The opinion of the court was delivered by: H. LEE SAROKIN
By two Orders dated July 23, 1992, and filed July 24, 1992, this court approved the Settlement and Plan of Distribution (hereinafter "Distribution") in this decade-old class action litigation. At page three of the Order Approving Settlement and Entering Final Judgment, the court reserved the right to file an Opinion explaining the court's reasons for approving the Settlement and Distribution. What follows is the court's further justification for approving the Settlement and Distribution, as supplemented by the Court's oral remarks at the July 20, 1992 Fairness Hearing, the July 13, 1992 Report and Recommendation of Special Master George priest Regarding the Fairness of the Settlement and the Proposed Plan of Distribution, and the July 18, 1992 Report and Recommendation of Special Master George Priest Regarding Certain Amendments to the Proposed Plan of Distribution and Summarizing Objections to the Proposed Plan of Distribution.
In its previous opinions in this matter, the court has recited the facts which gave rise to the claims asserted herein. It condemned the actions of those corporate officers who systematically set about to deprive thousands of workers of their pension benefits, and now praises their successors for recognizing the harm caused and for seeking to make amends to those so deprived. It is unfortunate that it took ten years and millions of dollars of litigation expenses to reach this moment. While this litigation has labored onward, entitled claimants have suffered financially and emotionally. Some have died in the interim. The settlement will restore only a portion of their financial losses to them or their families. It can never compensate for the years of anguish they endured or for the insidious injury inflicted upon them by an employer to whom they were loyal and dedicated and in whom they and their families reposed their trust and future security.
Before addressing the fairness and adequacy of the Settlement and Distribution, the court wishes to acknowledge the extraordinary efforts of the persons responsible for bringing this litigation to a just and satisfactory conclusion.
This case and its result is a tribute to these lawyers and the entire legal profession. They will be compensated, but they worked for all of these years with the risk that they might not be. Their dedication to this cause and this class does honor to the bar, and they have the respect and admiration of this court.
This was a joint effort, however. The attorneys brought the case to a point which was a catalyst for settlement, but Professor George Priest,
appointed as Special Master by the court, was responsible for the extraordinary amount received in settlement and for the development of the highly complex distribution plan. The resolution of this case and the plan was his doing, coupled with the efforts and cooperation of counsel for all parties and Dr. David Wise from Harvard University. There is no conceivable way that the court could have accomplished this settlement or developed this plan without Professor Priest's efforts, and the court, on its own behalf and on behalf of counsel and the litigants, extends its thanks and appreciation to him. His dedication, creativity, and extraordinary efforts brought this matter to a satisfactory conclusion which benefitted all of the members of the class in a just and fair fashion.
Finally, there is a unique aspect to this settlement which should not go unmentioned. It formalizes and recognizes the right of employees' spouses to participate in the recovery unless they are precluded by virtue of special circumstances or by prior legal proceedings. Their participation carries cut the goals and purposes of the law. It recognizes that spouses of employees have suffered derivative pension losses from these wrongful layoffs, and although not the basis for their claims, undoubtedly were required to make sacrifices as a result. Thus, they should share in the recovery for the losses sustained although the agony endured cannot be compensated.
The justification for this recognition of derivative spousal rights is due to the learned and innovative Opinion prepared by Professors John Langbein
and Judith Resnick.
They undertook a unique and novel issue, made it clear and understandable, and pointed the way to a fair and proper result.
The Legal Standard for Approval of the Settlement and Distribution
Fed. R. Civ. P. 23(e) provides: "A class action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs." Specifically, the court must assess "whether the settlement is fair, adequate, and reasonable." Stoetzner v. U.S. Steel Corp., 897 F.2d 115, 118 (3d Cir. 1990), quoting Walsh v. Great Atlantic and Pacific Tea Co., Inc., 726 F.2d 956, 965 (3d Cir. 1983). As described in the Manual for Complex Litigation (Second):
In determining whether a class settlement should be approved, the court must decide whether the interests of the class as a whole are better served if the litigation is resolved by the settlement rather than pursued. The settlement must be fair, reasonable, and adequate under the circumstances. In cases primarily seeking monetary relief, the present value of the damages plaintiffs would likely recover if successful, appropriately discounted for the risk of not prevailing, should be compared with the amount of the proposed settlement. The defendant's inability to pay a greater amount may be an important factor, as may the need of the plaintiff's for immediate relief.
MCL 2d § 30.44, at 242 (1985).
The Third Circuit Court of Appeals has specified several factors which courts in this circuit must consider when evaluating the fairness, adequacy, and ...