. Ohio 1992), a class action involving about 50,000
patients implanted with a potentially deadly, fracture-prone heart valve.
The settlement provided $90 million in immediate cash benefits, various
payments to class members who suffered valve fractures or who underwent
valve replacement surgery, and a $75 million research fund. Id.
at 148-50. The research fund was directed toward fostering non-invasive
methods for detecting fracture-prone valves and to enable class members
to pay for diagnostic services, both of which would directly benefit the
class members. Id. at 149.
2 Under Rule 1.220(c)(2), as under its federal counterpart Fed. R.
Civ. P. 23(c)(2), class members in (b)(3) class actions have a right to
opt out prior to a determination of their claims. That kind of notice was
sent out in this case in January 1997, and the class members were told
that this class action sought money damages for tobacco-related illnesses
and that they could opt out by May 1, 1997. Because that notice was sent
before the class members' claims were transmogrified into a request
for a research foundation, no "meaningful" right to opt out was provided
in this case. The failure to provide a meaningful opt-out right violates
both Rule 1.220(c)(2) and the due process clauses of the Florida and federal
constitutions, see Phillips Petroleum Co. v. Shutts, 472 U.S. 797,
813 (1986), which can only be cured if the class members are accorded a
right to opt out of the settlement.