Opinion ID: 705994
Heading Depth: 2
Heading Rank: 3

Heading: The Reserve-Insurance Claim

Text: 30 Finally, we reject appellants' contention that the district court's approval of the settlement was an abuse of discretion in light of the possible reserve-insurance claim. Before approving a proposed class action settlement, the district court must determine that the settlement, taken as a whole, is fair, reasonable, and adequate. See Weinberger v. Kendrick, 698 F.2d at 73; Grant v. Bethlehem Steel Corp., 823 F.2d at 24. The trial judge knows the litigants and the strengths and weaknesses of their contentions and is in the best position to evaluate whether the settlement constitutes a reasonable compromise. Handschu v. Special Services Division, 787 F.2d 828, 833 (2d Cir.1986). Therefore, a district court's disposition of a proposed class action settlement should be accorded considerable deference, Weinberger v. Kendrick, 698 F.2d at 73, and is reviewed for abuse of discretion, see In re Ivan F. Boesky Securities Litigation, 948 F.2d 1358, 1368 (2d Cir.1991). 31 In determining whether a proposed settlement is fair, reasonable, and adequate, [t]he primary concern is with the substantive terms of the settlement: 'Basic to this ... is the need to compare the terms of the compromise with the likely rewards of litigation.'  Weinberger v. Kendrick, 698 F.2d at 73 (quoting Protective Committee for Independent Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424-25, 88 S.Ct. 1157, 1163, 20 L.Ed.2d 1 (1968)); see also County of Suffolk v. Long Island Lighting Co., 907 F.2d 1295, 1324 (2d Cir.1990); Handschu v. Special Services Division, 787 F.2d at 833. 32 Appellants do not dispute the district court's finding that the reserve-insurance claim was not asserted in either the Maywalt or the Lindenauer action. Nor did they provide any evidence tending to establish either the merit or the value of that claim. Whether or not the claim would be extinguished by the release to be given in the settlement, the court is entitled to conclude that the mere proffer of the prospect of a claim that has neither been asserted nor substantiated nor evaluated by the proffering party should not impede the settlement of the class action. We see no abuse of discretion here in the district court's conclusion that recovery on that unasserted claim was not one of the likely rewards of the litigation.