Opinion ID: 785104
Heading Depth: 3
Heading Rank: 1

Heading: Fraud or Collusion

Text: 50 Appellants' brief contains several vague assertions of collusion. Primarily, Appellants claim that they had insufficient access to and participation in the settlement negotiations. Further, they suggest that collusion occurred in the negotiation of attorneys' fees. 51 It is unclear why Appellants' attorney, Alvin Chambliss (who represented the Private-Plaintiff class for many years), did not participate in the settlement negotiations. The lead Private Plaintiff, Congressman Thompson, testified at the fairness hearing that every effort was made to keep Mr. Chambliss informed regarding the negotiations. Further, letters and facsimiles — indicating correspondence between lead counsel for the class and Mr. Chambliss concerning the settlement talks — were presented as exhibits at the fairness hearing. Regardless, the district court found Appellants' allegations of collusion to be unsupported. Ayers, 2001 U.S. Dist. LEXIS 19730, at . Because Appellants have pointed to no record evidence that contradicts this finding — let alone evidence showing it to be clearly erroneous — we reject their contention that collusion was present in the settlement negotiations. 52 2. The Complexity, Expense, and Likely Duration of the Suit and the Stage of the Proceedings 53 The second and third Parker factors — the complexity, expense, and likely duration of the litigation and the stage of the proceedings and the amount of discovery completed — weigh in favor of affirming the district court's decision. First, regarding the second factor, settling now avoids the risks and burdens of potentially protracted litigation concerning several aspects of our remand instructions and the district court's remedial decree. See supra notes 8-9 and accompanying text (describing five issues that were not fully resolved when the parties reached their agreement). Specifically, settlement eliminates the transaction costs that further proceedings would impose on the process of desegregating Mississippi's state-university system. The agreement also provides relief for the class sooner than continued litigation would. 54 Second, examination of the stage of the proceedings and the amount of discovery completed weighs in favor of upholding the settlement. The several trials and appeals that have already occurred in this case have largely resolved the controlling legal issues. Thus, the parties and the district court possess ample information with which to evaluate the merits of the competing positions. 55 3. Likelihood of Success on the Merits and Range of Possible Recovery 56 Because two trials and several appeals have already occurred in this case, the probability of the Plaintiffs' success on the merits and the range of possible recovery have largely been resolved. Our 1997 opinion conclusively determined nearly all of the State's obligations. 19 Most of our instructions to the district court in that opinion concerned the remedial decree, see Ayers, 111 F.3d at 1228-29, and as discussed above, the district court concluded — before the parties reached their settlement — that much of the remedial decree had been satisfied. 20 57 Nevertheless, aside from their allegations of collusion, Appellants' main objections to the settlement agreement center on their view that the relief it provides is inadequate. Appellants primarily seek more money for academic programs and facilities at the historically black universities and lower admissions standards. But they also object to the requirement that the historically black universities reach and sustain an other-race enrollment of ten percent before gaining full control over the endowments created by the settlement agreement. Additionally, Appellants assert that the agreement does not adequately address institutional mission designations, 21 faculty salaries, governance, accreditation, and the allocation of land-grant functions between Alcorn State and Mississippi State University. We address each of Appellants' specific contentions in turn below and explain why Appellants are unlikely to achieve greater relief through further litigation. 58 Concerning Appellants' desire for more funding for and programs at the historically black universities, our 1997 decision affirmed the district court's finding that merely adding programs and increasing budgets is not likely to desegregate a historically black university. Ayers, 111 F.3d at 1213 (citation and internal quotation marks omitted). Additionally, we upheld the district court's determination that the State's funding formula is not traceable to de jure segregation. Id. at 1224-25. While we did instruct the district court to investigate potential programmatic enhancements at Alcorn State and Mississippi Valley State for the purpose of desegregating those schools, id. at 1228, the settlement agreement makes ample provision for academic offerings at both universities. Further, testimony of the Board's witnesses at the fairness hearing indicates that many of these programs were selected in accordance with our guidance that well-planned programs that respond to the particular needs and interests of local populations can help to desegregate historically black institutions. Id. at 1213-14. 59 As discussed above, several new academic programs have also been added at Jackson State, and the settlement agreement provides for the continuation of these programs in addition to the implementation of several new programs. Appellants nonetheless assert that the settlement should be invalidated because programs in law, pharmacy, engineering, and public health have not been established at Jackson State. Further, they contend that Jackson State should have partial control over the University of Mississippi Medical Center, located in Jackson, Mississippi. 60 Each of Appellants' contentions has been addressed by prior court rulings. First, the district court found, in its January 2001 order discussed above, that placing either a law school or a pharmacy school at Jackson State was neither feasible nor educationally sound; moreover, no party even sought such steps at the time of the district court's ruling. 22 Second, in the same order, the district court noted that an engineering school and a masters in public health program have already been implemented at Jackson State, and the settlement agreement provides continued funding for these offerings as well as funding for a school of public health at Jackson State. Third, regarding the University of Mississippi Medical Center, our 1997 decision affirmed the district court's finding that institutional affiliation between Jackson State and the Medical Center had no desegregative potential. Id. at 1211, 1215. 61 Regarding facilities at the historically black universities, our 1997 opinion also rejected Plaintiffs' argument for general funds to enhance facilities at these schools. Id. at 1224. Still, the settlement agreement provides up to $75 million for capital improvements at the historically black universities, including acquisition of property, construction of new buildings and repairs and renovation of existing ones, purchase of additional equipment, and landscaping and drainage installation. In addition, in its February 2001 order discussed above, the district court concluded that the Board had essentially satisfied its obligation under the remedial decree to assume greater control over funds for facilities maintenance. 62 Turning to Appellants' contentions respecting the current admissions policy, their hope for lower admissions standards also cannot be reconciled with our 1997 opinion, which specifically approved the district court's adoption of uniform admissions standards that are rigorous enough to exclude students incapable of succeeding at the university level. See id. at 1198-1200. In particular, we affirmed the district court's finding that the open admissions component of the standards then (and, apparently, again now) sought by the Private Plaintiffs was educationally unsound. 23 Id. at 1199. We did, however, instruct the district court to review the efficacy of the spring screening process and the summer remedial program. See id. at 1201, 1228-29. As discussed above, the court-appointed monitor's reports indicate that the summer program has been a success. Further, the settlement agreement responds to the monitor's primary recommendation regarding the summer program — i.e., that the program, and the availability of financial aid for participants, should be adequately publicized by the Board. 63 We also reject Appellants' objection to the requirement that each of the historically black universities achieve and maintain ten-percent other-race enrollment before receiving its share of the endowments. As the United States explains in its brief, the ten-percent threshold seeks to ensure that the historically black universities devote the endowment funds to promoting the desegregation of their schools, not to upgrading them so that they may be publicly financed, exclusively black enclaves by private choice. Fordice, 505 U.S. at 743, 112 S.Ct. 2727. This provision will not encourage the historically black universities to discriminate in admitting students because the current admissions standards are uniform across the state-university system; the schools lack discretion to deny entry to those applicants who meet the uniform criteria. Instead, the ten-percent threshold will provide the historically black universities with a legitimate incentive to recruit and to attract other-race students. 24 64 In addition, Appellants' complaint that institutional mission designations should have been addressed in the agreement is not well taken. In our 1997 opinion we observed that the district court's remedial decree does not order any alteration of the mission designations, and we further noted that [n]o party appeals retention of the mission designations per se. Ayers, 111 F.3d at 1211. But, even if we were to reconsider this issue now, the extensive programmatic enhancements at the historically black universities that have been implemented thus far and will be established as a result of the agreement are intended to remedy the present segregative effects of this particular vestige of de jure segregation. Cf. id. at 1213 (The issue of programmatic enhancement directly implicates policies governing institutional missions, which the district court found to be traceable to the de jure system and to have current segregative effects.). 65 Finally, turning to Appellants' last four areas of concern, our 1997 decision affirmed the district court's 1995 rulings that no relief was warranted to remedy disparities in the salaries, the hiring, or the promotion of African-American faculty, id. at 1226-27; to modify the composition of the Board or its staff, id. at 1227-28; to address the Board's efforts regarding the accreditation of academic programs at the historically black universities, 25 id. at 1214-15; or to re-allocate land-grant responsibilities between Alcorn State and Mississippi State University, id. at 1217. 66 Accordingly, both the probability of the Plaintiffs' success on the merits and the range of possible recovery point strongly in favor of affirming. Rejection of the settlement and further litigation is unlikely to lead to greater relief for the Private-Plaintiff class, particularly since most of the relief sought by Appellants has been foreclosed by our 1997 decision in this case. The settlement agreement provides meaningful relief; in particular, it contains generous funding for (1) a variety of new and enhanced academic programs at the historically black universities and (2) financial aid for participants in the summer remedial program — a program lauded by the court-appointed monitor — to assist those denied admission under the current uniform standards. Further, we reiterate that the targeted programmatic enhancements provided for in the agreement are intended to promote desegregation at the historically black universities. To the extent that Appellants press us to order the upgrading of Jackson State, Alcorn State, and Mississippi Valley State solely so that they may be publicly financed, exclusively black enclaves by private choice, the Supreme Court has rejected their contention. Fordice, 505 U.S. at 743, 112 S.Ct. 2727. 67 4. The Opinions of the Class Counsel, Class Representatives, and Absent Class Members 68 Appellants also assert that reversal is required because many class members oppose the settlement agreement. 26 Our jurisprudence, however, makes clear that a settlement can be approved despite opposition from class members, including named plaintiffs. See Reed, 703 F.2d at 174-75 (affirming the district court's approval of a settlement despite the objections of twenty-three of twenty-seven named plaintiffs and nearly forty percent of the 1,517 member class); Parker, 667 F.2d at 1207-08, 1214 (affirming a district court's approval of a settlement of a class-action suit even though nine of the eleven named plaintiffs opposed the settlement); Cotton v. Hinton, 559 F.2d 1326, 1331 (5th Cir.1977) (A settlement can be fair notwithstanding a large number of class members who oppose it.). That several class members desire broader relief, which has been foreclosed by prior court rulings, does not prevent judicial approval of this settlement agreement, which promises substantial relief to the class. 5. Inadequate Representation 69 Appellants also argue that the district court erred in approving the settlement because the class was not adequately represented during the settlement negotiations. Mr. Chambliss, Robert Pressman, and Armand Derfner have represented the Private Plaintiffs for many years. In March 2000, attorneys from the law firm of Byrd and Associates entered an appearance on behalf of the Private Plaintiffs, which was acknowledged and agreed to by Mr. Chambliss. Later that month, the district court designated Congressman Thompson as the lead plaintiff. In May 2000, in response to an order from the district court, Congressman Thompson named Isaac Byrd and Byrd's law firm as lead counsel for the Private Plaintiffs. Still, Mr. Chambliss, Mr. Pressman, and Mr. Derfner continued to represent the Private-Plaintiff class. 27 70 It appears that Mr. Byrd and his firm took the lead in negotiating the settlement agreement on behalf of the Private Plaintiffs. In their brief, Appellants criticize Congressman Thompson's and Mr. Byrd's representation of the class during the settlement negotiations. In particular, Appellants note that Mr. Byrd is primarily a plaintiffs' personal-injury lawyer and is inexperienced in civil-rights litigation. 71 In Reed, this court noted that adequacy of representation and adequacy of settlement are different sides of the same question. 28 703 F.2d at 175. Further, we stated that the settlement itself provides insight into adequacy of representation. Id.; accord Parker, 667 F.2d at 1211 (stating that generally an attorney who secures and submits a fair and adequate settlement has represented the client class fairly and adequately). Here, the district court concluded that the settlement agreement is fair, adequate, and reasonable, and our analysis of the agreement in the context of the Parker factors reveals no abuse of discretion by the district judge. We also observed in Reed that it is the trial judge who can best know how well the class was represented. 703 F.2d at 175. Here, the district court found the allegations of inadequate representation of class members wholly unsubstantiated. 29 Ayers, 2001 U.S. Dist. LEXIS 19730, at . Accordingly, because the agreement provides ample relief to the class and Appellants have not shown that any record evidence supports their inadequate-representation allegation, we refuse to invalidate the settlement on this ground. 6. Attorneys' Fees 72 Appellants also contend that the settlement should be rejected because the amount of attorneys' fees was negotiated along with the rest of the agreement. But they fail to cite any authority for the proposition that a district court abuses its discretion when it approves a settlement agreement that contains a provision for attorneys' fees. On the contrary, the Supreme Court has stated that, [i]deally, of course, litigants will settle the amount of a fee. Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). True, the Court has suggested that, in cases where the plaintiffs request damages and the defendant offers to settle for a lump sum covering both damages and attorneys' fees, negotiating the allocation may present a conflict of interest for the plaintiffs' attorney. But even in such cases, the Court has declined to prohibit simultaneous negotiation of liability and fees, stating that a defendant may have good reason to demand to know his total liability. White v. N.H. Dep't of Employment Sec., 455 U.S. 445, 454 n. 15, 102 S.Ct. 1162, 71 L.Ed.2d 325 (1982). Indeed, in the context of civil-rights litigation seeking injunctive relief, the Court has opined that prohibiting agreement between the parties on attorneys' fees might well preclude the settlement of a substantial number of cases. Evans v. Jeff D., 475 U.S. 717, 733, 106 S.Ct. 1531, 89 L.Ed.2d 747 (1986); cf. Armstrong v. Bd. of Sch. Dirs., 616 F.2d 305, 312, 326-27 (7th Cir.1980) (affirming the district court's approval of a settlement agreement that resolved a public-school-desegregation class action and that provided for the attorneys' fees of both counsel for the named plaintiffs and counsel for the absent class members). The provision for attorneys' fees therefore does not cause us to conclude that the district court abused its discretion in approving the settlement agreement. 7. Conclusion 73 We have analyzed the agreement in the context of the Parker factors, and we hold that the district court did not abuse its discretion in approving the settlement agreement. Further, we agree with the district court that Appellants' inadequate-representation argument fails, and we reject Appellants' assertion that the agreement's clause regarding attorneys' fees renders the settlement invalid. 74