Opinion ID: 799373
Heading Depth: 2
Heading Rank: 2

Heading: Class Certification and Appointment of Class Counsel

Text: Appellant contends [t]he district court abused its discretion by certifying this case as a class action because the same counsel cannot represent active and retired employees under [Fed.R.Civ.P.] 23(a)(4). Appellant also contends the district court failed properly to apply Fed. R.Civ.P. 23(c) and (g) to protect the interests of the class members and to make sure that the subclasses had proper representation. Rule 23(a)(4) permits certification of a class action only if the representative will fairly and adequately protect the interests of the class. Fed.R.Civ.P. 23(a)(4).... The district court must decide whether Rule 23(a)(4) is satisfied through balancing the convenience of maintaining a class action and the need to guarantee adequate representation to the class members. Wright v. Stone Container Corp., 524 F.2d 1058, 1061 (8th Cir. 1975). Rattray, 614 F.3d at 835. Appellant acknowledges the district court was aware of the conflict issue and took steps to address the potential conflict and ensure the class representatives, class counsel, and the intervenors would fairly and adequately protect the interests of the class. Fed.R.Civ.P. 23(a)(4). But appellant contends [t]he [district] court erred as a matter of law in failing to provide independent counsel for the retiree subclasses. We disagree. Although we have noted the potential for conflict between the interests of active and retired employees, see Anderson v. Alpha Portland Indus., 752 F.2d 1293, 1297 (8th Cir. 1985) (en banc) (citing Allied Chem. & Alkali Workers of Am. v. Pittsburgh Plate Glass Co., 404 U.S. 157, 181-82, 92 S.Ct. 383, 30 L.Ed.2d 341 (1971)), appellant fails to support his contention that such conflict requires separate counsel as a matter of law. See Reynolds, 584 F.2d at 286 (explaining theoretical conflicts of interest [between active and retired football players] did not require subclassification, disqualification of the named parties and class counsel, or disapproval of the settlement). According to appellant, the Supreme Court's decision in Ortiz v. Fibreboard Corp., 527 U.S. 815, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999), dictates that separate counsel be utilized. In support, appellant quotes the Supreme Court's statement that [I]t is obvious after Amchem [ Prods., Inc. v. Windsor, 521 U.S. 591, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997)] that a class divided between holders of present and future claims (some of the latter involving no physical injury and attributable to claimants not yet born) requires division into homogeneous subclasses under Rule 23(c)(4)(B), with separate representation to eliminate conflicting interests of counsel. See Amchem, 521 U.S. at 627, 117 S.Ct. 22[5]1 [2231] (class settlements must provide structural assurance of fair and adequate representation for the diverse groups and individuals affected). See Ortiz, 527 U.S. at 856, 119 S.Ct. 2295. But appellant does not provide any supporting analysis. Appellant's cursory argument fails to persuade us the Supreme Court's decision in Ortiz compels the conclusion that the district court in this case abused its discretion by not appointing separate counsel for the retirees, particularly absent a motion requesting separate counsel. Ortiz and Amchem were massive tort class action[s] prompted by the elephantine mass of asbestos cases that defie[d] customary judicial administration. Ortiz, 527 U.S. at 821, 119 S.Ct. 2295. The Supreme Court found the exceedingly divergent interests of present and future claim holders in those cases required separate counsel to address adequately the conflict. Id. at 855, 119 S.Ct. 2295. But the need for separate representation under the atypical circumstances of Ortiz and Amchem does not make appointing separate counsel the only acceptable means of addressing any conflicting interests of class members, id. at 821, 119 S.Ct. 2295, and providing structural assurance of fair and adequate representation for the entire class, Amchem, 521 U.S. at 627, 117 S.Ct. 2231. The circumstances that favored separate counsel in Ortiz are not present here. Ortiz turn[ed] on the conditions for certifying a mandatory settlement class on a limited fund theory under Federal Rule of Civil Procedure 23(b)(1)(B). Ortiz, 527 U.S. at 821, 119 S.Ct. 2295. In contrast, this case is a relatively straightforward declaratory judgment action seeking injunctive relief under Rule 23(b)(3). Rather than binding the retirees to a mandatory settlement and resolving their legal rights ... regardless of either their consent, or ... their express wish to the contrary, Ortiz, 527 U.S. at 847, 119 S.Ct. 2295 (footnote omitted), the district court provided two opportunities for the retirees to opt out of the caseonce before the parties settled, and once after the parties explained the settlement terms to the class. As we noted in Petrovic v. Amoco Oil Co., 200 F.3d 1140, 1145-46 (8th Cir.1999), Amchem, 521 U.S. at 601-02, 117 S.Ct. 2231, and Ortiz, 119 S.Ct. at 2305, each involved a situation in which the parties agreed upon a class definition and a settlement before formally initiating litigation, and then presented the district court with the complaint, proposed class, and proposed settlement. The difficulty inherent in such a situation is that the district court lack[s] the opportunity, present when a case is litigated, to adjust the class, informed by the proceedings as they unfold. Amchem, 521 U.S. at 620, 117 S.Ct. [at 2248]. .... The difficulties associated with settlements like those in Amchem and Ortiz  the possibility of collusion between class counsel and the defendant ... [and] the need for additional protections when the settlement is not negotiated by a court designated class representative, Hanlon v. Chrysler Corporation, 150 F.3d 1011, 1026 (9th Cir.1998)are therefore not present here. We also do not believe ... the stark conflicts of interest that the Supreme Court discerned in Amchem and Ortiz are present here. Petrovic, 200 F.3d at 1146. Though not entirely consistent, the interests of the active and retired city employees aligned in many significant ways, not the least of which was their driving interest to enjoin the city's enforcement of the ordinance. The conflicts appellant describes are far from the extraordinarily various injuries that sharply divided the interests of present and future asbestos claim holders in attempting to allocate the limited funds available in Amchem and Ortiz. Id. Indeed, as prospective retirees, the active employees shared an interest in protecting retiree rights. Expressly cognizant of the potential conflicts in this case, the district court appointed individual retirees as class representatives and subdivided the class to mitigate those potential conflicts. To further protect the interests of retirees, the district court permitted five retired firefighters to intervene with separate counsel and participate in settlement negotiations that focused extensively on protecting the retirees' interests. Those negotiations yielded significant safeguards built into the settlement agreement that the district court reasonably found adequate to protect the retirees from a future potential conflict, including a retiree representative during collective bargaining and a detailed arbitration process. Throughout the class action, the district court monitored the efforts of the class representatives, class counsel, and the intervenors to ensure fair and adequate representation. After considering all of the objections to the settlement, the district court found that although there are some conflicts within the classes, e.g., retired versus current employees, the parties have been well-represented during this process. The district court was aware of the potential conflict and took reasonable steps to address the retirees' concerns. Given the nature of this case and the potential conflict at issue, the district court did not abuse its discretion in certifying the class or by ensuring fair and adequate representation for the entire class by means other than appointing separate counsel for each subclass.