IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF LOUISIANA
___________________________________
)
IN RE FORD MOTOR CO. BRONCO II ) MDL DOCKET NO. 991
PRODUCTS LIABILITY LITIGATION ) No. 94-MD-991
___________________________________)
IN THE CIRCUIT COURT
OF GREENE COUNTY, ALABAMA
___________________________________
)
MARY RICE, BRENT PUCKETT, and )
RANDALL HALLMARK, individually and )
on behalf of all others similarly )
situated, )
)
Plaintiffs, )
)
v. ) Civil Action No.
) CV-93-065
FORD MOTOR COMPANY, )
)
Defendant. )
___________________________________)
PARTIAL RESPONSE OF THE BENNETT, ET AL.
OBJECTORS TO THE SETTLING PARTIES
SUBMISSIONS OF OCTOBER 31, 1994
Class members Suzanne F. Bennett, Al Causey, Michael E.
Roberts, and Robert Hooker, and the Center for Auto Safety, a
national automotive safety organization, hereby respond to the
submissions of the settling parties filed on October 31, 1994.
(See Footnote 1) As we had noted in support of our discovery
requests, many of the assertions made by the settling parties,
and some of the proposed settlement's terms, had not been
explained in the settling parties' September 30 memoranda. As
expected, the October 31 filings are far more voluminous than
what the settling parties had previously filed on September 30
and tread a great deal of new ground.
This memorandum is a *partial* response to those filings
because we are simply unable to garner our responsive
affidavits, and to present argument on wholly new issues
(*e.g.*, class counsel's marketing survey which was not even
commissioned until several days *after* we filed our
Objections), in just a couple of days. The issues that we
will address in a future filing -- as soon as is possible --
include the following: the strength of plaintiffs' case, the
diminution in value of the Bronco II vis a vis its
competitors, the marketing survey conducted by Dr. Itamar
Simonson, the cellular phone offer, the settling parties' new
materials on the validity of the proposed consumer warnings,
and the viability of retrofit.
Nevertheless, we are filing this memorandum on three
critical issues that we were able to respond now, in the hope
that the Court and the parties will be able to review them in
advance of the fairness hearing. Those issues are: notice to
the class; the "reaction of the class;" and attorney's fees
(including notice with respect to attorney's fees).
In particular, the information presented by the class
counsel as to the efficacy of the notice in this case very
seriously undermines the settling parties' claims that the
class notice comported with Rule 23 and due process.
Moreover, as we show below, the settling parties have not even
responded to the information we had previously presented that
strongly suggested that the first-class mail notice was not
nearly as effective as the settling parties promised it would
be. Because this is a threshold issue, we wanted our views to
reach the Court in advance of the fairness hearing.
*A. The Notice Did Not Meet the Requirements of Rule 23 or
Due Process.*
The settling parties' responses to our claims that the
notice was not the "best notice practicable under the
circumstances" is unavailing. *See* Fed. R. Civ. P. 23(c)(2).
First, a remarkable 39,959 of the 691,373 notices sent to the
class were returned as undeliverable. Freese Aff. Par. 1
(Oct. 30, 1994). While 6,602 were resent to presumably
correct addresses, *id.*, that left 33,357, or almost 5% that
were simply undelivered. Obviously, for this 5% of the class,
only a widespread publication campaign such as that undertaken
in *In re Domestic Air Transportation Antitrust Litigation*,
148 F.R.D. 297, 311 (N.D. Ga. 1992), and in *In re Agent
Orange Product Liability Litigation*, 818 F.2d 145, 167-68,
175 (2d Cir. 1987), would have provided proper notice.
Based solely on the information concerning undelivered
notices, Ford makes the rather bizarre leap of faith that "it
appears that individual mailed notice was received by as much
as *95 percent* of the Settlement Class." Ford Reply, at 44
(emphasis in original). But the 5% of the notices that were
not delivered -- as serious as that is in light of the very
scant publication notice -- appears to be only the tip of
iceberg. As we noted previously, the only study of which we
are aware indicates that almost 30% of car owners are not
notified of recalls and 24% of the owners of cars more than
two years old who receive recall notices are *not* the current
owners of the vehicles. Bennett Obj., Ex. 4, Ditlow Decl.
Par. 9; Ex. 16, Ditlow Supp. Decl., Par. 2 & Attachment 1
thereto. The settling parties do not respond at all to this
study, and present *no* evidence whatsoever to support Ford's
wild suggestion that 95% of the class received first-class
mail notice.
Moreover, buried in the class plaintiffs' newly presented
evidence is the Affidavit of Dr. Itamar Simonson, who
conducted a survey of Bronco II owners based on "[t]wo random
samples of 1,000 names each of Bronco II owners *generated by
Ford from the complete list of Bronco II owners*, using a
random number generator." *See* Simonson Aff., Par. 13 (Oct.
28, 1994), Exhibit B.7. to Class Counsel ("CC") Reply
(emphasis added). The research firm that conducted the survey
attempted to obtain telephone numbers for 1,300 of these
randomly chosen purported Bronco II owners, and 731 numbers
were obtained. Of those 731, 69 were invalid telephone
listings, 257 did not answer their phones after four attempts,
another 54 refused to participate in the survey, and one other
person could not respond because of a language barrier,
leaving 350 others to respond to the survey. Of these 350
potential respondents, however, *an incredible 150, *or nearly
43%*, indicated that they did not own a Bronco II*. *Id.*
If, as appears to be the case with this randomly chosen set of
alleged Bronco II owners, taken, as Dr. Simonson said, "from
the complete list of Bronco II owners," it is obvious that the
first-class mail notice was seriously -- and unlawfully --
deficient.
But that is not all. The answers to Dr. Simonson's
survey make absolutely clear that, because there was virtually
no notice by publication, most of the class was left in the
dark. Of the 200 actual Bronco II owners who responded to the
survey, *only 59% had even heard of the settlement at all.*
*Id.* Par. 16 & Ex. C thereto at Table 6-1. Because this
survey was performed from October 21-25, 1994, shortly after
the notice campaign had been completed, it is very likely that
the 59% figure is accurate. Put another way, it is highly
unlikely that the 41% who said they had never heard of the
settlement has simply forgotten that they had been notified by
first-class mail a few weeks earlier.
The bottom line is this: nearly 43% of people whom Ford
told Dr. Simonson were Bronco II owners were *not*, in fact,
Bronco II owners. And, of those who were Bronco II owners,
41% stated that they had no notice of the settlement, by
first-class mail or otherwise. Thus, under the sworn
affidavit of class counsel's own witness, the first-class mail
notice did not reach a clear majority of the class, a far cry
from Ford's unsubstantiated claim that the notice reached 95%
of the class by first-class mail.
That said, the case law plainly requires full-scale
publication notice, like that which occurred in the cases
cited in our Objections Brief, *see* Bennett Obj. Br. at 30-
33. In short, because a very significant segment of the class
did not get first-class mail notice, one summary notice in
*USA Today* is plainly not the "best notice practicable under
the circumstances" under Rule 23(c)(2), nor does it comport
with due process.
We will not repeat the authorities described in our
Objections, but several of the assertions on the issue of
notice made by the settling parties warrant a brief response.
*First*, Ford's main objection to the cases upon which we rely
is that they involved situations in which "the settlement
class members could not be individually notified." Ford Rep.
at 45 n.23. Actually, in those cases, some, but not all, of
the class could not be individually notified (recall that in
*Domestic Air*, 10 million potential class members were sent
first-class mail notice) and, therefore, a sweeping
notification campaign by publication and other media was
required. As we have shown, this *is* such a case in which
many class members were not individually notified, and,
therefore, the cases we cite are directly on point. (See
Footnote 2)
*Second*, despite Ford's protestations to the contrary,
*Taylor v. Liberty Nat'l Life Ins. Co.*, 462 So. 2d 907 (Ala.
1984), is on point. Here, as in *Taylor*, certain class
members were not given personal notice, and due process was
found lacking with respect to those who did not get such
notice in the absence of a formal publication campaign. Ford
distinguishes *Taylor* on the ground that the first-class
notice here was "designed to reach all class members ... ."
Ford Rep., at 46 n.23. Of course, we do not know Ford's
purpose in doing the notice campaign as it did, but that is
irrelevant; the fact is that all available evidence suggests
that the first-class mail notice was woefully inadequate,
regardless of how Ford "designed" the program.
*Third*, Ford maintains that our notice arguments are off
the mark because we have "completely ignore[d]" the fact that
the settlement received mention in a handful of newspaper
articles. Ford Mem. at 46 n. 24. That is incorrect for
several reasons. *Taylor* demonstrates that the mention of a
case in a newspaper (or TV story) is not the type of notice
contemplated by due process. 462 So. 2d at 914 (rejecting
notion that such media stories provide proper notice).
Moreover, missing from Ford's Reply is any explanation of what
these newspaper stories told the class; we doubt if all (or
even any) of these stories explained the terms of the
settlement, how to opt out, where to write for further
information, the right to object and retain one's own counsel,
and other items that would be included in a court-approved
notice or a formal publication notice. In any event, Dr.
Simonson's survey is conclusive on this point. Plainly, these
newspaper stories in a few cities were not the type of
effective notice that the courts approved in *Domestic Air*,
*In re Agent Orange*, and other cases, since a large
percentage of the class has never even heard of the
settlement. Simonson Aff. Par. 16.
*Fourth*, class counsel asserts, without *any* authority,
that "it is axiomatic that Rule 23 only requires such notice
as the court directs." CC Reply, at 18. (See Footnote 3) To
be sure, this Court has latitude in applying Rule 23(c)(2),
but the Court is not bound to approve a notice that was not
received by a large segment, or, it appears, by a majority of
the class. If this Court approved the notice program because
it was assured that the lists used by Ford were going to reach
all, or virtually all, current Bronco II owners, it surely
need not reaffirm the propriety of that notice program when it
is informed that the factual predicate for such an assurance
is simply not there. (See Footnote 4)
In light of the foregoing, the proposed settlement may
not go forward until such time as the class is given notice
that comports with Rule 23 and the Due Process Clause.
*B. The "Reaction of the Class" Does Not Aid the Settling
Parties.*
The settling parties argue that, because only a small
percentage of the class has opted out of the settlement, and
an even smaller percentage of the class has objected, this
somehow shows that the settlement is a good deal and should be
approved. We respectfully disagree. To be sure, there are
statements in the case law that "silence *may* be construed as
constituting tacit consent to the settlement agreement and
strongly favors approval of the settlement." *Bell Atlantic
Co. v. Bolger*, 2 F.3d 1304, 1313 (3d Cir. 1993)(emphasis
added). But even the case that said that recognized that such
assumptions can be quite unrealistic. *Bell Atlantic*
recognized that class response rates are low even when class
members are informed that they are entitled to money and need
merely fill out a short form to obtain it. *Id.* at 1313
n.15. And, this Court recognized as much in its October 28,
1994 discovery order, when it rejected the settling parties'
arguments that discovery should be denied simply because only
a small number objectors wanted discovery.
This Court in *In re Prudential-Bache Energy Securities
Litig.*, 815 F. Supp. 177, 182 (E.D. La. 1993), had it exactly
right:
The Court does not feel that mere silence is
acquiescence. It has a responsibility to those
silent voices who will be affected by this
litigation. Should the Court not undertake this
responsibility, some parties, and there is no
intention to implicate the parties hereto, would be
free to enter into any type of settlement and bind
those too timid to object or opt-out so long as an
opt-out provision is present.
Moreover, equating silence with approval of the
settlement overlooks the fact that, in mass consumer lawsuits,
objections are usually sparse because many class members may
not understand, or have the time or resources to further
explore, the issues in the notice. In short, for many
consumers, the cost of monitoring a class action is too great
to justify becoming involved. Thus, "[i]n sophisticated
settlements where the majority of absent class members are
usually unrepresented by counsel and possess insufficient
knowledge to evaluate the fairness of the settlement, [the
lack of objectors] should not be controlling." Newberg on
Class Actions* Sec. 11.27, at 11-53 to 11-54 (3d ed. 1992).
As this Court put it in its October 28, 1994 Order on
discovery (at 12):
The vast majority of the class members have no
ability to evaluate the fairness of the proposed
settlement. The court must rely upon its
investigation and the input of the few objecting
class members who do have the resources to provide
the court with pertinent information.
Response rates are likely to be especially low where, as
here, (1) class members are presented with a combined notice
of the class action and the settlement -- or, as Judge Posner
has put it, "a fait accompli," *Mars Steel Corp. v. Conti-
nental Ill. Nat'l Bank & Trust Co.*, 834 F.2d 677, 681 (7th
Cir. 1987) -- and (2) the settlement is of such trivial value
that it is not worth the consumer's time and expense to
investigate it. Moreover, the settling parties' view that the
class had silently ratified the settlement appears
particularly dubious when contrasted with the results of a
survey conducted *after* the opt-out deadline by class
counsel's marketing expert, who reported that almost half of
the class members did not even know about the settlement.*
See* Simonson Aff., Par. 16. Given all these obstacles, the
remarkable fact is that more than 1,000 members of the class
were well enough informed to object or opt out, not that the
rest of the class remained silent.
Further, it should be noted that objections were filed by
the best informed members of the class, namely, individuals
separately represented by counsel with in-depth information
about the facts of the case from other litigation, and by an
automotive safety organization with great knowledge of the
underlying problems of the Bronco II. These objectors were in
a far better position to inform themselves about the merits of
the settlement than the many consumers who probably knew
nothing about the lawsuit before receiving notice that the
suit was about to be settled. Thus, just as widespread and
vocal opposition to a settlement does not necessarily make
that settlement unreasonable, class members' resignation to a
bad deal does not justify its approval by the courts. *In re
General Motors Corp. Engine Interchange Litig.*, 594 F.2d
1106, 1137 (7th Cir.) (similar), *cert. denied*, 444 U.S. 870
(1979).
In addition, the absent class members were never made
aware of the critical fact that class counsel filed an
application for $4 million in attorney's fees and expenses,
with, as it turned out, no opposition from Ford. The class
never received any notice at all that their lawyers had filed
an application for fees in this amount, a fact that, by
itself, should invalidate the fee award. *See infra* Part
C.3.; *GM Engine Interchange*, 594 F.2d at 1130; *Bloyed v.
General Motors Corp.*, 881 S.W.2d 422 (Tex. App. 1994). The
class members were notified only that class counsel reserved
the right to apply for court-awarded fees, in an unspecified
amount. Surely, if the class members had realized that their
attorneys were likely to receive a large amount of cash, while
they received "relief" of trivial or no value, that would have
led to many more objections. But, because the parties sent
notice of the proposed settlement to the class before any
application for attorney's fees was filed, they managed to
hide that crucial piece of information from the class. *Cf.
National Super Spuds, Inc. v. New York Mercantile Exchange*,
660 F.2d 9, 16, 21 (2d Cir. 1981) (lack of objection by
majority of claimants insignificant when class is not apprised
of crucial terms of settlement).
Finally, the failure to provide the class with an opt-out
form was a serious error that, not only should invalidate the
notice, but should estop the settling parties from relying on
the small number of opt outs. (See Footnote 5) Only Ford
addresses this issue and, with all respect, its argument is
quite misleading. It states that "many courts" have upheld
class notices with no opt-out form because they have
"specifically" found that such notices would engender
confusion and cause unwitting opt outs. Ford Reply, at 48.
However, in reality, Ford has presented only *one* case which
stands for the proposition that Ford claims is hornbook law.
*Id.* (*citing Roberts v. Heim*, 130 F.R.D. 416, 423 (N.D.
Cal. 1988). But *Roberts*' analysis is conclusory; simply
saying that an opt out form will engender confusion does not
make it so, and neither *Roberts* nor Ford puts forth any
explanation as to why an opt-out form, properly explained and
labeled, would be confusing in the least.
The second case cited by Ford, *In re Domestic Air
Transp. Antitrust Litig.*, 141 F.R.D. 534, 553-54 (N.D. Ga.
1992), although citing *Roberts*, does not remotely stand for
the proposition that opt out forms are inherently confusing.
Rather, the court found that some confusion might be
engendered under the peculiar circumstances of that case,
because a claim form was being distributed at the same time;
therefore, the Court was concerned, based on sworn evidence
concerning experience in another similar case, that the class
members mistakenly might file both forms simultaneously.
Although that possibility does not seem realistic, the case
has no bearing here, where no claim form was sent to the
class, and so class members could not possibly have been
confused.
Perhaps most misleading, however, is Ford's failure to
acknowledge that the two leading authorities in the field
indicate that an opt out form should be used. H. Newberg & A.
Conte, *Newberg on Class Actions*, Sec. 8.31, p. 8-100 (Dec.
1992)("One court required absentees seeking exclusion to
request forms specifically prepared for this purpose, however,
in most other cases, exclusion forms are attached to the
mailed or published notice itself")(footnotes omitted); Manual
for Complex Litigation 2d ("MCL") Sec. 30.231 (1985)(same).
Indeed, the MCL contains an opt-out form (also reproduced in
the Newberg treatise) that is specifically recommended for use
in (b)(3) class actions. *Id.* Sec. 41.41 ("Request for
Exclusion"). That form is very simple and clearly would not
have confused the class.
Thus, Ford's argument that the settling parties omitted
an opt-out form because it could have engendered confusion
does not hold water. Whatever the settling parties' motives,
the natural effect on the class was to minimize the number of
opt outs. The failure to provide a simple opt-out form is yet
another reason that the small number of opt outs is of little
help to the settling parties and another reason that the
settlement may not be approved.
*C. No Attorney's Fees Should Be Awarded.*
*1. The Size of the Award Sought is Still Ludicrous.*
In response to our objections to the fee petition filed
by class counsel in the above-styled Alabama action, class
counsel has now supplemented the application with a six-page
memorandum of law and numerous conclusory affidavits from
other attorneys. Once again, *despite the fact that the
notice to the class specifically states that the federal court
will rule on the question of fees*, Class Notice, III, p. 2,
class counsel has failed to file the memorandum of law in the
federal action. Plainly, the federal court cannot properly
review a fee petition that class counsel refuses to file with
that court. Therefore, we attach a copy of class counsel's
new pleading, *see* Ex. 17, as we did with the original fee
petition. (See Footnote 6)
The recently-filed memorandum of law does virtually
nothing to explain why class counsel are entitled to $4
million in fees and expenses (or even how they chose $4
million over $2 million or $10 million). It explains in very
general terms some Alabama case law in which fees supposedly
have been awarded under a "common fund" theory, and describes
the various factors that a court should look to in determining
an award. The memorandum then states, without the detailed
explanation required under applicable law, that the factors
have been met in this case because "plaintiff's counsel have
greatly benefitted the class and the public and will serve the
public interest by preventing accidents related to the alleged
Bronco II rollover defect." Ex. 17, at 6. (See Footnote 7)
This simply will not do. In a case where class members will
obtain warning information quite similar, if not identical, to
information already mandated by federal regulation, 49 C.F.R.
Sec. 575.105, and a so-called inspection to determine whether
the vehicle meets the *defendant's* specifications -- an
inspection that the settling parties have now tacitly conceded
could be performed at home by anyone who can use a tape
measure -- considerably more must be shown to support such a
huge fee request.
*2. The "Fee Petition" is Still Not a Fee Petition.*
In our Objections, we noted that the fee petition did not
resemble fee petitions that are normally filed in complex
litigation -- or even in routine social security cases. *See*
Ex. 13 to Bennett Objections filed on October 17, 1994. The
application contained *no* contemporaneous time records, *no*
expense records, *no* explanation of counsel's customary
hourly rate or the market rates in the relevant community,
and, more generally, *no* real explanation of the work that
had been performed. We noted that such a unsupported
application for such a large amount of money was, to our
knowledge, unparalleled in American jurisprudence. Nothing
about the recent submissions has changed our views.
To be sure, the class plaintiffs have filed more
affidavits, thereby disclosing the names of more attorneys who
have worked on the case, but those affidavits suffer from the
same flaws as class counsel's original affidavits: they
contain no serious explanation of the work performed. *See*,
*e.g.*, Affidavit of Patrick W. Pendley, Par. 5 (stating
simply that he has spent about 140 hours "in prosecuting this
litigation"); *compare* *In re Oliver North (Watson Fee
Application*), 32 F.3d 607, 608 (D.C. Cir. 1994)(denying fees
"in toto" because the "attorney has not produced, nor did he
even maintain, any contemporaneous records reflecting the work
he performed ..."). The fee petition must still be rejected
in its entirety unless and until counsel furnishes the
detailed information that the law requires. (See Footnote 8)
*3. Notice to the Class About Fees.*
There is absolutely no excuse that the Notice did not
state the amount of the fee that class counsel would be
seeking. Class counsel's brief simply misses the point, when
it describes the general requirements for notice, *i.e.*, the
notice must "'present a fair recital of the subject matter and
of the proposed terms and must give the class and opportunity
to be heard.'" CC Reply Br., at 20 (quoting *Miller v.
Republic Nat. Life Ins. Co.*, 559 F.2d 426, 429 (5th Cir.
1977)). That general description of the notice requirement,
in our view, encompasses the issue of fees, and, more to the
point, it does not exclude any requirement that the amount of
fees sought be disclosed in the notice.
Class counsel also cites *In re Domestic Air Trans.
Antitrust Litig.*, 148 F.R.D. 127 (N.D. Ga. 1993), purporting
to quote a notice about fees from that case which class
counsel claims was identical to the one used in this case. CC
Reply, at 19. Class counsel is simply incorrect. Although
the class notice and settlement agreement in *Domestic Air*
left something to be desired, the notice did specifically
stated that counsel fees would come out of a $50 million cash
fund for fees, expenses, and administrative costs, which,
given the settlement's allocation of these funds, left at
least $24 million for fees (which is precisely what counsel in
that case requested). Class Notice in *Domestic Air*, at VII,
p. 3; Agreement of Settlement in *Domestic Air*, at Par. 5.
Thus, *Domestic Air* supports our position that notice to the
class about fees is quite practicable, and certainly does not
support the position that no notice on the issue is
appropriate. (See Footnote 9)
While we strenuously disagree with *class counsel*, with
all respect, *Ford's* use of authorities on this issue is
truly unseemly. First, Ford cites the Newberg treatise for
the proposition that the notice need only "apprise class
members that fees will be sought ... ." Ford Reply, at 50.
However, that very same treatise, just two pages earlier,
lists items that it calls the seven "basic elements" of a Rule
23(e) notice, number four of which is "[r]equested allowances
for attorney's fees." Newberg, *supra*, at Par. 8.32, p. 8-
105. Furthermore, Newberg provides a suggested Rule 23(e)
notice *in which a specific maximum amount of fees to be
sought is provided.* *See id.* Appendix 8-2, p. 8-148
("Illustrative Rule 23(e) Notice and Proof of Claim")(giving
actual dollar figures). Moreover, the Manual for Complex
Litigation, at Sec. 41.42, also provides a form in which class
counsel notifies the class of the maximum amount of fees to be
sought.
Second, Ford attempts to distinguish *Bloyed*, *supra* --
a case directly on point -- on the ground that, because it was
decided under the Texas Rules of Civil Procedure, "it has no
jurisdictional force in these proceedings." Ford Reply, at 50
n.26. We are not sure what this means, but if this is simply
a fancy way of saying that *Bloyed* is not controlling
authority, we have never suggested otherwise. But, if Ford
means to imply that the Texas Rules of Civil Procedure are
wholly different from the Rules applicable here, that is
plainly wrong, as *Bloyed* itself noted. *Bloyed*, 881 S.W.
2d 422, 1994 Tex. App. Lexis 1481, *9 n.5 (indicating that the
Texas class action rule is patterned after Fed. R. Civ. P. 23
and that "federal case law on this subject is persuasive").
Third, Ford states that the U.S. District Court for the
Eastern District of Pennsylvania, in a case concerning the
same settlement, has ruled in a manner "directly contrary to
the conclusion reached by" *Bloyed*. Ford Reply Br., at 50
n.26. That is not true. The reported decision in *In re
General Motors Corp. Pickup Truck Fuel Tank Product Liability
Litigation*, 846 F. Supp. 330, 341 (E.D. Pa. 1993), *appeals*
pending*, Nos. 94-1064, 1194, 1195, 1198, 1202, 1203, 1207,
1208, 1209, 1219 (3d Cir.) -- which Ford does not even bother
to mention is pending on appeal -- did not address the
question of attorney's fees or the class notice. Later, in
two unpublished orders, dated December 20, 1993, and February
2, 1994, the district court approved the fee request, without
a hearing on the question of fees or an objection from the
class on the fee issue, principally because the objectors were
not even served with the fee application. Some of the
objectors have raised the question of fees on appeal for the
first time -- including the issue of notice to class with
respect to fees. *See*, *e.g.*, Brief for Appellants Youngs
*et al.* in *In re General Motors Corp. Pickup Truck Fuel Tank
Product Liability Litigation*, Nos. 94-1207 and 94-1208 (Mar.
21, 1994), at 48-49.
Thus, the authorities cited by the settling parties
provide them no solace. And, one must ask -- regardless of
the force of legal authorities -- why didn't class counsel
reveal in the notice the amount of the fees that they would be
seeking? What did the settling parties have to hide? The
settling parties persist in the silly notion that they had
nothing to hide, and that the whole problem was one of timing:
the fee had not been requested when the notice was sent out.
Ford Reply Br., at 50. (See Footnote 10)
But this cannot be the reason for not telling the class
of the fee to be sought. It is not as if class counsel did
not know the amounts of the fees and expenses they would be
seeking in August, when the notice was prepared, or in mid-
September, when the notice was sent out, but that, on
September 30, when the fee petition was filed, all of a sudden
class counsel had a precise accounting of the fees and
expenses. As we have noted, the request is a perfectly round
$4 million based on a time and expense "guesstimate" that has
changed radically in the last month alone. In short, there is
no legitimate reason for the failure to provide notice to the
class of the fee to be sought, and no fee may be awarded
unless and until the class is given proper notice. (See
Footnote 11)
*4. Ford's Shocking Failure to Oppose the Fee Request.*
When the Bennett Objectors filed their original
objections, they did not know that Ford was not going to
oppose class counsel's fee request. We take claims of
collusion very seriously, and we have not made any in this
litigation. Further, we agree with this Court's October 28
Order that there is no direct evidence of collusion, Order at
11, as there almost never is. However, the fact that Ford has
not opposed a plainly excessive, and procedurally inadequate,
fee request, is, with all respect, circumstantial evidence of
collusion.
Ford stands to lose $4 million if the fee petition is
approved in full. That being so, why did not Ford object on
the ground that the $4 million award was excessive, or, at the
least, that a fee could not be awarded in the absence of *any*
time records, expense records, the names of the attorneys who
worked on the case and their relevant experiences, the market
rates for attorney's fees in the relevant communities, and all
the other indicia of a proper fee application? On the other
hand, why has Ford mounted such a vociferous defense of the
failure to disclose the amount of the fees requested in the
notice, a failure which can only harm class counsel's
pecuniary interests not Ford's? We urge the Court to pose
these questions to Ford before it rules on the fairness of the
settlement, not to mention the fee request, if it reaches that
issue.
FOOTNOTES
1 We received Ford's submission in the early evening of
November 1, 1994, and class counsel's submission on the
afternoon of Tuesday, November 2, 1994.
2 To the extent that some cases suggest that a first-class
mail notice, standing alone, that reaches only a small
fraction of the class is the "best practicable notice
under the circumstances," they are flatly inconsistent
with the terms of Rule 23(c)(2) and the weight of
authority.
3 *See also id.* ("Because this Court approved the notices
we sent, it may summarily dispose of the objectors'
meritless and unwarranted attacks on the adequacy of
notice").
4 Even after the Simonson Affidavit and our prior
presentation of the 1980 study commissioned by the
Department of Transportation (which the class plaintiffs
simply ignore), class counsel persists in maintaining
that "Plaintiffs sent actual notice to over 691,373 class
members ... ." CC Reply, at 18. We note that class
counsel may not rely on the Settlement Agreement
provision that *Ford* need do not more than send the
notice to the list maintained by R.L. Polk and publish
the notice in *USA Today*. *See* SA, Par. 6.b., pp. 9-
10. Regardless of Ford's obligation, the *class
plaintiffs* are responsible, by law, for fulfilling the
notice requirements under Rule 23 and the Due Process
Clause. *See*, *e.g.*, *Eisen v. Carlisle & Jacquelin*,
417 U.S. 156 (1974).
5 The Bennett Objectors did not raise this specific issue
in its original Objections, because we were unaware that
an opt-out form had been omitted from the Notice package.
We (erroneously) assumed that an opt-out form was
included, as is standard operating procedure under the
Manual on Complex Litigation 2d. Nevertheless, since
other objectors raised the issue, it is properly before
the Court.
6 We have not, however, filed the supporting affidavits,
which we believe class counsel are obligated to file with
the federal court and which we urge the federal court to
demand, among other things, before it considers approving
the proposed settlement. We cannot, of course, be
certain that the fee petition has not been filed in the
federal action, but the style of the federal case appears
nowhere on the fee memorandum and the memorandum deals
almost exclusively with propositions of Alabama law.
7 In addition, class counsel presents the affidavit of
another lawyer from Birmingham, Alabama, who baldly
proclaims that the proposed settlement "was the best
result obtainable." Affidavit of Andrew P. Campbell.
How does Mr. Campbell know that and why is his opinion on
that question relevant? Mr. Campbell may, if he desires,
seek to file an amicus brief (to which we would not
object), to argue that the fee requested is appropriate,
but Mr. Campbell's sworn affidavit does not magically
transform a matter of opinion or argument into one of
fact. Interestingly, Mr. Campbell says nothing about how
class counsel's fee request compares with market rates in
Birmingham.
8 Class counsel's original estimate of about 3,300 to 3,500
hours of work performed, and to be performed, on the
case, has now burgeoned to "in excess of 5752 hours," Ex.
17, at 6, again without the benefit of time records.
Much more troubling is class counsel's statement that
they "have advanced or will advance by conclusion of this
matter more than $500,000 in out-of-pocket expenses in
preparation of this case," *id.*, because of their prior
statement that expenses would be at least $800,000.
*See* Bennett Obj., Ex. 11 (Affidavit of Richard Freese,
Par. 4). It is troubling because, if not for the
opposition to this gargantuan fee request, class counsel
would have sought to collect the $4 million, in part
premised on the apparently inaccurate claim that their
expenses were in the neighborhood of $800,000.
9 Class counsel claim that the notice was appropriate
because class members could have found out about the fee
application since it is on file at the courthouse and is
"available for inspection and copying." CC Reply, at 20.
But the whole point of the Notice is to sent to the class
the pertinent facts relating to the proposed settlement.
If class counsel were correct, all that would be
necessary would be for the Notice explain the pendency of
the case and tell the 700,000 class members to travel to
the courthouse to find out about the settlement terms.
Class counsel's argument is particularly ironic here,
since they did *not* file the fee application in New
Orleans, so that a class member who traveled there would
have come up empty handed (but, hopefully, with an
explanation to push on toward Eutaw, Alabama).
10 *See also* Milo Geyelin, "Critics Call Bronco II
Settlement a Lemon," *Wall St. Journal*, p. B1 (Oct. 18,
1994)("The amount [of the fee request], which works out
to $1,140 an hour, wasn't disclosed to Bronco II class
members in notices alerting them to the proposed
agreement. The two lawyers [*i.e.*, class counsel]
explain that they didn't file the request until after the
mailings").
11 Ford's argument, at page 50 of its Reply Brief, that the
notice need not contain information on fees because the
amount has not yet been awarded makes no sense. None of
the terms of a proposed class action settlement are final
when a notice is sent out -- they are frequently subject
to renegotiation by the parties and all must be approved
by the court. Obviously, that is no reason to deprive
the class of what one or both of the parties are seeking
in the settlement, including the amount of the fees or
some reasonable estimate thereof.
*Conclusion*
For the additional foregoing reasons, the proposed
settlement should not be approved. The Bennett Objectors
reserve the right to present further evidence and argument in
response to the settling parties' voluminous October 31, 1994
filings.
Respectfully submitted,
____________________________
Brian Wolfman
D.C. Bar No.427491
Alan Morrison
D.C. Bar No. 073114
Public Citizen Litigation Group
Suite 700, 2000 P Street, N.W.
Washington, DC 20036
(202) 588-1000
_______________________
Robert Graham
Kentucky Bar No. 85112
Center for Auto Safety
Suite 410, 2001 S Street, N.W.
Washington, DC 20009
Attorneys for Suzanne F. Bennett
*et al.*
November 4, 1994
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