Court Opinion

ID: 9847610
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:03:13.193704+00
Date Added: 2024-06-11T09:17:23.025855
License: Public Domain

McHUGH, Justice,
dissenting:
Pursuant to its order of November 26, 1985, the Circuit Court of Monongalia County approved the compromise or settlement of the McClain-Longfellow action. The majority of this Court has held that the circuit court “abused its discretion” in setting that order aside. In so holding, the majority has concluded that (1) prohibition is a proper remedy to contest the circuit court’s action, and (2) it is the “obligation” of a circuit court to approve á settlement agreed to by the parties, if the settlement “does not violate public policy.” I disagree with those conclusions and, therefore, respectfully dissent.
As the majority indicates, the McClain-Longfellow action is a class action and is, thus, subject to Rule 23(c) of the West Virginia Rules of Civil Procedure. That rule, as well as its federal counterpart, provides that “[a] class action shall not be dismissed or compromised without the approval of the court.”
The majority is correct, I believe, in its suggestion that “abuse of discretion” is a proper standard in reviewing the appropriateness of a settlement approval or disapproval under Rule 23. Girsh v. Jepson, 521 F.2d 153, 156 (3rd Cir.1975); Grunin v. International House of Pancakes, 513 F.2d 114, 123 (8th Cir.), cert. denied, 423 U.S. 864, 96 S.Ct. 124, 46 L.Ed.2d 93 (1975); City of Detroit v. Grinnell Corp., 495 F.2d 448, 455 (2nd Cir.1974); United Founders Life Insurance Co. v. Consumers National Life Insurance Co., 447 F.2d 647, 655 (7th Cir.1971).
However, such a review is more suitable to an appeal from a circuit court’s ruling than it is to a prohibition proceeding. As we stated in Myers v. Frazier, 173 W.Va. 658, 319 S.E.2d 782, 801 (1984): “[Ordinarily prohibition does not lie for an abuse of discretion_” See also syl. pt. 2, State ex rel. Peacher v. Sencindiver, 160 W.Va. 314, 233 S.E.2d 425 (1977). Cf. State v. Bosworth, 143 W.Va. 725, 731, 105 S.E.2d 1, 5 (1958). The majority concedes that the circuit court “did not necessarily act in excess of [its] jurisdiction.” Moreover, the record in this action does not reveal the “substantial, clear-cut, legal errors” plainly in contravention of law, with regard to which this Court may employ prohibition in a “discretionary way” under Hinkle v. Black, 164 W.Va. 112, 262 S.E.2d 744 (1979). Prohibition is not a proper remedy in this action.
With regard to a circuit court’s approval or disapproval of a compromise or settlement under Rule 23(c), more than simply “public policy” should be considered. As stated in 3B J. Moore, Moore’s Federal Practice § 23.80[4] (2nd ed. 1985):
[T]he matter of dismissal or compromise is left to the sound discretion of the trial *394court. Its determination will be reversed only if it abuses that discretion.
The burden is upon the proponents of a settlement to persuade the court that it is fair, adequate, and reasonable.
The cases contain many discussions of what standards the courts should apply in determining whether a settlement is “fair, adequate, and reasonable.” Among the most important factors to be considered are:
(1) The strength of plaintiff’s case on the merits balanced against the amount offered in settlement;
(2) Presence of collusion in reaching a settlement;
(3) The reaction of members of the class to the settlement;
(4) The opinion of competent counsel [;]
(5)The stage of the proceedings and the amount of discovery completed.
' Accordingly, I am of the opinion that inasmuch as the majority has indicated that a circuit court’s approval or disapproval of a compromise or settlement of a class action (under Rule 23) depends solely upon “public policy,” the majority overlooks other relevant criteria a circuit court should consider. The majority’s reasoning in this action is result-oriented and based upon a superficial analysis of legal principles.
I am authorized to state that Justice McGRAW joins me in this dissent.