MATTIE HALLEY; SHEM ONDITI; LETICIA MALAVE; TEMPORARY ADMINISTRATOR OF THE ESTATE OF SERGIO DE LA CRUZ, On Behalf of Themselves and All Others Similarly Situated
HONEYWELL INTERNATIONAL, INC.; PPG INDUSTRIES, INC. Maureen Chandra, Appellant
ARGUED: January 17, 2017
Appeal from the United States District Court for the District
of New Jersey (D.C. Civil Action No. 2-10-cv-03345) District
Judge: Honorable Esther Salas
Paciorkowski, Esq. [ARGUED] Jersey City, N.J. 07304 Rui O.
Santos, Esq. Shebell & Shebell Counsel for Appellant
Kanner, Esq. Elizabeth B. Petersen, Esq. Kanner &
Whiteley, Ned I. Miltenberg, Esq. National Legal Scholars Law
Anthony Z. Roisman, Esq. [ARGUED] Counsel for Appellees
Mattie Halley, Shem Onditi, Leticia Malave, and Temporary
Administrator of the Estate of Sergio De La Cruz
Michael D. Daneker, Esq. Allyson T. Himelfarb, Esq. Arnold
& Porter Kaye Scholer, Michael R. McDonald, Esq. Gibbons
One Gateway Center Newark, Counsel for Appellee Honeywell
Before: AMBRO, VANASKIE, and SCIRICA, Circuit Judges
SCIRICA, Circuit Judge.
an appeal from the approval of a settlement of a Federal Rule
of Civil Procedure 23(b)(3) class action arising out of
hexavalent chromium contamination in Jersey City, New Jersey.
The class action was brought on behalf of property owners in
several neighborhoods in Jersey City whose homes were
allegedly contaminated by byproducts disposed of at two
chromium chemical manufacturing plants. Defendants Honeywell
International, Inc., and PPG Industries, Inc., are the
successors in interest of the manufacturing plant owners and
operators. Plaintiffs asserted common law tort claims and
civil conspiracy claims for depreciation of their property
values due to the alleged contamination, but not claims for
harm other than economic loss to property value, such as
personal injury or medical monitoring claims. The District
Court certified a settlement-only class as to the claims
against Honeywell and approved a $10, 017, 000 settlement
fund, which included an award of costs and attorneys'
fees for plaintiffs' counsel. Maureen Chandra is a member
of the Honeywell settlement class who objects to various
aspects of the settlement and the award of costs and
conclude the class certification requirements of Federal Rule
of Civil Procedure 23(a) and (b)(3) are satisfied, and the
District Court did not abuse its discretion in approving the
settlement under Federal Rule of Civil Procedure 23(e) and
the award of attorneys' fees under Federal Rule of Civil
Procedure 23(h). But we will remand for the District Court to
reconsider the award of costs under Rule 23(h).
BACKGROUND AND PROCEDURAL HISTORY
Chromium Production in Jersey City
case involves two chromate chemical production facilities in
Jersey City, New Jersey. Honeywell is the successor in
interest to Mutual Chemical Company of America, which
operated a facility from 1895 to 1954 on West Side Avenue.
PPG is the successor in interest to Pittsburgh Plate Glass
Company and Natural Refining Company, which operated a
facility from 1924 to 1963 on Garfield Avenue.
facilities created chromium ore processing residue
("COPR") as a byproduct of chemical manufacturing.
COPR waste from the facilities was disposed of at two sites
in Jersey City. Mutual disposed of COPR at a site near its
plant on the west side of Jersey City, near the Hackensack
River ("the Mutual site"). Pittsburgh Plate Glass
disposed of COPR near its plant further east ("the
Pittsburgh Plate Glass site"). Plaintiffs allege more
than one million tons of waste products were disposed of at
the two sites.
contains hexavalent chromium,  which the United States Environmental
Protection Agency and the New Jersey Department of
Environmental Protection classify as a known human
carcinogen. Hexavalent chromium is hazardous to humans and
other organisms if inhaled or ingested in contaminated water.
and its predecessors in interest have been proceeding with
COPR cleanup at the Mutual site for many years. See
Interfaith Community Org. v. Honeywell Int'l, Inc.,
399 F.3d 248 (3d Cir. 2005). The State of New Jersey first
sought a remedy for the site in 1982, after chromium waste
was discovered in surface water on the site. Id. at
252. Over the course of ongoing negotiations with NJDEP,
Honeywell and its predecessors attempted various interim
remediation measures, including capping parts of the site
with asphalt and a plastic liner. Id. at 253. There
have been a number of consent orders regarding the Honeywell
site arising from litigation brought by NJDEP under New
Jersey environmental protection statutes and regulations in
the New Jerseys state courts, beginning with a 1990 consent
order, and most recently a 2011 consent judgment, as modified
1995, a community organization and its members brought a
federal action against Honeywell and other defendants to
compel cleanup of the Mutual site under the citizen suit
provision of the Resource Conservation and Recovery Act, 42
U.S.C. § 6972(a)(1)(B). Id. at 252. The United
States District Court for the District of New Jersey
determined Honeywell was required to remediate under RCRA and
directed Honeywell to excavate and remove chromium waste from
the Mutual site under the supervision of a
federal-court-appointed site administrator. See id.
at 268 (affirming injunction against Honeywell to compel
cleanup of Mutual site).
action involves three putative classes of property owners in
Jersey City in three different neighborhoods near the
chromium manufacturing plants and related disposal sites.
Class A includes property owners in a neighborhood east and
south of the Mutual site. Class C includes property owners
located in a smaller area west of Class A. Together, Class A
and Class C include 3, 497 properties. The neighborhood
comprising Class B is in a different part of Jersey City, to
the east of Class A and surrounding the Pittsburgh Plate
Glass site to the north.
allege both defendants negligently disposed of COPR and other
chromium manufacturing byproducts, resulting in continuing
contamination of the surrounding properties. They further
allege Honeywell, PPG, and their predecessors, individually
and in conspiracy with one another, concealed the fact of
COPR disposal and the known health risks resulting from the
Sixth Amended Complaint asserted five causes of action on
behalf of the three putative classes: (1) private nuisance,
(2) strict liability, (3) trespass, (4) negligence, and (5)
civil conspiracy. Plaintiffs sought compensatory relief in
the form of economic damages "for loss of property
value, " as well as punitive damages.
initially filed this action in New Jersey state court in
2010, and defendants removed the case to the United States
District Court for the District of New Jersey. On February
28, 2011, the District Court granted in part and denied in
part Honeywell's motion to dismiss, and the case
proceeded to discovery. On July 17, 2014, prior to the
completion of discovery or filing of a motion for class
certification, plaintiffs and Honeywell informed the District
Court they had reached a settlement in principle following
negotiations under the auspices of an independent third-party
November 7, 2014, plaintiffs and Honeywell filed a motion for
preliminary approval of the class action settlement. The
District Court granted the motion on May 1, 2015, and
certified two classes for settlement purposes, comprising
Class A and Class C. The District Court also appointed class
counsel and approved the proposed claims administrator and
form of notice.
notice to the class, the District Court received three
objections from four class members, and twenty-eight opt-out
requests. Maureen Chandra was one of the objectors.
the close of the objections period, on September 3, 2015,
plaintiffs and Honeywell filed a motion for final approval of
the class action settlement. Chandra filed a brief in
opposition to the joint motion for settlement approval. On
September 25, 2015, the District Court held a fairness
hearing on the proposed settlement under Federal Rule of
Civil Procedure 23(e)(2), at which Chandra made an appearance
through counsel. On April 26, 2016, the District Court, as
outlined below, certified the class for settlement purposes
under Rule 23(a) and (b), granted final approval of the
settlement as fair and reasonable under Rule 23(e), and
approved plaintiffs' counsel's motion for costs and
attorneys' fees under Rule 23(h). See Halley v.
Honeywell Int'l, Inc., Civil Action No. 10-3345,
2016 WL 1682943 (D.N.J. April 26, 2016).
filed this appeal. Chandra does not dispute the District
Court's conclusions with respect to the requirements of
Rule 23(a) and (b). But Chandra argues the District Court
abused its discretion in finding the settlement fair and
reasonable under Rule 23(e) and in awarding plaintiffs'
counsel attorneys' fees and costs under Rule 23(h).
settlement provides a $10, 017, 000.00 non-reversionary
settlement fund for residential property owners in Class A
and Class C to include payments to class members, incentive
awards for class representatives, litigation costs,
attorneys' fees, and fund administration expenses. The
final breakdown of those payments is as follows:
$10, 017, 000.00
$1, 140, 023.77
$2, 504, 250.00
Expenses Settlement Class Funds
$6, 133, 447.36
settlement classes include 3, 497 properties, entitled to $1,
745 per potential claimant. Valid claims were submitted on
behalf of 2, 085 properties, and the unclaimed funds will be
distributed pro rata to valid claimants. Thus, the final
allocation per property is $2, 926.
approve a class action settlement, a district court must
determine the requirements for class certification of Federal
Rule of Civil Procedure 23(a) and (b) are met. Amchem Prods., Inc. v.
Windsor, 521 U.S. 591, 619-20 (1997). The proposed
settlement may be taken into consideration when evaluating
whether these requirements are met. Id.; In re
Prudential Ins. Co. America Sales Practice Litig. Agent
Actions, 148 F.3d 283, 308 (3d Cir. 1998). We review the
District Court's decision to certify a class for
settlement purposes for an abuse of discretion.
Prudential, 148 F.3d at 299.
District Court determined the proposed settlement classes
should be certified after concluding the requirements of Rule
23(a) and (b) were met. With respect to Rule 23(a), the Court
concluded joinder of the owners of the 3, 497 properties in
Classes A and C would be impractical. See Stewart v.
Abraham, 275 F.3d 220, 226-27 (3d Cir. 2001). Second,
the Court determined questions of fact relating to operation
of the Mutual plant and subsequent remediation satisfied the
commonality requirement. Third, the Court concluded the class
representatives of Class A and Class B satisfied the
typicality requirement through their contention that their
respective properties have been adversely affected by COPR
contamination resulting from Honeywell's conduct. Fourth,
the Court determined class counsel was qualified to
adequately represent the class, and the interests of the
class representatives were adequately aligned with the other
class members because they allegedly suffered the same harm
through COPR contamination of their property and they seek
the same remedy.
District Court also found the requirements of Rule 23(b)(3)
predominance requirement was satisfied because common issues
relating to the generation, disposal, and failure to
remediate COPR, and Mutual and Honeywell's knowledge of
and negligence with respect to the effects of COPR disposal
predominated over any individual issues. The Court determined
the superiority requirement was met because the class action
device achieved significant efficiencies compared to
noted, none of the objectors raised any issues with respect
to Rule 23(a) and (b), and Chandra does not dispute these
conclusions in this appeal. We conclude the District
Court's findings were well within its sound discretion.
FAIRNESS OF THE PROPOSED SETTLEMENT
Rule of Civil Procedure 23(e) provides "the claims . . .
of a certified class may be settled . . . only with the
court's approval." "Even if it has satisfied
the requirements for certification under Rule 23, a class
action cannot be settled without the approval of the court
and a determination that the proposed settlement is fair,
reasonable and adequate." Prudential, 148 F.3d
at 316 (quotation omitted). When the parties seek
simultaneous class certification and settlement approval,
courts must "be even more scrupulous than usual when
they examine the fairness of the proposed settlement."
Id. at 317 (quotation omitted). The ultimate
decision whether to approve a proposed settlement under this
standard "is left to the sound discretion of the
district court." Id. at 299. "An appellate
court may find an abuse of discretion where the district
court's decision rests upon a clearly erroneous finding
of fact, an errant conclusion of law or an improper
application of law to fact." Id. (quotations
articulated a number of factors to guide district courts in
the exercise of their discretion to approve class action
settlements. In Girsh v. ...