In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 01-3572

FREDERICK A. UHL and TIMOTHY ELZINGA,

ON BEHALF OF THEMSELVES AND ALL OTHERS

SIMILARLY SITUATED,

Plaintiffs-Appellees,

v.

THOROUGHBRED TECHNOLOGY AND

TELECOMMUNICATIONS, INC.,

Defendant-Appellee,

CATHY MASON,

Intervenor/Appellant.

____________

Appeal from the United States District Court

for the Southern District of Indiana, Indianapolis Division.

No. IPOO-1232-C B/S—Sarah Evans Barker, Judge.

____________

ARGUED APRIL 3, 2002—DECIDED OCTOBER 29, 2002

____________

Before COFFEY, DIANE P. WOOD and WILLIAMS, Circuit

Judges.

DIANE P. WOOD, Circuit Judge. This litigation arose

after Thoroughbred Technology & Telecommunications, Inc.

(T-Cubed) announced that it had the right to install conduits for fiber optic cables along railroad right-of-way

corridors. Timothy Elzinga, a property owner along a rightof-way owned by the Norfolk Southern Railway, disagreed.
2 No. 01-3572

In his view, such a use by T-Cubed without the permission

of the adjacent landowners would amount to a slander of

their title and a trespass. Discussions took place between

Elzinga and T-Cubed, which eventually bore fruit in the

form of a proposed class-wide settlement. This proposed

settlement presumed that Elzinga would be certified as

the representative of the putative class. With this much

accomplished, Elzinga then filed suit and simultaneously sought certification of a settlement class, consisting

of all the persons who owned real estate on either side

of the railroad tracks along the route T-Cubed proposed

to use for its cable.

One particular complication figures significantly in this

appeal. At any given point, T-Cubed will lay fiber optic

cable on only one side of the tracks. Ex ante, it is impossible to know which side that will be; detailed engineering surveys and technical criteria will govern the company’s final choice. The settlement agreement attempts

to deal with this uncertainty by dividing the class members into two categories: the Cable Side and the NonCable Side. (It does not address separately the possibility

that one landowner might own land on both sides of the

track; presumably such a person falls within both subgroups.) Under the terms of the agreement, the two

groups will receive different forms of compensation. All

class members, however, will become shareholders in

Class Corridor, LLC (Class Corridor), a newly created limited liability company.

The appellant in this case, Cathy Mason, is an unnamed

class member who claims that the settlement is unfair,

and more formally, that it fails to satisfy the requirements of FED. R. CIV. P. 23(a) and (b). (While a dispute

remains as to whether Mason will be entitled to any

benefits under the settlement agreement, the fact that

she is claiming that she should receive something is

enough to ensure that she has standing to intervene.) The
No. 01-3572 3

1 The formal definition of the class reads as follows:

All persons or entities owning land that is under or adjacent to railroad corridors used by Norfolk Southern Railway

Company, certain of its subsidiaries and Pennsylvania

Lines LLC on the following ten point-to-point corridors

(the “Settlement Corridors”) on which T-Cubed plans to

install telecommunications conduit and/or fiber optic cable:

A. Atlanta, GA - Jacksonville, FL 362 miles

B. Atlanta, GA - Chattanooga, TN 170 miles

C. Chattanooga, TN - Cincinnati, OH 190 miles

D. Chattanooga, TN - Memphis, TN 299 miles

E. Cincinnati, OH - Bellevue, OH 263 miles

F. Detroit, MI - Toledo, OH 57 miles

G. Atlanta, GA - Charlotte, NC 220 miles

H. Chicago, IL - Harrisburg, PA 719 miles

I. Harrisburg, PA - Alexandria, VA 169 miles

J. Cleveland, OH - Erie, PA 73 miles

district court granted Mason’s motion to intervene, but

it then overruled her objections and approved both the

certification of the settlement class and the settlement

agreement itself. We affirm.

I

The class Elzinga represents has approximately 58,000

members. They all own property along several thousand

miles of railroad track.1

 Although some class members

own their property in fee simple absolute, in most instances, the property immediately adjacent to the track

is subject to an easement or right-of-way owned by Norfolk Southern Corporation (Norfolk Southern). Regardless, all parties admit that in many cases, title to the properties will be difficult to prove.
4 No. 01-3572

Norfolk Southern granted to T-Cubed, its subsidiary, the

right to lay fiber optic cable in the corridors along the

railway easements. T-Cubed then announced its intention to install its cables in those corridors so that it

could then market network services to communications

providers. Elzinga’s complaint alleged slander of title

(arising from T-Cubed’s claim that it has a property interest along the railroad right-of-way) and actual or threatened trespass (arising from T-Cubed’s surveying of the

property and its planned installment of conduits). On behalf of himself and the proposed class, he requested declaratory relief proclaiming the owners’ interest in the

land and injunctive relief prohibiting T-Cubed from taking further unlawful action.

Before we proceed to the details of the settlement agreement, we must first address the composition of the class

the district court agreed to certify. The two groups

within the class, the Cable Side and the Non-Cable Side,

are determined by the eventual use of the side of the

track on which the class members’ property resides

(which is a significant issue for those who do not own the

property on both sides of a given section of track). As we

noted above, this distinction is important because T-Cubed

will lay its cables on only one side of the railroad track.

Furthermore, T-Cubed has refused to identify which properties would be Cable Side and which would be Non-Cable

Side, because it claimed that there was no way it could

know until after it had entered the land and surveyed

it (and thus committed the trespass the complaint was

in part trying to prevent). As a result, class representative Elzinga had to agree to the settlement before knowing on which side of the tracks his own property fell. This

“veil of uncertainty” exists as well for Mason; although

she objects that the settlement agreement is not fair,

she does not know whether she will be in the Cable Side

or Non-Cable Side group.
No. 01-3572 5

Under the settlement approved by the district court,

all class members, Cable Side and Non-Cable Side, will

abandon any claims against T-Cubed and transfer an

easement to T-Cubed for the specific purpose of laying

cable. In exchange for the easement, depending upon

whether they turn out to be Cable Side or Non-Cable

Side, the class members will receive varying compensation.

In keeping with the fact that the Cable Side class members will have given up the most, they will receive the

most generous compensation. T-Cubed will pay each one

$6,000 per linear mile and a percentage of its revenue from the sale, lease, and license of the conduits it

installs along the corridors. They will also receive ownership interests in the new company, Class Corridor, described below. The Non-Cable Side owners will not receive direct cash payments. They too, however, will receive

the same kind of ownership interests in Class Corridor,

and will benefit financially in their capacity as shareholders.

The settlement agreement places Class Corridor at the

heart of the overall process. All class members (Cable

Side and Non-Cable Side), will transfer easements to

the new company. T-Cubed, for its part, must give Class

Corridor assets including dark optical fiber and an

option for Class Corridor to purchase a conduit from

T-Cubed. In addition, if T-Cubed leases or sells four or

more conduit systems to a telecommunications company,

T-Cubed will pay either $316 per fiber mile or up to 16

dark fibers to Class Corridor. T-Cubed will also transfer

non-cash telecommunication assets to Class Corridor,

permitting it either to own and manage a telecommunications company or to take a specified sum of money.

Finally, Class Corridor will convey all Cable Side easements to T-Cubed once T-Cubed determines which side of

the corridor it will use for its cables. If T-Cubed fails to

install a telecommunication system along the railway,
6 No. 01-3572

the easements will terminate four years after the effective date of the approval of the settlement.

As noted above, class members will be entitled to share

in any revenues that Class Corridor may earn from the

telecommunication assets. They will own 100% of the

company at a rate of one membership share for each ten

linear feet of real estate owned by that class member,

along with apportioned voting rights. Shareholder distributions are within the discretion of the Class Corridor

Board of Directors and will be made as reasonably determined.

Finally, class counsel will receive $2,000 per linear

mile for the first three conduits installed in the settlement corridors, a percentage of T-Cubed’s gross receipts

with respect to the fourth and successive conduits, and

25% of certain revenues generated by Class Corridor or

the cash payment to which Non-Cable Side class members are entitled from Class Corridor. This means that

class counsel will receive compensation of the same type

and at the same time as class members; as one expert

testified, class counsel can never receive compensation

that is more advantageous than that which goes to the

class members.

Mason acknowledges that Class Corridor has an upside,

in that it permits class members to participate in any

successes in the telecommunications market and to have

greater control over future uses of their property. She

points out, however, that there is also a downside. Most

importantly in her view, any future benefit the class

members may receive from Class Corridor is speculative.

Class Corridor may never be able to commence its intended business, it might not be able to raise sufficient

financing to fund its operations, and it may experience

difficulties achieving profitability. As readers of the business pages of the newspapers know all too well at this
No. 01-3572 7

point, the telecommunications market has been volatile.

This means that, insofar as their compensation is tied to

Class Corridor, the class members might do very well or

they might wind up empty-handed.

The district court was aware of these gloomier possibilities. Despite that, the court approved the settlement

agreement. Overall, the court found it to be fair to all

parties, particularly in light of the potential weakness

of the plaintiffs’ individual cases and the risks for all

parties that accompanied delay. It also found that Elzinga

could adequately represent all the class members, future

Cable Side and Non-Cable Side, and certified the class

over Mason’s objections.

II

A. Jurisdictional Amount

Before proceeding to the merits we must first satisfy

ourselves that the $75,000 amount in controversy requirement of 28 U.S.C. § 1332(a) has been met. This amount

is determined by an evaluation of the controversy described in the plaintiff’s complaint and the record as a

whole, as of the time the case was filed. Shaw v. Dow

Brands, Inc., 994 F.2d 364, 366 (7th Cir. 1993). It is obvious

that in conducting the required inquiry the court may

consider the value of any benefit the named representatives may receive. In a case that seeks only money damages, the amount the defendant will lose is more or less

the same. But in a case like this one, for injunctive relief, there may be an asymmetry. The question has thus

arisen whether it is proper in determining amount in

controversy to look in the alternative to the cost the

defendant will incur in complying with the injunction the

plaintiff seeks. In this circuit, the answer to the latter

question has been yes: it is established that the jurisdictional amount should be assessed looking at either the
8 No. 01-3572

benefit to the plaintiff or the cost to the defendant of the

requested relief—the so-called “either viewpoint” rule. See,

e.g., In re Brand Name Prescription Drugs Antitrust Litigation, 123 F.3d 599, 609 (7th Cir. 1997); McCarty v.

Amoco Pipeline Co., 595 F.2d 389, 391-95 (7th Cir. 1979).

Those cases specifically establish that the cost to a defendant of complying with an injunction sought by the

plaintiff may properly be considered in determining the

amount in controversy. As the Ninth Circuit recognized

in In re Ford Motor Co./Citibank (South Dakota), N.A.,

264 F.3d 952, 958-59 (9th Cir. 2001), cert. granted under

the name Ford Motor Co. v. McCauley, 122 S. Ct. 1063

(2002) (No. 01-896), it may be more difficult to make

this assessment in the class action context. We too have

recognized that there are difficulties in that situation,

but we have chosen to resolve them by looking separately

at each named plaintiff’s claim and the cost to the defendant of complying with an injunction directed to that

plaintiff. Brand Name Drugs, 123 F.3d at 610. In our

view, that ensures that we are not undermining the

nonaggregation rule that still applies to class actions

where the named plaintiff’s claim does not satisfy the

jurisdictional amount. The Ninth Circuit apparently rejected our approach in its Ford Motor Co. opinion. The

Supreme Court now has the case under advisement, and

we recognize that its decision may affect the rule we

have followed. Nonetheless, we see no reason to hold

this case for the decision in Ford Motor Co.; instead, we

respectfully choose to adhere to the Brand Name

Drugs approach. We are confident that the parties will be

able to preserve their rights to have any contrary Supreme Court ruling applied, should the Court find the

Ninth Circuit’s approach persuasive.

The reason it is necessary to consider this wrinkle of

jurisdictional doctrine stems from the fact that Elzinga

was unsure whether he was on Cable Side or Non-Cable
No. 01-3572 9

Side. This means that there is a serious question whether

his injury satisfied the jurisdictional amount. Standing

alone, the value of an easement on his property is probably insufficient: the relief he requested in his complaint

was primarily declaratory, and if he ends up being on the

Non-Cable Side, the trespass will be solely for the purpose of surveying the land. Elzinga argues, however, that

under the “either viewpoint” rule, there is more than

$75,000 at stake with his individual claim (which is necessary even under this court’s view of the scope of 28 U.S.C.

§ 1367 and Zahn v. International Paper Corp., 414 U.S.

291 (1973), see Stromberg Metal Works, Inc. v. Press

Mechanical, Inc., 77 F.3d 928, 930-33 (7th Cir. 1996)). He

asserts that it is unquestioned that T-Cubed would have

to spend more than $75,000 to avoid the costs of injunction and condemnation even if only his land was involved. See McCarty, 595 F.2d at 395. Mason has offered

nothing to refute that factual assertion. We are satisfied,

looking at this case from T-Cubed’s viewpoint, that

the jurisdictional amount requirement of § 1332 is satisfied, Gottlieb v. Westin Hotel Co., 990 F.2d 323, 329-30

(7th Cir. 1993), and we therefore proceed to Mason’s next

challenge.

B. Justiciability

This one, which Mason raised at oral argument, also

goes to the court’s jurisdiction: she claims that the claims

of the class members are non-justiciable at this stage of

the proceedings. To resolve this justiciability argument,

we must look at how the class is defined. If, as Mason

argues, the class’s claims are future claims, largely hypothetical at this stage, then the claims may not be ripe.

If that were true, we would have to vacate the order

below and our analysis would end here. See generally

U.S. Bancorp. Mortgage Co. v. Bonner Mall P’ship, 513

U.S. 18, 21-23 (1994) (vacatur proper where mootness
10 No. 01-3572

arises from external circumstances or from unilateral action of prevailing party; or case was always moot).

The class in this case has some similarities to certain toxic tort cases, insofar as the eventual harm to

the class members was uncertain at the time the complaint was filed and at the time of the settlement. But

the similarity is not complete, and in the end it tends

more to support the plaintiffs than to undermine them.

In many toxic tort cases, uncertainties abound: which

class members were exposed to the substance? who has

suffered compensable injuries already? who may never

suffer injuries? But if the risk itself is immediate, contingent claims based on that risk are justiciable and are

routinely addressed both in toxic tort settlements and

in bankruptcy proceedings. In this case, parts of the controversy are already unquestionably ripe: the class members’ titles have already been slandered, and T-Cubed

will need to enter the property at least for purposes of

its surveys. The only thing (important though it is) that

is not known is whether any particular owner will be

Cable Side or Non-Cable Side (or both). Furthermore, at

the time of settlement, the slander claim was justiciable

because some harm had already occurred. This is enough

to permit the court to address the entire suit, including

the claims for trespass and the injunction. On these facts,

those claims are in no way hypothetical; their immediacy and their relation to the slander claim is enough to

permit the court to address the entire controversy.

This is particularly true in light of the fact that we

are addressing a settlement. Williams v. General Elec.

Capital Auto Lease, 159 F.3d 266, 274 (7th Cir. 1998)

(“It is not at all uncommon for settlements to include a

global release of all claims past, present, and future, that

the parties might have brought against each other.”). The

fact that each individual class member did not know the

full extent of the burden she would suffer is unimportant.
No. 01-3572 11

T-Cubed claimed rights to all of the property, and the

settlement required all class members to provide T-Cubed

with an easement.

III

Satisfied that we may proceed to the merits, we turn

next to the issue of class certification. We review the district court’s certification of a class for an abuse of discretion. This is true even in the settlement context. Amchem

Products, Inc. v. Windsor, 521 U.S. 591, 630 (1997); Retired Chicago Police Assoc. v. City of Chicago, 7 F.3d 584,

596 (7th Cir. 1993). For a district court to certify a class

under Rule 23(a) of the FEDERAL RULES OF CIVIL PROCEDURE, the class must satisfy the requirements of (1) numerosity; (2) commonality; (3) typicality; and (4) representativeness.

A. Class Representative

Much of Mason’s argument centers around what she

deems conflicting subgroups that were only assigned one

representative. In Amchem, 521 U.S. at 619, and Ortiz v.

Fibreboard Corp., 527 U.S. 815, 828 n.6 (1999), the Supreme Court emphasized that although settlement is

relevant to class certification, the requirements of Rule

23 must still be satisfied. Thus, a district court may not

abandon the Federal Rules merely because a settlement

seems fair, or even if the settlement is a “good deal.” In

some ways, the Rule 23 requirements may be even more

important for settlement classes, for which (as this court

has put it), the district court must act almost as a fiduciary of the class when approving settlements. Reynolds

v. Beneficial Nat’l Bank, 288 F.3d 277, 279-80 (7th Cir.

2002).

A class may not satisfy the requirements of Rule

23(a)(4) if the class representative does not “possess the
12 No. 01-3572

same interest and suffer the same injury as the class

members.” East Tex. Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403 (1977) (citing Schlesinger v. Reservists Committee to Stop the War, 418 U.S. 208, 216 (1974)).

This requires the district court to ensure that there is

no inconsistency between the named parties and the

class they represent. Amchem, 521 U.S. at 625. As the

Supreme Court also noted in Amchem, some classes are

more prone than others to intra-class conflicts that are

not suitable for a single class representative—even if

the single class representative believes “that the Settlement serves the aggregate interests of the entire class.”

521 U.S. at 627.

Although Mason has expressed legitimate concerns

about Elzinga’s literal and figurative representation of

both sides of the track, we think she misses the mark in

the end. Her objection is premised on the idea that the

class must be viewed solely from an ex post perspective.

See John C. Coffee, Jr., Class Wars: The Dilemma of the

Mass Tort Class Action, 95 COLUM. L. REV. 1343, 1435-36

(1995). Nothing in Amchem compels such an approach.

In Amchem, the Court found the class to be overbroad

in part because it contained both exposure-only and currently injured plaintiffs. In the instant case all members of the class are, for the most significant part of

the feared damages, “exposure only”: they have all been

slandered and many have suffered a surveying trespass,

but they are unaware if they will yet suffer trespass injuries from the installation of cable. Thus, if we view

Elzinga’s adequacy at the time of the settlement, he was

in the same position as all class members. T-Cubed did

not limit its claims to rights in Cable Side property; it

claimed rights to all property adjacent to and beneath

the railway.

Moreover, the fact that Cable Side and Non-Cable Side

will receive different compensation under the settlement
No. 01-3572 13

does not make it novel or unfair. See Petrovic v. Amoco,

200 F.3d 1140, 1147 (8th Cir. 1999) (holding differences

in the amount of damages do not necessarily prohibit

class certification). True, the district court could have appointed two representatives, one to represent the future Cable Side owners and one to represent the future Non-Cable Side owners. But we see no reason why

it was compelled to do this, since the named representative had an equal incentive to represent both sides as

long as he did not know where his property would end up.

Until the cable has been laid, no “Cable Side” exists. In the

end the Cable Side and Non-Cable Side may have diverging goals—the classes are mutually exclusive; by definition, Elzinga cannot be on both sides of the track. Cable

Side’s goal would be compensation for the conduits on

their land, while the Non-Cable Side goal would be preparation for future infringement by telecommunications

groups through the formation of Class Corridor.

The district court observed that Elzinga was able to

serve as a good class representative because he would be

a “concrete working example of John Rawls’ celebrated

theory of the ‘veil of ignorance.’ ” We need not decide if

we have a pure Rawlsian situation here, or what the

legal consequences should be if we did. The important

fact is that Elzinga was not merely an uninterested neutral participant, unable to serve as an effective advocate

for the class. He was someone who had a real stake in

all aspects of the case: the slander of title claims, the

surveying trespass claims, and the cable conduit trespass claims. See Rand v. Monsanto Co., 926 F.2d 596, 599

(7th Cir. 1991). In light of the arguments presented to

it, the district court did not abuse its discretion in finding Elzinga satisfied the requirements of Rule 23(a)(4).

(We do not comment on whether possible differences in

ownership rights, state law, or other factors should have

influenced the certification decision, as Mason does not
14 No. 01-3572

rely on these factors to challenge the propriety of the

settlement class. See, e.g., Isaacs v. Sprint Corp., 261 F.3d

679 (7th Cir. 2001) (reversing certification of a class in a

similar case).)

B. Class Corridor

Having determined that the district court did not

abuse its discretion in certifying the class, we at last

turn to the merits of the decision to approve the settlement. Mason argues that the settlement is not fair in

large part because it relies so heavily on the newly

created Class Corridor. Federal courts favor settlement, so

the district court’s inquiry into the settlement structure

is limited to whether the settlement is lawful, fair, reasonable and adequate. Isby v. Bayh, 75 F.3d 1191, 1198-99

(7th Cir. 1996). Mason must do more than just argue

that she would have preferred a different settlement

structure, as this court’s review of the settlement structure is even more narrow. We will reject the district

court’s decision to approve it only if we find an abuse of

discretion. Id.

In approving the settlement, the district court considered factors from the Manual for Complex Litigation

and Moore’s Federal Practice. It placed considerable

weight on the strength (or lack thereof) of the plaintiffs’

case on the merits. It noted the potential difficulty for individual landowners to bring this claim. Although T-Cubed

claimed that it owned all of the easements, what is more

likely is that some of the individual landowners own the

land outright, some may have granted the railroad easements strictly limited to railroad purposes, and others

may have granted broader easements to Norfolk Southern that it could convey immediately to T-Cubed. See

Isaacs, 261 F.3d at 681-82 (noting in a similar class action the difficulty in identifying different conveyances
No. 01-3572 15

by and to different parties made at different times over

a period of more than a century).

Mason agrees that the settlement is probably a good

deal overall, and applauds class counsel for reaching such

an unusual and innovative settlement. Her complaint

is only that the settlement runs the risk of leaving NonCable Side class members without any compensation at

all (even though, if Class Corridor succeeds, all class members might benefit handsomely from it). We agree with

Mason that the future of Class Corridor is indeed speculative, despite what the appellees describe as a “blueribbon” Board of Advisors ready to propose a Board of

Directors, and despite the fact that T-Cubed is obligated

to give it certain assets. Class Corridor will have the

burdens of any startup company—no employees, officers,

operating capital, or startup financing to meet daily

expenses. But it is unclear why this makes the Non-Cable

Side class members worse off than they would be without the settlement, recalling that by definition T-Cubed

would not be buying a permanent easement from them. In

re Mexico Money Transfer Litigation, 267 F.3d 743, 748

(7th Cir. 2001) (“[O]ne must ask whether the value of relief in the aggregate is a reasonable approximation of the

value of plaintiffs’ claim.”). Non-Cable Side’s only injuries

are the slander of title and the limited trespass for survey purposes. Although, under the settlement, they will

remain encumbered by a telecommunications easement

owned by Class Corridor, this unused easement is not

likely to be much different from the railroad easement

to which much of this property was subject. Therefore,

the fact that Non-Cable Side’s recovery is minimal is

unproblematic since their damages are also minimal.

Indeed the only recovery ordinarily granted for slander

is the cost of clearing the title—in this case, title to land

the individual might not even have.
16 No. 01-3572

We also think this settlement structure is different

from the one rejected by the Second Circuit in In re Agent

Orange Product Liability Litigation, 818 F.2d 179, 181 (2d

Cir. 1987). In Agent Orange, the district court devised

an independent foundation to administer funds on behalf

of class members. The Second Circuit rejected the district court’s transfer of judicial duties to an independent

organization as “there is no principle of law authorizing

such a broad delegation of judicial authority to private

parties.” Id. at 185. Unlike the independent body the

Agent Orange court disapproved, Class Corridor is not

only a product of the settlement. It signed the settlement agreement. Like the other parties to the agreement,

it will remain under the district court’s jurisdiction as

it distributes cash and shares. Moreover, issuing securities as a settlement has long been accepted. General

Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d

1074, 1082 (7th Cir. 1997). Perhaps there could have

been an even more creative settlement or, alternatively,

one that is more traditional. But that is not the question

we must resolve. The district court did not abuse its

discretion when it determined that the settlement before it (on behalf of a class from which only 250 of the

58,000 class members opted out) complied with Rule 23.

IV

We AFFIRM the judgment of the district court.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—10-29-02