previously approved in this court's July 23, 1992 Order is fair, adequate, and reasonable.
The Plan of Distribution
As suggested supra, the court has received objections from individual class members regarding the proposed Plan of Distribution. As detailed in this court's July 23, 1992 Order Approving Plan of Distribution, as well as the Special Master's July 18, 1992 Report and Recommendation Regarding Certain Amendments to the Proposed Plan of Distribution and Summarizing Objections to the Proposed Plan of Distribution, several of these objections have since been incorporated by consent into the Distribution. In addition, as explained by counsel for plaintiffs and the Special Master at the July 20, 1992 Fairness Hearing, as well as in the Special Master's July 18th Report, the remaining objections are generally without merit.
The court has reviewed all of the letters forwarded to the court, some praising the proposed Plan of Distribution and others criticizing it. Most of the objections involve personal complaints regarding the estimated amount of individual awards.
With the large number of persons involved in this case, it would have been impossible and taken years to consider all of the circumstances of each individual. (Indeed, as described supra, the desirability of avoiding such a scenario was a major impetus towards the Settlement itself.) For instance, some of those who will receive less because they sought and obtained other employment, either from Continental or elsewhere, complain about those who may not have looked as hard for work and may even have refused employment. But it would have been impossible to determine who tried diligently to find work and who did not, and then attempt to evaluate and to calculate their claims based upon those individual efforts and their respective success or failure.
By necessity, the formula ignores certain individualized factors which would increase the award for some and decrease it for others. As already mentioned, it excludes entire groups which everyone wishes could be included. But even this huge fund has its limitations, and the unwarranted expansion of the class dilutes the valid claims of all those clearly entitled to participate.
There has been an extraordinary effort to be fair and to develop uniform criteria which could be applied in a practical fashion. Some may receive too much, some may receive too little, and some unfortunately will receive nothing at all, even though they believe in good faith that they are entitled to participate. But the goal here is fairness, not perfection which cannot be achieved.
The court is satisfied that the Plan of Distribution is fair and reasonable. The court is especially impressed by the manner in which the Distribution calculates an award based on factors of particular relevance to the ERISA cause of action which gave rise to this lawsuit: years of service, closeness to vesting, ability to vest, years to retirement, and earnings experience after leaving Continental.
Fairness also requires the Distribution to include provisions securing the rights of class members' current and former spouses. The Report prepared by Professors Langbein and Resnick sets forth the spousal interests under ERISA and how they are at issue in this litigation, persuasively explaining that any Distribution must take account of these spousal interests if it is to be approved. The difficulty in this case was that, because defendants' conduct allegedly defeated the spousal pension accruals that congress mandated in the Retirement Equity Act of 1984, 29 U.S.C. § 1055 (amending ERISA section 205), the precise mechanism which congress devised for implementing spousal interests was unavailable to the non-employee spouses in this case.
Because ERISA guarantees a survivorship annuity to the spouse of a vested employee, 29 U.S.C. § 1055, spouses of class members also suffered damages as a result of the employee's lost potential to vest for a pension. Although ERISA does not create any federal property rights for divorced spouses, ERISA does respect state law distributions of marital property. The Special Master has already notified divorced spouses of their former spouse's anticipated award in order to enable spouses to secure their state property rights, if any.
The July 23, 1992 Order Approving the Settlement and Entering Final Judgment details the full history of class notices and hearings, and the court need not repeat that history here. 7/23/92 Order at PP 8-12, pps. 8-10. The court does note that the class members have been fully and fairly apprised of their rights throughout these proceedings, and the court is not aware of any complaints in this regard. Again, the court is indebted to Professor Priest and his diligent efforts to provide class members with adequate and efficient notice.
The court also wishes to note the Special Master's assurance that the negotiations leading up to this Settlement were conducted at "arm's length." See In re Agent Orange Litigation, supra, 597 F. Supp. at 762 (court must focus on absence of collusion in settlement negotiations, in addition to whether interests of all class members were adequately considered). In fact, the Special Master facilitated the negotiations, and the parties did not engage in face-to-face negotiations. 7/13/ 92 R & R at 22. There is no question that the settlement was reached without corruption or collusion. To the contrary, counsel have ceaselessly and vigorously defended the rights of the class throughout the settlement negotiations and the ensuing negotiations to arrive at an acceptable plan of distribution.
Based on the foregoing considerations, this court previously and here again approves the Settlement and Distribution in this case.
H. LEE SAROKIN, U.S.D.J.
Date: September 17, 1992