Title: Perdue v. Green

State: alabama

Issuer: Alabama Supreme Court

Document:

REL:04/19/2013 
Notice: T h i s o p i n i o n i s 
s u b j e c t t o f o r m a l r e v i s i o n b e f o r e p u b l i c a t i o n i n 
t h e 
advance 
s h e e t s o f 
Southern Reporter. 
R e a d e r s a r e r e q u e s t e d t o 
n o t i f y t h e 
Reporter of 
Decisions, 
Alabama A p p e l l a t e C o u r t s , 300 D e x t e r Avenue, Montgomery, Alabama 36104-3741 
((334) 
2 2 9 - 0 6 4 9 ) , o f 
any t y p o g r a p h i c a l o r o t h e r e r r o r s , i n 
o r d e r t h a t c o r r e c t i o n s may be made 
b e f o r e t h e 
o p i n i o n i s 
p r i n t e d i n 
Southern Reporter. 
SUPREME COURT OF ALABAMA 
OCTOBER TERM, 2012-2013 
1101337 
Carol M. Perdue, i n d i v i d u a l l y and 
as next f r i e n d and 
guardian of 
Anna K. Perdue 
v. 
L i s a Nix 
Green e t a l . 
1101506 
William D. Motlow, J r . , 
and 
Shane Sears 
v. 
L i s a Nix 
Green e t a l . 
Appeals from Montgomery C i r c u i t Court 
(CV-10-900013) 
1101337; 1101506 
On R e t u r n t o Remand 
PER CURIAM. 
I m m e d i a t e l y f o l l o w i n g t h e r e l e a s e o f our 
p r e v i o u s o p i n i o n 
i n t h i s m a t t e r , see Perdue v. Green, [Ms. 1101337, March 16, 
2012] 
So. 3d 
( A l a . 
2012) ("Perdue I " ) , 
t h e l e g i s l a t u r e 
p a s s e d A c t No. 2012-198, A l a . 
A c t s 2012 ("the 2012 A c t " ) , 
r e p e a l i n g t h e s t a t u t o r y p r o v i s i o n u n d e r p i n n i n g our d e c i s i o n i n 
Perdue I , i n which we v a c a t e d t h e judgment o f t h e Montgomery 
C i r c u i t 
C o u r t a p p r o v i n g a s e t t l e m e n t agreement c o n c l u d i n g 
l i t i g a t i o n 
i n v o l v i n g t h e Alabama P r e p a i d A f f o r d a b l e C o l l e g e 
T u i t i o n ("PACT") program. 
The l e g i s l a t u r e ' s a c t i o n 
r e q u i r e s 
t h i s C o u r t t o a l t e r our p r e v i o u s d e c i s i o n . 
BACKGROUND 
As d i s c u s s e d i n Perdue I , t h i s case i n v o l v e s t h e PACT 
program and i t s b o a r d o f d i r e c t o r s ("the PACT b o a r d " ) . 
The 
PACT program a l l o w s p e r s o n s t o p u r c h a s e c o n t r a c t s i n advance 
of a c h i l d ' s a t t e n d i n g c o l l e g e ; t h e c o n t r a c t s p r o v i d e c e r t a i n 
t u i t i o n payments from t h e PACT program's t r u s t f u n d i f t h e 
c h i l d s u b s e q u e n t l y a t t e n d s a c o l l e g e o r u n i v e r s i t y . 
See §§ 
16-33C-5, -6, A l a . Code 1975, and Johnson v. T a y l o r , 770 So. 
2d 1103, 1104 ( A l a . C i v . App. 1999). 
2 
1101337; 1101506 
In J a n u a r y 2010, numerous p l a i n t i f f s
1 f i l e d a c l a s s - a c t i o n 
c o m p l a i n t a g a i n s t t h e PACT b o a r d . 
I n Perdue I we summarized 
the p l e a d i n g s below as f o l l o w s : 
" A c t i n g under t h e p r e m i s e t h a t t h e PACT program was 
c r e a t e d t o a l l o w t h e d e s i g n a t e d 
b e n e f i c i a r y o f a 
PACT 
c o n t r a c t 
t o 
a t t e n d 
c o l l e g e 
w i t h o u t 
b e i n g 
r e q u i r e d 
t o 
pay 
t u i t i o n 
o r 
mandatory 
f e e s , 
r e g a r d l e s s o f t h e f i n a n c i a l h e a l t h o f t h e 
PACT T r u s t 
Fund and/or t h e a b i l i t y o f t h e PACT program t o 
pay, 
the 
p l a i n t i f f s 
a l l e g e d 
t h a t 
t h e PACT b o a r d had 
i n d i c a t e d i t s i n a b i l i t y t o f u l f i l l o u t s t a n d i n g PACT 
c o n t r a c t s . 
... 
The 
p l a i n t i f f s 
r e q u e s t e d 
a 
d e c l a r a t o r y 
judgment 
c o n s t r u i n g 
t h e 
r e s p e c t i v e 
r i g h t s and o b l i g a t i o n s o f t h e i n d i v i d u a l c l a s s e s 
under 
t h e PACT 
c o n t r a c t s 
and t h e c o n t r o l l i n g 
s t a t u t e s so t h e y c o u l d d e c i d e whether t o remain i n 
the 
PACT 
program 
o r t o 
c a n c e l 
t h e i r 
e x i s t i n g 
c o n t r a c t s and seek a r e f u n d 
( l e s s any a p p l i c a b l e t a x 
p e n a l t y ) . 
They a l s o s t a t e d a c l a i m under 42 U.S.C. 
§ 1983, a l l e g i n g v i o l a t i o n s o f r i g h t s g u a r a n t e e d by 
v a r i o u s 
p r o v i s i o n s 
o f 
t h e 
U n i t e d 
S t a t e s 
C o n s t i t u t i o n . 
"The 
PACT 
b o a r d 
answered 
and 
f i l e d 
a 
c o u n t e r c l a i m . 
I n i t s ' c o u n t e r c l a i m f o r d e c l a r a t o r y 
r e l i e f , ' t h e PACT b o a r d 
a l l e g e d 
t h a t , based upon 
a c t u a r i a l p r o j e c t i o n s , t h e PACT T r u s t Fund 
l a c k e d 
s u f f i c i e n t 
a s s e t s 
t o 
c o n t i n u e 
payment 
o f 
f u l l 
t u i t i o n expenses p a s t t h e year 2015. The PACT b o a r d 
f u r t h e r 
n o t e d 
t h a t 
i t had 
'adopted 
p r o p o s e d 
amendments t o i t s e x i s t i n g r u l e s and r e g u l a t i o n s , ' 
1These p l a i n t i f f s i n c l u d e d L i s a N i x 
Green; B r e n t A. Green; 
B l a k e Green; E l d r i d g e M. F r a n k l i n ; Eason L. F r a n k l i n ; K i m b e r l y 
H. F r a n k l i n , i n d i v i d u a l l y and as n e x t f r i e n d o f John Stephen 
F r a n k l i n ; B r i a n A. McVeigh, i n d i v i d u a l l y and as n e x t f r i e n d 
o f 
Sarah K. McVeigh; A l l e n R. Hudson, i n d i v i d u a l l y and as n e x t 
f r i e n d o f Emma L. Hathaway; and N i n a M c G i n n i s , 
i n d i v i d u a l l y 
and as n e x t f r i e n d o f S t e v i e A. Graves. 
3 
1101337; 1101506 
w h i c h , 
though 
s p e c i f i c a l l y 
aimed 
a t 
r e m i t t i n g 
payment f o r 
mandatory f e e s and expenses t o a l l PACT 
c o n t r a c t h o l d e r s , might 
r e s u l t i n payment o f 'an 
amount l e s s than t h e f u l l 
t u i t i o n and f e e s c h a r g e d 
by t h e r e s p e c t i v e c o l l e g e o r u n i v e r s i t y ' i n d i r e c t 
c o n f l i c t 
w i t h 
t h e p l a i n t i f f s ' 
i n t e r p r e t a t i o n o f 
t h e i r 
c o n t r a c t 
r i g h t s . 
Thus, 
t h e PACT 
b o a r d 
r e q u e s t e d , p u r s u a n t t o A l a . Code 1975, § 6-6-220 e t 
seq. and § 19-3B-101 e t s e q . , t h e t r i a l 
c o u r t ' s 
a s s i s t a n c e i n c o n s t r u i n g t h e 
PACT b o a r d ' s powers and 
r e s p o n s i b i l i t i e s under t h e s t a t u t e s e s t a b l i s h i n g t h e 
PACT program; a d e t e r m i n a t i o n 
as t o whether t h e 
p r o p o s e d 
changes 
t o i t s r u l e s 
and 
r e g u l a t i o n s 
v i o l a t e d 
t h e 
s t a t u t o r y , 
c o n s t i t u t i o n a l , 
o r 
c o n t r a c t u a l 
r i g h t s o f t h e PACT 
c o n t r a c t 
h o l d e r s 
and/or 
t h e PACT 
c o n t r a c t 
b e n e f i c i a r i e s ; 
and a 
d e t e r m i n a t i o n 
as t o whether t h e PACT b o a r d 
c o u l d 
l i q u i d a t e t h e PACT T r u s t Fund and d i s t r i b u t e t h e 
r e m a i n i n g 
a s s e t s . " 
Perdue I , 
So. 3d a t 
( f o o t n o t e s 
o m i t t e d ) . 
W h i l e t h e u n d e r l y i n g 
a c t i o n was p e n d i n g i n t h e 
t r i a l 
c o u r t , t h e l e g i s l a t u r e e n a c t e d A c t No. 2010-725, A l a . A c t s 
2010 
("the 2010 A c t " ) , w h i c h , among o t h e r 
t h i n g s , amended 
c e r t a i n 
s t a t u t o r y p r o v i s i o n s r e l a t i n g t o t h e PACT program. 
S e c t i o n 12 o f t h e 2010 A c t , which was e f f e c t i v e 
A p r i l 30, 
2010, and w h i c h was c o d i f i e d a t § 16-33C-19, A l a . Code 1975,
2 
" s t r o n g l y encourage[d] t h e PACT b o a r d t o make any 
f i n a n c i a l l y 
b e n e f i c i a l 
changes 
t o PACT 
r u l e s , 
p r o c e d u r e s , o r p o l i c i e s , t o t h e e x t e n t t h a t t h e PACT 
b o a r d 
i s a u t h o r i z e d 
o r p e r m i t t e d 
t o make 
such 
2The 2012 A c t r e p e a l e d § 16-33C-19 e f f e c t i v e 
A p r i l 12, 
2012. 
S e c t i o n 4 o f t h e 
2012 A c t p r o v i d e s : " T h i s r e p e a l ... 
i s 
r e t r o a c t i v e t o A p r i l 30, 2010." 
4 
1101337; 1101506 
changes and t o t h e e x t e n t 
t h a t such changes would  
not 
v i o l a t e t h e c o n t r a c t u a l 
r e l a t i o n s h i p e x i s t i n g  
between a PACT c o n t r a c t h o l d e r and t h e PACT b o a r d . " 
(Emphasis added.) 
U l t i m a t e l y , t h e t r i a l 
c o u r t 
c e r t i f i e d t h e 
u n d e r l y i n g 
a c t i o n 
as a 
c l a s s 
a c t i o n , 
and t h e p a r t i e s 
e v e n t u a l l y 
n e g o t i a t e d a p r o p o s e d 
s e t t l e m e n t : 
"On May 5, 2011, t h e p a r t i e s s u b m i t t e d a j o i n t 
m o t i o n , a l o n g w i t h a p r o p o s e d s e t t l e m e n t 
agreement, 
r e q u e s t i n g t h a t t h e t r i a l c o u r t approve t h e p r o p o s e d 
c l a s s - a c t i o n 
s e t t l e m e n t 
agreement, t h e 
p r o f e s s e d 
purpose o f which was 'to 
p r o v i d e 
C l a s s Members w i t h 
the maximum amount o f b e n e f i t s from t h e a v a i l a b l e 
a s s e t s . ' 
I n o r d e r t o e f f e c t t h a t 
s t a t e d purpose, 
the 
p r o p o s e d 
s e t t l e m e n t 
agreement 
p u r p o r t e d 
t o 
m o d i f y t h e terms o f t h e o u t s t a n d i n g PACT c o n t r a c t s . 
The 
p r o p o s e d 
m o d i f i c a t i o n 
was 
accompanied by a 
p u r p o r t e d 
w a i v e r 
by t h e 
c l a s s 
members 
o f t h e 
a p p l i c a t i o n o f A l a . Code 1975, § 16-33C-1 e t 
s e q . , 
and t h e terms o f t h e i r i n d i v i d u a l PACT c o n t r a c t s t o 
the e x t e n t t h e p r o v i s i o n s i n e i t h e r t h e s t a t u t e s o r 
the PACT c o n t r a c t s were i n c o n s i s t e n t w i t h t h e terms 
of t h e s e t t l e m e n t 
agreement. 
" A d d i t i o n a l l y , t h e 
p r o p o s e d s e t t l e m e n t agreement 
s e t 
t u i t i o n and f e e payments a t t u i t i o n and f e e 
r a t e s 
a p p l i c a b l e f o r f a l l 2010 ... and 
r e q u i r e d 
c l a s s members t o be 
p e r s o n a l l y 
r e s p o n s i b l e f o r 
payment o f any t u i t i o n and f e e s n o t c o v e r e d by t h e 
PACT program 
payments. 
C l a s s 
members were 
a l s o 
a f f o r d e d , as an a l t e r n a t i v e remedy, t h e r i g h t t o 
c a n c e l 
t h e i r PACT c o n t r a c t s and t o r e c e i v e 
r e f u n d s 
l e s s any a p p l i c a b l e t a x e s o r p e n a l t i e s . 
"The 
s e t t l e m e n t agreement a l s o i n c l u d e d , as p a r t 
of 
i t s terms, an award o f a t t o r n e y 
f e e s t o c l a s s 
members' c o u n s e l i n 
t h e amount o f $4,950,000 and an 
award f o r 
l i t i g a t i o n - r e l a t e d expenses i n 
t h e 
amount 
5 
1101337; 1101506 
of $15,000. 
The s e t t l e m e n t agreement a l s o c o n t a i n e d 
a r e l e a s e of c l a s s members' p o t e n t i a l c l a i m s a g a i n s t 
the PACT b o a r d 
('and a l l o t h e r r e l a t e d p e r s o n s 
and 
e n t i t i e s ' ) , i n c l u d i n g t h e f o l l o w i n g : 
" ' [ A ] n y 
and 
a l l 
m a t t e r s , 
demands, 
l i a b i l i t i e s , 
a c t i o n s , 
l a w s u i t s , 
l i e n s , 
d e b t s , damages, 
o b l i g a t i o n s , 
c l a i m s , and 
any o t h e r expenses, c h a r g e s , 
or c o s t s of 
e v e r y 
k i n d and n a t u r e , known or unknown, 
s u s p e c t e d 
o r 
u n s u s p e c t e d , 
howsoever 
a r i s i n g , a t law or i n e q u i t y , whether on an 
i n d i v i d u a l o r r e p r e s e n t a t i v e b a s i s , which 
were 
a s s e r t e d or which 
c o u l d have 
been 
a s s e r t e d 
as 
of 
the 
e x e c u t i o n 
o f 
t h i s 
S e t t l e m e n t , i n c l u d i n g (but not l i m i t e d to) 
t h o s e c l a i m s which were a s s e r t e d o r w h i c h 
c o u l d have been a s s e r t e d i n [the u n d e r l y i n g 
a c t i o n ] as w e l l as any and a l l 
o t h e r c l a i m s 
r e l a t i n g 
t o 
t h e 
o p e r a t i o n 
and 
a d m i n i s t r a t i o n of t h e PACT Program and/or 
the PACT T r u s t Fund, 
i n c l u d i n g 
(but not 
l i m i t e d 
to) 
t h e payment/non-payment 
o f 
t u i t i o n and f e e s and a l l c l a i m s 
a v a i l a b l e 
under t h e U n i f o r m T r u s t Code ... o t h e r than 
the o b l i g a t i o n s 
embodied i n t h i s S e t t l e m e n t 
and 
any 
judgment 
e n t e r e d 
by 
t h e 
c o u r t 
a p p r o v i n g or a d o p t i n g t h i s 
S e t t l e m e n t . ' " 
Perdue I , 
So. 3d a t 
. 
On 
May 
5, 
2011, 
t h e 
t r i a l 
c o u r t 
e n t e r e d 
an 
o r d e r 
p r e l i m i n a r i l y a p p r o v i n g t h e p r o p o s e d s e t t l e m e n t agreement and 
s e t t i n g a f a i r n e s s h e a r i n g . 
The 
t r i a l 
c o u r t d i r e c t e d t h a t 
n o t i c e of t h e p r o p o s e d s e t t l e m e n t be p r o v i d e d by m a i l t o c l a s s 
members whose a d d r e s s e s were d i s c e r n i b l e from t h e r e c o r d s of 
the PACT program. 
A d d i t i o n a l l y , a n o t i c e was p o s t e d on the 
6 
1101337; 1101506 
Web s i t e f o r 
t h e PACT program. 
Numerous w r i t t e n 
o b j e c t i o n s 
were s u b s e q u e n t l y 
f i l e d i n t h e t r i a l c o u r t by c e r t a i n c l a s s 
members. 
Testimony was 
p r e s e n t e d 
a t t h e subsequent 
f a i r n e s s 
h e a r i n g , 
i n c l u d i n g t e s t i m o n y by an a c t u a r y employed by t h e 
PACT b o a r d . 
As d e t a i l e d i n Perdue I , t h e a c t u a r y 
t e s t i f i e d 
t h a t t h e a s s e t s o f t h e 
PACT program were i n s u f f i c i e n t t o 
meet 
i t s 
f u t u r e 
l i a b i l i t i e s . 
The p r o p o s e d 
s e t t l e m e n t , 
i t was 
a s s e r t e d , was i n t e n d e d t o ensure t h a t t h e a v a i l a b l e funds were 
e v e n l y d i s t r i b u t e d so t h a t as many b e n e f i c i a r i e s as p o s s i b l e 
r e c e i v e d as much as p o s s i b l e , and t h e l i m i t s on t h e t u i t i o n 
payments r e n d e r e d t h e s e t t l e m e n t 
a c t u a r i a l l y v i a b l e . 
F u r t h e r , 
the 
chairman o f t h e PACT b o a r d 
t e s t i f i e d 
t h a t 
t h e PACT 
program's i n v e s t m e n t s had 
n o t 
p e r f o r m e d as w e l l as a n t i c i p a t e d 
and 
t h a t 
i t s o b l i g a t i o n s f a r exceeded i t s a s s e t s . 
The 
chairman t e s t i f i e d t h a t , o t h e r t h a n t h e p r o p o s e d 
s e t t l e m e n t 
agreement, t h e 
PACT b o a r d had no s o l u t i o n t h a t would a l l o w i t 
t o 
p r o v i d e 
b e n e f i t s 
t o a l l 
PACT 
c o n t r a c t 
h o l d e r s 
and 
b e n e f i c i a r i e s . 
C e r t a i n p e r s o n s o b j e c t i n g t o t h e 
s e t t l e m e n t 
were 
p r o v i d e d 
an o p p o r t u n i t y 
a t t h e h e a r i n g 
t o argue i n 
o p p o s i t i o n and r a i s e d numerous i s s u e s , i n c l u d i n g t h e argument 
t h a t t h e p r o p o s e d s e t t l e m e n t 
agreement was c o n t r a r y t o t h e 
7 
1101337; 1101506 
2010 A c t . 
I n an o r d e r e n t e r e d J u l y 27, 2011, 
t h e t r i a l c o u r t 
approved t h e p r o p o s e d s e t t l e m e n t agreement, f i n d i n g t h a t i t 
was f a i r , adequate, and r e a s o n a b l e . 
C a r o l M. Perdue, 
i n d i v i d u a l l y and as n e x t 
f r i e n d and 
g u a r d i a n o f h e r d a u g h t e r , Anna K. Perdue; W i l l i a m D. Motlow, 
J r . ; and Shane Sears ( h e r e i n a f t e r c o l l e c t i v e l y r e f e r r e d t o 
as 
"the 
o b j e c t o r s " ) , a l l 
o f whom a r e o b j e c t i n g 
c l a s s members, 
a p p e a l e d t h e t r i a l c o u r t ' s judgment a p p r o v i n g t h e s e t t l e m e n t 
agreement.
3 
A l t h o u g h t h e o b j e c t o r s r a i s e d numerous i s s u e s i n 
Perdue 
I , 
t h i s 
C o u r t 
a d d r e s s e d 
o n l y 
one 
i s s u e , 
which 
p r e t e r m i t t e d 
d i s c u s s i o n 
o f 
t h e 
r e m a i n i n g 
i s s u e s . 
S p e c i f i c a l l y , we f o c u s e d on § 16-33C-19: 
" I t i s c l e a r t h a t t h e l e g i s l a t u r e , i n 
e n a c t i n g 
A c t No. 2010-725, a t t e m p t e d t o r e c t i f y t h e f i n a n c i a l 
d i f f i c u l t i e s o f t h e 
PACT program. ... That s a i d , t h e 
l e g i s l a t u r e a l s o c l e a r l y u n d e r t o o k t o p r e s e r v e t h e 
b e n e f i t s 
o r i g i n a l l y 
p r o m i s e d 
t o PACT 
c o n t r a c t 
h o l d e r s . 
S e c t i o n 
12 o f A c t No. 2010-725, 
now 
c o d i f i e d a t § 16-33C-19 and q u o t e d above, p r o v i d e s 
t h a t t h e PACT b o a r d was 
' s t r o n g l y encouraged' t o 
make 'any f i n a n c i a l l y 
b e n e f i c i a l 
changes t o PACT 
r u l e s , p r o c e d u r e s , o r p o l i c i e s , t o t h e e x t e n t t h a t 
the 
PACT b o a r d i s a u t h o r i z e d o r p e r m i t t e d t o make 
3 P e r d u e i s 
t h e a p p e l l a n t i n case no. 1101337; Motlow and 
Sears a r e t h e a p p e l l a n t s i n case no. 1101506. 
A l t h o u g h we 
c o n s o l i d a t e d t h e two a p p e a l s , s e p a r a t e b r i e f s were f i l e d i n 
each a p p e a l . We sometimes r e f e r t o t h e arguments made i n 
one 
or 
t h e o t h e r 
a p p e a l , as w e l l 
as t o t h e arguments made 
c o l l e c t i v e l y by t h e o b j e c t o r s . 
8 
1101337; 1101506 
such changes and t o t h e e x t e n t 
t h a t 
such changes 
would 
n o t v i o l a t e t h e 
c o n t r a c t u a l 
r e l a t i o n s h i p 
e x i s t i n g between a PACT c o n t r a c t h o l d e r and t h e PACT 
b o a r d . ' 
The PACT b o a r d was t h u s encouraged t o make 
changes, b u t l i m i t e d i n making o n l y t h o s e changes 
t h a t 
'would 
n o t 
v i o l a t e ' 
t h e 
then 
' e x i s t i n g ' 
c o n t r a c t u a l r e l a t i o n s h i p between i t and t h e c o n t r a c t 
h o l d e r s . ... 
"The 
s e t t l e m e n t 
agreement s t a t e s : 'The purpose 
and e f f e c t o f t h i s S e t t l e m e n t s h a l l be t o m o d i f y t h e 
d i s p o s i t i v e terms o f t h e PACT T r u s t Fund and/or t h e 
terms o f t h e c o n t r a c t u a l r e l a t i o n s h i p s between C l a s s 
Members and t h e PACT Board.' 
I t 
was u n d i s p u t e d i n 
the 
t r i a l c o u r t and i t i s 
u n d i s p u t e d on a p p e a l 
t h a t 
the 
terms o f t h e s e t t l e m e n t 
agreement 
a l t e r t h e 
c o n t r a c t 
o f each PACT 
c o n t r a c t 
h o l d e r , 
a l t h o u g h 
t h e r e i s some d i s p u t e as t o how d i f f e r i n g 
v e r s i o n s 
of t h e 
PACT c o n t r a c t s a r e a f f e c t e d . The o b j e c t o r s do 
not 
consent 
t o any such 
m o d i f i c a t i o n 
o f 
t h e i r 
c o n t r a c t s o r waive any s t a t u t o r y 
r i g h t s . Thus, t o 
the 
e x t e n t t h e PACT b o a r d 
a c t e d 
t o change i t s 
e x i s t i n g 
r u l e s , p r o c e d u r e s , o r p o l i c i e s t o a c c e p t 
m o d i f i c a t i o n o f t h e PACT c o n t r a c t s , as i t i n d i c a t e d 
i n 
i t s c o u n t e r c l a i m 
t h a t i t 
had done, i t v i o l a t e d 
the c o n t r a c t u a l r e l a t i o n s h i p w i t h t h e PACT 
c o n t r a c t 
h o l d e r s by e x c e e d i n g t h e e x p r e s s l i m i t a t i o n s e t out 
i n § 16-33C-19." 
Perdue I , 
So. 3d a t 
( f o o t n o t e s 
o m i t t e d ) . 
We 
r e j e c t e d arguments by t h e p l a i n t i f f s and t h e PACT 
b o a r d t h a t § 16-33C-19 d i d 
n o t p r o h i b i t t h e PACT b o a r d from 
e n t e r i n g i n t o t h e s e t t l e m e n t 
agreement: 
"Here, i t 
would c o n t r a v e n e t h e p l a i n language o f § 
16-33C-19 
t o 
a l l o w 
t h e 
i m p l e m e n t a t i o n 
o f 
a 
s e t t l e m e n t 
agreement t h a t 
c l e a r l y ' v i o l a t e [ s ] t h e 
c o n t r a c t u a l r e l a t i o n s h i p e x i s t i n g between [the] PACT 
C o n t r a c t 
h o l d e r [ s ] 
and t h e PACT 
b o a r d . ' 
Thus, 
however w e l l - i n t e n t i o n e d , t h e s e t t l e m e n t 
agreement 
9 
1101337; 1101506 
i s 
c l e a r l y c o n t r a r y t o s t a t e 
l a w .
1 6 
"
1 6 D u r i n g t h e f a i r n e s s h e a r i n g , t h e t r i a l 
c o u r t 
asked t h e chairman o f t h e PACT b o a r d whether, 
' i f 
[the 
t r i a l 
c o u r t ] gave a p p r o v a l t o [the proposed] 
s e t t l e m e n t , [the 
c o u r t ] would ... be v i o l a t i n g t h e 
laws 
o f t h e S t a t e 
o f Alabama.' 
The 
chairman 
responded: 'I b e l i e v e i t would.'" 
Perdue I , 
So. 3d a t 
. We 
c o n c l u d e d : 
"In u n d e r t a k i n g t o 
remedy t h e f i n a n c i a l problems 
f a c i n g 
t h e PACT 
program, 
t h e 
l e g i s l a t u r e 
has 
e x p l i c i t l y p l a c e d c e r t a i n l i m i t s on t h e 
PACT b o a r d ' s 
a u t h o r i t y t o c r a f t s o l u t i o n s t h a t would v i o l a t e t h e 
c o n t r a c t u a l 
r i g h t s 
p r o v i d e d 
t o 
PACT 
c o n t r a c t 
h o l d e r s . 
N e i t h e r t h e 
PACT b o a r d , under § 16-33C-19, 
nor t h e j u d i c i a r y , under A l a . Const. 1901, 
§ 43, 
has 
the a u t h o r i t y t o i g n o r e t h e e x p l i c i t s t a t u t o r y law 
s p e c i f i c a l l y 
e n a c t e d 
t o 
a d d r e s s 
a 
p a r t i c u l a r 
s i t u a t i o n . 
... T h e r e f o r e , 
we can r e a c h no 
o t h e r 
c o n c l u s i o n b u t t h a t t h e t r i a l 
c o u r t exceeded 
i t s 
d i s c r e t i o n i n a p p r o v i n g a s e t t l e m e n t agreement t h a t 
i s 
p l a i n l y 
'adverse 
t o t h e enactments 
o f t h e 
l e g i s l a t u r e , 
[and] i s [ , t h e r e f o r e , ] 
i l l e g a l 
and 
v o i d . ' 
C a r r i n g t o n [ v. C a l l e r ] , 2 Stew. [175,] a t 
192 
[ ( A l a . 
1 8 2 9 ) ] . " 
Perdue I , 
So. 3d a t 
. 
We 
thus 
v a c a t e d t h e 
t r i a l 
c o u r t ' s o r d e r a p p r o v i n g t h e s e t t l e m e n t and remanded t h e cause. 
W h i l e t h e PACT b o a r d ' s 
a p p l i c a t i o n f o r r e h e a r i n g was 
p e n d i n g i n t h i s C o u r t , t h e l e g i s l a t u r e p a s s e d t h e 2012 
A c t , 
w h i c h , among o t h e r t h i n g s , s p e c i f i c a l l y r e p e a l e d § 16-33C-19. 
As t o t h e r e p e a l o f § 16-33C-19, t h e 2012 A c t s t a t e d t h a t 
i t 
was " r e m e d i a l and c u r a t i v e and i s r e t r o a c t i v e t o A p r i l 30, 
10 
1101337; 1101506 
2010," t h e e f f e c t i v e date o f t h e 2010 A c t . 
On J u l y 11, 
2012, 
we g r a n t e d t h e a p p l i c a t i o n f o r r e h e a r i n g and remanded 
t h i s 
case t o t h e t r i a l c o u r t t o c o n s i d e r t h e c o n s t i t u t i o n a l i t y o f 
the r e t r o a c t i v e a p p l i c a t i o n o f t h e 
2012 A c t . 
Perdue v. Green, 
[Ms. 1101337, J u l y 11, 2012] 
So. 3d 
( A l a . 2012). 
The 
t r i a l 
c o u r t on September 17, 2012, e n t e r e d 
an "Order on 
Remand" i n 
which i t c o n c l u d e d t h a t t h e r e t r o a c t i v i t y p r o v i s i o n 
of t h e 2012 A c t 
was c o n s t i t u t i o n a l . 
On r e t u r n t o remand, t h e o b j e c t o r s 
c h a l l e n g e t h e 
t r i a l 
c o u r t ' s r u l i n g . 
A l t e r n a t i v e l y , t h e y renew t h e c h a l l e n g e s i n 
t h e i r 
i n i t i a l 
b r i e f s on a p p e a l i n Perdue I t o t h e 
t r i a l 
c o u r t ' s 
a p p r o v a l 
o f t h e s e t t l e m e n t 
agreement, w h i c h were 
p r e t e r m i t t e d by our d i s p o s i t i o n o f t h e one i s s u e . 
DISCUSSION 
I. C o n s t i t u t i o n a l C h a l l e n g e t o t h e 2012 
A c t 
The 
l i m i t a t i o n i n § 16-33C-19 on t h e power o f t h e PACT 
b o a r d t o d i m i n i s h t h e c o n t r a c t u a l r i g h t s o f t h e PACT c o n t r a c t 
h o l d e r s was t h e l i n c h p i n o f our h o l d i n g i n Perdue I and 
t h e 
s o l e b a s i s f o r t h i s C o u r t ' s v a c a t i o n o f t h e 
judgment 
a p p r o v i n g 
the 
s e t t l e m e n t 
agreement. 
There i s no d i s p u t e 
t h a t t h e 
r e t r o a c t i v e r e p e a l o f t h a t Code s e c t i o n would have t h e e f f e c t 
of 
removing § 16-33C-19 as a b a s i s f o r our d e c i s i o n and 
11 
1101337; 1101506 
i n v a l i d a t i n g the r a t i o n a l e of Perdue I ; i n s t e a d , the 
i s s u e 
p r e s e n t e d on 
r e t u r n 
t o remand i s whether 
the 
r e t r o a c t i v e 
a p p l i c a t i o n of the 2012 A c t i s c o n s t i t u t i o n a l . 
" ' " T h i s c o u r t r e v i e w s de novo a 
t r i a l 
c o u r t ' s 
i n t e r p r e t a t i o n 
of 
a 
s t a t u t e , 
because 
o n l y 
a 
q u e s t i o n 
of 
law 
i s 
p r e s e n t e d . " 
S c o t t B r i d g e Co. v. W r i g h t , 
883 So. 2d 1221, 1223 
( A l a . 2003). 
" C o n t i n e n t a l N a t ' l Indem. Co. v. F i e l d s , 926 So. 2d 
1033, 1034-35 ( A l a . 2005). L i k e w i s e , 
" ' " [ o ] u r 
r e v i e w 
of 
c o n s t i t u t i o n a l 
c h a l l e n g e s t o l e g i s l a t i v e enactments i s de 
novo." 
R i c h a r d s v. I z z i , 819 So. 2d 25, 29 
n. 3 ( A l a . 
2001) . A d d i t i o n a l l y , a c t s of the 
l e g i s l a t u r e 
a r e presumed 
c o n s t i t u t i o n a l . 
S t a t e v. Alabama Mun. 
I n s . Corp., 730 So. 
2d 107, 110 ( A l a . 1998). See a l s o Dobbs v.  
S h e l b y County Econ. & Indus. Dev. 
A u t h . , 
749 
So. 
2d 
425, 
428 
( A l a . 1999) 
("In 
r e v i e w i n g 
the 
c o n s t i t u t i o n a l i t y 
of 
a 
l e g i s l a t i v e a c t , t h i s C o u r t w i l l 
s u s t a i n 
the 
a c t 
' " u n l e s s 
i t i s 
c l e a r 
beyond 
r e a s o n a b l e doubt t h a t i t i s v i o l a t i v e o f 
the 
fundamental law."' 
White v. R e y n o l d s  
M e t a l s Co., 558 So. 2d 373, 383 ( A l a . 1989) 
( q u o t i n g Alabama S t a t e Fed'n of Labor v.  
McAdory, 246 A l a . 1, 9, 18 So. 2d 810, 815 
( 1 9 4 4 ) ) . " ) . 
We approach t h e q u e s t i o n of 
the 
c o n s t i t u t i o n a l i t y of a l e g i s l a t i v e a c t 
" ' " w i t h e v e r y p r e s u m p t i o n and intendment i n 
f a v o r o f i t s 
v a l i d i t y , and seek t o s u s t a i n 
r a t h e r t h a n s t r i k e down the enactment of a 
c o o r d i n a t e 
b r a n c h 
of the 
government."'" 
Monroe v. Harco, I n c . , 762 So. 2d 828, 831 
( A l a . 
2000) 
( q u o t i n g 
Moore 
v. 
M o b i l e 
 
I n f i r m a r y A s s ' n , 592 So. 2d 156, 159 ( A l a . 
1991), q u o t i n g i n t u r n McAdory, 246 A l a . a t 
9, 18 So. 2d a t 815) . 
12 
1101337; 1101506 
"'Moreover, i n o r d e r 
t o overcome 
the 
p r e s u m p t i o n of c o n s t i t u t i o n a l i t y , 
... 
the 
p a r t y a s s e r t i n g the u n c o n s t i t u t i o n a l i t y of 
the A c t 
... b e a r s the burden " t o show t h a t 
[the A c t ] i s not c o n s t i t u t i o n a l . " 
Board of  
T r u s t e e s 
of Employees' R e t i r e m e n t Sys. 
of 
 
Montgomery v. 
T a l l e y , 291 
A l a . 307, 
310, 
280 So. 2d 553, 556 
(1973). 
See a l s o Thorn  
v. 
J e f f e r s o n County, 375 
So. 
2d 780, 
787 
( A l a . 1979) ("It i s the law, of c o u r s e , 
t h a t 
a p a r t y a t t a c k i n g a s t a t u t e has the burden 
of 
overcoming 
the 
p r e s u m p t i o n 
of 
c o n s t i t u t i o n a l i t y 
" ) . ' 
" S t a t e ex r e l . K i n g v. Morton, 955 So. 2d 1012, 
1017 
( A l a . 2006)." 
M a d a l o n i v. C i t y of M o b i l e , 37 So. 3d 739, 742-43 ( A l a . 2009) 
. 
The 
o b j e c t o r s m a i n t a i n 
t h a t the a p p l i c a t i o n of the 
2012 
A c t i n t h i s case would v i o l a t e c e r t a i n c o n s t i t u t i o n a l r i g h t s .
4 
More s p e c i f i c a l l y , t h e y m a i n t a i n t h a t r e t r o a c t i v e a p p l i c a t i o n 
of the 2012 
A c t i m p a i r s r i g h t s a c c r u i n g t o them under 
t h e i r 
o u t s t a n d i n g PACT c o n t r a c t s and/or the r e p e a l e d p o r t i o n s of the 
2010 
A c t , 
w h i c h 
r i g h t s , 
t h e y 
say, 
v e s t e d 
p r i o r 
t o 
the 
enactment 
of 
the 
2012 
A c t . 
C o n t r a r y 
t o 
the 
o b j e c t o r s ' 
p o s i t i o n , however, the a p p e l l e e s argue t h a t the 2012 
A c t does 
not work a l e g i s l a t i v e c u r t a i l m e n t of any 
r i g h t s , v e s t e d 
or 
o t h e r w i s e , 
and 
does 
not 
d i r e c t l y 
i m p a i r 
any 
c o n t r a c t u a l 
4As 
r e q u i r e d by § 6-6-227, A l a . Code 1975, 
the 
a t t o r n e y 
g e n e r a l was 
n o t i f i e d of the p r e s e n t 
c o n s t i t u t i o n a l c h a l l e n g e 
t o the 2012 
A c t . 
13 
1101337; 1101506 
o b l i g a t i o n . 
"An a c t t h a t i s e x p r e s s l y r e t r o a c t i v e w i l l be g i v e n 
r e t r o a c t i v e e f f e c t u n l e s s i t 
i m p a i r s v e s t e d 
r i g h t s . 
Alabama A l c o h o l i c Beverage C o n t r o l Bd. v. C i t y o f  
Pelham, 855 So. 2d 1070 ( A l a . 2003) . 
S e c t i o n 95 o f 
A r t . 
IV o f t h e Alabama 
C o n s t i t u t i o n 
o f 1901 
p r o v i d e s : 
' A f t e r 
s u i t has been commenced on any 
cause o f a c t i o n , t h e L e g i s l a t u r e s h a l l have no power 
t o t a k e away such cause o f a c t i o n , o r d e s t r o y any 
e x i s t i n g d e f e n s e t o such s u i t . ' . . . 
" 
Ex p a r t e F.P., 857 So. 2d 125, 137 ( A l a . 2003) . 
See a l s o 
B l a k e v. S t a t e ex r e l . Going, 178 A l a . 407, 411, 59 So. 623, 
625 
(1912) ("It 
i s 
a g e n e r a l r u l e ... t h a t when a s t a t u t e i s 
r e p e a l e d i t 
s t a n d s as i f 
i t 
had never e x i s t e d , e x c e p t as t o 
v e s t e d 
r i g h t s w h i c h have 
a c c r u e d under i t s o p e r a t i o n . " ) . 
F u r t h e r , A l a . Const. 1901, A r t . I , § 22, p r o v i d e s t h a t "[no] 
law, 
i m p a i r i n g t h e o b l i g a t i o n s o f c o n t r a c t s 
... 
s h a l l be 
p a s s e d by t h e l e g i s l a t u r e . " 
In h e r b r i e f , Perdue appears t o s t a r t w i t h t h e p r e m i s e 
t h a t a l l PACT c o n t r a c t h o l d e r s have a v e s t e d 
r i g h t i n t h e i r 
c o n t r a c t s and t h a t t h e s e t t l e m e n t agreement d i m i n i s h e s 
t h o s e 
c o n t r a c t u a l 
r i g h t s . 
She then p o i n t s t o s t a t e m e n t s by t h e 
p l a i n t i f f s ' 
c l a s s 
c o u n s e l 
and t h e PACT 
b o a r d 
members 
i n d i c a t i n g t h a t t h e 2012 A c t i s 
a " b l e s s i n g " o r "endorsement" 
of t h e s e t t l e m e n t agreement and argues t h a t such b l e s s i n g o r 
14 
1101337; 1101506 
endorsement 
o f t h e s e t t l e m e n t 
agreement 
equates 
t o t h e 
l e g i s l a t i o n d i m i n i s h i n g v e s t e d 
r i g h t s : 
" I n t h e 
words o f t h e 
A p p e l l e e s , 'the 
L e g i s l a t u r e has 
u n d e r t a k e n t o g r a n t i t s endorsement o f t h e p a r t i e s ' 
e f f o r t s t o a c h i e v e a c l a s s wide compromise.' 
I n 
o t h e r 
words, 
t h e y 
aver 
t h a t 
[the 2012 A c t ] was 
p a s s e d 
( a c c o r d i n g t o C l a s s Counsel) f o r t h e s o l e 
purpose o f r e t r o a c t i v e l y g a i n i n g a p p r o v a l o f a p r i o r 
s e t t l e m e n t 
w h i c h 
i t s e l f 
a d m i t t e d l y 
d i m i n i s h e d t h e 
c o n t r a c t u a l r i g h t s o f t h e C l a s s Members. 
"However, 
[the 2012 A c t ] ... 
cannot be so 
a p p l i e d i f d o i n g so would i m p a i r t h e v e s t e d c o n t r a c t 
r i g h t s 
o f 
PACT 
p u r c h a s e r s 
and 
b e n e f i c i a r i e s . 
. . . [ I ] t 
cannot 
be 
a p p l i e d 
r e t r o a c t i v e l y 
i f 
i t 
i m p a i r s a s u b s t a n t i v e , v e s t e d 
r i g h t . " 
Perdue's b r i e f on r e t u r n t o remand, a t 20. 
We d i s a g r e e . 
As t h e a p p e l l e e s argue, t h e 2012 A c t does 
not i m p a i r a n y t h i n g . 
W h i l e i t removes c e r t a i n p r o h i b i t i o n s 
on 
the a c t i o n s o f t h e PACT b o a r d - - i . e . , removes t h e b a r r i e r o f § 
16-33C-19 t o t h e PACT b o a r d ' s n e g o t i a t i o n o f t h e s e t t l e m e n t 
agreement 
w i t h t h e c l a s s members--the 
l e g i s l a t i o n 
i t s e l f 
n e i t h e r d i m i n i s h e s , removes, o r i m p a i r s any c o n t r a c t u a l r i g h t s 
or o b l i g a t i o n s , v e s t e d o r n o t , nor mandates any p a r t i c u l a r 
r e s u l t . 
The o b j e c t o r s p o i n t t o n o t h i n g i n 
t h e 2012 A c t t h a t 
c u r t a i l s t h e r i g h t s and remedies o f PACT c o n t r a c t 
h o l d e r s ; 
i n d e e d , 
we 
a r e 
c i t e d 
no 
a u t h o r i t y 
i n d i c a t i n g 
t h a t 
a 
l e g i s l a t i v e enactment g r a n t i n g a u t h o r i t y t o 
a S t a t e e n t i t y can 
15 
1101337; 1101506 
run a f o u l o f § 22 o r § 95 o f t h e 
Alabama C o n s t i t u t i o n . 
I t i s 
the s e t t l e m e n t 
agreement t h a t a l t e r s t h e r i g h t s found i n t h e 
PACT c o n t r a c t s , n o t t h e 2012 A c t . 
Perdue 
a l s o 
contends 
t h a t 
§ 
16-33C-19 
p r o v i d e s 
a 
" d e f e n s e " t h a t , under § 95, cannot be r e t r o a c t i v e l y r e p e a l e d . 
As n o t e d above, § 95 s t a t e s : " A f t e r s u i t has been commenced on 
any cause o f a c t i o n , t h e l e g i s l a t u r e s h a l l have no power t o 
t a k e away such 
cause o f a c t i o n , o r d e s t r o y 
any e x i s t i n g 
d e f e n s e t o such s u i t . " 
(Emphasis added.) 
Perdue 
s t a t e s : 
" [ A ] n 
a b s o l u t e 
d e f e n s e t o t h i s 
o v e r r e a c h by t h e 
[PACT board] was A l a . Code 
[1975,] § 16-33C-19, 
w h i c h a l l o w e d r u l e changes, b u t e x p r e s s l y 
p r o h i b i t e d 
the PACT B o a r d from making any changes t o t h e PACT 
Program 
t h a t 
would 
' v i o l a t e 
t h e 
c o n t r a c t u a l 
r e l a t i o n s h i p e x i s t i n g between a PACT c o n t r a c t 
h o l d e r 
and t h e PACT Board.' 
That same code 
s e c t i o n 
d e l e t e d 
by 
[the 2012 A c t ] , t h u s 
e l i m i n a t i n g 
d e f e n s e t o t h e [PACT board's] c o u n t e r c l a i m . 
Doing 
c l e a r l y 
v i o l a t e s A r t i c l e IV § 95 o f t h e Alabama 
C o n s t i t u t i o n . " 
was 
a 
so 
Perdue's b r i e f on r e t u r n t o remand, a t 25 ( f o o t n o t e 
o m i t t e d ) . 
In e x p l a i n i n g what c o n s t i t u t e s a "defense t o such 
s u i t " 
f o r p u r p o s e s o f § 95, t h i s C o u r t has s t a t e d : "We have 
h e l d 
t h a t [the ' e x i s t i n g - d e f e n s e ' 
p r o v i s i o n o f § 95] a p p l i e s 
'only 
t o m a t t e r s o f s u b s t a n c e and n o t t o m a t t e r s o f form o r t o 
s t a t u t e s w h i c h a r e r e m e d i a l i n 
n a t u r e ; ' [and] 
t h a t '"no p e r s o n 
has a v e s t e d r i g h t i n 
a p a r t i c u l a r remedy ... o r i n p a r t i c u l a r 
16 
1101337; 1101506 
modes o f p r o c e d u r e . " ' " 
Tyson v. J o h n s - M a n v i l l e 
S a l e s Corp., 
399 
So. 2d 263, 269 ( A l a . 
1981) 
( q u o t i n g 
S t a t e Bd. o f  
Optometry v. Lee O p t i c a l Co. o f Alabama, 284 A l a . 562, 565, 
226 So. 2d 623, 625 (1969), q u o t i n g i n 
t u r n 2 Frank E. Horack, 
J r . , 
S u t h e r l a n d 
on S t a t u t o r y 
C o n s t r u c t i o n § 2218 (3d ed. 
1 9 4 3 ) ) . 
F u r t h e r , t h e " e x i s t i n g d e f e n s e " must be 
" v e s t e d . " 
I d . 
S e c t i o n 16-33C-19 was e n a c t e d a f t e r t h e 
u n d e r l y i n g a c t i o n 
was 
f i l e d i n t h e t r i a l 
c o u r t . 
F u r t h e r , t h e b a r t o t h e 
s e t t l e m e n t agreement r e c o g n i z e d i n Perdue I as c r e a t e d by § 
16-33C-19 was n o t i n 
t h e n a t u r e o f a s t a t u t o r y o r common-law 
a f f i r m a t i v e d e f e n s e t o a cause o f a c t i o n o r a c l a i m . 
The 
b r i e f s 
b e f o r e 
us do n o t d i s c u s s o r a d d r e s s whether t h e 
argument t h a t t h e PACT b o a r d d i d 
not have t h e 
power t o a c c e p t 
the 
s e t t l e m e n t 
agreement under § 16-33C-19 c o n s t i t u t e d an 
" e x i s t i n g d e f e n s e " as c o n t e m p l a t e d by § 95, and t h e r e i s 
no 
c i t a t i o n t o c a s e l a w , such as Tyson, d i s c u s s i n g t h e p r o p e r 
a n a l y s i s f o r 
t h a t i s s u e . 
I n o t h e r words, we have no a n a l y s i s 
or a u t h o r i t y showing t h a t t h e l e g a l argument r e g a r d i n g t h e 
e f f e c t o f § 16-33C-19 equates t o a " d e f e n s e " as t h a t term i s 
c o n t e m p l a t e d i n § 95. 
R u l e 
2 8 ( a ) ( 1 0 ) , A l a . 
R. App. P., 
r e q u i r e s 
t h a t 
arguments 
i n 
a p p e l l a t e 
b r i e f s 
c o n t a i n 
17 
1101337; 1101506 
d i s c u s s i o n s o f f a c t s and r e l e v a n t l e g a l a u t h o r i t i e s t o s u p p o r t 
a p a r t y ' s p o s i t i o n ; i f t h e b r i e f s do n o t c o n t a i n t h e l e g a l and 
f a c t u a l a n a l y s i s n e c e s s a r y t o comply w i t h t h e r u l e , t h e n t h e 
argument i s 
waived. 
White Sands Group, L.L.C. v. PRS I I , 
LLC, 
998 So. 2d 1042, 1058 ( A l a . 2008). 
Because t h e b r i e f s on 
r e t u r n t o remand do n o t e x p l a i n how § 16-33C-19 c o n s t i t u t e s an 
" e x i s t i n g d e f e n s e " under § 95, and because no a u t h o r i t y i n 
s u p p o r t o f t h i s argument i s p r e s e n t e d , t h e 
argument i s waived. 
Motlow and Sears appear t o advance t h e p o s i t i o n t h a t some 
c o n t r a c t h o l d e r s may have r e l i e d on t h e passage o f t h e 2010 
A c t as a " r e p r e s e n t a t i o n " t h a t t h e S t a t e was o b l i g a t i n g 
i t s e l f 
t o pay f u l l t u i t i o n on t h e PACT c o n t r a c t s . 
However, a l t h o u g h 
the 2010 A c t made c e r t a i n f u t u r e 
f u n d i n g 
a p p r o p r i a t i o n s and 
e x p r e s s e d t h e l e g i s l a t u r e ' s b e l i e f t h a t , b a s e d on c e r t a i n 
a c t u a r i a l p r o j e c t i o n s , t h e 
program would be f u l l y funded, see 
§ 16-33C-16(b), A l a . Code 1975 ( r e p e a l e d by t h e 
2012 A c t ) , t h e 
2010 
A c t a c t u a l l y 
e x p r e s s e d no 
o b l i g a t i o n o r g u a r a n t e e . 
Because t h e 2010 A c t 
was e n a c t e d a f t e r t h e u n d e r l y i n g 
a c t i o n 
was f i l e d , t h e c l a s s members c l e a r l y were n o t r e l y i n g on 
t h e 
s u b s e q u e n t l y added f u n d i n g 
p r o v i s i o n s o f t h e 2010 A c t o r 
t h e 
r e s t r i c t i o n s on t h e PACT board's powers i n 
t h e 2010 A c t when 
t h e y p u r c h a s e d t h e i r c o n t r a c t s o r 
when t h e y f i l e d t h i s a c t i o n . 
18 
1101337; 1101506 
F u r t h e r , a t a l l t i m e s , b o t h b e f o r e and a f t e r the enactment of 
the now 
r e p e a l e d 2010 
A c t and under the s e t t l e m e n t 
agreement, 
the c l a s s members c o n t i n u e 
t o have the o p t i o n t o remain i n or 
t o w i t h d r a w from the PACT program. 
We 
see no m e r i t 
i n 
t h i s 
argument. 
Here, the 
r e t r o a c t i v e a p p l i c a t i o n of the 
2012 
A c t 
w i l l 
not 
r e s u l t i n a 
t a k i n g 
of 
the 
c l a s s members' 
c o n t r a c t u a l 
r i g h t s t o payments of t u i t i o n and 
f e e s ; r a t h e r , the 2012 
A c t 
was p a s s e d and 
i s a p p l i e d r e t r o a c t i v e l y i n o r d e r t o remove a 
h u r d l e 
i d e n t i f i e d 
by 
t h i s 
C o u r t 
i n Perdue 
I 
t o 
the 
PACT 
b o a r d ' s 
a b i l i t y 
t o 
n e g o t i a t e 
a 
s e t t l e m e n t 
t h a t , 
w i t h 
the 
consent 
of 
the 
c l a s s , 
r e s u l t s 
i n 
the 
a l t e r a t i o n of 
the 
c o n t r a c t u a l o b l i g a t i o n s . G i v e n t h a t Alabama law r e q u i r e s t h i s 
C o u r t 
t o presume t h a t 
the 
2012 
A c t 
i s c o n s t i t u t i o n a l 
and 
v a l i d , 
t h a t 
t h i s 
C o u r t 
i s r e q u i r e d 
t o seek t o 
s u s t a i n i t 
r a t h e r than t o 
s t r i k e 
i t down, and 
t h a t the 
o b j e c t o r s have 
f a i l e d t o show t h a t i t i s u n c o n s t i t u t i o n a l , we are 
c o n s t r a i n e d 
by Alabama law t o u p h o l d the r u l i n g of the 
t r i a l c o u r t as 
t o 
the 
c o n s t i t u t i o n a l i t y of the 
r e t r o a c t i v e a p p l i c a t i o n of 
the 
2012 
A c t . 
I I . Remaining C h a l l e n g e s t o the S e t t l e m e n t 
Because the 2012 
A c t has removed § 16-33C-19 as a b a s i s 
19 
1101337; 1101506 
on 
which 
t o 
c h a l l e n g e 
the 
t r i a l 
c o u r t ' s 
a p p r o v a l 
of 
the 
s e t t l e m e n t agreement, we now 
c o n s i d e r the a d d i t i o n a l grounds 
a s s e r t e d by the o b j e c t o r s i n t h e i r 
i n i t i a l 
a p p e a l . 
A. 
The 
C l a s s - C e r t i f i c a t i o n 
P r o c e s s 
"In 
r e v i e w i n g 
a 
c l a s s - c e r t i f i c a t i o n 
o r d e r , 
t h i s 
C o u r t 
l o o k s t o see whether the 
t r i a l c o u r t exceeded i t s d i s c r e t i o n 
i n e n t e r i n g the o r d e r ; however, we r e v i e w de novo the q u e s t i o n 
whether the t r i a l c o u r t a p p l i e d the c o r r e c t l e g a l s t a n d a r d i n 
r e a c h i n g 
i t s d e c i s i o n . " 
U n i v e r s i t y Fed. 
C r e d i t Union 
v. 
 
Grayson, 
878 
So. 
2d 
280, 
286 
( A l a . 2003) 
( c i t i n g 
Reynolds  
M e t a l s Co. v. 
H i l l , 825 So. 2d 100, 
104 
( A l a . 2 0 0 2 ) ) . 
1. 
R i g o r o u s A n a l y s i s 
Both the p l a i n t i f f s and the PACT b o a r d s t i p u l a t e d 
t h a t 
c e r t i f i c a t i o n of a c l a s s a c t i o n was a p p r o p r i a t e i n t h i s 
case; 
t h e r e f o r e , no c h a l l e n g e s were i n i t i a l l y l o d g e d i n the 
t r i a l 
c o u r t t o the 
c l a s s - c e r t i f i c a t i o n p r o c e s s . 
Motlow and 
Sears 
c o n t e n d on 
a p p e a l 
t h a t the 
t r i a l 
c o u r t 
f a i l e d 
t o 
c o n d u c t , 
b e f o r e 
i t 
c e r t i f i e d 
the 
s u b j e c t 
c l a s s e s , 
the 
" r i g o r o u s 
a n a l y s i s " 
r e q u i r e d 
by 
§ 
6-5-641, 
A l a . 
Code 
1975. 
A d d i t i o n a l l y , 
t h e y m a i n t a i n 
t h a t the p r e r e q u i s i t e s of 
Rule 
23(a) 
and 
2 3 ( b ) , 
A l a . 
R. 
C i v . 
P., 
were 
not 
met. 
More 
s p e c i f i c a l l y , t h e y argue, t h e r e i s a l a c k of b o t h commonality 
20 
1101337; 1101506 
and 
t y p i c a l i t y 
between 
t h e 
c l a s s 
members 
and "the 
r e p r e s e n t a t i v e p a r t i e s do n o t c l e a r l y and a d e q u a t e l y 
p r o t e c t 
the i n t e r e s t o f t h e c l a s s . " 
Other than t h e i r g e n e r a l c i t a t i o n t o t h e r e q u i r e m e n t s o f 
R u l e 23 and c a s e l a w e s t a b l i s h i n g t h e n e c e s s i t y o f a r i g o r o u s 
a n a l y s i s , 
no 
argument 
i s 
o f f e r e d 
o r 
a u t h o r i t y 
c i t e d 
d e m o n s t r a t i n g 
t h a t t h e t r i a l 
c o u r t ' s a n a l y s i s and r e s u l t i n g 
o r d e r i n t h i s case a r e l e g a l l y i n s u f f i c i e n t . 
A c l o s e r e a d i n g 
of Motlow and S e a r s ' s b r i e f r e v e a l s t h a t t h i s argument s i m p l y 
r e s t a t e s t h e g e n e r a l 
d i s s a t i s f a c t i o n 
w i t h t h e 
s e t t l e m e n t 
terms, as d i s c u s s e d i n 
more d e t a i l below. 
N o t a b l y , t h e b r i e f 
f a i l s t o c o n t a i n 
c i t a t i o n s t o t h e r e c o r d o r t o t h e 
t r i a l 
c o u r t ' s 
c e r t i f i c a t i o n 
o r d e r and a l s o 
f a i l s t o i d e n t i f y any 
d e f i c i e n c i e s a t t e n d a n t t o t h e c e r t i f i c a t i o n h e a r i n g .
5 
W i t h no 
5The t r i a l c o u r t ' s "Amended Order o f C l a s s 
C e r t i f i c a t i o n " 
r e f l e c t s t h a t " [ t h e ] m a t t e r came b e f o r e [the 
t r i a l c o u r t ] f o r 
h e a r i n g on c e r t i f i c a t i o n o f t h i s case as a c l a s s a c t i o n . " I t 
f u r t h e r r e f l e c t s t h a t t h e d e c i s i o n t o c e r t i f y was based upon 
" f u l l c o n s i d e r a t i o n o f ... arguments p r e s e n t e d . " 
I t t h e r e f o r e 
appears t h a t t h e t r i a l c o u r t c o n d u c t e d a h e a r i n g on t h e i s s u e 
of c l a s s c e r t i f i c a t i o n . 
We note, however, t h a t when Perdue's 
c o u n s e l p r e s e n t e d argument r e g a r d i n g t h e 
non-opt-out s t a t u s o f 
the c l a s s d u r i n g t h e f a i r n e s s h e a r i n g , t h e f o l l o w i n g exchange 
o c c u r r e d : 
"THE COURT: L i s t e n . But what I'm s a y i n g , when 
the whole c l a s s was i n i t ... s h o u l d n ' t p o t e n t i a l 
c l a s s members have o b j e c t e d a t t h a t time? 
21 
1101337; 1101506 
" [ P e r d u e ' s c o u n s e l ] : They -- t h e y c o u l d have 
o b j e c t e d , Your Honor. 
"THE COURT: 
Okay. 
That's 
what 
I'm 
s a y i n g . 
That's 
a l l . 
[Perdue's c o u n s e l ] : But I'm -- I'm n o t 
-¬
"THE COURT: Doesn't t h e r u l e [ ] 
r e q u i r e 
t h a t ? 
R u l e 23, d o e s n ' t i t 
r e q u i r e t h a t ? 
" [ P e r d u e ' s c o u n s e l ] : A c t u a l l y , Your Honor, you 
d i d n ' t s c h e d u l e a h e a r i n g on t h i s and 
you d i d n ' t ask 
f o r 
o b j e c t i o n s on t h i s . A l l 
t h a t was s a i d -¬
"THE COURT: Went [ s i c ] s e n t a --
" [ P e r d u e ' s c o u n s e l ] : A l e g a l n o t i c e . You d i d n ' t 
t e l l anybody t o c o m p l a i n o r t o b r i n g an o b j e c t i o n . 
"THE COURT: But l i s t e n . People have a r i g h t t o 
h i r e l a w y e r s whenever t h e y want 
t o . 
" [ P e r d u e ' s 
c o u n s e l ] : 
C e r t a i n l y 
t h e y do. Your 
Honor. 
And t h e y 
a l s o have a r i g h t t o g e t f a i r 
n o t i c e and due p r o c e s s when 
t h e r e ' s 
l i t i g a t i o n 
p e n d i n g b e f o r e t h e C o u r t . 
"THE COURT: W e l l --
"[Perdue's c o u n s e l ] : And — 
"THE COURT: -- t h e y d i d 
have n o t i c e . 
" [ P e r d u e ' s c o u n s e l ] : 
Of t h i s 
h e a r i n g . " 
A l t h o u g h we note 
t h a t t h e a p p e l l a t e 
r e c o r d 
c o n t a i n s 
no 
t r a n s c r i p t 
o f a 
c l a s s - c e r t i f i c a t i o n 
h e a r i n g , 
g i v e n t h e 
a m b i g u i t y o f 
t h e f o r e g o i n g and 
i n l i g h t o f 
t h e 
p l a i n language 
of t h e t r i a l 
c o u r t ' s o r d e r , we assume 
t h a t t h e t r i a l 
c o u r t 
22 
1101337; 1101506 
c i t a t i o n s 
t o 
a p p l i c a b l e 
a u t h o r i t y 
i n s u p p o r t of 
the 
s c a n t 
argument p r e s e n t e d and no argument a p p l y i n g l e g a l a u t h o r i t y t o  
the 
f a c t s 
of 
the 
p r e s e n t 
case, 
the 
o b j e c t o r s ' 
r i g o r o u s -
a n a l y s i s c l a i m i s w a i v e d f o r p u r p o s e s of a p p e l l a t e 
r e v i e w . 
R u l e 28(a) (10), A l a . R. App. 
P.; White Sands Group, 998 So. 
2d 
a t 
1058; 
and 
M a d a l o n i , 
37 
So. 
3d 
a t 
749 
("It 
i s 
the 
a p p e l l a n t ' s burden t o r e f e r t h i s C o u r t t o l e g a l a u t h o r i t y t h a t 
s u p p o r t s [ h i s ] argument."). 
2. 
Non-opt-out C l a s s 
Motlow 
and 
Sears 
a l s o 
argue 
t h a t 
the 
t r i a l 
c o u r t ' s 
c e r t i f i c a t i o n 
of 
the 
c l a s s 
a c t i o n - - a n d , 
u l t i m a t e l y 
i t s 
i m p o s i t i o n of the s e t t l e m e n t 
terms on t h a t c l a s s - - w i t h o u t 
an 
" o p t - o u t " 
p r o v i s i o n b o t h v i o l a t e s the 
c l a s s members' 
due-
p r o c e s s r i g h t s and c o n f l i c t s w i t h " d i c t a of the U n i t e d 
S t a t e s 
Supreme C o u r t . " 
Motlow 
and 
S e a r s ' s 
b r i e f , 
a t 
24. 
T h i s 
e n t e r e d t h a t o r d e r , as i n d i c a t e d , f o l l o w i n g a h e a r i n g on 
t h a t 
i s s u e . R e g a r d l e s s , 
however, we note t h a t we have p r e v i o u s l y 
d e c l i n e d t o h o l d " t h a t a p r e - c e r t i f i c a t i o n e v i d e n t i a r y h e a r i n g 
i s r e q u i r e d i n e v e r y case -- or even i n most c a s e s . " 
Ex 
p a r t e  
F i r s t N a t ' l Bank of J a s p e r , 
717 
So. 
2d 342, 
346 
( A l a . 1997). 
See 
a l s o 
§ 6-5-641(d), A l a . Code 1975 
( p r o v i d i n g t h a t 
the 
t r i a l c o u r t " s h a l l " h o l d an e v i d e n t i a r y h e a r i n g "on motion of 
because we u p h o l d the c e r t i f i c a t i o n 
of 
der R u l e 2 3 ( b ) ( 1 ) and 
( b ) ( 2 ) , A l a . 
C i v . P., 
see 
P a r t 
r e g a r d i s harmles 
any p a r t y " ) . 
F u r t h e r , because 
a non-opt-out c l a s s under R u l e 2 3 ( b ) ( 1 ) and 
( b ) ( 2 ) , A l a . 
R. 
C i v . P., 
see P a r t I I . A . 2 , 
i n f r a , any p r o c e d u r a l 
e r r o r i n t h i s 
23 
1101337; 1101506 
argument, however, i s f r a u g h t w i t h i n c o n s i s t e n c i e s . 
The 
r e c o r d 
r e f l e c t s 
t h a t , 
f o l l o w i n g the PACT board's 
f i l i n g 
of 
a 
s t i p u l a t i o n 
e v i d e n c i n g 
i t s q u a l i f i e d , 
g e n e r a l 
agreement 
t h a t 
c l a s s - b a s e d 
r e l i e f 
was 
p r o p e r 
and 
t h a t 
c e r t i f i c a t i o n c o u l d l a t e r be r e e v a l u a t e d , i n December 2010 
the 
t r i a l 
c o u r t 
e n t e r e d 
the 
o r d e r 
c e r t i f y i n g 
the 
c l a s s . 
S p e c i f i c a l l y 
f i n d i n g 
t h a t 
the 
u n d e r l y i n g 
a c t i o n 
was 
"an 
a p p r o p r i a t e case f o r c l a s s c e r t i f i c a t i o n f o r the 
P l a i n t i f f s 
under R u l e 2 3 ( b ) ( 2 ) , 
[ A l a . R. 
C i v . P.,] 
and 
f o r the 
[PACT 
board] on 
[ i t s ] C o u n t e r c l a i m under R u l e 2 3 ( b ) ( 1 ) ( A ) ( B ) 
[ s i c ] 
[, A l a . 
R. 
C i v . 
P . ] , " 
the 
t r i a l 
c o u r t 
c e r t i f i e d 
s e v e r a l 
c l a s s e s and 
s u b c l a s s e s . 
In 
t h e i r 
b r i e f , Motlow and 
S e a r s , 
i n k e e p i n g 
w i t h 
the 
t r i a l 
c o u r t ' s 
c e r t i f i c a t i o n 
o r d e r , 
i n i t i a l l y 
argue 
t h a t 
"Alabama C o u r t s do not a l l o w a mandatory c l a s s t o be 
c e r t i f i e d 
under R u l e 
23(b)(2) 
when the predominant 
r e l i e f sought i s 
damages." 
In s u p p o r t 
of 
t h e i r argument, t h e y 
c i t e Compass  
Bank v. Snow, 823 
So. 
2d 
667 
( A l a . 2001) . 
A l t h o u g h 
the 
p i n p o i n t 
c i t a t i o n 
t o Snow i n c l u d e d i n t h e i r 
b r i e f does 
not 
s t a n d 
f o r the p r o p o s i t i o n f o r which i t i s i d e n t i f i e d , Snow 
does, g e n e r a l l y , h o l d t h a t " c e r t i f i c a t i o n of a c l a s s p u r s u a n t 
t o 
R u l e 
2 3 ( b ) ( 2 ) [ , 
A l a . 
R. 
C i v . 
P.,] 
i s improper 
i f 
the 
24 
1101337; 1101506 
p r i m a r y r e l i e f sought i s 
money damages." 
823 So. 2d a t 678 
( c i t a t i o n s o m i t t e d ) . 
L a t e r i n t h e same argument s e c t i o n o f 
t h e i r b r i e f , however, Motlow and Sears acknowledge t h a t "the 
[ p r e s e n t ] 
l a w s u i t has never asked 
[ f o r ] o r sought monetary 
r e l i e f 
" Motlow and S e a r s ' s b r i e f , a t 24. We agree. 
See 
Perdue I , 
So. 3d a t 
( i d e n t i f y i n g t h e p l a i n t i f f s ' 
c l a i m s 
as i n c l u d i n g a r e q u e s t f o r a d e c l a r a t o r y 
judgment 
c o n s t r u i n g 
t h e r e s p e c t i v e 
r i g h t s and o b l i g a t i o n s o f t h e 
p a r t i e s under t h e PACT c o n t r a c t s and a c l a i m under 42 U.S.C. 
§ 1983 a l l e g i n g v i o l a t i o n s o f r i g h t s g u a r a n t e e d by 
v a r i o u s 
p r o v i s i o n s 
o f t h e U n i t e d 
S t a t e s 
C o n s t i t u t i o n ) . Thus, i t 
appears t h a t Snow i s 
i n a p p l i c a b l e .
6 
To 
t h e e x t e n t 
t h a t 
t h e 
o b j e c t o r s 
argue 
t h a t 
t h e 
s e t t l e m e n t 
agreement, which 
r e l e a s e s n o n - c l a s s - b a s e d 
c l a i m s 
f o r monetary damages, somehow e v i d e n c e s t h a t monetary r e l i e f 
i s 
a t 
i s s u e 
here 
and 
thus 
r e q u i r e d 
R u l e 
2 3 ( b ) ( 3 ) 
c e r t i f i c a t i o n , 
we 
d i s a g r e e . 
I n 
F i r s t 
Alabama 
Bank o f 
6 W i t h o u t c i t i n g a u t h o r i t y , Motlow and Sears argue t h a t any 
c l a s s c e r t i f i e d p u r s u a n t t o R u l e 2 3 ( b ) ( 3 ) , A l a . R. C i v . P., 
i s 
r e q u i r e d 
t o have 
an 
o p t - o u t 
p r o v i s i o n . 
See Adams v.  
R o b e r t s o n , 676 So. 2d 1265, 1270 ( A l a . 1995) ( " [ I ] n a c l a s s 
a c t i o n b r o u g h t under R u l e 2 3 ( b ) ( 3 ) , t h e 
members o f t h e c l a s s 
are 
e n t i t l e d t o 'opt o u t ' o f t h e c l a s s a c t i o n and pursue a 
s e p a r a t e 
l a w s u i t . " ) . N e v e r t h e l e s s , 
as s e t out above, t h e 
p r e s e n t c l a s s e s were n o t c e r t i f i e d p u r s u a n t t o R u l e 23(b) ( 3 ) . 
25 
1101337; 1101506 
Montgomery, N.A. 
v. M a r t i n , 425 So. 2d 415 
( A l a . 1982), 
we 
h e l d t h a t "the f a c t t h a t a R u l e 2 3 ( b ) ( 1 ) o r (b)(2) s u i t 
may 
u l t i m a t e l y r e s u l t i n a monetary r e c o v e r y from a d e f e n d a n t does 
not p r e v e n t c e r t i f i c a t i o n under t h o s e s u b d i v i s i o n s . " 
425 So. 
2d a t 423 
( c i t i n g S e n t e r v. G e n e r a l Motors Corp., 532 F.2d 511 
(5th C i r . 1976); R o b i n s o n v. L o r i l l a r d Corp., 444 F.2d 
791 
(4th C i r . 1 9 7 1 ) ) . 
See a l s o Muzquiz v. C i t y o f San A n t o n i o , 
378 F. Supp. 949 (W.D. 
Tex. 1974), a f f ' d , 520 F.2d 993 (5th 
C i r . 
1975), judgment v a c a t e d and remanded on o t h e r grounds, 
438 U.S. 901 (1978) ( u p h o l d i n g c e r t i f i c a t i o n of R u l e 2 3 ( b ) ( 2 ) 
c l a s s where an a c c o u n t i n g and r e s t i t u t i o n were sought a l o n g 
w i t h i n j u n c t i v e r e l i e f ) . 
T h e r e f o r e , the o b j e c t o r s have f a i l e d 
t o demonstrate t h a t the t r i a l 
c o u r t e r r e d i n c e r t i f y i n g the 
c l a s s as a non-opt-out c l a s s under R u l e 2 3 ( b ) ( 1 ) and 
( b ) ( 2 ) . 
B. Assessment o f the Proposed S e t t l e m e n t Agreement 
1. 
F a i r n e s s , Adequacy, and R e a s o n a b l e n e s s 
The o b j e c t o r s m a i n t a i n t h a t the t r i a l c o u r t e r r o n e o u s l y 
c o n c l u d e d t h a t the s e t t l e m e n t agreement was 
f a i r , 
adequate, 
and r e a s o n a b l e as t o a l l c l a s s members. As the 
o b j e c t o r s 
acknowledge, 
the 
t r i a l 
c o u r t must approve a s e t t l e m e n t i n 
c l a s s - a c t i o n 
l i t i g a t i o n . 
See Perdue I , 
So. 3d a t 
; 
R u l e 2 3 ( e ) , A l a . R. C i v . P. 
The p r o p o n e n t s of any 
c l a s s -
26 
1101337; 1101506 
a c t i o n s e t t l e m e n t bear the burden of d e m o n s t r a t i n g 
t h a t the 
p r o p o s e d 
s e t t l e m e n t i s f a i r , adequate, and r e a s o n a b l e . 
The 
t r i a l c o u r t ' s f i n d i n g s a r e a c c o r d e d " [ g ] r e a t w e i g h t , " and 
we 
r e v i e w the 
t r i a l 
c o u r t ' s o r d e r a p p r o v i n g 
such a s e t t l e m e n t 
agreement t o determine whether the 
t r i a l 
c o u r t exceeded i t s 
d i s c r e t i o n . 
Perdue I , 
So. 3d a t 
; Grayson, 
878 So. 
2d 
at 
286. 
In d e t e r m i n i n g whether the p r e s e n t s e t t l e m e n t agreement 
was 
f a i r , adequate, and r e a s o n a b l e , the t r i a l c o u r t c o n s i d e r e d 
the f o l l o w i n g f a c t o r s o u t l i n e d i n Adams v. R o b e r t s o n , 676 
So. 
2d 1265 
( A l a . 1995): 
"(1) the l i k e l i h o o d of s u c c e s s a t t r i a l 
(2) the 
range of p o s s i b l e r e c o v e r y ; 
(3) 
the p o i n t on 
or 
below the range of p o s s i b l e r e c o v e r y a t which 
the 
s e t t l e m e n t i s f a i r , 
adequate, and 
r e a s o n a b l e ; 
(4) 
the 
c o m p l e x i t y , 
expense, 
and 
d u r a t i o n 
of 
the 
l i t i g a t i o n ; 
(5) 
the 
s u b s t a n c e 
and 
amount 
of 
o p p o s i t i o n t o the s e t t l e m e n t ; (6) the stage of the 
p r o c e e d i n g s 
a t which 
the s e t t l e m e n t was 
a c h i e v e d ; 
and 
(7) the f i n a n c i a l a b i l i t y 
of [the defendant] 
t o 
w i t h s t a n d a g r e a t e r judgment and the p o t e n t i a l f o r 
a judgment or judgments i n an amount or amounts 
l i k e l y t o t r i g g e r the Due P r o c e s s c o n s i d e r a t i o n s (as 
r e c o g n i z e d i n Green O i l Co. v. Hornsby, 539 So. 
2d 
218 
( A l a . 1989)) r e l a t i n g t o p u n i t i v e damages. 
See, 
B e n n e t t 
v. B e h r i n g Corp., 737 
F.2d 
982, 
986 
(11th 
C i r . 
1984); 
C i t y of D e t r o i t v. G r i n n e l l Corp., 
495 
F.2d 
448, 
463 
(2d 
C i r . 
1974); 
and 
Bryan 
v. 
 
P i t t s b u r g h P l a t e G l a s s Co., 
494 
F.2d 
799 
(3d C i r . 
1974), 
c e r t . d e n i e d , 419 U.S. 
900, 95 S.Ct. 184, 
42 
L. Ed. 2d 146 
(1974). 
Another 
f a c t o r c o n s i d e r e d by 
the t r i a l c o u r t was whether p r o p e r n o t i c e was g i v e n . 
27 
1101337; 1101506 
. . . 
" 
676 So. 2d a t 1273. 
See a l s o K n i g h t v. Alabama, 469 F. Supp. 
2d 1016, 
1032 
(N.D. 
A l a . 2006). 
As e x p l a i n e d i n K n i g h t , i n 
e v a l u a t i n g 
the 
terms 
of 
a 
c l a s s - a c t i o n 
s e t t l e m e n t 
f o r 
f a i r n e s s , 
adequacy, 
and 
r e a s o n a b l e n e s s , 
the 
t r i a l 
c o u r t 
" s h o u l d compare the terms of the s e t t l e m e n t agreement w i t h the 
l i k e l y rewards t h a t the 
' c l a s s would have r e c e i v e d f o l l o w i n g 
a s u c c e s s f u l t r i a l 
of the c a s e . ' " 
469 
F. Supp. 2d a t 
1032 
( q u o t i n g 
C o t t o n 
v. 
H i n t o n , 
559 
F.2d 
1326, 
1330 
(5th C i r . 
1 9 7 7 ) ) . 
The o b j e c t o r s contend t h a t i n the p r e s e n t case the 
t r i a l 
c o u r t ' s 
d e t e r m i n a t i o n 
was 
d e f e c t i v e 
i n 
the 
f o l l o w i n g 
r e s p e c t s :
7 
a. 
L i k e l i h o o d of s u c c e s s a t 
t r i a l 
I n i t i a l l y , the o b j e c t o r s argue t h a t the t r i a l c o u r t e r r e d 
i n 
c o n c l u d i n g 
t h a t 
the 
c l a s s members' 
p o t e n t i a l 
l a c k 
of 
s u c c e s s s h o u l d the m a t t e r p r o c e e d t o t r i a l weighed i n f a v o r of 
the a p p r o v a l of the s e t t l e m e n t . 
S p e c i f i c a l l y , t h e y m a i n t a i n 
t h a t an e x a m i n a t i o n of the t h r e e f a c t o r s i d e n t i f i e d by them as 
r e l e v a n t t o t h i s d e t e r m i n a t i o n , "(1) the m e r i t s of the 
c l a s s 
7We 
address each f a c t o r i n the o r d e r i n which t h e y appear 
i n Perdue's b r i e f . 
28 
1101337; 1101506 
members' c l a i m s , (2) t h e d e f e n s e s r a i s e d by t h e d e f e n d a n t s , 
and (3) t h e m a n a g e a b i l i t y o f t h e t r i a l , " does n o t s u p p o r t t h e 
t r i a l c o u r t ' s 
d e t e r m i n a t i o n . 
As 
t o t h i s 
f a c t o r , t h e t r i a l 
c o u r t ' s 
f i n a l 
judgment 
a p p r o v i n g t h e s e t t l e m e n t agreement s p e c i f i c a l l y found t h a t , 
o t h e r than l e g i s l a t i v e a p p r o p r i a t i o n s and i t s c u r r e n t a s s e t s , 
the PACT b o a r d had no means o f h o n o r i n g a p o t e n t i a l judgment 
awarding f u l l b e n e f i t s t o a l l c l a s s members; t h u s , t h e t r i a l 
c o u r t c o n c l u d e d , 
i t was u n a b l e t o "say t h a t t h e c l a s s members 
would l i k e l y o b t a i n a more f a v o r a b l e o r more e q u i t a b l e r e s u l t 
a t 
t r i a l 
than 
t h e y 
would 
r e c e i v e 
under 
t h e 
p r o p o s e d 
S e t t l e m e n t . " 
Because t h e u n d i s p u t e d e v i d e n c e adduced a t 
t h e 
f a i r n e s s h e a r i n g i n d i c a t e d t h e a s s e t s o f t h e PACT t r u s t 
fund 
were i n s u f f i c i e n t t o f u l l y pay t u i t i o n under t h e o u t s t a n d i n g 
PACT c o n t r a c t s , we a r e c o n s t r a i n e d t o agree w i t h t h e 
t r i a l 
c o u r t t h a t t h e 
award g u a r a n t e e d t o each c l a s s member under t h e 
terms o f t h e s e t t l e m e n t agreement l i k e l y exceeds t h e reward 
the c l a s s members would r e c e i v e i f t h e y were s u c c e s s f u l a t 
t r i a l . 
See K n i g h t , 469 F. Supp. 2d a t 
1033. 
We f u r t h e r note t h a t , g i v e n t h e a l l e g e d t i m e - s e n s i t i v e 
n a t u r e o f t h e r e l i e f 
a f f o r d e d by t h e s e t t l e m e n t 
agreement, 
p r o c e e d i n g t o t r i a l would have consumed c o n s i d e r a b l e time and 
29 
1101337; 1101506 
would have f u r t h e r d e p l e t e d t h e l i m i t e d a s s e t s o f t h e PACT 
program. 
As e x p l a i n e d by t h e c o u r t i n K n i g h t : 
"A 
h e a r i n g 
o r 
t r i a l 
a l s o 
would 
have 
r e q u i r e d 
t e s t i m o n y 
from e x p e r t s and v a r i o u s w i t n e s s e s . 
To 
say t h e l e a s t , a h e a r i n g o r t r i a l would be l e n g t h y 
and 
l o g i s t i c a l l y 
c o m p l i c a t e d , 
and would r e s u l t i n 
g r e a t expense f o r 
a l l p a r t i e s . 
F o r those 
r e a s o n s , 
the 
C o u r t 
c o n c l u d e s 
t h a t t h e r i s k s 
f a c e d by t h e 
p a r t i e s and t h e d i f f i c u l t y i n managing a t r i a l o r 
h e a r i n g c o u n s e l i n f a v o r o f a c c e p t i n g t h e p r o p o s e d 
S e t t l e m e n t 
Agreements." 
469 F. Supp. 2d a t 1033.
8 
I n c o n s i d e r a t i o n o f t h e f o r e g o i n g , 
8 I n f a c t , t h e t r i a l c o u r t ' s o r d e r i n c l u d e d t h e f o l l o w i n g 
f a c t u a l f i n d i n g s r e g a r d i n g t h e c o m p l e x i t y o f t h e m a t t e r and 
a n t i c i p a t e d 
expense 
s h o u l d 
t h e m a t t e r 
p r o c e e d t o a c t u a l 
l i t i g a t i o n : 
" F u l l l i t i g a t i o n o f t h i s case would be complex, 
e x p e n s i v e , 
and time consuming. The case 
i n v o l v e s 
r i g h t s , 
o b l i g a t i o n s , and d u t i e s under 40,000 PACT 
C o n t r a c t s t h a t w i l l be p a i d out over a span o f two 
decades. 
W h i l e t h e C o u r t i s i n f o r m e d t h a t enormous 
amounts o f time have been expended on b o t h s i d e s o f 
t h i s case, i t 
i s 
o b v i o u s t h a t f u r t h e r l i t i g a t i o n o f 
the case 
w i l l 
n e c e s s i t a t e 
s i g n i f i c a n t l y much more 
t i m e , e f f o r t , and expense. 
I f t r i e d , t h i s case 
w i l l 
r e q u i r e 
e x t e n s i v e 
and 
e x p e n s i v e 
a c t u a r i a l 
and 
f i n a n c i a l e v i d e n c e . 
E x p e r t t e s t i m o n y on many i s s u e s 
w i l l be n e c e s s a r y . 
Most i m p o r t a n t l y , such expenses 
and 
d e l a y s 
would 
c o n t i n u e 
t o erode t h e 
l i m i t e d 
a v a i l a b l e 
funds 
a t t h e d e t r i m e n t 
o f t h e c l a s s 
members as a whole. 
"The 
C o u r t i s o f t h e view t h a t p r o c e e d i n g t o 
t r i a l i n t h i s case, w i t h subsequent a p p e a l s , 
would 
be not o n l y d e t r i m e n t a l t o t h e c l a s s members, i t i n 
a l l 
l i k e l i h o o d would be 
f a t a l t o t h e PACT 
T r u s t 
Fund. 
Based upon t h e e v i d e n c e o f r e c o r d , by t h e 
30 
1101337; 1101506 
we c o n c l u d e t h a t t h e t r i a l c o u r t d i d n o t exceed i t s d i s c r e t i o n 
i n d e t e r m i n i n g 
t h a t t h i s f a c t o r weighed i n f a v o r o f a p p r o v i n g 
the s e t t l e m e n t 
agreement. 
b. 
Stage o f p r o c e e d i n g s where s e t t l e m e n t 
a c h i e v e d 
The 
o b j e c t o r s 
n e x t 
m a i n t a i n 
t h a t 
t h e 
t r i a l 
c o u r t ' s 
a p p r o v a l o f t h e s e t t l e m e n t agreement was i n a p p r o p r i a t e i n t h a t 
the s e t t l e m e n t was a c h i e v e d b o t h w h i l e t h e case remained i n 
i t s i n f a n c y and w i t h o u t t h e b e n e f i t o f "any r e a l 
d i s c o v e r y . " 
Perdue's b r i e f , a t 52. More s p e c i f i c a l l y , t h e y c o n t e n d t h a t 
the 
l i m i t e d 
number o f d e p o s i t i o n s 
and w r i t t e n 
d i s c o v e r y 
r e q u e s t s 
c o u p l e d 
w i t h 
c l a s s c o u n s e l ' s 
f a i l u r e t o o b t a i n an 
o p p o s i n g e x p e r t o r t o depose t h e PACT b o a r d members o r t h e i r 
a c t u a r y r e g a r d i n g t h e f u n d i n g s h o r t f a l l d e m o n s t r a t e s t h a t t h e 
case was not i n 
t h e 
p r o p e r p o s t u r e f o r 
s e t t l e m e n t and t h a t t h e 
t r i a l c o u r t ' s c o n t r a r y c o n c l u s i o n was e r r o n e o u s . 
The 
t r i a l 
c o u r t , 
i n s u p p o r t o f i t s f i n d i n g i n 
t h i s 
r e g a r d , 
n o t e d 
t h a t , 
a t t h e time 
t h e 
i n i t i a l 
p r o p o s e d 
time 
t h i s 
case 
c o u l d 
be 
t r i e d , 
a p p e a l e d , 
and 
f i n a l i z e d , 
t h e 
PACT 
T r u s t 
Fund 
would 
be 
s i g n i f i c a n t l y (and 
perhaps c o m p l e t e l y ) 
d e p l e t e d . I f 
t h a t were t o o c c u r , a l a r g e p e r c e n t a g e o f t h e c l a s s 
members would u l t i m a t e l y r e c e i v e l e s s than t h e l e v e l 
of 
b e n e f i t s 
t o be 
p r o v i d e d 
under 
t h e p r o p o s e d 
S e t t l e m e n t . 
... 
" 
31 
1101337; 1101506 
s e t t l e m e n t was r e a c h e d as a r e s u l t o f m e d i a t i o n , t h e m a t t e r 
had been p e n d i n g f o r 
more than a y e a r . 
I t f u r t h e r f o u n d as 
f o l l o w s : 
"The 
r e c o r d s and m a t e r i a l s 
f i l e d 
w i t h t h e C o u r t 
d i s c l o s e t h a t t h e r e has been e x t e n s i v e d i s c o v e r y , 
b o t h 
f o r m a l 
and 
i n f o r m a l . 
These 
p a r t i e s , 
and 
p a r t i c u l a r l y t h e i r c o u n s e l , a r e i n t i m a t e l y 
f a m i l i a r 
w i t h t h e f a c t s , f i g u r e s , law, r i s k and c o m p l e x i t y o f 
the 
case. 
Both 
s i d e s 
o f 
t h i s 
case 
have 
had 
s u f f i c i e n t o p p o r t u n i t y t o e v a l u a t e t h e s t r e n g t h s and 
weaknesses 
o f 
t h e i r 
r e s p e c t i v e 
t h e o r i e s 
and 
p o s i t i o n s 
" 
The o b j e c t o r s argue t h a t " [ t ] h e f a c t t h a t a l l d i s c o v e r y 
has 
been 
c o m p l e t e d and t h e case 
i s ready 
f o r t r i a l i s 
i m p o r t a n t , 
because 
i t 
o r d i n a r i l y 
a s s u r e s 
s u f f i c i e n t 
development o f t h e f a c t s t o p e r m i t a r e a s o n a b l e judgment on 
the p o s s i b l e m e r i t s o f t h e c a s e . " 
K n i g h t , 469 F. Supp. 2d 
a t 
1033. 
Given t h e 
w e a l t h o f i n f o r m a t i o n r e g a r d i n g t h e f i n a n c i a l 
c r i s i s f a c i n g t h e 
PACT b o a r d , however, t h i s C o u r t d e c l i n e s t o 
h o l d c o n t r a r y t o t h e t r i a l c o u r t t h a t t h e p a r t i e s and t h e i r 
c o u n s e l l a c k e d a s u f f i c i e n t u n d e r s t a n d i n g o f t h e m e r i t s o f 
t h e i r 
r e s p e c t i v e 
cases 
a t t h e time 
t h a t 
s e t t l e m e n t 
was 
a c h i e v e d . 
F u r t h e r , a l t h o u g h no e x p e r t was o b t a i n e d t o t e s t i f y 
on b e h a l f o f t h e p l a i n t i f f s , 
b o t h c l a s s c o u n s e l and c o u n s e l 
f o r t h e o b j e c t o r s c r o s s - e x a m i n e d 
t h e PACT chairman and t h e 
PACT board's a c t u a r y r e g a r d i n g t h e p r o f f e r e d f i n a n c i a l d a t a . 
32 
1101337; 1101506 
A g a i n , t o o , 
t h e u n d i s p u t e d 
e v i d e n c e adduced a t t h e f a i r n e s s 
h e a r i n g s u g g e s t s t h a t t h e d e l a y and expense a s s o c i a t e d 
w i t h 
a d d i t i o n a l 
d i s c o v e r y w o u l d have f u r t h e r d e p l e t e d t h e funds 
u l t i m a t e l y 
a v a i l a b l e f o r d i s t r i b u t i o n . 
We a r e , t h e r e f o r e , 
u n a b l e t o c o n c l u d e t h a t t h e t r i a l c o u r t e r r e d i n 
d e c i d i n g t h a t 
the 
s t a g e a t w h i c h 
s e t t l e m e n t 
was a c h i e v e d 
d i d n o t weigh 
a g a i n s t a p p r o v i n g t h e terms o f t h e s e t t l e m e n t 
agreement. 
c. 
Range o f p o s s i b l e 
r e c o v e r y 
The 
o b j e c t o r s 
c o n t e n d t h a t t h e t r i a l 
c o u r t 
f a i l e d t o 
p r o p e r l y compare t h e terms o f t h e s e t t l e m e n t agreement w i t h 
the 
l i k e l y rewards t h e c l a s s would have r e c e i v e d 
f o l l o w i n g 
t r i a l because i t 
d i d 
n o t f a c t o r a " l e v e l o f s u c c e s s f o r t h e 
[ c l a s s ] . " 
A c c o r d i n g 
t o Perdue, 
t h e 
i n i t i a t i o n 
o f t h e 
u n d e r l y i n g 
a c t i o n 
a c t u a l l y 
d i m i n i s h e d 
c l a s s 
members' 
c o n t r a c t u a l b e n e f i t s i n t h a t b e f o r e t h e a c t i o n was f i l e d each 
member was 
s t i l l 
r e c e i v i n g f u l l b e n e f i t s . 
Motlow and Sears 
f u r t h e r 
c o n t e n d 
t h a t 
t h e 
s e t t l e m e n t 
agreement 
a c t u a l l y 
p r o v i d e s 
l i t t l e o r no r e l i e f t o c l a s s members i n l i g h t o f 
t h e 
l e g i s l a t u r e ' s s t a t u t o r y a s s u r a n c e s o f f u l l 
f u n d i n g . 
C o n t r a r y t o t h o s e c l a i m s , however, i t i s 
u n d i s p u t e d 
t h a t 
the PACT program i s f a c i n g an economic s h o r t f a l l and t h a t , 
w i t h o r w i t h o u t 
i n i t i a t i o n o f t h e u n d e r l y i n g a c t i o n , and even 
33 
1101337; 1101506 
w i t h t h e f u n d i n g added by the 2010 A c t , each c l a s s member 
c o u l d not e x p e c t 
t o c o n t i n u e 
t o r e c e i v e 
f u l l 
payment 
o f 
b e n e f i t s 
i n d e f i n i t e l y , nor c o u l d a c l a s s member 
a n t i c i p a t e 
t h a t the t r i a l c o u r t would have o r d e r e d t h e PACT b o a r d t o do 
something 
t h a t 
t h e u n d i s p u t e d 
e v i d e n c e 
i n d i c a t e s i t was 
c l e a r l y i n c a p a b l e of d o i n g , i . e . , p a y i n g 
f u l l t u i t i o n f o r a l l 
PACT c o n t r a c t s . In s u p p o r t of i t s f i n d i n g i n t h i s r e g a r d , t h e 
t r i a l c o u r t s t a t e d : 
"The u n c o n t r o v e r t e d 
e v i d e n c e 
i n t h i s 
case i s 
t h a t the PACT T r u s t Fund has a s i g n i f i c a n t 
a c t u a r i a l 
d e f i c i t , i . e . , 
i t s a s s e t s a r e i n s u f f i c i e n t t o pay 
the p r o j e c t e d l i a b i l i t y a s s o c i a t e d w i t h f u l l 
t u i t i o n 
and 
mandatory f e e payments. The 
C o u r t 
t h e r e f o r e 
b e l i e v e s 
t h a t 
t h e 
' l i m i t e d 
fund' 
d o c t r i n e 
has 
a p p l i c a t i o n . 
O r t i z v F i b e r b o a r d Corp.[,] 
527 
U.S. 
115 (1999); Ex p a r t e H o l l a n d , 692 So. 2d 811 ( A l a . 
1997). 
Under 
the 
l i m i t e d 
fund 
d o c t r i n e , 
t h e 
f o l l o w i n g i s s u e s g e n e r a l l y must be e s t a b l i s h e d : (1) 
t h e r e a r e m u l t i p l e c l a i m a n t s a g a i n s t t h e d e f e n d a n t 
on t h e fund; (2) t h e d e f e n d a n t on the f u n d has o n l y 
a 
l i m i t e d 
amount t o pay 
t h o s e 
c l a i m s ; 
(3) t h e 
l i m i t e d amount i s i n s u f f i c i e n t t o pay a l l 
of the 
c l a i m s i n f u l l ; and (4) a l l 
of t h e c l a i m a n t s a r e , o r 
can be, b r o u g h t b e f o r e t h e c o u r t . 
"In 
t h i s 
case 
t h e r e a r e a p p r o x i m a t e l y 
40,000 
o u t s t a n d i n g PACT C o n t r a c t s owned by 
a p p r o x i m a t e l y 
30,000 
i n d i v i d u a l s . The e v i d e n c e 
i s e q u a l l y 
c l e a r 
t h a t t h e PACT T r u s t Fund i s a l i m i t e d 
fund 
w i t h 
f i n i t e a s s e t s . 
As of May 2011, the T r u s t Fund had 
a p p r o x i m a t e l y $440 m i l l i o n i n a s s e t s . 
I t a l s o has 
an income stream, i n f u t u r e d o l l a r s , o f $548 m i l l i o n 
as 
p r o v i d e d 
under 
[the 2010 
A c t ] . Those 
annual 
i n s t a l l m e n t s a r e s c h e d u l e d 
t o b e g i n i n 2015. The 
p r e s e n t v a l u e of t h e t o t a l a s s e t s , a c c o r d i n g t o t h e 
34 
1101337; 1101506 
S t a t e 
T r e a s u r e r 
and 
t h e 
PACT 
a c t u a r y , 
i s 
a p p r o x i m a t e l y $830 m i l l i o n . 
On t h e o t h e r hand, t h e 
p r e s e n t v a l u e o f t h e o b l i g a t i o n s owed by t h e T r u s t 
Fund under PACT C o n t r a c t s w e l l exceeds $1 b i l l i o n . 
"Given 
t h e l i m i t e d 
fund 
d o c t r i n e ... i t 
i s 
l i k e l y t h a t t h e o n l y s o l u t i o n a t t r i a l would be t h e 
same 
as 
t h a t 
a c c o m p l i s h e d 
by 
t h e 
p r o p o s e d 
S e t t l e m e n t , 
i . e . , t o e q u i t a b l y d i v i d e t h e l i m i t e d 
funds among t h e c l a s s members. 
Because t h e r e i s 
no 
a l t e r n a t i v e 
source o f f u n d i n g 
w i t h which t o pay 
b e n e f i t s , t h e e x p e c t a t i o n o f any g r e a t e r 
r e c o v e r y 
would be e n t i r e l y 
s p e c u l a t i v e . 
Moreover, because  
the a s s e t s o f t h e PACT T r u s t Fund would c o n t i n u e t o  
be d e p l e t e d d u r i n g ongoing 
l i t i g a t i o n , t h e range o f  
p o s s i b l e 
r e c o v e r y 
a v a i l a b l e t o t h e c l a s s members  
would a c t u a l l y be l e s s i f 
an e q u i t a b l e d i v i s i o n i s 
 
d e l a y e d 
u n t i l 
t r i a l . 
Because o f t h e s i g n i f i c a n t 
r i s k 
t h a t a m a j o r i t y o f t h e c l a s s members would 
r e c o v e r 
l e s s (or perhaps n o t h i n g ) i f 
t h e p r o p o s e d 
S e t t l e m e n t i s 
n o t approved, t h e C o u r t c o n c l u d e s t h a t 
t h i s f a c t o r weighs i n f a v o r o f a p p r o v a l . " 
(Emphasis added.) 
As d e m o n s t r a t e d by t h e f o r e g o i n g f i n d i n g s o f t h e 
t r i a l 
c o u r t , i t 
appears b o t h t h a t t h e p r o p o s e d r e s o l u t i o n o f t h e 
l i t i g a t i o n by s e t t l e m e n t i s f a i r and r e a s o n a b l e and t h a t i t i s 
a t 
l e a s t on p a r w i t h t h e a n t i c i p a t e d 
r e s u l t (and t h e o n l y 
r e s u l t i d e n t i f i e d as p o s s i b l e ) s h o u l d t h e m a t t e r p r o c e e d t o a 
t r i a l on t h e m e r i t s . 
The s e t t l e m e n t agreement i s aimed a t 
p r o v i d i n g t h e h i g h e s t l e v e l o f b e n e f i t s p o s s i b l e t o a l l c l a s s 
members. 
T h e r e f o r e , we a r e u n a b l e t o c o n c l u d e t h a t t h e t r i a l 
c o u r t 
e r r e d i n f i n d i n g 
t h a t t h e s e t t l e m e n t agreement was 
35 
1101337; 1101506 
r e a s o n a b l e as compared t o t h e range o f p o s s i b l e r e c o v e r y i n 
t h i s a c t i o n . 
d. 
O p p o s i t i o n t o t h e s e t t l e m e n t agreement 
The o b j e c t o r s acknowledge t h a t , o f t h e 
40,000 o u t s t a n d i n g 
PACT 
c o n t r a c t s owned by 30,000 
p a r t i c i p a n t s on t h e PACT 
program, t h e r e were a t most o n l y a p p r o x i m a t e l y 70 o b j e c t o r s .
9 
Based on t h o s e 
f i g u r e s , t h e t r i a l 
c o u r t computed t h a t t h e 
o b j e c t i n g c l a s s members r e p r e s e n t e d 
" l e s s than 0.18% o f 
t h e 
t o t a l c o n t r a c t owners." 
The 
t r i a l 
c o u r t 
f u r t h e r e x p l a i n e d t h a t t h e o b j e c t i o n s 
r e c e i v e d 
c o l l e c t i v e l y 
c h a l l e n g e d 
t h e 
s e t t l e m e n t 
on t h e 
f o l l o w i n g f i v e grounds ( w i t h t h e t h i r d s t a t e d ground a l l e g e d l y 
b e i n g t h e most common): 
" ( 1 ) [ t h e 
t r i a l 
c o u r t ' s 
a l l e g e d 
l a c k 
o f ] 
j u r i s d i c t i o n ; (2) t h e r i p e n e s s o r a c t u a l e x i s t e n c e 
of a c o n t r o v e r s y ; 
(3) t h e f a i l u r e t o e n f o r c e PACT 
C o n t r a c t s a g a i n s t t h e S t a t e o f Alabama; (4) 
t h e l a c k 
of opt out r i g h t s ; 
and (5) e x c e s s i v e 
a t t o r n e y s ' 
9The 
t r i a l 
c o u r t ' s 
f i n a l 
judgment 
r e f l e c t s 
t h a t 
a p p r o x i m a t e l y 55 c l a s s members f i l e d t i m e l y w r i t t e n o b j e c t i o n s 
and 
t h a t 8 a d d i t i o n a l 
o b j e c t i o n s were 
r e c e i v e d 
a f t e r t h e 
e s t a b l i s h e d 
d e a d l i n e . 
By 
t h i s 
C o u r t ' s 
count, t h e r e c o r d 
i n c l u d e s a t o t a l o f 69 s e p a r a t e w r i t t e n o b j e c t i o n s f i l e d by 
c l a s s 
members; 
however, 
some 
o f 
t h o s e 
f i l i n g s 
appear 
d u p l i c a t i v e . 
36 
1101337; 
1101506 
f e e s . "
1 0 
We 
note 
t h a t 
o t h e r 
c h a l l e n g e s 
r e g a r d i n g 
t h e 
s e t t l e m e n t 
agreement 
i n c l u d e d 
i n t h e 
w r i t t e n 
o b j e c t i o n s 
t h a t 
were 
e x p r e s s e d 
d u r i n g the f a i r n e s s h e a r i n g i n c l u d e d t h e l a c k o f 
i n p u t from t h e l e g i s l a t u r e ; t h e a l l e g e d l y d i s p a r a t e t r e a t m e n t 
i n t h e s e t t l e m e n t agreement o f PACT c o n t r a c t h o l d e r s b a s e d on 
p u r c h a s e and/or a n t i c i p a t e d m a t r i c u l a t i o n d a t e s , i . e . , 
t h a t 
the p r o p o s e d s e t t l e m e n t was n o t i n t h e b e s t i n t e r e s t of a l l 
c l a s s members; t h a t t h e s e t t l e m e n t agreement c o n f l i c t e d w i t h 
and m o d i f i e d t h e a l l e g e d terms of t h e o r i g i n a l PACT c o n t r a c t s 
i n t h a t t h e s e t t l e m e n t agreement p r o v i d e d f o r payment o f l e s s 
than 
f u l l t u i t i o n and mandatory f e e s ; concerns r e g a r d i n g t h e 
p r o p o s e d t u i t i o n - p a y m e n t cap and t h e c l a s s members' 
l i a b i l i t y 
f o r 
any s h o r t f a l l ; t h a t t h e s e t t l e m e n t agreement 
r e p r e s e n t e d 
an u n c o n s t i t u t i o n a l t a k i n g o f v e s t e d p r o p e r t y 
r i g h t s 
w i t h 
r e g a r d t o c l a s s members h o l d i n g p a i d - i n - f u l l c o n t r a c t s ; t h a t 
the 
s e t t l e m e n t 
agreement 
l e f t 
c l a s s members i n a 
worse 
p o s i t i o n than t h e y were i n as a r e s u l t of t h e 2010 A c t and t h e 
apparent 
c o n f l i c t between t h e s e t t l e m e n t agreement and t h e 
p r o v i s i o n s of t h e 2010 A c t ; c l a s s members' 
d i s s a t i s f a c t i o n 
1 0The t r i a l c o u r t ' s o r d e r then c o n s i d e r e d and r e j e c t e d , 
i n 
t u r n , t h e i n d i v i d u a l m e r i t o f t h e s e grounds. 
37 
1101337; 1101506 
w i t h 
the 
p r o v i s i o n 
t h a t 
any 
funds r e m a i n i n g w i t h 
the PACT 
program a f t e r a l l o b l i g a t i o n s were met would be t r a n s f e r r e d t o 
the 
E d u c a t i o n 
T r u s t 
Fund; 
a l l e g e d 
n o t i c i n g 
d e f i c i e n c i e s 
( r e g a r d i n g 
b o t h 
the 
n o t i c e 
of 
c l a s s 
c e r t i f i c a t i o n 
and 
the 
n o t i c e d i s c l o s i n g the p r o p o s e d s e t t l e m e n t agreement); and 
the 
a l l e g e d o v e r b r e a d t h of the s e t t l e m e n t agreement, i n 
g e n e r a l , 
and, 
i n p a r t i c u l a r , w i t h r e g a r d t o the terms of the 
i n c l u d e d 
r e l e a s e 
of 
l i a b i l i t y 
f o r PACT b o a r d members. 
A d d i t i o n a l l y , 
s e v e r a l 
c l a s s members o f f e r e d 
a l t e r n a t i v e s o l u t i o n s 
t o 
the 
p r o p o s e d s e t t l e m e n t agreement. 
The 
f a c t t h a t 
l e s s than 70 
c l a s s members out 
of 30,000 
o b j e c t e d 
t o 
the 
s e t t l e m e n t 
agreement weighs 
i n 
f a v o r 
of 
a p p r o v a l of the s e t t l e m e n t agreement.
1 1 
When c o n f r o n t e d w i t h 
s i m i l a r 
numbers 
i n Adams, 
t h i s 
C o u r t made 
the 
f o l l o w i n g 
o b s e r v a t i o n : 
" I n 
r e v i e w i n g 
the 
t r i a l 
c o u r t ' s 
f i n d i n g s 
and 
1 1 P e r d u e 
s u g g e s t s 
t h a t 
the 
r e l a t i v e l y 
s m a l l number 
of 
o b j e c t o r s may 
be a t t r i b u t e d t o numerous f a c t o r s , i n c l u d i n g the 
p u r p o r t e d l y 
s h o r t 
p e r i o d 
f o r 
f i l i n g 
and 
the 
p u r p o r t e d 
"campaign of m i s i n f o r m a t i o n " 
a l l e g e d l y u n d e r t a k e n by the PACT 
b o a r d and c l a s s c o u n s e l i n an e f f o r t t o f r i g h t e n c l a s s members 
i n t o 
a c c e p t i n g 
the p r o p o s e d s e t t l e m e n t agreement. Perdue's 
b r i e f , 
a t 
55. 
There i s , however, n o t h i n g b e f o r e 
t h i s 
C o u r t 
e i t h e r s u b s t a n t i a t i n g t h o s e c l a i m s 
or e s t a b l i s h i n g t h a t 
the 
p u r p o r t e d 
t h r e a t 
t o 
c l a s s 
members' 
b e n e f i t s 
was 
" m i s i n f o r m a t i o n . " 
38 
1101337; 1101506 
o r d e r , 
we 
f i n d 
p a r t i c u l a r l y 
i n t e r e s t i n g 
the 
f a c t 
t h a t l e s s than 1,000 
c l a s s members, out of 400,000 
( l e s s than 1%) 
o b j e c t e d t o the s e t t l e m e n t . 
C o u r t s 
have a f f i r m e d s e t t l e m e n t s when s u b s t a n t i a l l y l a r g e r 
numbers 
of 
the 
c l a s s 
had 
o b j e c t e d . 
See, 
e.g., 
Huguley v. G e n e r a l Motors Corp., 999 F.2d 
142 
(6th 
C i r . 
1993) 
( s e t t l e m e n t w i t h 
no 
o p t - o u t 
p r o v i s i o n 
approved 
over 
o b j e c t i o n s 
by 
15% 
of 
the 
c l a s s ) ; 
County of S u f f o l k v. Long I s l a n d L i g h t i n g Co., 
90 7 
F.2d 
1295 
(2d C i r . 1990) 
( s e t t l e m e n t approved 
over 
o b j e c t i o n s 
of 
a 
m a j o r i t y 
of 
the 
c l a s s 
r e p r e s e n t a t i v e s ) ; TBK P a r t n e r s L t d . v. Western Union  
Corp., 
675 
F.2d 
456 
(2d 
C i r . 
1982) 
( a p p r o v i n g 
s e t t l e m e n t 
over 
o b j e c t i o n s 
of 
a m a j o r i t y 
of 
the 
c l a s s ) ; Reed v. G e n e r a l Motors Corp., 703 
F.2d 
170 
(5th 
C i r . 1983) 
( s e t t l e m e n t approved w i t h 
600 
of 
1469 
c l a s s members o b j e c t i n g ) . " 
676 So. 2d a t 1273. 
A l t h o u g h 
t h i s C o u r t i s c o g n i z a n t of the 
f r u s t r a t i o n 
e v i d e n c e d 
i n 
each 
w r i t t e n 
o b j e c t i o n , 
the 
r e l a t i v e l y 
l i m i t e d 
number 
of 
o b j e c t i o n s 
as 
w e l l 
as 
the 
c o n c e r n s r a i s e d t h e r e i n do not undermine the 
t r i a l 
c o u r t ' s 
a p p r o v a l of the s e t t l e m e n t agreement a g a i n s t which t h e y were 
l o d g e d . 
e. 
Payment of c l a s s c o u n s e l ' s 
f e e s 
C i t i n g 
the 
p o t e n t i a l 
f o r 
abuse, 
the 
o b j e c t o r s 
a l s o 
c h a l l e n g e the 
t r i a l 
c o u r t ' s a p p r o v a l 
of the p o r t i o n of 
the 
s e t t l e m e n t agreement awarding c l a s s c o u n s e l n e a r l y $5 
m i l l i o n 
i n 
a t t o r n e y 
f e e s .
1 2 
The 
t r i a l 
c o u r t c o n d u c t e d a 
s e p a r a t e 
1 2The o b j e c t o r s c r i t i c i z e the f a c t t h a t the f e e s a c t u a l l y 
d i m i n i s h the funds i n the PACT program, w h i c h are i n t e n d e d t o 
39 
1101337; 1101506 
h e a r i n g on t h e a p p r o p r i a t e n e s s o f t h e p l a i n t i f f s ' m o t i o n 
f o r 
f e e s and c o s t s , and f o l l o w i n g t h a t 
h e a r i n g 
i t d e v o t e d a 
s u b s t a n t i a l p o r t i o n o f i t s f i n a l judgment t o e v a l u a t i n g 
t h i s 
i s s u e . 
S p e c i f i c a l l y , t h e t r i a l c o u r t h e l d t h a t t h e award o f 
a t t o r n e y 
f e e s was j u s t i f i e d 
under t h e common-fund d o c t r i n e 
because " c l a s s c o u n s e l ... n o t o n l y s e r v e d t h e 
common e s t a t e 
but 
p r o t e c t e d and p r e s e r v e d 
t h e t r u s t 
a s s e t s , 
i . e . , t h e 
'common f u n d . ' " 
The t r i a l c o u r t a l s o i n c l u d e d an e v a l u a t i o n 
of t h e r e a s o n a b l e n e s s o f t h e r e q u e s t e d 
f e e based on t h e 
a p p l i c a t i o n o f 
t h e f o l l o w i n g g u i d e l i n e s p r e v i o u s l y s e t 
out 
by 
t h i s C o u r t i n 
Brown v. S t a t e , 565 So. 2d 585, 592 ( A l a . 1990) : 
"(1) The measure o f s u c c e s s 
a c h i e v e d . 
"(2) The n a t u r e and v a l u e o f t h e s u b j e c t - m a t t e r o f 
the a t t o r n e y ' s employment, i n c l u d i n g t h e 
n o v e l t y and 
d i f f i c u l t y o f t h e q u e s t i o n s 
p r e s e n t e d . 
"(3) The l e a r n i n g , 
s k i l l , and l a b o r 
r e q u i s i t e t o 
p e r f o r m t h e l e g a l s e r v i c e p r o p e r l y . 
"(4) 
The t i m e 
consumed and r e a s o n a b l e 
expenses 
i n c u r r e d by t h e a t t o r n e y . 
"(5) 
The p r o f e s s i o n a l e x p e r i e n c e , 
r e p u t a t i o n and 
b e n e f i t t h e PACT c o n t r a c t h o l d e r s and t h e i r b e n e f i c i a r i e s . 
The 
t r i a l c o u r t ' s o r d e r 
r e f l e c t s t h a t t h e 
amount o f a t t o r n e y 
f e e s p r o v i d e d f o r i n 
t h e 
s e t t l e m e n t agreement was " i n c l u d e d 
i n 
the c a l c u l a t i o n s 
and 
p r o j e c t i o n s i n 
o r d e r t o 
make t h e 
p r o p o s e d 
s e t t l e m e n t v i a b l e and w o r k a b l e . " 
40 
1101337; 1101506 
a b i l i t y of the a t t o r n e y . 
"(6) The w e i g h t of [the a t t o r n e y ' s ] 
r e s p o n s i b i l i t y . 
"(7) 
The 
fee 
arrangement 
between 
a t t o r n e y 
and 
c l i e n t , 
i n c l u d i n g whether 
a 
fee 
was 
f i x e d 
or 
c o n t i n g e n t . 
"(8) The fee c u s t o m a r i l y c h a r g e d i n the l o c a l i t y f o r 
s i m i l a r l e g a l s e r v i c e s and awards i n s i m i l a r 
c a s e s . 
"(9) The 
time 
l i m i t a t i o n s imposed by the c l i e n t 
or 
by the 
c i r c u m s t a n c e s . 
"(10) The 
l i k e l i h o o d t h a t the a t t o r n e y ' s employment 
i n 
t h i s case p r e c l u d e d o t h e r employment. 
"(11) 
The 
n a t u r e 
and 
l e n g t h 
of 
the p r o f e s s i o n a l 
r e l a t i o n s h i p w i t h the 
c l i e n t . 
"(12) 
The 
u n d e s i r a b i l i t y of the 
case. 
"(13) 
Any non-monetary b e n e f i t s c o n f e r r e d upon the 
c l a s s i n t h i s c l a s s a c t i o n . " 
R e c o u n t i n g 
the e v i d e n c e 
o f f e r e d i n s u p p o r t 
of each of 
the 
f a c t o r s 
i d e n t i f i e d 
i n Brown, 
the 
t r i a l 
c o u r t u l t i m a t e l y 
c o n c l u d e d 
t h a t the e v i d e n c e 
j u s t i f i e d 
the 
r e q u e s t e d 
award, 
w h i c h i t termed " f a i r and r e a s o n a b l e , " 
and t h a t the awarded 
fee was 
" s i g n i f i c a n t l y l o w e r 
than 
a t y p i c a l 
fee awarded i n 
such a complex and 
d i f f i c u l t 
c a s e . "
1 3 
1 3The t r i a l c o u r t ' s o r d e r i n c l u d e d a u t h o r i t y e s t a b l i s h i n g 
t h a t 
a customary 
a t t o r n e y - f e e 
award 
i n common-fund 
cases 
t y p i c a l l y ranges from 20% t o 25% of the r e c o v e r y . See, 
e.g., 
Reynolds v. F i r s t Alabama Bank of Montgomery, N.A., 
471 So. 
2d 
1238, 
1245 
( A l a . 1985) . 
The 
t r i a l 
c o u r t ' s 
o r d e r 
f u r t h e r 
41 
1101337; 
1101506 
In 
her 
c h a l l e n g e 
t o t h e 
a t t o r n e y - f e e 
award, 
Perdue 
contends t h a t t h e common-fund d o c t r i n e i s i n a p p l i c a b l e because 
no common fund was a c t u a l l y c r e a t e d i n t h i s case; i n s t e a d , she 
a s s e r t s , t h e s e t t l e m e n t agreement and t h e a t t o r n e y - f e e award 
d r a i n t h e PACT program's 
f u n d s . 
However, 
t h e common-fund 
d o c t r i n e does not a p p l y o n l y i f 
a f u n d i s " c r e a t e d " ; i n s t e a d , 
the " p r i n c i p l e [ i s ] 
d e s i g n e d t o compensate an a t t o r n e y whose 
s e r v i c e s on b e h a l f of h i s c l i e n t o p e r a t e d t o c r e a t e , d i s c o v e r , 
i n c r e a s e , p r e s e r v e , or p r o t e c t a fund t o which o t h e r s may a l s o 
have a c l a i m . " 
Henley & C l a r k e v. B l u e C r o s s - B l u e 
S h i e l d of 
Alabama, 434 So. 2d 274, 276 ( A l a . 
C i v . App. 1983) (emphasis 
a d d e d ) .
1 4 
The 
t r i a l 
c o u r t h e l d t h a t t h e s e t t l e m e n t i n t h i s 
i n c l u d e d t h e f o l l o w i n g c a l c u l a t i o n as t o t h e r e q u e s t e d f e e i n 
the p r e s e n t 
case: 
" A c c o r d i n g 
t o t h e a c t u a r i a l 
e x p e r t 
t e s t i m o n y 
and 
r e p o r t , 
t h i s 
l i t i g a t i o n 
has 
p r o v i d e d 
t h e 
c l a s s 
members w i t h a b e n e f i t of a p p r o x i m a t e l y $400 m i l l i o n 
( p r e s e n t v a l u e ) over what t h e y would have r e c e i v e d 
had r e f u n d s been g i v e n o r i f 
t h e PACT T r u s t Fund had 
been a l l o w e d t o h i t z e r o . The f e e r e q u e s t i n t h i s 
case i s r o u g h l y 1.25% of t h a t amount." 
1 4The C h i e f J u s t i c e , i n h i s d i s s e n t , a l s o p o i n t s out t h a t 
no "common fund" was c r e a t e d i n t h i s case. 
However, as Henley  
& C l a r k h o l d s , t h e common-fund d o c t r i n e a l s o a p p l i e s when a 
fund i s p r e s e r v e d o r p r o t e c t e d . As t h e u n d i s p u t e d e v i d e n c e i n 
t h i s 
case 
i n d i c a t e d , 
see 
s u p r a 
note 
13, 
the 
s e t t l e m e n t 
agreement p r o v i d e d $400 m i l l i o n i n b e n e f i t s t o t h e p l a i n t i f f s . 
42 
1101337; 1101506 
case s e r v e s t o p r e s e r v e the funds i n the PACT program; t h u s , 
we see no m e r i t i n the argument t h a t the common-fund d o c t r i n e 
does not a p p l y i n t h i s 
c a s e .
1 5 
As t o Perdue's c h a l l e n g e t o the amount of the a t t o r n e y -
fee award, we note t h a t an award of an a t t o r n e y fee under the 
common-fund d o c t r i n e " i s w i t h i n the sound d i s c r e t i o n 
of 
the 
t r i a l 
c o u r t , and 
the 
r u l i n g 
on 
t h a t q u e s t i o n 
w i l l 
not 
be 
r e v e r s e d 
on 
a p p e a l " 
a b s e n t a showing t h a t the 
t r i a l 
c o u r t 
exceeded t h a t d i s c r e t i o n . 
Ex p a r t e Horn, 718 So. 2d 694, 
702 
( A l a . 1998). 
Here, the t r i a l c o u r t found t h a t the 
s e t t l e m e n t 
agreement 
r e s u l t e d 
i n 
a 
b e n e f i t 
t o 
the 
p l a i n t i f f s 
of 
a p p r o x i m a t e l y $400 m i l l i o n and t h a t the a t t o r n e y fee awarded 
was 
a p p r o x i m a t e l y 
1.25% 
of t h a t amount. 
See 
supra note 
13. 
Even 
so, 
an 
a t t o r n e y - f e e 
award 
"must b e a r 
a 
r e a s o n a b l e 
r e l a t i o n s h i p 
t o the time expended on the c a s e " and g e n e r a l l y 
cannot be based " s o l e l y on an 
a r b i t r a r y p e r c e n t a g e o f " 
the 
v a l u e of p r o p e r t y or funds a t i s s u e i n the p r o c e e d i n g s . 
C a r v e r 
 
v. F o s t e r , 928 So. 2d 1017, 
1027 
( A l a . 2005). 
In C a r v e r , 
we 
r e v e r s e d an a t t o r n e y - f e e award and remanded the case f o r the 
t r i a l c o u r t " t o award a r e a s o n a b l e 
fee commensurate w i t h the 
1 5 O t h e r than s t a t i n g t h a t the award i s " e x o r b i t a n t , " Sears 
and Motlow p r e s e n t no argument t h a t i t i s e x c e s s i v e . 
43 
1101337; 1101506 
time spent, as w e l l as o t h e r f a c t o r s , i n c l u d i n g the absence of 
p e r i o d i c payments, any 
r i s k a s s o c i a t e d w i t h the 
a p p r o p r i a t e 
d i s c h a r g e 
of l e g a l 
r e s p o n s i b i l i t i e s i n the u n d e r t a k i n g , 
and 
any o t h e r a p p l i c a b l e f a c t o r s 
" 
928 So. 2d a t 1027. 
The 
o b j e c t o r s c i t e no a u t h o r i t y , such as C a r v e r , s e t t i n g f o r t h the 
p r o p e r s t a n d a r d f o r t h i s C o u r t t o use i n a n a l y z i n g whether the 
amount of the a t t o r n e y - f e e award i n t h i s case was p r o p e r . 
The 
o n l y attempt on a p p e a l by any 
of the o b j e c t o r s t o 
c h a l l e n g e 
the 
c a l c u l a t i o n 
of 
the 
a t t o r n e y 
f e e , 
o t h e r 
than 
Perdue's 
s t a t i n g i n a c o n c l u s o r y 
f a s h i o n t h a t "no e v i d e n c e 
j u s t i f i e d 
i t , " 
i s 
an 
argument 
by 
Perdue 
t h a t 
11 
of 
the 
3,600 
c o m p u t e r i z e d - r e s e a r c h 
i n q u i r i e s 
on 
the 
Westlaw 
database 
p u r p o r t e d l y p e r f o r m e d by c l a s s c o u n s e l do not i n v o l v e r e s e a r c h 
r e g a r d i n g 
t h i s 
case. 
There 
i s no 
c h a l l e n g e 
t o the 
hours 
p u r p o r t e d l y i n v e s t e d i n the p r o s e c u t i o n of t h i s case by c l a s s 
c o u n s e l , no c h a l l e n g e r e g a r d i n g the 
l i t i g a t i o n expenses, 
and 
no c h a l l e n g e t o the 
t r i a l c o u r t ' s r e s o l u t i o n of the 13 Brown 
f a c t o r s 
s e t 
f o r t h 
above; 
f u r t h e r , no 
a l t e r n a t e method 
of 
c a l c u l a t i o n of the a t t o r n e y fee i s p r o p o s e d by the o b j e c t o r s .
1 6 
1 6The C h i e f J u s t i c e , i n h i s d i s s e n t , u n d e r t a k e s t o examine 
the "time and l a b o r " p e r f o r m e d by c l a s s c o u n s e l i n d i s c o v e r y 
and 
the expenses c l a s s c o u n s e l 
i n c u r r e d . 
However, no 
such 
c h a l l e n g e i s found i n Perdue's b r i e f . 
" ' [ T ] h i s C o u r t i s not 
44 
1101337; 
1101506 
When a p a r t y 
f a i l s t o 
make an argument, o r t o c i t e a u t h o r i t y 
s u p p o r t i n g an argument, t h e argument i s w a i v e d : "'Where an 
a p p e l l a n t 
f a i l s t o c i t e any a u t h o r i t y f o r 
an argument, 
t h i s 
C o u r t may a f f i r m t h e judgment on those 
i s s u e s , f o r 
i t i s 
n e i t h e r t h e C o u r t ' s d u t y nor i t s 
f u n c t i o n t o p e r f o r m a l l t h e 
l e g a l r e s e a r c h f o r 
an a p p e l l a n t . ' " Welch v. H i l l , 608 So. 2d 
727, 728 ( A l a . 
1992) ( q u o t i n g Sea Calm S h i p p i n g Co., S.A. v.  
Cooks, 565 So. 2d 212, 216 ( A l a . 
1990) ( c i t a t i o n s o m i t t e d ) ) . 
G i v e n t h e d e a r t h o f argument on t h i s i s s u e , t h e r e i s 
no l e g a l 
b a s i s 
d e m o n s t r a t i n g 
t h a t 
t h e 
t r i a l 
c o u r t 
exceeded i t s 
d i s c r e t i o n i n a p p r o v i n g t h e 
amount o f t h e a t t o r n e y 
f e e . 
The 
o b j e c t o r s 
argue 
t h a t t h e a t t o r n e y - f e e 
award i s 
e v i d e n c e 
t h a t 
c l a s s c o u n s e l had a c o n f l i c t o f 
i n t e r e s t .
1 7 
under a d u t y t o s e a r c h t h e r e c o r d i n o r d e r t o a s c e r t a i n 
whether i t 
c o n t a i n s e v i d e n c e t h a t w i l l 
s u s t a i n a c o n t e n t i o n 
made by e i t h e r p a r t y t o an a p p e a l . ' " 
Brannan & Guy, P.C. v.  
C i t y o f Montgomery, 828 So. 2d 914, 920 ( A l a . 
2002) 
( q u o t i n g 
T o t t e n v. L i g h t i n g & Supply, I n c . , 507 So. 2d 502, 503 
( A l a . 
1 9 8 7 ) ) . 
1 7Motlow and Sears note 
t h a t t h e s e t t l e m e n t 
agreement 
c o n t a i n s a " c l e a r s a i l i n g agreement." 
Such an agreement " i s 
one where t h e p a r t y p a y i n g t h e [ a t t o r n e y ] f e e agrees n o t 
t o 
c o n t e s t t h e 
amount t o 
be awarded ... so l o n g as t h e [ a t t o r n e y -
fee] award f a l l s beneath a n e g o t i a t e d c e i l i n g . " 
Weinberger 
v. 
 
G r e a t N o r t h e r n Nekoosa Corp., 925 F.2d 
518, 
520 n.1 ( 1 s t C i r . 
1991). 
They c o n t e n d t h a t such agreements a r e s u s p e c t and 
r e q u i r e g r e a t e r s c r u t i n y . Motlow and S e a r s ' s b r i e f , however, 
c o n t a i n s no d i s c u s s i o n as t o 
how t h a t agreement i m p a c t e d t h i s 
45 
1101337; 1101506 
S p e c i f i c a l l y , Perdue contends t h a t t h e " o n l y b e n e f i c i a r i e s " t o 
the 
s e t t l e m e n t 
agreement a r e t h e a t t o r n e y s , who 
w i l l 
reap 
a t t o r n e y f e e s w h i l e t h e i r c l i e n t s , t h e 
PACT c o n t r a c t h o l d e r s , 
w i l l r e c e i v e r e d u c e d b e n e f i t s . 
However, as n o t e d above, t h e 
t r i a l 
c o u r t 
found 
t h a t t h e s o l u t i o n a c c o m p l i s h e d by t h e 
s e t t l e m e n t 
agreement, 
i . e . , t h e e q u i t a b l e 
d i v i s i o n o f t h e 
l i m i t e d funds among t h e c l a s s members, was l i k e l y t h e o n l y 
s o l u t i o n 
a v a i l a b l e i n t h i s 
case: 
t h e r e i s no a l t e r n a t i v e 
s o u r c e o f f u n d i n g 
w i t h w h i c h t o pay a l l b e n e f i t s t o a l l 
c o n t r a c t h o l d e r s . 
With t h e r i s k 
t h a t t h e m a j o r i t y o f t h e 
c l a s s members would a c t u a l l y r e c o v e r 
l e s s than t h e c o n t r a c t 
amount, o r perhaps n o t h i n g , 
absent t h e s o l u t i o n p r o p o s e d by 
the s e t t l e m e n t agreement, we see 
no m e r i t i n 
t h e 
argument t h a t 
the 
s e t t l e m e n t 
agreement a f f o r d s "no" b e n e f i t t o t h e c l a s s 
members. 
Perdue a l s o contends t h a t c l a s s c o u n s e l d i d 
n o t h i r e an 
e x p e r t t o c h a l l e n g e o r t o v e r i f y t h e f i n d i n g s o f t h e PACT 
b o a r d ' s 
a c t u a r i a l 
e x p e r t . 
However, 
Perdue 
p r e s e n t s 
no 
argument as t o why t h i s a d d i t i o n a l expense was n e c e s s a r y i n 
t h i s case: t h e r e i s 
no a l l e g a t i o n by any p a r t y — i n c l u d i n g t h e 
case. 
46 
1101337; 1101506 
p l a i n t i f f s , t h e o b j e c t o r s , and PACT b o a r d - - t h a t t h e a c t u a r i a l 
p r o j e c t i o n s by t h e 
PACT board's e x p e r t i n c o r r e c t l y s t a t e d 
t h e 
f i n a n c i a l p e r i l o f t h e PACT p r o g r a m .
1 8 
Perhaps t h e h i r i n g o f 
an e x p e r t would have e v i d e n c e d more work on t h e p a r t o f c l a s s 
c o u n s e l ; t h e r e i s 
no argument by t h e p a r t i e s , however, t h a t 
such work was r e q u i r e d . 
Perdue 
a l s o 
contends 
t h a t 
a 
p o t e n t i a l 
c o n f l i c t 
o f 
i n t e r e s t a r i s e s when c l a s s - b a s e d r e l i e f i s n e g o t i a t e d a t 
t h e 
same time as c l a s s c o u n s e l ' s f e e i s n e g o t i a t e d and t h a t such 
c o n f l i c t i s " p l a i n l y 
e v i d e n t " i n t h i s 
case. 
As n o t e d i n 
K n i g h t : "The C o u r t pays a t t e n t i o n t o t h e amount o f a t t o r n e y s ' 
f e e s 
awarded t o c l a s s 
c o u n s e l 
because 
'the 
s i m u l t a n e o u s 
n e g o t i a t i o n o f c l a s s 
r e l i e f and a t t o r n e y ' s 
f e e s 
c r e a t e s a 
p o t e n t i a l f o r c o n f l i c t . ' " 469 F. Supp. 2d a t 1036 ( q u o t i n g 
Manual f o r 
Complex L i t i g a t i o n § 30.42, a t 239 (3d 
ed. 1995)). 
However, a c c o r d i n g t o t h e a p p e l l e e s , c l a s s c o u n s e l ' s f e e 
was 
n e g o t i a t e d 
o n l y 
a f t e r 
c l a s s - b a s e d 
r e l i e f had a l r e a d y been 
1 8 C l a s s c o u n s e l 
t e s t i f i e d a t t h e h e a r i n g on t h e a t t o r n e y 
f e e s t h a t he b e l i e v e d i t was u n n e c e s s a r y t o h i r e an e x p e r t t o 
t e s t t h e 
p r o j e c t i o n s o f t h e 
PACT b o a r d ' s e x p e r t because i t 
was 
o b v i o u s t h a t t h e funds i n 
t h e 
PACT program were i n s u f f i c i e n t . 
F u r t h e r m o r e , c l a s s c o u n s e l argued t h a t t h e l e g i s l a t u r e had 
asked t h e 
R e t i r e m e n t Systems o f 
Alabama i n 
2009 t o 
i n v e s t i g a t e 
the 
f i n a n c i a l 
h e a l t h o f t h e PACT program, and a 
r e s u l t i n g 
a c t u a r i a l s t u d y c o n f i r m e d t h a t t h e program was underfunded. 
47 
1101337; 1101506 
r e s o l v e d . 
F u r t h e r m o r e , a t the h e a r i n g 
on 
the 
a t t o r n e y - f e e 
award, the d e p o s i t i o n of the m e d i a t o r i n t h i s case, 
r e t i r e d 
A s s o c i a t e J u s t i c e B e r n a r d Harwood, was 
e n t e r e d i n t o e v i d e n c e 
" f o r 
the l i m i t e d p u r p o s e s t o show t h a t i t was 
an arm 
l e n g t h ' s 
n e g o t i a t i o n . " 
I t s t a t e d : 
" [ C o u n s e l : ] As p a r t of t h i s n e g o t i a t e d 
s e t t l e m e n t , 
i t i n c l u d e d an agreement as t o what the 
a t t o r n e y ' s 
f e e s 
f o r the 
c l a s s c o u n s e l 
c o l l e c t i v e l y would 
be, 
and 
t h a t was 
f o u r 
m i l l i o n 
n i n e hundred and 
f i f t y 
thousand d o l l a r s . 
Was 
t h a t i s s u e as t o 
a t t o r n e y ' s 
f e e s a l s o n e g o t i a t e d a t an arm's l e n g t h good 
f a i t h 
manner d u r i n g the c o u r s e of t h i s m e d i a t i o n ? 
" [ M e d i a t o r : ] 
V e r y much so. 
" [ C o u n s e l : ] Would i t be 
f a i r t o say t h a t t h a t i s s u e 
was 
h o t l y d e b a t e d a t t i m e s ? 
" [ M e d i a t o r : ] 
I t was 
h o t l y d e b a t e d . " 
We 
see n o t h i n g 
i n d i c a t i n g t h a t the 
t r i a l c o u r t exceeded 
i t s d i s c r e t i o n i n f a i l i n g t o f i n d t h a t a c o n f l i c t of i n t e r e s t 
a f f e c t e d 
the 
a t t o r n e y - f e e 
award 
i n 
t h i s 
case, 
and 
no 
c o m p e l l i n g 
l e g a l argument i s put 
f o r t h d e m o n s t r a t i n g how 
any 
i n c r e a s e d 
s c r u t i n y r e q u i r e s 
the 
c o n c l u s i o n 
t h a t 
the 
t r i a l 
c o u r t ' s a p p r o v a l of the a t t o r n e y - f e e award was 
i n e r r o r . 
F i n a l l y , Perdue argues t h a t c e r t a i n postjudgment a c t i o n s 
by 
the PACT b o a r d and 
c l a s s c o u n s e l 
e v i d e n c e a c o n f l i c t 
of 
i n t e r e s t ; she 
s p e c i f i c a l l y n o t e s t h a t c l a s s c o u n s e l was 
p a i d 
48 
1101337; 1101506 
the a t t o r n e y - f e e award w h i l e t h i s case was p e n d i n g on a p p e a l . 
As e x p l a i n e d i n Perdue I : 
" F o l l o w i n g 
t h e e n t r y 
o f t h e 
t r i a l 
c o u r t ' s 
judgment, t h e PACT b o a r d on August 9, 2011, p a i d t o 
the 
c l e r k 
o f 
t h e 
t r i a l 
c o u r t 
$4,977,500 i n 
s a t i s f a c t i o n 
o f 
t h e 
o u t s t a n d i n g 
judgment f o r 
a t t o r n e y 
f e e s , 
c a s e - r e l a t e d expenses, and amounts 
awarded t o 
t h e c l a s s r e p r e s e n t a t i v e s p u r s u a n t t o 
t h e 
terms o f t h e s e t t l e m e n t 
agreement. 
On t h a t same 
d a t e , Perdue 
f i l e d h e r n o t i c e o f a p p e a l . 
"The 
n e x t day, c l a s s c o u n s e l 
p e t i t i o n e d t h e 
t r i a l c o u r t f o r d i s b u r s e m e n t o f t h e funds on d e p o s i t 
w i t h t h e c l e r k o f t h e t r i a l 
c o u r t . 
That 
motion 
s p e c i f i c a l l y r e f e r e n c e d Perdue's p e n d i n g a p p e a l b u t 
s t a t e d 
t h a t 
Perdue 
had 
f a i l e d 
t o 
' i n c l u d e 
a 
supersedeas 
bond 
n e c e s s a r y 
t o 
s t a y 
t h e 
above 
judgment.' The f o l l o w i n g day, d e s p i t e i t s awareness 
of Perdue's p e n d i n g a p p e a l , t h e t r i a l c o u r t 
e n t e r e d 
an o r d e r 
p e r m i t t i n g immediate 
d i s b u r s e m e n t o f t h e 
f u n d s . 
I n t h a t o r d e r , t h e t r i a l 
c o u r t 
e x p l i c i t l y 
acknowledged 
Perdue's p e n d i n g a p p e a l b u t c o n c l u d e d 
t h a t 
Perdue's 
n o t i c e 
' s p e c i f i c a l l y 
d e c l i n e d any 
attempt t o supersede any o f t h e judgments e n t e r e d by 
the 
C o u r t . ' " 
Perdue I , 
So. 3d a t 
( f o o t n o t e o m i t t e d ) . 
T h i s C o u r t 
n o t e d t h a t such d i s b u r s e m e n t o f t h e a t t o r n e y f e e s by t h e t r i a l 
c o u r t "appear[ed] c o n t r a r y " t o 
t h e 
d i s b u r s e m e n t p r o c e d u r e s 
s e t 
f o r t h i n t h e s e t t l e m e n t agreement. 
So. 3d a t 
n.13. 
N e v e r t h e l e s s , t h e premature d i s b u r s e m e n t was an a c t i o n t a k e n 
by t h e t r i a l c o u r t , n o t t h e p a r t i e s . 
Perdue f i l e d i n t h i s C o u r t a motion t o s t a y t h e e x e c u t i o n 
of judgment. 
The p l a i n t i f f s and t h e PACT b o a r d opposed t h e 
49 
1101337; 1101506 
m o t i o n on t h e 
grounds t h a t no such motion had been f i l e d 
f i r s t 
i n t h e t r i a l c o u r t , t h a t no supersedeas bond had been p o s t e d , 
t h a t d e l a y i n e x e c u t i o n would 
d i s r u p t t h e PACT 
c o n t r a c t -
payment scheme embraced i n 
t h e s e t t l e m e n t agreement, and t h a t 
a s t a y o f t h e payment o f t h e a t t o r n e y f e e s and expenses was 
moot 
because 
t h e PACT 
b o a r d 
had 
a l r e a d y 
s a t i s f i e d t h e 
judgment. 
Perdue 
c h a r a c t e r i z e s 
t h e s e 
a c t i o n s 
as 
e v i d e n c i n g a 
c o n f l i c t o f i n t e r e s t because 
c l a s s c o u n s e l "was u r g i n g 
t h i s 
C o u r t t o l e t 
them keep t h e i r f e e . " 
Perdue's b r i e f , a t 63. 
C h i e f 
J u s t i c e Moore, i n h i s d i s s e n t , 
c h a r a c t e r i z e s 
t h e s e 
a c t i o n s 
as t h e PACT b o a r d and 
c l a s s 
c o u n s e l 
" w o r k [ i n g ] 
t o g e t h e r t o a u t h o r i z e immediate payment o f t h e a t t o r n e y f e e s 
i n 
v i o l a t i o n o f t h e v e r y s e t t l e m e n t agreement t h e y now ask 
t h i s C o u r t t o approve." 
So. 3d a t 
. 
However, as 
t h e 
above f a c t s demonstrate, t h e PACT b o a r d had no r o l e i n 
t h e 
premature d i s b u r s e m e n t o f t h e f u n d s , and t h e subsequent 
j o i n t 
a c t s o f t h e PACT b o a r d and c l a s s c o u n s e l were a t t e m p t s t o 
s i m p l y d e f e n d t h e i r e n t i r e judgment on a p p e a l . 
f. 
P l a i n t i f f s ' monetary 
r e l i e f 
The o b j e c t o r s n e x t argue t h a t t h e t r i a l 
c o u r t e r r e d i n 
a p p r o v i n g a s e t t l e m e n t agreement p u r s u a n t t o which t h e named 
50 
1101337; 1101506 
p l a i n t i f f s 
are 
the 
o n l y 
c l a s s members 
r e c e i v i n g monetary 
r e l i e f . 
W i t h 
r e g a r d 
t o 
t h i s 
a s p e c t 
of 
the 
s e t t l e m e n t -
agreement a p p r o v a l , 
the 
t r i a l 
c o u r t ' s 
o r d e r 
c o n t a i n e d 
the 
f o l l o w i n g f i n d i n g s : 
"An 
a d d i t i o n a l term of the p r o p o s e d 
S e t t l e m e n t 
i s the p r o v i s i o n f o r an award of $2,500 t o each of 
the 
d e s i g n a t e d 
c l a s s r e p r e s e n t a t i v e s . Such awards 
are commonplace i n c l a s s a c t i o n c a s e s . 
They 
a r e , 
however, t o be c a r e f u l l y s c r u t i n i z e d t o ensure t h a t 
t h e y are 
r e a s o n a b l e 
and 
not done as a t r a d e o f f 
t o 
r e l i e f f o r the c l a s s members as a whole. When such 
awards are p r o p o s e d , the C o u r t s h o u l d 
l o o k t o 
the 
a c t i o n s 
t a k e n 
by 
the 
c l a s s 
r e p r e s e n t a t i v e s 
t o 
p r o t e c t the i n t e r e s t s of a l l c l a s s members, whether 
t h o s e a c t i o n s r e s u l t e d i n a s u b s t a n t i a l b e n e f i t t o 
the 
c l a s s , 
and 
the 
amount 
of 
time 
and 
e f f o r t 
expended i n the 
l i t i g a t i o n . 
"Documents which have p r e v i o u s l y been f i l e d w i t h 
the C o u r t 
s u f f i c i e n t l y demonstrate t h a t the 
c l a s s 
r e p r e s e n t a t i v e s have been f u l l y aware of the 
i s s u e s 
i n v o l v e d . 
The C o u r t was 
i n f o r m e d t h a t t h e s e c l a s s 
r e p r e s e n t a t i v e s have been deposed, have p a r t i c i p a t e d 
i n p r e p a r i n g and r e s p o n d i n g t o o t h e r d i s c o v e r y , have 
p a r t i c i p a t e d i n n e g o t i a t i o n s and m e d i a t i o n 
of 
t h i s 
case, 
and 
have 
o t h e r w i s e 
c o n t r i b u t e d 
i n 
a 
s i g n i f i c a n t 
way 
t o 
the p r o p o s e d 
S e t t l e m e n t . 
The 
C o u r t a l s o n o t e s t h a t none of the o b j e c t i o n s 
f i l e d 
i n t h i s case have c h a l l e n g e d 
the p r o p o s e d award t o 
the 
c l a s s r e p r e s e n t a t i v e s . A c c o r d i n g l y , 
the 
C o u r t 
f i n d s t h a t the awards t o the c l a s s 
r e p r e s e n t a t i v e s 
are f a i r , are c o n s i s t e n t w i t h the e f f o r t s u n d e r t a k e n 
by 
the 
c l a s s 
r e p r e s e n t a t i v e s , 
and 
have 
no 
s i g n i f i c a n t impact on the 
o v e r a l l 
r e l i e f a v a i l a b l e 
t o the c l a s s members as a whole." 
Thus, a l t h o u g h 
i t i s t r u e t h a t the c l a s s r e p r e s e n t a t i v e s 
were awarded a c t u a l monetary 
r e l i e f under the terms of 
the 
51 
1101337; 1101506 
s e t t l e m e n t agreement, i t i s a l s o c l e a r t h a t the amount awarded 
was 
s m a l l 
and 
was 
aimed 
s o l e l y 
a t 
compensating 
the 
r e p r e s e n t a t i v e s 
f o r the 
time 
and 
e f f o r t 
t h e y 
expended 
on 
b e h a l f of the c l a s s as a whole. 
The 
o b j e c t o r s c i t e 
n o t h i n g 
d i s p u t i n g the 
t r i a l 
c o u r t ' s f i n d i n g s , as s e t out above, 
or 
o t h e r w i s e 
e v i d e n c i n g 
t h a t 
the 
t r i a l 
c o u r t 
exceeded 
i t s 
d i s c r e t i o n i n t h i s 
r e g a r d . 
g. 
D i s p a r a t e t r e a t m e n t 
of c l a s s members 
The o b j e c t o r s a l s o c o n t e n d t h a t the 
t r i a l c o u r t e r r e d i n 
a p p r o v i n g 
a 
s e t t l e m e n t 
t h a t 
p u r p o r t e d l y 
t r e a t s 
p a r t i c u l a r 
segments of the c l a s s d i f f e r e n t l y from o t h e r segments based on 
the 
a n t i c i p a t e d 
m a t r i c u l a t i o n 
d a t e 
of 
the 
b e n e f i c i a r y . 
S p e c i f i c a l l y , Perdue n o t e s t h a t " b e n e f i c i a r i e s m a t r i c u l a t i n g 
to 
c o l l e g e e a r l i e r 
w i l l have a h i g h e r p e r c e n t a g e of 
t h e i r 
t u i t i o n p a i d . ... 
Those m a t r i c u l a t i n g t o c o l l e g e l a t e r 
w i l l 
r e c e i v e s i g n i f i c a n t l y l e s s from the s e t t l e m e n t when r e d u c e d t o 
p r e s e n t 
v a l u e , 
i . e . , $35,000 i n 2010 
d o l l a r s 
w i l l 
be 
w o r t h 
s i g n i f i c a n t l y more than $35,000 i n 2025 d o l l a r s . " 
Perdue's 
b r i e f , 
a t 
67. 
The 
t r i a l 
c o u r t ' s 
o r d e r 
a p p r o v i n g 
the 
s e t t l e m e n t agreement does not appear t o c o n t a i n a 
s e p a r a t e 
f i n d i n g a d d r e s s i n g t h i s p a r t i c u l a r f a c t o r ; however, the 
t r i a l 
c o u r t 
d i d 
s p e c i f i c a l l y 
c o n c l u d e 
t h a t 
" [ t ] h e 
p r o p o s e d 
52 
1101337; 1101506 
s e t t l e m e n t 
... s e r v e [ s ] t o address t h e u n d i s p u t e d 
f u n d i n g 
s h o r t f a l l 
by 
e s t a b l i s h i n g p a r a m e t e r s 
f o r an 
e q u i t a b l e 
d i s t r i b u t i o n o f t h e l i m i t e d 
a s s e t s o f t h e [PACT p r o g r a m ] , 
a l o n g w i t h t h e l e g i s l a t i v e a p p r o p r i a t i o n s o f [the 
2010 A c t ] . " 
F u r t h e r , " [ i ] t 
i s w e l l s e t t l e d t h a t '"where t h e t r i a l 
c o u r t 
does n o t make 
s p e c i f i c 
f a c t u a l 
f i n d i n g s , t h i s 
c o u r t 
w i l l 
assume 
t h a t t h e t r i a l 
c o u r t made such 
f i n d i n g s as would 
s u p p o r t i t s judgment 
Poh v. Poh, 64 So. 3d 49, 59-60 
( A l a . 
C i v . App. 2010) ( q u o t i n g Herboso v. Herboso, 881 So. 2d 
454, 456 ( A l a . C i v . App. 2003), q u o t i n g i n t u r n B e r r y h i l l v.  
Reeves, 705 So. 2d 505, 507 ( A l a . C i v . App. 1 9 9 7 ) ) . 
The PACT b o a r d n o t e s t h a t , a l t h o u g h 
a l l c l a s s members 
might n o t be t r e a t e d e q u a l l y i n t h i s r e g a r d , "the r e l a t i v e 
b e n e f i t o f t h e s e t t l e m e n t i s d i s t r i b u t e d e q u i t a b l y among a l l 
of t h e c l a s s members," w i t h 
those who have been 
i n v e s t e d 
l o n g e s t — and whose b e n e f i c i a r i e s a r e , t h e r e f o r e , presumably 
c l o s e r t o m a t r i c u l a t i o n -- r e c e i v i n g t h e 
most r e t u r n on t h e i r 
i n v e s t m e n t 
"and 
[more 
r e c e n t 
i n v e s t o r s ] 
r e c e i v i n g 
l e s s 
r e l a t i v e 
r e t u r n ... [having] 
l o n g e r h o r i z o n s 
[ i n ] 
which t o 
make a l t e r n a t i v e f i n a n c i a l arrangements." PACT b o a r d ' s b r i e f , 
a t 
72. 
I t f u r t h e r 
r e l i e s 
on t h e a c t u a r y ' s 
t e s t i m o n y 
i n d i c a t i n g t h a t t h e "main g o a l " o f 
t h e c a l c u l a t i o n s u n d e r l y i n g 
53 
1101337; 1101506 
the s e t t l e m e n t agreement was aimed a t "mak[ing] sure t h a t as 
many b e n e f i c i a r i e s r e c e i v e as many d o l l a r s as p o s s i b l e s p r e a d 
e v e n l y . " Thus, d e s p i t e t h e a l l e g e d l y d i s p a r a t e t r e a t m e n t , t h e 
PACT b o a r d n o n e t h e l e s s m a i n t a i n s t h a t t h e s e t t l e m e n t agreement 
s a t i s f i e s R u l e 23. We agree. 
A l t h o u g h 
perhaps 
n o t 
t r u l y 
e q u a l , 
t h e 
s e t t l e m e n t 
agreement -- f o r a l l t h a t 
appears 
-- p r e s e n t s t h e b e s t 
p o s s i b l e d i s t r i b u t i o n o f t h e fund's l i m i t e d a s s e t s among t h e 
numerous c l a i m a n t s . As t h e t r i a l c o u r t n o t e d : 
" [ I t ] i s 
... u n d i s p u t e d f a c t t h a t t h e l i m i t e d a s s e t s 
of t h e PACT T r u s t Fund w i l l c o n t i n u e t o be d e p l e t e d 
i f t h e p r o p o s e d S e t t l e m e n t i s 
n o t approved. 
I t i s 
the view o f t h e C o u r t t h a t i t 
would be u n f a i r and 
i n e q u i t a b l e t o p e r m i t 
f u l l 
b e n e f i t s t o be p a i d t o 
c e r t a i n 
c l a s s members 
[ i . e . , 
those members whose 
b e n e f i c i a r i e s a r e a l r e a d y m a t r i c u l a t i n g and/or 
w i l l 
r e a c h g r a d u a t i o n p r i o r t o d e p l e t i o n o f t h e fund's 
a s s e t s , ] 
such 
t h a t t h e r e m a i n i n g 
c l a s s 
members 
[ i . e . , 
t h o s e 
whose 
b e n e f i c i a r i e s 
have 
n o t y e t 
r e a c h e d m a t r i c u l a t i o n age,] 
would u l t i m a t e l y r e c e i v e 
l e s s than t h e sums t o 
be p r o v i d e d under t h e p r o p o s e d 
S e t t l e m e n t , and p o s s i b l y n o t h i n g a t a l l . " 
Thus, t h e e v i d e n c e 
s u g g e s t s t h a t t h e p r o p o s e d 
d i s t r i b u t i o n 
p r o v i d e d f o r 
i n 
t h e s e t t l e m e n t agreement i s 
t h e o n l y means o f 
e n s u r i n g t h a t e v e r y c l a s s member r e c e i v e s a t l e a s t some r e t u r n 
on h i s o r h e r i n v e s t m e n t .
1 9 
We a r e , t h e r e f o r e , u n a b l e t o 
19We 
n o t e , t o o , t h a t s h o u l d i n v e s t m e n t 
r e t u r n s 
exceed 
a n t i c i p a t i o n s , those e x c e s s funds, t o o , w i l l be i n c l u d e d 
i n 
54 
1101337; 1101506 
c o n c l u d e 
t h a t t h e t r i a l 
c o u r t 
exceeded i t s 
d i s c r e t i o n i n 
c o n c l u d i n g 
t h a t 
t h i s 
f a c t o r , t o o , weighed 
i n f a v o r 
o f 
s e t t l e m e n t 
a p p r o v a l . 
G i v e n t h e above, we c o n c l u d e t h a t t h e t r i a l c o u r t d i d n o t 
exceed i t s d i s c r e t i o n i n 
h o l d i n g t h a t t h e s e t t l e m e n t agreement 
met t h e a p p l i c a b l e f a c t o r s o u t l i n e d i n 
Adams, 
s u p r a . 
2. 
A d d i t i o n a l 
C o n s i d e r a t i o n s 
a. 
N o t i c e 
Motlow and Sears contend t h a t t h e n o t i c e a d v i s i n g c l a s s 
members o f t h e p r o p o s e d s e t t l e m e n t was d e f i c i e n t i n numerous 
r e s p e c t s , 
i n c l u d i n g i t s a l l e g e d 
f a i l u r e 
t o i n f o r m 
c l a s s 
members o f s p e c i f i c s e t t l e m e n t terms, such as t h e compensation 
due 
c l a s s c o u n s e l and t h e method by w h i c h t h a t compensation 
was c a l c u l a t e d and/or n e g o t i a t e d ; 
i t s f a i l u r e t o s p e c i f y t h e 
2010 
r a t e s a t which t u i t i o n payments would, under t h e terms o f 
the 
s e t t l e m e n t 
agreement, be p a i d ; 
t h e i n s u f f i c i e n t 
time 
a l l e g e d l y a l l o w e d by t h e m a i l i n g date t o r e v i e w t h e s e t t l e m e n t 
and r e s p o n d b e f o r e t h e s c h e d u l e d h e a r i n g d a t e ; and t h e f a i l u r e 
of t h e n o t i c e t o i n f o r m 
c l a s s members o f t h e t o t a l 
v a l u e 
f u t u r e d i s t r i b u t i o n s t o c l a s s members. 
Moreover, each c l a s s 
member r e t a i n s t h e r i g h t t o seek a r e t u r n o f h i s o r h e r 
o r i g i n a l i n v e s t m e n t . 
55 
1101337; 1101506 
and/or p r o j e c t e d b e n e f i t of the s e t t l e m e n t . 
F o l l o w i n g 
i t s p r e l i m i n a r y a p p r o v a l 
of 
the 
s e t t l e m e n t 
agreement, the 
t r i a l 
c o u r t o r d e r e d 
t h a t approved forms 
of 
n o t i c e be sent t o a l l 
c l a s s members a t the a d d r e s s e s 
a p p e a r i n g 
i n the r e c o r d s of the PACT program and t h a t n o t i c e a l s o be 
p o s t e d 
on 
the Web 
s i t e 
f o r the PACT program. 
The 
c o u r t -
approved n o t i c e p r o v i d e d , i n f u l l , 
as 
f o l l o w s : 
"NOTICE OF PROPOSED CLASS ACTION SETTLEMENT 
"A 
p r o p o s e d 
c l a s s 
a c t i o n 
s e t t l e m e n t 
('Settlement') 
has been r e a c h e d 
i n the 
l i t i g a t i o n 
s t y l e d L i s a N i x Green, e t a l . v. Kay 
I v e y , e t a l , 
C i r c u i t C o u r t 
of Montgomery County, Alabama, Case 
No.: 
CV-2010-900013. The p r o p o s e d S e t t l e m e n t would 
change the manner i n which t u i t i o n and f e e s are p a i d 
by PACT. 
Among o t h e r t h i n g s , the S e t t l e m e n t would 
use 
F a l l 
2010 
r a t e s as the b a s e l i n e amount t o 
be 
p a i d i n the f u t u r e f o r t u i t i o n and f e e s , r e g a r d l e s s 
of the year t h a t PACT C o n t r a c t b e n e f i t s are used. 
Any 
t u i t i o n 
and 
f e e s charged 
above t h a t b a s e l i n e 
amount would not be p a i d by PACT, but would be 
the 
e x c l u s i v e 
r e s p o n s i b i l i t y 
of 
the 
PACT 
C o n t r a c t 
p u r c h a s e r 
or b e n e f i c i a r y . 
A complete copy of 
the 
p r o p o s e d 
S e t t l e m e n t , 
a l o n g 
w i t h 
the 
c o u r t ' s 
p r e l i m i n a r y 
a p p r o v a l 
of 
the 
S e t t l e m e n t , 
can 
be 
o b t a i n e d on the PACT w e b s i t e , www.8 
0 
0alapact.com, 
or 
by c o n t a c t i n g J . Doyle F u l l e r f o r C l a s s A a t 
(334) 
270-0020, 
j d f @ f u l e r c o p e l a n d . c o m , 
or 
Andrew 
P. 
Campbell 
f o r 
C l a s s 
B 
a t 
(205) 
251-5900, 
acampbell@lsclaw.com. 
You are encouraged t o r e v i e w 
t h e s e documents i n 
f u l l . 
"The 
c o u r t has s c h e d u l e d a h e a r i n g f o r June 20, 
2011 a t 1:00 
p.m. 
t o c o n s i d e r whether t o g r a n t 
f i n a l 
a p p r o v a l 
of 
the 
S e t t l e m e n t . 
I f 
the 
p r o p o s e d 
S e t t l e m e n t r e c e i v e s f i n a l a p p r o v a l by the c o u r t , you 
56 
1101337; 1101506 
w i l l 
be bound by 
the terms t h e r e o f . 
The 
a p p r o v a l 
h e a r i n g 
w i l l 
be 
h e l d 
i n 
Courtroom 
4A 
of 
the 
Montgomery County C o u r t h o u s e , l o c a t e d a t 100 
South 
Lawrence 
S t r e e t , 
Montgomery, 
Alabama. 
You 
may 
appear a t the h e a r i n g 
t o o b j e c t t o the 
S e t t l e m e n t . 
However, i n o r d e r 
t o be h e a r d a t the h e a r i n g , 
you 
must 
f i l e 
a w r i t t e n 
o b j e c t i o n 
w i t h 
the 
c o u r t 
no 
l a t e r than June 10, 2011. 
Any o b j e c t i o n s not 
t i m e l y 
f i l e d 
s h a l l be deemed waived. For 
f u r t h e r 
d e t a i l s , 
p l e a s e c o n t a c t c l a s s c o u n s e l or see the PACT w e b s i t e 
under 
'Proposed 
C l a s s 
A c t i o n 
S e t t l e m e n t 
I n f o r m a t i o n ' . " 
In i t s f i n a l 
o r d e r of a p p r o v a l , 
the 
t r i a l 
c o u r t 
s p e c i f i c a l l y 
found t h a t "the 
... 
d i s t r i b u t i o n of n o t i c e was 
i n c o m p l i a n c e 
w i t h the r e q u i r e m e n t s of the p r e l i m i n a r y a p p r o v a l 
o r d e r , 
the 
Alabama R u l e s of C i v i l P r o c e d u r e , and due 
p r o c e s s . " 
R u l e 2 3 ( e ) , 
A l a . R. 
C i v . P., 
p r o v i d e s 
t h a t n o t i c e of a 
compromise i n c l a s s - a c t i o n l i t i g a t i o n 
" s h a l l be g i v e n t o a l l 
members of the 
c l a s s i n such manner as the 
c o u r t 
d i r e c t s . " 
The 
o b j e c t o r s 
f a i l 
t o i n c l u d e 
a u t h o r i t y t h a t e s t a b l i s h e s 
a 
minimum time frame f o r such n o t i f i c a t i o n or t h a t r e q u i r e s t h a t 
the n o t i c e c o n t a i n the a l l e g e d o m i s s i o n s t h e y i d e n t i f y . 
There 
i s a l s o no a u t h o r i t y c i t e d e s t a b l i s h i n g t h a t the 
d e s i g n a t e d 
b e n e f i c i a r i e s , who were not i n c l u d e d as named c l a s s members, 
were a l s o e n t i t l e d t o n o t i c e . 
F u r t h e r , t h e y f a i l t o e s t a b l i s h 
t h a t the n o t i c e v i o l a t e d R u l e 23(e) 
or n o t i o n s of due 
p r o c e s s . 
"A 
c l a s s 
s e t t l e m e n t 
n o t i c e 
need 
o n l y 
p r o p e r l y 
i d e n t i f y the p l a i n t i f f 
c l a s s and g e n e r a l l y 
d e s c r i b e 
57 
1101337; 1101506 
the terms o f t h e s e t t l e m e n t so as t o a l e r t members 
' w i t h a d v e r s e v i e w p o i n t s t o i n v e s t i g a t e and t o come 
f o r w a r d and be h e a r d . ' Mendoza[ v. Tucson 
S c h o o l  
D i s t . No. 1 ] , 623 F.2d [1338] a t 1352 [ ( 5 t h 
C i r . 
1 9 7 9 ) ] . 
See I n r e South 
F l o r i d a Waste 
D i s p o s a l 
 
A n t i t r u s t L i t i g a t i o n , 896 F.2d 493, 495 (11th C i r . 
1990) 
(per c u r i a m ) ; 
Burns v. E l r o d , 757 F.2d 151, 
155 ( 7 t h 
C i r . 1985) 
. The n o t i c e i s 'not r e q u i r e d t o 
p r o v i d e 
a 
complete 
source 
o f 
s e t t l e m e n t 
i n f o r m a t i o n . ' I n r e Gypsum A n t i t r u s t Cases, 565 F.2d 
1123, 
1125 ( 9 t h 
C i r . 1977) 
. See a l s o Greenspun v.  
Bogan, 492 F.2d 375, 382 (1st C i r . 1974)." 
B a t t l e v. L i b e r t y N a t ' l L i f e I n s . Co., 770 F. Supp. 1499, 
1522 
(N.D. 
A l a . 1991). 
Here, t h e n o t i c e 
c l e a r l y 
s a t i s f i e s t h e r e q u i r e m e n t s i n 
B a t t l e . 
Not o n l y was t h e n o t i c e , f o r a l l t h a t 
a p p e a r s , 
p r o p e r l y 
d i s t r i b u t e d 
t o 
t h e 
p l a i n t i f f 
c l a s s , 
b u t i t 
i n d i s p u t a b l y i n f o r m s c l a s s members b o t h o f t h e 
m o d i f i c a t i o n i n 
the p r o p o s e d s e t t l e m e n t agreement o f t h e i r c o n t r a c t 
b e n e f i t s 
and 
t h a t a p p r o v a l o f t h e p r o p o s e d s e t t l e m e n t 
agreement 
w i l l 
c o n s t i t u t e a f i n a l a d j u d i c a t i o n o f t h e i r c l a i m s . 
A l t h o u g h a 
copy o f t h e a c t u a l s e t t l e m e n t 
agreement was n o t a t t a c h e d t o 
the n o t i c e , t h e i n f o r m a t i o n 
i n c l u d e d was s u f f i c i e n t t o p l a c e 
members adverse t o t h e p r o p o s e d s e t t l e m e n t on n o t i c e o f t h e 
need t o i n v e s t i g a t e 
f u r t h e r t h e terms o f t h e 
s e t t l e m e n t 
agreement v i a t h e 
methods i d e n t i f i e d , and, i f t h e y so d e s i r e d , 
of how t o f o r m a l l y o b j e c t t o f i n a l a p p r o v a l . 
T h e r e f o r e , 
we 
58 
1101337; 1101506 
are u n c o n v i n c e d t h a t t h e t r i a l c o u r t , i n f i n d i n g t h a t n o t i c e 
was adequate, exceeded i t s d i s c r e t i o n . 
b. 
O v e r b r e a d t h 
F i n a l l y , 
t h e o b j e c t o r s 
c h a l l e n g e 
t h e 
t r i a l 
c o u r t ' s 
a p p r o v a l 
o f t h e terms o f t h e s e t t l e m e n t 
agreement on t h e 
ground o f o v e r b r e a d t h . 
I n t h i s r e g a r d , t h e y argue b o t h t h a t 
the s e t t l e m e n t agreement i m p r o p e r l y p r o v i d e s f o r r e l i e f 
t h a t 
was n o t p r a y e d f o r i n e i t h e r t h e i n i t i a l 
c o m p l a i n t 
o r t h e 
r e s u l t i n g c o u n t e r c l a i m and t h a t t h e r e l e a s e c o n t a i n e d i n t h e 
s e t t l e m e n t agreement i s o v e r b r o a d i n t h e p r e s e n t 
c o n t e x t i n 
t h a t i t r e l e a s e s t h e PACT b o a r d members from 
l i a b i l i t y f o r 
p o t e n t i a l 
t o r t 
c l a i m s 
beyond 
t h e scope 
o f t h e 
p r e s e n t 
l i t i g a t i o n and f o r 
w h i c h c l a s s members a l l e g e d l y r e c e i v e d no 
c o r r e s p o n d i n g 
b e n e f i t . 
The 
s o l e 
a u t h o r i t y 
t h i s 
C o u r t 
can 
l o c a t e 
i n t h e 
o b j e c t o r s ' b r i e f s c h a l l e n g i n g t h e 
p u r p o r t e d l y o v e r b r o a d n a t u r e 
of t h e r e l i e f p r o v i d e d , however, i s 
aimed a t t h e i n f r i n g e m e n t 
of t h e c o n t r a c t m o d i f i c a t i o n s i n l i g h t o f t h e 2010 A c t . 
The 
o b j e c t o r s c i t e n o t h i n g a c t u a l l y e s t a b l i s h i n g t h a t a m u t u a l l y 
n e g o t i a t e d 
s e t t l e m e n t 
agreement 
cannot 
i n c l u d e 
r e l i e f 
d i f f e r e n t than t h e r e l i e f p r a y e d f o r 
i n 
t h e c o m p l a i n t . 
Moreover, t h e o b j e c t o r s 
f a i l t o a d e q u a t e l y a l l e g e t h e 
59 
1101337; 1101506 
v a l u e and/or v i a b i l i t y o f t h e p o t e n t i a l 
t o r t 
c l a i m s , which 
t h e y c o n t e n d were i m p r o p e r l y 
r e l e a s e d , i n l i g h t of t h e f a c t 
t h a t 
the PACT b o a r d members were 
sued i n t h e i r 
o f f i c i a l 
c a p a c i t i e s and t h u s may be e n t i t l e d t o S t a t e immunity. 
See 
Burgoon v. Alabama S t a t e Dep't of Human Res., 835 So. 2d 131, 
132-33 ( A l a . 2002) (a s u i t f o r 
damages a g a i n s t S t a t e 
o f f i c i a l s 
i n t h e i r o f f i c i a l c a p a c i t i e s i s , i n e s s e n c e , an a c t i o n a g a i n s t 
the S t a t e 
i t s e l f and cannot p r o c e e d ) . 
F i n a l l y , a l t h o u g h t h e 
o b j e c t o r s appear t o contend t h a t t h e r e l e a s e excuses t h e PACT 
b o a r d f o r any f u t u r e mismanagement o r c o r r e s p o n d i n g b r e a c h of 
f i d u c i a r y 
d u t y , 
we note 
t h a t , as s e t out i n our 
o r i g i n a l 
o p i n i o n i n t h i s m a t t e r , 
t h e r e l e a s e e x t e n d e d o n l y t o c l a i m s 
"'which were a s s e r t e d or w h i c h c o u l d have been a s s e r t e d as o f 
the e x e c u t i o n of [the] S e t t l e m e n t . ' " 
Perdue I , 
So. 3d a t 
. 
T h e r e f o r e , we see no m e r i t i n t h i s c o n t e n t i o n . 
S u f f i c e 
i t t o say, a l t h o u g h t h e r e l e a s e may be "broad," t h e o b j e c t o r s 
have p r o v i d e d no a u t h o r i t y d e m o n s t r a t i n g 
t h a t i t 
i s so o v e r l y 
b r o a d 
t h a t 
t h e 
t r i a l 
c o u r t 
exceeded 
i t s d i s c r e t i o n 
i n 
a p p r o v i n g i t . 
A f t e r t h o r o u g h l y r e v i e w i n g t h e t r i a l c o u r t ' s f i n d i n g s o f 
f a c t and c o n c l u s i o n s of law, we cannot h o l d t h a t t h e 
t r i a l 
c o u r t exceeded i t s 
d i s c r e t i o n i n f i n d i n g t h a t t h e s e t t l e m e n t 
60 
1101337; 1101506 
agreement was 
f a i r , adequate, and r e a s o n a b l e . 
CONCLUSION 
In c o n s i d e r a t i o n 
o f t h e f o r e g o i n g , t h e t r i a l c o u r t ' s J u l y 
27, 2011, o r d e r a p p r o v i n g t h e s e t t l e m e n t agreement and 
i t s 
September 17, 2012, 
o r d e r 
e n t e r e d on remand 
f i n d i n g t h e 
r e t r o a c t i v e a p p l i c a t i o n o f t h e 2012 A c t t o be 
c o n s t i t u t i o n a l 
are a f f i r m e d . 
1101337 -- AFFIRMED. 
1101506 -- AFFIRMED. 
P a r k e r , 
J . , and Windom, 
P i t t m a n , 
and Moore, 
S p e c i a l 
J u s t i c e s , * 
concur. 
Shaw, J . , 
and Lyons, S p e c i a l J u s t i c e , * concur 
s p e c i a l l y . 
Moore, C.J., c o n c u r s i n p a r t and d i s s e n t s i n p a r t . 
S t u a r t , 
B o l i n , 
Murdock, Main, 
Wise, and B r y a n , J J . , 
r e c u s e 
t h e m s e l v e s . 
* R e t i r e d A s s o c i a t e J u s t i c e Champ Lyons, J r . , and C o u r t of 
C i v i l A p p e a l s Judges C r a i g S. P i t t m a n and T e r r y A. Moore were 
a p p o i n t e d t o s e r v e as S p e c i a l 
J u s t i c e s i n r e g a r d t o t h e s e 
a p p e a l s . 
C o u r t 
of C r i m i n a l A p p e a l s 
P r e s i d i n g Judge Mary 
B e c k e r Windom was a p p o i n t e d t o s e r v e as a S p e c i a l J u s t i c e on 
r e t u r n t o remand. 
61 
1101337; 1101506 
SHAW, J u s t i c e 
( c o n c u r r i n g s p e c i a l l y ) . 
I concur i n 
t h e 
main o p i n i o n . I w r i t e s e p a r a t e l y o n l y t o 
make s e v e r a l o b s e r v a t i o n s . 
The PACT program was c r e a t e d w i t h l a u d a b l e i n t e n t i o n s 
and 
a p p a r e n t l y 
o p e r a t e d 
e f f e c t i v e l y 
f o r a number o f 
y e a r s ; 
however, as d e m o n s t r a t e d by t h e f a c t s s e t out i n t h e main 
o p i n i o n , i t 
now s t a n d s as a c a u t i o n a r y t a l e w i t h r e s p e c t t o 
the 
c r e a t i o n o f government 
programs 
o p e r a t i n g 
i n 
areas 
t r a d i t i o n a l l y 
r e s e r v e d t o f a m i l i e s o r i n d i v i d u a l s . 
PACT 
c o n t r a c t s p u r c h a s e d b e f o r e 1995, i t 
i s a l l e g e d i n t h i s 
case, 
were t o f u l l y pay t h e c o l l e g e t u i t i o n o f t h e b e n e f i c i a r i e s ; 
a f t e r 1995, p u r c h a s e r s 
were p u r p o r t e d l y 
i n f o r m e d 
t h a t t h e 
t u i t i o n p a i d depended on t h e f i n a n c i a l h e a l t h o f t h e 
program. 
In any e v e n t , 
t h e r e c o r d 
i n d i c a t e s t h a t t h e PACT program 
cannot 
f u l f i l l i t s f i n a n c i a l o b l i g a t i o n s ; most r e g r e t t a b l y , 
the f a m i l i e s and i n d i v i d u a l s who have i n v e s t e d i n , and r e l i e d 
on, 
t h i s once p r o m i s i n g program bear t h e f u l l b r u n t o f t h i s 
f o r f e i t u r e and a r e 
now f a c e d w i t h t h e d i f f i c u l t i e s o f d e a l i n g 
w i t h t h e f i n a n c i a l s h o r t f a l l o f t h e PACT program. 
In our o r i g i n a l 
d e c i s i o n i n t h i s 
case, 
t h i s 
C o u r t , 
f o l l o w i n g 
t h e p l a i n 
language 
o f t h e l e g i s l a t u r e ' s 
2010 
enactments, w h i c h were i n t e n d e d t o r e s c u e t h e PACT program, 
62 
1101337; 1101506 
h e l d 
t h a t t h e PACT b o a r d 
c o u l d n o t a l t e r t h e c o n t r a c t u a l 
r i g h t s o f t h e PACT c o n t r a c t h o l d e r s . 
Perdue v. Green, [Ms. 
1101337, March 16, 2012] 
So. 3d 
( A l a . 2012). 
A c t 
No. 
2012-198, A l a . A c t s 2012 ("the 
2012 A c t " ) , however, has g i v e n 
b r o a d powers t o t h e PACT b o a r d t o a l t e r t h o s e r i g h t s . 
The 
j u d i c i a l 
b r a n c h 
o f 
s t a t e 
government 
does 
n o t have t h e 
a u t h o r i t y 
t o 
r e j e c t an a c t t h a t 
i s t h e d u l y 
e n a c t e d , 
c o n s t i t u t i o n a l e x e r c i s e o f t h e l e g i s l a t u r e ' s i n h e r e n t power. 
Doing so would i n t r u d e upon t h e power o f t h e l e g i s l a t u r e 
i n 
v i o l a t i o n o f A l a . Const. 1901, A r t . I I I . , 
§ 43, w h i c h f o r b i d s 
the 
j u d i c i a l 
b r a n c h 
from 
e x e r c i s i n g 
t h e power 
o f t h e 
l e g i s l a t i v e b r a n c h , so t h a t our 
government i s 
one " o f 
laws and 
not o f men." 
A l l t h e J u s t i c e s i n t h i s case agree t h a t t h e 
2012 A c t i s n o t u n c o n s t i t u t i o n a l based on i t s r e t r o a c t i v e 
a p p l i c a t i o n . 
Our d e c i s i o n t o d a y f o l l o w s t h e law p r o v i d e d by 
the 
l e g i s l a t u r e , which has t h e e x c l u s i v e power t o 
f o r m u l a t e 
the p u b l i c p o l i c y o f t h i s S t a t e , s u b j e c t t o t h e 
c o n s t i t u t i o n . 
B o l e s v. P a r r i s , 952 So. 2d 364, 367 ( A l a . 2006) 
("[T]he 
l e g i s l a t u r e , and n o t t h i s C o u r t , has t h e e x c l u s i v e domain t o 
f o r m u l a t e 
p u b l i c p o l i c y i n Alabama."). 
To me, i t 
i s 
an u n d e r s t a t e m e n t t o say t h a t t h e amount o f 
the a t t o r n e y 
f e e s awarded i n t h i s case i s u n s e t t l i n g , g i v e n 
63 
1101337; 1101506 
the s o u r c e of the funds from w h i c h the fee must be p a i d 
and 
the i n t e n d e d purpose of the PACT program. 
However, whether I 
would have r e a c h e d a d i f f e r e n t r e s u l t w i t h r e s p e c t 
t o 
t h i s 
i s s u e had 
I been the 
t r i a l judge i n t h i s case i s i r r e l e v a n t 
f o r p u r p o s e s of a p p e l l a t e r e v i e w . 
The d e c i s i o n by t h i s C o u r t 
as t o whether t h o s e f e e s are l e g a l i s u l t i m a t e l y c o n t r o l l e d by 
the 
a p p l i c a b l e law, 
a l t h o u g h 
we 
J u s t i c e s may, 
from time 
t o 
t i m e , 
r e s p e c t f u l l y d i s a g r e e 
as 
t o what t h a t 
law means 
or 
r e q u i r e s . 
A t 
a 
minimum, 
however, 
I 
b e l i e v e 
t h a t 
the 
a d v e r s a r i a l system upon w h i c h our l e g a l p r e c e d e n t s are based 
d i c t a t e s t h a t we 
r u l e a c c o r d i n g 
t o the 
f a c t s and 
arguments 
p r e s e n t e d 
t o us by the p a r t i e s b e f o r e 
us. 
In t h a t v e i n , I 
have 
n o t h i n g 
b e f o r e 
me 
by 
w h i c h 
t o 
d i s a g r e e 
w i t h 
the 
c o n c l u s i o n i n the main o p i n i o n t h a t no l e g a l b a s i s - - s u f f i c i e n t 
argument p r e m i s e d on the a p p l i c a b l e law and 
f a c t s - - h a s been 
p r e s e n t e d 
on 
a p p e a l 
d e m o n s t r a t i n g 
t h a t 
the 
t r i a l 
c o u r t ' s 
a p p r o v a l of the amount of the a t t o r n e y - f e e award i s due t o be 
s e t a s i d e on the b a s i s t h a t i n a p p r o v i n g 
t h a t amount the 
t r i a l 
c o u r t exceeded i t s 
d i s c r e t i o n . 
64 
1101337; 1101506 
LYONS, S p e c i a l J u s t i c e ( c o n c u r r i n g 
s p e c i a l l y ) . 
I concur f u l l y i n the main o p i n i o n . 
I w r i t e s p e c i a l l y t o 
endorse t h a t a s p e c t of J u s t i c e Shaw's s p e c i a l c o n c u r r e n c e i n 
w h i c h he o b s e r v e s t h a t " i t i s an u n d e r s t a t e m e n t t o say 
t h a t 
the amount of 
the 
a t t o r n e y 
f e e s 
awarded 
i n 
t h i s 
case 
i s 
u n s e t t l i n g , " 
So. 
3d 
a t 
, y e t 
n o t e s 
t h a t 
he 
i s 
c o n s t r a i n e d by the l i m i t a t i o n s imposed on an a p p e l l a t e c o u r t 
by the a d v e r s a r i a l system, t h e r e b y p r e v e n t i n g him from g o i n g 
beyond the m a t e r i a l s b e f o r e the c o u r t i n o r d e r t o r e a c h a more 
p a l a t a b l e 
r e s u l t . 
I f the award of an a t t o r n e y fee exceeded a t r i a l 
c o u r t ' s 
s u b j e c t - m a t t e r 
j u r i s d i c t i o n , such as where payment of the fee 
would be i n c o n s i s t e n t w i t h the d o c t r i n e of s o v e r e i g n immunity, 
t h i s 
C o u r t 
c o u l d 
r a i s e 
the 
i s s u e 
on 
i t s 
own 
m o t i o n , 
n o t w i t h s t a n d i n g t h a t the i s s u e had not been a s s e r t e d by any of 
the p a r t i e s t o the a p p e a l . 
A l a n d v. Graham, 287 
A l a . 
226, 
229, 
250 
So. 
2d 
677, 
678 
(1971). 
However, the PACT 
t r u s t 
funds are 
c l e a r l y 
not 
S t a t e 
funds; 
t h e r e f o r e , no 
i s s u e 
of 
s o v e r e i g n immunity i s p r e s e n t e d . 
See § 16-33C-6(b), A l a . Code 
1975 
("The amounts on d e p o s i t i n the PACT T r u s t Fund s h a l l not 
c o n s t i t u t e p r o p e r t y of the s t a t e , and the s t a t e may have 
no 
c l a i m or i n t e r e s t i n them."). 
65 
1101337; 1101506 
I , t o o , 
am " h o l d i n g my nose" as I j o i n i n u p h o l d i n g t h e 
a t t o r n e y f e e , 
b u t I do so f o r 
t h e r e a s o n s s e t f o r t h i n 
t h e 
main o p i n i o n and as a m p l i f i e d by J u s t i c e Shaw i n 
h i s s p e c i a l 
c o n c u r r e n c e . 
J u s t i c e 
S c a l i a 
r e c e n t l y 
d e a l t 
w i t h 
t h e 
c i r c u m s t a n c e o f a judge 
f i n d i n g i t n e c e s s a r y t o u p h o l d a 
r e s u l t he o r she d i s l i k e s . 
He s a i d : "The judge who 
always 
l i k e s t h e r e s u l t s he reaches i s a bad j u d g e . "
2 0 
I would 
s o f t e n 
t h a t 
c r i t i c i s m 
t o say t h a t 
such a judge does not 
adhere 
t o t h e 
p r o p e r 
b o u n d a r i e s 
o f 
a p p e l l a t e 
r e v i e w . 
N e v e r t h e l e s s , I do n o t l i k e t h e r e s u l t I have r e a c h e d today. 
2 0Tasha 
T s i a p e r a s , 
" C o n s t i t u t i o n a 'dead, dead, 
dead' 
document, S c a l i a t e l l s SMU a u d i e n c e , " D a l l a s News, J a n u a r y 28, 
2013. 
On t h e date 
t h i s 
o p i n i o n was r e l e a s e d , t h e a r t i c l e 
c o u l d 
be 
a c c e s s e d 
a t 
http://www.dallasnews.com/news/ 
c o m m u n i t y - n e w s / p a r k - c i t i e s / h e a d l i n e s / 2 
013012 8-supreme-court-
j u s t i c e - s c a l i a - o f f e r s - p e r s p e c t i v e - o n - t h e - l a w - a t - s m u - l e c t u r e . 
ece. 
66 
1101337; 1101506 
MOORE, C h i e f 
J u s t i c e 
( c o n c u r r i n g i n p a r t and d i s s e n t i n g i n 
p a r t ) . 
In Perdue v. Green, [Ms. 1101337, March 16, 2012] 
So. 
3d 
( A l a . 2012) ("Perdue I " ) , t h i s C o u r t h e l d t h a t , " t o t h e 
e x t e n t t h e PACT B o a r d a c t e d t o change i t s e x i s t i n g 
r u l e s , 
p r o c e d u r e s , o r p o l i c i e s t o a c c e p t m o d i f i c a t i o n o f t h e PACT 
c o n t r a c t s , ... i t v i o l a t e d t h e c o n t r a c t u a l r e l a t i o n s h i p w i t h 
the PACT c o n t r a c t h o l d e r s by e x c e e d i n g t h e e x p r e s s 
l i m i t a t i o n 
s e t out i n 
§ 16-33C-19[, A l a . Code 1975.]" 
So. 3d a t 
. 
T h e r e f o r e , 
t h e s e t t l e m e n t 
approved by t h e t r i a l 
c o u r t was 
" c l e a r l y c o n t r a r y t o s t a t e l a w . " 
So. 3d a t 
. T h i s C o u r t 
v a c a t e d 
t h e t r i a l 
c o u r t ' s 
o r d e r 
a p p r o v i n g 
t h e 
s e t t l e m e n t 
agreement and remanded t h e case. 
W h i l e t h e PACT board's 
a p p l i c a t i o n f o r r e h e a r i n g i n 
Perdue I was p e n d i n g i n t h i s C o u r t , t h e l e g i s l a t u r e p a s s e d 
A c t 
No. 2012-198, A l a . A c t s 2012 ("the 
2012 A c t " ) , r e p e a l i n g § 16-
33C-19, A l a . Code 1975. I agree w i t h P a r t I o f t h e m a j o r i t y 
o p i n i o n t h a t t h e r e t r o a c t i v e a p p l i c a t i o n o f t h e 2012 A c t 
i s 
not 
u n c o n s t i t u t i o n a l and does n o t i m p a i r t h e c o n t r a c t u a l 
r i g h t s o r o b l i g a t i o n s o f 
t h e 
PACT c o n t r a c t h o l d e r s . I d i s s e n t , 
however, from P a r t I I o f t h e m a j o r i t y o p i n i o n r e g a r d i n g t h e 
award o f $4,950,000 i n 
a t t o r n e y f e e s because such a f e e 
i s n o t 
67 
1101337; 
1101506 
j u s t i f i e d 
i n t h i s case under t h e 
f a c t s 
p r e s e n t e d 
and i s 
c l e a r l y e x c e s s i v e . I am a l s o p e r s u a d e d t h a t t h e 
s e t t l e m e n t 
agreement i n t h i s case s h o u l d not have been approved because 
t h e r e e x i s t s an a p p a r e n t c o n f l i c t of i n t e r e s t between 
c l a s s 
c o u n s e l and t h e members o f t h e c l a s s 
i t s e l f . 
When 
c o n s i d e r i n g 
the 
f a i r n e s s , 
adequacy, 
and 
r e a s o n a b l e n e s s 
of a p r o p o s e d s e t t l e m e n t agreement i n a c l a s s 
a c t i o n , a c o u r t must pay s p e c i a l " a t t e n t i o n t o t h e amount of 
a t t o r n e y s ' 
f e e s 
awarded 
t o 
c l a s s 
c o u n s e l 
because 
'the 
s i m u l t a n e o u s 
n e g o t i a t i o n of c l a s s r e l i e f and a t t o r n e y ' s 
f e e s 
c r e a t e s a p o t e n t i a l f o r c o n f l i c t . ' " K n i g h t v. Alabama, 469 F. 
Supp. 2d 1016, 1036 
(N.D. A l a . 2006) 
( q u o t i n g Manual f o r 
Complex L i t i g a t i o n § 30.42, a t 239 (3d ed. 1995)). Because of 
t h i s p o t e n t i a l f o r c o n f l i c t between c l a s s members and t h e i r 
a t t o r n e y s i n c l a s s - a c t i o n m a t t e r s , a c o u r t r e v i e w i n g an award 
of a t t o r n e y f e e s i n a c l a s s - a c t i o n s e t t l e m e n t must be c a r e f u l 
t o s c r u t i n i z e the r e a s o n a b l e n e s s 
of t h e a t t o r n e y f e e s . As t h e 
f e d e r a l d i s t r i c t c o u r t e x p l a i n e d i n Bowen v. South T r u s t Bank 
of Alabama, 760 F. Supp. 889, 892 (M.D. A l a . 1991): 
" I n d e t e r m i n i n g whether p l a i n t i f f s ' 
c o u n s e l i s i n 
f a c t e n t i t l e d t o f e e s , and i f so, i n what 
amount, 
the 
c o u r t 
must 
be 
s e n s i t i v e 
t o 
t h e 
p o t e n t i a l 
c o n f l i c t of i n t e r e s t between 
p l a i n t i f f s and t h e i r 
c o u n s e l , and must be p a r t i c u l a r l y c a r e f u l t o i n s u r e 
68 
1101337; 1101506 
t h a t t h e u l t i m a t e d i v i s i o n o f s e t t l e m e n t 
funds i s 
f a i r t o absent c l a s s members." 
A c c o r d i n g l y , 
t h i s 
C o u r t 
s h o u l d more c a r e f u l l y examine t h e 
t r i a l 
c o u r t ' s award o f c l a s s c o u n s e l ' s 
a t t o r n e y 
f e e s f o r 
r e a s o n a b l e n e s s 
as w e l l as f o r t h e i n h e r e n t 
c o n f l i c t o f 
i n t e r e s t w i t h c l a s s members t h a t e x i s t e d when e x o r b i t a n t f e e s 
were 
a g r e e d 
t o by 
t h e PACT 
b o a r d 
d u r i n g 
s e t t l e m e n t 
n e g o t i a t i o n s . W i t h r e g a r d t o t h e i s s u e o f t h e a t t o r n e y 
f e e s , 
I 
c i t e C a r o l M. Perdue's b r i e f and h e r b r i e f on r e t u r n t o 
remand 
t h r o u g h o u t 
t h i s 
d i s s e n t . 
Those 
b r i e f s 
speak f o r 
t h e m s e l v e s r e g a r d i n g whether t h e a p p e l l a n t s c h a l l e n g e 
c l a s s 
c o u n s e l ' s 
f e e s on a p p e a l . The C o u r t does n o t need t o s e a r c h 
the r e c o r d t o 
make t h e a p p e l l a n t s ' case f o r them; Perdue makes 
her case by c i t i n g t o t h e r e c o r d i n 
h e r b r i e f s t o t h i s 
C o u r t . 
See 
Perdue's b r i e f , a t 42-66; Perdue's b r i e f on r e t u r n t o 
remand, a t 54-58. 
As Perdue n o t e s i n h e r b r i e f on o r i g i n a l s u b m i s s i o n , a 
f a c t t h a t weighs a g a i n s t such an e x c e s s i v e a t t o r n e y - f e e award 
i s t h a t t h i s case was s e t t l e d i n 
t h e e a r l y p r e t r i a l s t a g e s o f 
the p r o c e e d i n g s , 
o n l y s i x d e p o s i t i o n s h a v i n g been t a k e n by 
t h e 
PACT b o a r d and a t most two d e p o s i t i o n s by c l a s s 
c o u n s e l . 
Perdue's b r i e f , a t 51-53. F u r t h e r m o r e , as Perdue a r g u e s , c l a s s 
69 
1101337; 1101506 
c o u n s e l never d i s c l o s e d an e x p e r t , and t h e r e i s 
no i n d i c a t i o n 
t h a t an e x p e r t was even c o n s u l t e d . Perdue's b r i e f , a t 43, 
51¬
52, 59, 64-65. 
Moreover, n o t h i n g i n t h e r e c o r d shows t h a t 
c l a s s c o u n s e l deposed members o f 
t h e 
PACT b o a r d o r 
t h e a c t u a r y 
upon whose t e s t i m o n y t h e s e t t l e m e n t amount was based. Perdue 
a l l e g e s as much i n 
h e r b r i e f . Perdue's b r i e f , a t 43, 51-52, 
58-59, 64-65. F i n a l l y , 
c o s t s and expenses o f c l a s s 
c o u n s e l 
were c a l c u l a t e d t o 
be o n l y $15,000. 
In l i g h t o f 
t h e 
f o r e g o i n g , t h e 
time and l a b o r r e q u i r e d 
o f 
c l a s s c o u n s e l t o t h i s p o i n t i n t h i s case do n o t appear t o 
w a r r a n t an award o f $4,950,000 i n a t t o r n e y f e e s out o f 
t h e 
a l r e a d y s t r a i n e d PACT t r u s t fund. See Perdue's b r i e f , a t 
43, 
46, 59-63. See a l s o Rule 1.5, A l a . R. P r o f . Conduct (time and 
l a b o r 
expended by an a t t o r n e y a r e t o be 
c o n s i d e r e d i n 
d e t e r m i n i n g whether a f e e 
i s e x c e s s i v e ) .
2 1 
2 1 I n most c l a s s a c t i o n s , a common fund i s 
c r e a t e d e i t h e r 
by a f i n a l judgment i n 
t h e a c t i o n o r t h e s e t t l e m e n t o f 
t h e 
c l a s s 
a c t i o n and i s m a i n t a i n e d by c l a s s 
c o u n s e l f o r t h e 
b e n e f i t o f c l a s s members. I n t h i s 
case, as t h e m a j o r i t y 
o p i n i o n r e c o g n i z e s , c l a s s c o u n s e l d i d n o t 
c r e a t e a common fund 
because t h e 
PACT t r u s t fund a l r e a d y e x i s t e d 
when c l a s s c o u n s e l 
was r e t a i n e d and 
t h e 
fund was m a i n t a i n e d by t h e 
PACT b o a r d . I n 
a f o o t n o t e , t h e 
m a j o r i t y s t a t e s t h a t t h e 
"common-fund d o c t r i n e 
a l s o a p p l i e s when a fund i s p r e s e r v e d o r p r o t e c t e d . " 
So. 
3d 
a t 
n. 14. I agree. However, t h e f a c t t h a t c l a s s c o u n s e l d i d 
not have t o c r e a t e a common fund s u g g e s t s t h a t c o u n s e l d i d 
n o t 
have t o 
do as 
much work as i s u s u a l l y r e q u i r e d i n c l a s s - a c t i o n 
70 
1101337; 1101506 
Perhaps most p r o b l e m a t i c 
i s t h a t t h e i n t e r a c t i o n s o f 
c l a s s 
c o u n s e l 
and 
t h e 
PACT 
b o a r d 
d u r i n g 
s e t t l e m e n t 
n e g o t i a t i o n s l e a v e t h e i m p r e s s i o n t h a t those p a r t i e s l a c k e d an 
a d v e r s a r i a l 
r e l a t i o n s h i p . 
Perdue 
d i s c u s s e s 
t h i s 
a l l e g e d 
c o n f l i c t a t l e n g t h i n h e r b r i e f s t o t h i s 
C o u r t . 
Perdue's 
b r i e f , a t 42-44, 59-66; Perdue's b r i e f on r e t u r n t o remand, a t 
53-58. As one o b j e c t o r n o t e d : "'I'm n o t t o o happy w i t h what 
I've seen i n 
t h e c o u r t here w i t h o p p o s i n g c o u n s e l . Seems l i k e 
t h e y a r e h o l d i n g hands more than t h e y a r e r e p r e s e n t i n g two 
d i f f e r e n t s i d e s . ' " Perdue's b r i e f , a t 42. 
C l a s s c o u n s e l d i s t r i b u t e d t o t h e members o f t h e c l a s s a 
" S e t t l e m e n t 
D e s c r i p t i o n " and a " Q u e s t i o n s and Answers" form, 
b o t h o f w h i c h r e p e a t e d t h e f i n a n c i a l c o n c l u s i o n s o f t h e PACT 
b o a r d and t h e a c t u a r y r e t a i n e d by t h e PACT b o a r d , even though 
c l a s s c o u n s e l had never r e t a i n e d t h e i r own e x p e r t t o c h a l l e n g e 
or v e r i f y those c o n c l u s i o n s . Perdue's b r i e f , a t 43, 51-52, 56¬
59, 64-65; Perdue's b r i e f on r e t u r n t o remand, a t 55-56. I t 
appears t h a t c l a s s c o u n s e l t o o k a t f a c e v a l u e a l l 
t h e c l a i m s 
of t h e PACT b o a r d and i t s a c t u a r y 
r e g a r d i n g t h e f i n a n c i a l 
c o n d i t i o n o f t h e t r u s t fund and used those c l a i m s t o encourage 
l i t i g a t i o n . 
71 
1101337; 1101506 
the c l a s s members t o r e a c h a s e t t l e m e n t . See Perdue's b r i e f , 
at 43, 46, 51-52, 58-59, 64-65; Perdue's b r i e f on r e t u r n t o 
remand, a t 54-56. Moreover, a l t h o u g h c l a s s c o u n s e l had never 
deposed an e x p e r t t o r e f u t e t h e f i n d i n g s o f t h e a c t u a r y h i r e d 
by t h e 
PACT b o a r d , t h e " S e t t l e m e n t D e s c r i p t i o n " 
and " Q u e s t i o n s 
and Answers" form d i s t r i b u t e d by c l a s s 
c o u n s e l warned t h e 
c l a s s 
i n s t r o n g 
language 
about t h e consequences o f n o t 
s e t t l i n g t h e case: 
" [ I ] f 
t h i n g s c o n t i n u e d on c o u r s e , by t h e f a l l o f 
2012 t h e PACT fund would n o t have enough money t o 
even g i v e you your money back. And w i t h i n a few 
y e a r s t h e PACT 
f u n d 
would be c o m p l e t e l y 
out o f 
money. 
"The 
second 
a l t e r n a t i v e was t o s i m p l y 
shut t h e 
Program down b e f o r e t h e p o i n t o f no r e t u r n 
( f a l l 
2010) and i n s u r e t h a t each PACT p a r t i c i p a n t a t l e a s t 
got t h e i r money back. 
" I s 
t h i s what you b a r g a i n e d f o r ? No, i t 
i s 
n o t . 
I s 
t h i s b e t t e r than s i m p l y s h u t t i n g t h e Program down? 
We b e l i e v e i t i s . 
" I f 
t h a t was t h e r u l i n g , by t h e time t h i s case was 
f u l l y l i t i g a t e d t h e PACT f u n d c o u l d be out o f money 
and you c o u l d have l o s t e v e r y t h i n g . 
" I f 
t h i s case 
l a s t e d p a s t t h e f a l l o f 2012 and we 
were n o t a b l e t o h o l d t h e S t a t e 
l i a b l e on 
t h e s e 
c o n t r a c t s a l l 
may w e l l have been 
l o s t . 
"  
"The 
a l t e r n a t i v e i s t o s i m p l y go ahead, f a c e t h e 
i n e v i t a b l e , shut t h e program down and g i v e everyone 
72 
1101337; 1101506 
t h e i r money back. I t i s our o p i n i o n t h a t i f t h i s 
s e t t l e m e n t i s 
n o t approved, o r i f a few p e o p l e d e l a y 
i t t h r o u g h a p p e a l s , t h a t t h e program w i l l 
c o l l a p s e . 
I f t h a t c o l l a p s e o c c u r s a f t e r next 
f a l l , you f o l k s 
won't even be a b l e t o g e t your money back. That i s 
u n a c c e p t a b l e t o 
us. 
"Given t h a t t h e PACT Program was on t h e verge o f 
c o l l a p s e , t h e b e n e f i t here was s a v i n g t h e program. 
The v a l u e o f t h a t i s 
i n e x c e s s o f $500 m i l l i o n . " 
Perdue's 
b r i e f , a t 56-57. Such inducements t o s e t t l e seem 
p a r t i c u l a r l y 
s u s p e c t when 
c l a s s 
c o u n s e l 
s t o o d t o b e n e f i t 
$4,950,000 s h o u l d t h e c l a s s members a c c e p t t h e s e t t l e m e n t . 
Perdue's 
b r i e f , 
a t 42-44, 46, 52-53, 
55-59, 
60-61, 65; 
Perdue's 
b r i e f 
on r e t u r n t o remand, a t 56-58. And 
c l a s s 
members have e v e r y r e a s o n t o s u s p e c t a l a c k o f an a d v e r s a r i a l 
r e l a t i o n s h i p when c l a s s c o u n s e l and t h e PACT b o a r d a g r e e d t o 
f u l l payment o f a t t o r n e y f e e s p r i o r t o t h i s C o u r t ' s r u l i n g on 
the a p p e a l , d e s p i t e t h e f a c t t h a t t h e s e t t l e m e n t agreement 
r e s t r i c t e d such payments u n t i l 
a f t e r t h e a p p e a l p r o c e s s had 
been completed. Perdue's 
b r i e f , a t 43, 61-63; Perdue's 
b r i e f 
on r e t u r n t o remand, a t 56-58. 
A f t e r t h e o b j e c t o r s f i l e d a "Motion t o S t a y o f E x e c u t i o n 
of Judgment and E x p e d i t e d Treatment" 
w i t h t h i s C o u r t , 
c l a s s 
c o u n s e l and t h e PACT b o a r d 
s u b m i t t e d a j o i n t 
response i n 
o p p o s i t i o n t o t h e m o t i o n , 
f i l i n g s n o t e d i n Perdue's b r i e f , a t 
73 
1101337; 
1101506 
43, 62-63, and i n Perdue's b r i e f on r e t u r n t o remand, a t 56. 
Both 
c l a s s 
c o u n s e l and t h e PACT b o a r d worked t o g e t h e r t o 
a u t h o r i z e immediate payment o f t h e a t t o r n e y f e e s i n v i o l a t i o n 
of t h e v e r y s e t t l e m e n t agreement t h e y now ask t h i s C o u r t t o 
approve. 
I must 
r e s p e c t f u l l y 
d i s a g r e e 
w i t h t h e m a j o r i t y 
o p i n i o n 
t h a t 
" n o t h i n g 
i n d i c a t [ e s ] 
t h a t 
t h e 
t r i a l 
c o u r t 
exceeded i t s d i s c r e t i o n i n f a i l i n g t o f i n d t h a t a c o n f l i c t o f 
i n t e r e s t a f f e c t e d t h e a t t o r n e y - f e e award i n t h i s c a s e . " 
So. 
3d a t 
. 
In c o n c l u s i o n , a l t h o u g h I f i n d no f a u l t i n 
t h e enactment 
of t h e 2012 A c t and t h e l e g i s l a t u r e ' s 
a t t e m p t 
t o 
a d d r e s s 
p o t e n t i a l problems w i t h t h e PACT program, I am c o m p e l l e d t o 
d i s a p p r o v e a s e t t l e m e n t agreement t h a t b o t h c l a s s c o u n s e l and 
the PACT b o a r d 
have 
a l r e a d y 
v i o l a t e d , and I 
r e s p e c t f u l l y 
d i s s e n t from t h e 
m a j o r i t y o p i n i o n b o t h as t o 
t h e a t t o r n e y f e e s 
awarded and as t o t h e a p p r o v a l o f t h e s e t t l e m e n t agreement 
e n t e r e d i n t h i s c l a s s 
a c t i o n . 
74