NORMA R. BROIN, et al.,
Plaintiffs, 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 actionsettlement and gives notice of their intent to appear through counsel (AlanB. Morrison) at the fairness hearing scheduled for January 26, 1998.
As we explain further below, the Williams Objectors oppose thesettlement for two basic reasons. First, the settlement violatesfundamental tenets of fairness and adequate representation because theprincipal benefit obtained by the named representatives--$300 million incash--is paid not to the class members, but to a medical researchfoundation 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 mainproblem is that class counsel have yet to submit their fee applicationso that the Court and the class members can evaluate the reasonablenessof the request. See Kuhnlein v. Department of Revenue, 662 So.2d309 (Fla. 1995).
Indeed, the problem in responding to the $46 million feerequestpermeates this entire proceeding. Despite specific requests, class counselhave refused to provide copies of pleadings and other case documents, evenat objectors' expense. In addition, although the burden of establishingthe fairness of the settlement rests squarely on its proponents, Newbergon Class Actions, ¶ 11.42 (3d ed. 1992), the settling partieshave chosen to await the filing of objections before putting forth theirevidentiary and other support for the settlement, which they will filejust four business days prior to the fairness hearing. Assuming that objectorsare served promptly, they will be hard pressed to digest, let alone respondto, the settling parties' arguments, as well as to prepare for the fairnesshearing. Thus, we reserve the right to supplement these objections andto 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 introductionand then explain in greater detail why the settlement should be rejected.Finally, we make suggestions for amendments to the settlement that wouldcure 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 settlementand its deficiencies. This settlement arises out of a class action filedby Norma R. Broin and other named plaintiffs on behalf of a class of non-smokingflight attendants who have worked or are working for U.S.-based airlines.Second AmendedComplaint, ¶ 48. The defendants are the major tobaccocompanies and affiliated trade groups. The class includes only flight attendantswho are currently suffering from a tobacco-related illness and specificallyexcludes 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, rangingfrom cancer to heart disease to infertility to general respiratory ailments.Second Amended Complaint, ¶ 82(b). The plaintiffs seek recovery underFlorida law on theories of strict liability, breach of implied warranty,negligence, fraud and misrepresentation, and conspiracy to misrepresentand commit fraud. Id. ¶ 142. The second amended complaint--underwhich the settlement occurred--seeks only traditional damages relief. Thus,on behalf of the class, the class representatives sought compensatory damagesfor bodily injury, pain and suffering, disability, disfigurement, lossof life's enjoyment, medical expenses, loss of earnings, and mental anguish.Id. The plaintiffs also demanded punitive damages on account ofthe 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 Rule1.220(c)(2). The notice explained, among other things, that this case wasa class action for damages against the tobacco companies, and that theclass members had the right to exclude themselves from the class on orbefore May 1, 1997. To thebest of our knowledge, the notice did not indicatethat the case might settle for relief not sought in the complaint, letalone for hundreds of millions of dollars payable to a research foundationrather than to the plaintiff class.
After the opt-out period ended, a "Stage I" trial began, focusingon general causation and other common issues regarding the defendants'conduct. On October 10, 1997, during the defendants' case-in-chief, theparties 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 toimprove early detection of, and find cures for, tobacco-related diseases.Settlement Agreement, ¶ ¶ 7-8. The foundation will be named inhonor of the lead plaintiff, Norma Broin, and will be directed by a boardof trustees, including flight attendants, nominated by class counsel. Id.¶ 8. The defendants also agree to support the enactment of "appropriatefederal legislation" to prohibit smoking on regularly scheduled internationalflights (or segments of international flights) originating or terminatingin the United States. Id. ¶ 11.
Under the settlement, class members retain the right to suethe tobacco companies individually to collect damages for their smoking-relatedinjuries, and the defendants agree to waive, for one year after final approvalof the settlement, any applicable statute of limitation or repose. In thoseindividual suits, thedefendants would have the burden of proof regardinggeneral causation, i.e. that second-hand smoke causes tobacco-relatedillness, but only with respect to some of the smoking-related diseasesalleged in the complaint. Id. ¶ 12(d). Class members have theright to use evidence submitted in the Stage I trial before this Court,"subject to all objections by any party," and the defendants shall provideindividual claimants a copy of the video testimony from the Stage I trial.Id. ¶ 12(e).
Finally, the settlement provides that class members bringingindividual suits may sue in the Eleventh Judicial District of Florida (whereFlorida substantive law will apply), as well as in any other forum wherevenue is proper. Id. ¶ 12(c). The class notice, but not thesettlement agreement, indicates that "Class Counsel and other independentcounsel will be available to represent Class Members" in individual cases,but the notice does not state who those lawyers will be and what they willcharge for their services. See Notice of Proposed Class-Action Settlementand Final Settlement Hearing, Part V (Oct. 31, 1997).
In exchange, the defendants retain certain rights and obtaincertain benefits. First, the defendants obtain a release from all classmembers concerning any matters relating to the causes of action set forthin the second amended complaint. Settlement Agreement, ¶¶ 14-15.
Second, although plaintiffs retain the right to bring individuallitigation as described above, that litigation is circumscribed in severalimportant respects: (a) no class membermay seek punitive damages (or anyother type of non-compensatory damages); (b) no class member may seek recoveryon 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 suitagainst the defendants, and thus is barred from participating in any formof aggregated litigation. Id. ¶¶ 12(a), 12(g).
Third, the defendants are not obligated to pay any money toany class member in settlement of the class members' claims, nor do theyadmit liability concerning any of the conduct alleged in the second amendedcomplaint.
Fourth, although the defendants have the burden of proof ongeneral causation, the individual plaintiffs retain the burden of proofon all other issues, including specific causation, i.e., that second-handtobacco smoke caused their particular diseases. Id. ¶ 12(d).
Finally, the settlement provides that class counsel StanleyRosenblatt and Susan Rosenblatt will seek an attorney's fee of $46 millionand 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, estimatedat $3 million. Id.
The Payment of $300 Millionto a Research Foundation, Rather Than to the Class Members, Demonstrates,As a Matter of Law, That the Settlement is Unfair and That the Class RepresentativesHave Not Adequately Represented the Class.
This case involves a settlement in which the defendants haveagreed to a limited set of arguable procedural advantages to members ofthe plaintiff class who wish to bring individual suits against the tobaccoindustry, in exchange for the surrender of the most potent tools in tobaccolitigation. Eliminating the class members' rights to seek punitive damagesand to sue for any fraud- related and intentional torts, and abrogatingall future class or aggregated litigation, has been, for years, the ultimatelitigation wish-list of the tobacco industry. Class counsel obviously believesthat this trade-off alone would not provide sufficient consideration fortheir clients since they bargained for and obtained defendants' paymentof $300 million. Even with that payment, there is, in our view, seriousdoubt as to the adequacy of the total settlement package, in large partbecause the non- monetary components of the settlement may only benefita few class members.
Nonetheless, we assume for the sake of these objections thatthe combined value of the benefits to the class ($300 million, plus variousarguable future litigation advantages) roughly equal the costs to the class(various future litigation disadvantages, such as the waiver of punitivedamages). We also assume, without conceding, that a $300 million cash paymentto the class members themselves would be a reasonable settlement in lightof the risks of litigating the class action to final judgment. The fundamentalproblem is not the amount of the payment, but that it is going to a researchfoundation, and not to the class members.
The class representatives and class counsel have decided totrade the most significant components of the class members' claims (punitivedamages, fraud-based and intentional torts, the right to aggregate) fora research foundation. If Norma Broin and the other class members wantto 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 allowthem to trade the Williams Objectors' or the other absentees' claims inthat manner.
There is reason to doubt whether the Broin Foundation will beof any value to any class member. After all, tens of billionsof dollars have been spent to date to treat and cure cancer, with littlediscernible affect on cancer rates. But even assuming that the $300 millionwill be put to good use, the money must be used exclusively for the benefitof the class. For example, Ms. Williams has early-onset asthma, which requiresmedication and has dramatically altered her life style. Williams Affidavit,¶¶ 3-6 (attached as Exh. 1). Similarly, Mr. Levine suffers fromsevere sinusitis. Levine Affidavit, ¶¶ 3-5 (attached as Exh.2). Any foundation money spent for "early detection" of tobacco-relateddisease simply will not assist Ms. Williams, Mr. Levine, or any other classmember since, under the class definition, they already are suffering fromsome tobacco-related disease. Moreover, for class members who already haveserious, terminal ailments, such as many of those listed in the secondamended complaint (e.g., stomach cancer), a research foundationdirected to cure future disease cannot conceivably benefit those classmembers. Indeed, the classincludes the survivors of former flightattendants who have already succumbed to tobacco-related illness and forwhom a research foundation is of no possible benefit. In sum, the corecomponent of the settlement--the $300 million research foundation--rendersthe settlement fundamentally unfair because the foundation will not benefitthe persons on whose behalf the class action was filed. See Eisenv. Carlisle & Jacquelin, 479 F.2d 1005, 1018 (2d Cir. 1973), vacatedand remanded on other grounds, 417 U.S. 156 (1974) (fluid recoverythat doesn't benefit class would violate due process).Seefootnote 1
Nor can the settlement be justified on a cy pres theory.In some circumstances, a limited portion of a class action fund could bedirected to a charity, under the close supervision of the court, whosepurposes 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 (2dCir. 1987). Such cy pres disbursements are permissible when thereis left-over money following distribution of a cash fund and further distributionis impractical or impossible. But the settling parties here "do not claimthat a cy pres settlement is appropriate because it would be impossibleordifficult to locate class members, or because each individual class member'srecovery would be so small as to make an individual distribution economicallyimpossible." In re Matzo Food Prods. Litig., 156 F.R.D. 600, 606(D.N.J. 1994)(rejecting settlement because payment went to charity ratherthan to class members).
To the contrary, most or all of the class members have alreadybeen located and notified, and the class members' recoveries, if the $300million were paid to them, would be quite substantial. If we assume, quitegenerously and in the absence of proof of class size from class counsel,that 1,000 individuals meet the class definition (non-smoking flight attendantswho currently suffer tobacco-related injuries), each would receive, onaverage, $300,000 in exchange for giving up their rights to punitive damages,etc. Some class members with life-threatening illnesses would receive farmore, and those with less serious illnesses would receive less. But whateverthey received, they could each then make an individual decision whetherto contribute all or some of their recoveries to combat tobacco-relateddiseases.
The conclusion that a "charitable giving" theory is unacceptablehere is underscored by the jarring disconnect between the damages soughtin the second amended complaint and the establishment of the Broin Foundation.The second amended complaint seeks actual monetary damages, such as lostwages and medical expenses. Ms. Williams, for instance, has ongoing medicalexpenses relating to her adult-onset asthma. If we assume that Ms. Williams'expenses will come to $10,000 over her lifetime, it isdifficult to seehow a $10,000 charitable contribution to combat tobacco-related diseasewill get Ms. Williams one step closer to recovering those expenses. SeeJewish Guild for the Blind v. First Nat'l Bank in St. Petersburg, 226So.2d 414 (Fla. App. 2d Dist. 1969)(where testamentary trust provided foracquisition or construction of separate building for blind children, cypres doctrine did not permit installation of facilities in existingbuilding, even though trust principal was inadequate for acquisition orconstruction of separate building); In re Ford Bronco II Prod. Liab.Litig., 1995 U.S. Dist. Lexis 3507, *19 (E.D. La. 1995)(rejecting classaction settlement in part because settlement provided only a non-monetarypackage of benefits and none of the damages relief sought in complaint).
The class representatives' decision to direct the settlement'sbenefits to a charitable foundation also demonstrates a lack of adequaterepresentation under Rule 1.220(a)(4). As noted above, the second amendedcomplaint seeks only compensatory and punitive money damages topay for the class members' personal injuries. When notified of the classcertification and their right to opt out in January 1997, the class memberswere told the same thing: that this class action sought damages for tobacco-relatedinjuries. And later, when the plaintiffs tried their case in chief, asthe notice of this settlement clearly states, the plaintiffs were attemptingto establish the defendants' liability, so that the class members couldcome forward in "Stage II" and prove their money damages.
Little did the absent plaintiffs know that lead plaintiffNormaBroin's chief goal in this class action was not to collect the moneydamages that she demanded in the complaint or proclaimed in the January1997 notice, but to prove a point:
We have accomplished a huge amount of what weset out to do. This [lawsuit] was never about money to me. It wasabout 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 Objectorshave every reason to believe was the central-- indeed, the only--goalof this lawsuit.
The inadequate representation that upended the settlement involvedin Amchem Prods., Inc. v. Windsor, 117 S. Ct. 2231 (1997), palesin comparison to the inadequate representation here. In Amchem,the named plaintiffs who had been exposed to the defendants' asbestos productsentered into a settlement that would provide them cash payments if andwhen they contracted certain asbestos-related diseases. The Court ruledthat the named plaintiffs were not adequate representatives under Fed.R. Civ. P. 23(a)(4)--the federal counterpart to Rule 1.220(a)(4)--becausethey sought to represent both currently-injured class members and thosewho 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 currentbenefits, while those seeking insurance against future injuries might wantprotections against inflation, a future opt-out right, and other benefitsthat the settlement did notprovide. Id. at 2251.
Although the global settlement in Amchem failed miserablyto protect the absentees, at least there was some nexus between what theplaintiffs sought in the complaint and what the settlement was intendedto provide. Thus, from the beginning, the class representatives in Amchemsought cash recoveries for their present or future asbestos-related injuries.And despite the settlement's crippling intra-class conflicts, the settlementdid, in fact, provide cash recoveries. Here, by contrast, the complainthas Norma Broin leading the charge to collect money damages for class memberssuch as the Williams Objectors, but she now proclaims that "[t]his [case]was never about money to me." Thus, the settlement establishes a researchfoundation named after Mrs. Broin, but pays no money to the Williams Objectorsor any other class member. Indeed, it tells the Williams Objectors andtheir fellow class members that their only chance at recovering damagesis in individual litigation that has not even commenced--the very typeof litigation that the class action was filed to avoid.
One additional point bears mention. As the Supreme Court hassaid repeatedly, the requirement of adequate representation in state-courtclass 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 MatsushitaElec. Indus. Co. v. Epstein, 116 S. Ct. 873, 889 (1996)(Ginsburg, J.,concurring). Because the causes of action held by absent class membersare a form ofproperty protected by state law, see Logan v. ZimmermanBrush Co., 455 U.S. 422, 428-29 (1982), they cannot be compromisedunless the named plaintiffs have provided adequate representation. Shutts,472 U.S. at 712. And although, the Florida Supreme Court has yet to developa due process class action jurisprudence, we have no doubt that ArticleI, section 9 of the Florida Constitution--which is modeled on the FourteenthAmendment's due process clause-- incorporates the same principles enunciatedby the Supreme Court of the United States.
Here, it is uncontested that the named representatives havedrastically altered the nature of the class members' rights in their causesof action. They can no longer seek punitive damages. They can no longerbring any claim based on fraud, misrepresentation, concealment, or anyother intentional tort theory, which is quite troubling since, accordingto Ms. Broin, the class action was principally "about exposing the lies,deception and fraud" of the tobacco industry. Absent class members likethe Williams Objectors can no longer join with other plaintiffs in fightingthe tobacco industry. And the $300 million extracted from the defendantsin compromise of the plaintiffs' claims is going not to the injured flightattendants but to the Broin Foundation. For the reasons stated above, thesettlement must be rejected on non- constitutional grounds. Moreover, giventhese facts, the near- complete abandonment of the interests of absentclass members such as the Williams Objectors also constitutes a violationof the dueprocess clauses of the Florida and United States Constitutions.Seefootnote 2
The $46 MillionAttorney's Fees Request Should Not Be Approved.
At this juncture, there is no basis for approving class counsel'sgargantuan $46 million fee request. Not only is the amount greatly in excessof even the most generous estimates of the time and risk involved, butclass counsel has yet to come forward with evidence to substantiate anyfee as required by law. See Kuhnlein v. Dep't of Revenue, 662 So.2d309 (Fla. 1995). We acknowledge that class counsel has spent many yearsand invested considerable resources on this litigation and, therefore,if the settlement were one that the Court could approve, a generous feewould be justified. That fee could properly take into account both theRosenblatts' time, monetary investment, and a reasonable enhancement forthe risk of non-recovery.
More so than with respect to the settlement itself, it is fundamentallyunfair for class counsel to require class members to object to the feerequest 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 millionfee when their initial objections are due. As we understand it, the feeapplication need not even be filed until the close of business on January19, 1997. And given the lack of cooperation we have encountered from classcounsel in obtaining other documents, we may not see the application untiljust before the fairness hearing. Thus, we reserve the right make furtherobjections and to take discovery relevant to the fee request after we havehad a full opportunity to review the application. Nonetheless, there areseveral basic observations that we can make regarding the fee request,even on the current record.
First, the Court should not reach the fee questionat all because the settlement does not warrant approval; the followingpoints apply only if the Court decides to approve the settlement.
Second, class counsel may not avoid scrutiny oftheir fee request on the ground that the defendants have agreed to paythe fee "separate" from the $300 million payment to the Broin Foundation.Any defendant, particularly the highly sophisticated litigation-testeddefendants here, are well aware that a class action settlement involvesboth payments (or other consideration) for the merits and payments forfees. Settlement of both elements are generated by the value of the plaintiffs'claims, and it is up to the Court, not the settling parties, todetermine what portion of the entire settlement proceeds are to be paidto 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 awardedcoupons toward the purchase of a new General Motors truck. In addition,the plaintiffs' attorneys sought, and the lower court awarded, a $9.5 millionfee to be paid by the defendants. Class counsel argued that, because, underthe settlement, the fee was to be paid "separately" by the defendant apartfrom the coupon distribution, objecting class members did not have standingto contest the fees on appeal. The Third Circuit rejected that argumentas "patently meritless" because the settlement's fee component was "forall 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., 925F.2d 518, 522-24 (1st Cir. 1991)(even where defendant agrees to pay fee,judicial scrutiny is necessary to police potential conflict between classmembers' interests and those of fee-seeking attorneys).
Thus, there can be no argument here that the class members haveno interest in the Rosenblatts' fee award, as a smaller fee for the Rosenblattsmay well have led to a more favorable settlement for the class members.Indeed, the class members' interest in opposing the fee request is evengreater here than was the class members' interest in General Motors.There, the defendant had, in the settlement agreement, reserved the rightto oppose any fee request, see In re General Motors Corp. Pick-upTruckFuel Tank Prods. Liab. Litig., 846 F. Supp. 330, 352 (E.D. Pa. 1994)(quoting attorney's fees provision of settlement), thus arguably retainingthe right to minimize its fee liability by arguing that class counsel hadnot earned the requested fee. Here, just the opposite is true; the defendanthas already agreed--in a so-called "clear sailing" provision--that $46million is a reasonable fee and has pledged not to oppose a requestfor that amount. Settlement Agreement, ¶ 10. As the U.S. Court ofAppeals for the First Circuit has held, "the very existence of a clearsailing provision increases the likelihood that class counsel has bargainedaway 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 millionfee, 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 hereis considerable. Under Kuhnlein, supra, class counsel mayonly obtain a fee on a lodestar basis and, therefore, they must providethe Court with billing records, describing their work on a task-by-taskbasis. 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 Rosenblattare 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 assuminga multiplier of three (i.e., $750 per hour), that would mean 7,667eight-hour days (or more than twenty- five years of 300 days each) devotedsolely to this litigation.
Fifth, as noted earlier, assuming that the Courtapproves the settlement, a reasonable contingency multiplier should beadded to a reasonable lodestar fee. However, any multiplier should be temperedby one factor peculiar to this settlement. In most class actions, a settlementterminates the claims of the class and thus ends all related litigation.Here, however, the Rosenblatts have structured the settlement so that theclass members get no money now, but may file individual suits ata later date. Part V of the class notice states that the Rosenblatts intendto offer representation in many of those cases, which they will presumablyhandle under percentage retainer agreements yielding them between one-thirdand 40% of any recovery. Although we acknowledge that those future individualcases will bear their own risks, the Rosenblatts will stand to gain considerableadditional fees. However, the size of the multiplier in a class actionlike this depends, in part, on the quality of the results obtained. SeeKuhnlein, 662 So.2d at 315. Here, that "quality" depends largely onwhether individual litigants such as Norma Broin and the Williams Objectorswill be able to obtain reasonable settlements or judgments without theright to seek punitive damages or the right to recover on the basis offraud, concealment, and other intentional misconduct perpetrated by thetobacco industry. Therefore, part of class counsel's multiplier shouldbe deferred to the individual litigation, to be collected in the form ofcontingent fees if that litigation is successful.
C. Renegotiation of the Settlement.
As explained above, we believe that the settlement suffers fromone fundamental defect: It trades the plaintiffs' valuable claims for aresearch fund named in honor of the lead plaintiff, without paying a pennyto the injured class members. Our criticisms of the settlement are notan attack on the altruism exhibited by Norma Broin or by any other flightattendant who wishes to advance medical research. That altruism is highlyadmirable. But no one--especially class counsel or the named representativesin a class action--has the right to demand altruism of others. In short,the Williams Objectors and the other class members have been forced, throughthe compromise of their valuable claims, to make a charitable contributionto the Broin Foundation.
The defendants have determined that $300 million is a reasonablepurchase price for elimination of the class members' rights to punitivedamages and intentional torts and to aggregate their cases. If that $300million were placed in a fund to be divided in a reasonable manner amongthe class members, we would have no objection to such a settlement. Werecognize 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), butit can reject the current agreement and suggest what changes would benecessaryfor approval. See id. at 726; Bowling v. Pfizer, 143 F.R.D.138 (S.D. Ohio 1992)(court suggested changes later incorporated in Bowlingv. Pfizer, 143 F.R.D. 141 (S.D. Ohio 1992)). We urge the Court to takethat approach here.
There is another possibility that the Court may wish to consider.Class counsel have indicated that the class members overwhelmingly supportthis settlement and its $300 million payment to the Broin Foundation. Perhapsthe class members agree with Norma Broin that this case "hasn't been aboutmoney. It's been about education and getting the truth." Associated PressNews Report (attached as Exh. 4). Perhaps many of the absentees are willing,therefore, to trade the value of their claims to promote tobacco-relatedmedical research. That proposition could easily be tested by allowing theclass members to designate in writing whether they wish to contribute theirshare of the $300 million settlement fund to the Broin Foundation or whetherthey wish to keep that amount for themselves. Of course, if the class membersopt to make a donation, they would also keep the other alleged benefitsof the settlement, such as the waivers of the statutes of limitations andrepose, the altered burden of proof, etc. For class members who do notmake such a donation, it would be reasonable to require them to sign anappropriate release. If class counsel are correct about the class members'support for the settlement, they should support our proposal, because theresult 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 settlementshould not be approved. We ask the Court to consider the alternative solutionsproposed above.
Alan B. Morrison
Attorneys for Class Members
Angela Williams, et al.
January 5, 1998
Footnote: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 50,000patients implanted with a potentially deadly, fracture-prone heart valve.The settlement provided $90 million in immediate cash benefits, variouspayments to class members who suffered valve fractures or who underwentvalve replacement surgery, and a $75 million research fund. Id.at 148-50. The research fund was directed toward fostering non-invasivemethods for detecting fracture-prone valves and to enable class membersto pay for diagnostic services, both of which would directly benefit theclass members. Id. at 149.
Footnote: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 toopt out prior to a determination of their claims. That kind of notice wassent out in this case in January 1997, and the class members were toldthat this class action sought money damages for tobacco-related illnessesand that they could opt out by May 1, 1997. Because that notice was sentbefore the class members' claims were transmogrified into a requestfor a research foundation, no "meaningful" right to opt out was providedin this case. The failure to provide a meaningful opt-out right violatesboth Rule 1.220(c)(2) and the due process clauses of the Florida and federalconstitutions, see Phillips Petroleum Co. v. Shutts, 472 U.S. 797,813 (1986), which can only be cured if the class members are accorded aright to opt out of the settlement.