Court Opinion

ID: 814032
Source: CourtListenerOpinion
Date Created: 2012-12-20 15:51:39+00
Date Added: 2024-06-11T18:00:50.647409
License: Public Domain

11-3696-cv (L)
Blessing et al., v. Martin

               UNITED STATES COURT OF APPEALS
                   FOR THE SECOND CIRCUIT

                         SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT.
CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007 IS
PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE
32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY
ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”).    A PARTY CITING TO A SUMMARY ORDER
MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
          At a stated term of the United States Court of Appeals
for the Second Circuit, held at the Daniel Patrick Moynihan
United States Courthouse, 500 Pearl Street, in the City of New
York, on the 20th day of December, two thousand twelve.

PRESENT:   ROBERT D. SACK,
           DENNY CHIN,
           RAYMOND J. LOHIER, JR.,
                     Circuit Judges.

- - - - - - - - - - - - - - - - - - -x

CARL BLESSING, EDWARD A. SCERBO,
JOHN CRONIN, CHARLES BONISIGNORE,
ANDREW DREMAK, TODD HILL, CURTIS
JONES, JOSHUA NATHAN, JAMES
SACCHETTA, DAVID SALYER, SUSIE
STANAJ, PAUL STASIUKEVICIUS, SCOTT
BYRD, GLENN DEMOTT, MELISSA FAST,
JAMES HEWITT, RONALD WILLIAM KADER,
EDWARD LEYBA, GREG LUCAS, KEVIN
STANFIELD, TODD STAVE, PAOLA
TOMASSINI, JANEL STANFIELD, BRIAN
BALAGUERA, individually and on
behalf of all others similarly
situated,
               Plaintiffs-Appellees,
                -v.-

SIRIUS XM RADIO INC.,
               Defendant-Appellee,

                                             11-3696-cv (Lead)
                                             11-3729-cv (Con)
                                                11-3834-cv   (Con)
                                                11-3883-cv   (Con)
               -v.-                             11-3908-cv   (Con)
                                                11-3910-cv   (Con)
                                                11-3916-cv   (Con)
                                                11-3965-cv   (Con)
                                                11-3970-cv   (Con)
                                                11-3972-cv   (Con)

MARVIN UNION, ADAM FALKNER, NICOLAS
MARTIN, JILL PIAZZA, KEN WARD, RUTH
CANNATA, LEE CLANTON, CRAIG
CANTRALL, BEN FRAMPTON, KIM
FRAMPTON, JOEL BROIDA, JOHN
SULLIVAN, SHEILA MASSIE, JASON M.
HAWKINS, STEVEN CRUTCHFIELD, SCOTT
D. KRUEGER, ASSET STRATEGIES, INC.,
CHARLES B. ZURAVIN, JENNIFER
DEACHIN, RANDY LYONS, TOM CARDER,
JOHN IRELAND, JEANNIE MILLER,
MICHAEL HARTLEIB, BRIAN DAVID GOE,
DONALD K. NACE, CHRISTOPHER BATMAN,
               Objectors-Appellants,

LINDA MROSKO, LANGE M. THOMAS,
               Objectors.

- - - - - - - - - - - - - - - - - - -x

FOR PLAINTIFFS-APPELLEES:        JAMES J. SABELLA (Jay W.
                                 Eisenhofer, Richard S. Schiffrin,
                                 Shelly L. Friedland, Grant &
                                 Eisenhofer P.A., New York, New
                                 York, Mary S. Thomas, Grant &
                                 Eisenhofer P.A., Wilmington,
                                 Delaware, Reuben Guttman, Grant &
                                 Eisenhofer, Washington, District of
                                 Columbia, Paul F. Novak, Milberg
                                 LLP, Detroit, Michigan, Herman
                                 Cahn, Anne Fornecker, Milberg LLP,
                                 New York, New York, Nicole Duckett,
                                 Milberg LLP, Los Angeles,
                                 California, Christopher B. Hall,
                                 Edward S. Cook, P. Andrew Lampros,
                                 Cook, Hall & Lampros, LLP, Atlanta,
                                 Georgia, on the brief).

FOR DEFENDANTS-APPELLEE:         TODD R. GEREMIA (John M. Majoras,
                                 Thomas Demitrack, on the brief),
                                 Jones Day, New York, New York.

FOR OBJECTORS-APPELLANTS:        THEODORE H. FRANK, Center for Class
                                 Action Fairness LLC, Washington,
                                 District of Columbia, PAUL S.

                                  -2-
                                ROTHSTEIN, Gainesville, Florida
                                (Michael Hartlieb, pro se, Brian
                                David Goe, pro se, N. Albert
                                Bacharach, Jr., Gainesville,
                                Florida, R. Stephen Griffis,
                                Hoover, Alabama, Charles M.
                                Thompson, Birmingham, Alabama,
                                Joseph Darrell Palmer, Law Offices
                                of Darrell Palmer P.C., Solana
                                Beach, California, Steve A. Miller,
                                Denver, Colorado, on the briefs).

FOR AMICUS CURIAE:              Michael E. Rosman, Michelle A.
                                Scott, for Center for Individual
                                Rights, Washington, District of
                                Columbia.

                                Meriem L. Hubbard, Joshua P.
                                Thompson, for Pacific Legal
                                Foundation, Sacramento, California.

            Appeal from the United States District Court for the

Southern District of New York (Baer, J.).
            UPON DUE CONSIDERATION, IT IS ORDERED, ADJUDGED, AND

DECREED that the judgment and order of the district court are

AFFIRMED.

            Objectors-appellants appeal from the district court's

August 25, 2011 final order and judgment approving the settlement

of this class action, and its August 25, 2011 order awarding
class counsel $13 million in attorneys' fees and expenses.    We

assume the parties' familiarity with the underlying facts, the

procedural history of the case, and the issues on appeal.

            This Court reviews for abuse of discretion a district

court's approval of a proposed class action settlement, D'Amato

v. Deutsche Bank, 236 F.3d 78, 85 (2d Cir. 2001), and its award
of attorneys' fees, In re Nortel Networks Corp. Sec. Litig., 539

F.3d 129, 134 (2d Cir. 2008).

                                 -3-
            Collectively, objectors argue, inter alia, that the

district court erred when it:    (1) found that the proposed

settlement was fair, reasonable, and adequate; (2) found that the

attorneys' fee award was reasonable; and (3) directed the sole

candidate for class counsel to address diversity concerns in

staffing the case.    We address each of these arguments in turn.
1.   The Proposed Settlement

            A district court's approval of a settlement is

contingent on a finding that the settlement is "fair, reasonable,

and adequate."    Fed. R. Civ. P. 23(e)(2); see also 28 U.S.C.
1712(e) (2006) (judicial scrutiny of coupon settlement requires

finding that the settlement is "fair, reasonable, and adequate").

This entails a review of both procedural and substantive

fairness.    See, e.g., D'Amato, 236 F.3d at 85.    With respect to

procedural fairness, a proposed settlement is presumed fair,

reasonable, and adequate if it culminates from "arm's-length

negotiations between experienced, capable counsel after

meaningful discovery."    McReynolds v. Richards-Cantave, 588 F.3d
790, 803 (2d Cir. 2009) (internal quotation marks omitted).      A

proposed settlement is substantively fair if the nine factors

outlined in City of Detroit v. Grinnell Corp. weigh in favor of

that conclusion.    See, e.g., Wal-Mart Stores, Inc. v. Visa

U.S.A., Inc., 396 F.3d 96, 117 (2d Cir. 2005) (citing Grinnell,

495 F.2d 448, 463 (2d Cir. 1974)).

            Here, the proposed settlement provided, in part, that

defendant-appellant Sirius XM Radio Inc. ("Sirius XM") would not

raise its prices for five months.      Furthermore, class members

                                 -4-
received no cash remedy.    The case was settled on the eve of

trial, after nearly three years of litigation, including

extensive fact and expert discovery.    Moreover, competent counsel

appeared on both sides, and settlement was reached only after

contentious negotiations.    Thus, the district court did not abuse

its discretion when it presumed the proposed settlement was

procedurally fair, see McReynolds, 588 F.3d at 803, and objectors

presented no evidence to rebut that presumption.

            The record also supports a finding of substantive

fairness.    The district court conducted a fairness hearing, where

it considered objectors' arguments.    The district court's opinion

and order approving the proposed settlement also noted that it

had considered the oral and written submissions of the objectors.

Moreover, although objectors now complain that the district court

did not thoroughly evaluate the value of the settlement, no one

requested an evidentiary hearing to ascertain the settlement's

value, more time to identify expert witnesses, or an opportunity

to present any witnesses.

            Finally, the Grinnell factors supported the district
court's determination that the proposed settlement was

substantively fair.    In particular, it became apparent that, were

the case to go to trial, plaintiffs' likelihood of success was

slim.   We acknowledge that valuing nonmonetary antitrust

settlements -- much like the price freeze here -- is an

inherently imprecise business, see Merola v. Atl. Richfield Co.,

515 F.2d 165, 172 (3d Cir. 1975) (courts should apply their

"informed economic judgment" and any "probative evidence of the

                                 -5-
monetary value" of the remedy when assessing nonmonetary

antitrust settlement value), and as the record provides a factual

basis for its finding, we hold that the district court did not

abuse its discretion when it concluded that the proposed

settlement was substantively fair.
2.   Reasonableness of the Attorneys' Fee Award

           Except as otherwise required by statute, fees awarded

pursuant to a class action suit must be calculated as either a

"percentage of the fund" or by applying the lodestar method.

See, e.g., Masters v. Wilhelmina Model Agency, Inc., 473 F.3d

423, 436 (2d Cir. 2007); Wal-Mart Stores, 396 F.3d at 121.    The

reasonableness of a fee calculated by either of these methods,

however, is determined by the factors outlined in our decision in

Goldberger v. Integrated Res., Inc., 209 F.3d 43, 50 (2d Cir.

2000).    See Masters, 473 F.3d at 436.

            Objectors contend that the $13 million fee was

unreasonable because of the clear-sailing and reversionary

provisions written into the settlement, and in light of the

limited recovery to the class.    To the extent objectors argue

that the clear-sailing and reversionary provisions suggest

improper collusion between class counsel and Sirius XM, we note

that such provisions, without more, do not provide grounds for

vacating the fee.    See Malchman v. Davis, 761 F.2d 893, 905 & n.5

(2d Cir. 1985) (addressing clear-sailing provision), abrogated on
other grounds, Amchem Prods., Inc. v. Windsor, 521 U.S. 591

(1997).    Moreover, the fee was negotiated only after settlement

terms had been decided and did not, as the district court found,

                                 -6-
reduce what the class ultimately received.    See id. (such factors

favored respecting the fee); Thompson v. Metro. Life Ins. Co.,

216 F.R.D. 55, 71 (S.D.N.Y. 2003) (same).    Finally, the district

court independently inspected applicable time and expense records

before judging the reasonableness of the requested fee, which --

after accounting for expenses -- represented less than sixty

percent of the lodestar calculation.    Thus, as the record

supports a finding that the $13 million award was reasonable, the

district court did not abuse its discretion in granting the fee

award.

          Objectors also argue that the price freeze offered in

the proposed settlement was the equivalent of a "coupon" and,

therefore, should have been subject to the attorneys' fee

provisions applicable to coupon settlements under the Class

Action Fairness Act of 2005 ("CAFA").    See § 1712(a)-(c).   We
need not, however, decide this issue.    Even assuming that the

coupon provisions of CAFA were applicable, the district court's

approval of the proposed settlement and the attorneys' fee award

was appropriate.   As noted, the attorneys' fees were negotiated

only after the terms of the settlement were reached, and the fee

award comes directly from Sirius XM, rather than from funds (or

coupons) earmarked for the class.

          Thus, even assuming the price freeze was the equivalent

of a coupon, no "portion of [the] attorney's fee award . . . is

attributable to the award of the coupons."    § 1712(a).   Where "a

portion of the recovery of the coupons is not used to determine

the attorney's fee to be paid to class counsel, any attorney's

                                -7-
fee award shall be based upon the amount of time class counsel

reasonably expended working on the action."          § 1712(b)(1); see

also S. Rep. No. 109-14, at 30 (2005) ("[T]he proponents of a

class settlement involving coupons may decline to propose that

attorney's fees be based on the value of the coupon-based relief

provided by the settlement.       Instead, the settlement proponents

may propose that counsel fees be based upon the amount of time

class counsel reasonably expended working on the action.").             The

district court approved the fee award after determining it was

reasonable under the lodestar method, which reflects "the amount

of time class counsel reasonably expended working on the action,"

and is therefore consistent with CAFA.         § 1712(b), (c)(2).
3.   Diversity of Class Counsel

           In the class certification order, the district court

requested that class counsel consider diversity when staffing the
     1
case, a provision objectors now contest.          To establish standing

to bring a claim, a plaintiff must show (1) injury-in-fact, (2)

causation, and (3) redressability.        Town of Babylon v. Fed. Hous.
Fin. Agency, 699 F.3d 221, 228 (2d Cir. 2012).          An injury-in-fact

is a "'concrete and particularized' harm to a 'legally protected

interest.'"    Selevan v. N.Y. Thruway Auth., 584 F.3d 82, 89 (2d

Cir. 2009); see also W.R. Huff Asset Mgmt. Co., LLC v. Deloitte &

Touche LLP, 549 F.3d 100, 107 (2d Cir. 2008) ("[P]laintiff must

have personally suffered an injury.").         Although objectors allege

      1
            The class certification order stated that class counsel "should
ensure that the lawyers staffed on the case fairly reflect the class
composition in terms of relevant race and gender metrics." Opinion and Order
at 14, Blessing v. Sirius XM Radio Inc., No. 09-cv-10035 (S.D.N.Y. Mar. 29,
2011), ECF No. 85.

                                    -8-
that staffing a case with an eye to diversity "may interfere with

[counsel's] ability to provide the best representation for the

class," J.A. 829, they never contend that class counsel's

representation was actually inferior.   As objectors failed to

state an injury-in-fact, we find that they lack standing to

challenge the district court's diversity request in its class

certification order.

          We have considered objectors' remaining arguments and

conclude they are without merit.   For the foregoing reasons, we
AFFIRM the orders and judgment of the district court.

                              FOR THE COURT:
                              Catherine O’Hagan Wolfe, Clerk

                               -9-