Court Opinion

ID: 1008295
Source: CourtListenerOpinion
Date Created: 2013-07-04 19:37:58.999829+00
Date Added: 2024-06-11T15:27:04.662732
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS
                 FOR THE FOURTH CIRCUIT

ROBERT A. SCARDELLETTI; FRANK              
FERLIN, JR.; JOEL PARKER; DON BUJOLD,
as Trustees of the Transportation
Communications International Union
Staff Retirement Plan,
                   Plaintiffs-Appellees,
                   v.
GEORGE THOMAS DEBARR, Individually
and as representative of a class of all
persons similarly situated; ANTHONY
SANTORO, SR.,
                 Defendants-Appellees,
                  and
DONALD A. BOBO; R. I. KILROY; F. T.
LYNCH; FRANK MAZUR,
                         Defendants,          No. 99-2619

                   v.
ROBERT J. DEVLIN; RETIRED EMPLOYEES
PROTECTIVE ASSOCIATION,
                  Movants-Appellants,
                  and
A. MEADERS; JAMES H. GROSKOPF;
THOMAS C. ROBINSON; DOYLE W.
BEAT; MIRIAM E. PARRISH; ROBERT A.
PARRISH; DESMOND FRASER; JAMES L.
BAILEY; DOROTHY DEERWESTER;
THOMAS J. HEWSON; CLAY B. WOLFE;
KENNETH B. LANE; BRIAN A. JONES;
CHARLES O. SWASY,
                  Parties in Interest.     
2                       SCARDELLETTI v. DEVLIN

ROBERT A. SCARDELLETTI; FRANK              
FERLIN, JR.; JOEL PARKER; DON BUJOLD,
as Trustees of the Transportation
Communications International Union
Staff Retirement Plan,
                   Plaintiffs-Appellees,
                   v.
GEORGE THOMAS DEBARR, Individually
and as representative of a class of all
persons similarly situated; ANTHONY
SANTORO, SR.,
                 Defendants-Appellees,
                  and
DONALD A. BOBO; R. I. KILROY; F. T.
LYNCH; FRANK MAZUR,
                         Defendants,            No. 00-1411

                   v.
ROBERT J. DEVLIN; RETIRED EMPLOYEES
PROTECTIVE ASSOCIATION,
                  Movants-Appellants,
                  and
A. MEADERS; JAMES H. GROSKOPF;
THOMAS C. ROBINSON; DOYLE W.
BEAT; MIRIAM E. PARRISH; ROBERT A.
PARRISH; DESMOND FRASER; JAMES L.
BAILEY; DOROTHY DEERWESTER;
THOMAS J. HEWSON; CLAY B. WOLFE;
KENNETH B. LANE; BRIAN A. JONES;
CHARLES O. SWASY,
                  Parties in Interest.     
                        SCARDELLETTI v. DEVLIN                 3

ROBERT A. SCARDELLETTI; FRANK              
FERLIN, JR.; JOEL PARKER; DON BUJOLD,
as Trustees of the Transportation
Communications International Union
Staff Retirement Plan,
                   Plaintiffs-Appellees,
                   v.
GEORGE THOMAS DEBARR, Individually
and as representative of a class of all
persons similarly situated; ANTHONY
SANTORO, SR.,
                 Defendants-Appellees,
                  and
DONALD A. BOBO; R. I. KILROY; F. T.
LYNCH; FRANK MAZUR,
                         Defendants,            No. 00-1525

                   v.
ROBERT J. DEVLIN; RETIRED EMPLOYEES
PROTECTIVE ASSOCIATION,
                  Movants-Appellants,
                  and
A. MEADERS; JAMES H. GROSKOPF;
THOMAS C. ROBINSON; DOYLE W.
BEAT; MIRIAM E. PARRISH; ROBERT A.
PARRISH; DESMOND FRASER; JAMES L.
BAILEY; DOROTHY DEERWESTER;
THOMAS J. HEWSON; CLAY B. WOLFE;
KENNETH B. LANE; BRIAN A. JONES;
CHARLES O. SWASY,
                  Parties in Interest.     
        On Remand from the United States Supreme Court.
                     (S. Ct. No. 01-417)
4                      SCARDELLETTI v. DEVLIN
                      Argued: October 31, 2000

                       Decided: July 27, 2001

                Decided on Remand: August 8, 2002

       Before WILLIAMS and MICHAEL, Circuit Judges, and
    Joseph F. ANDERSON, Jr., Chief United States District Judge
       for the District of South Carolina, sitting by designation.

Affirmed by unpublished per curiam opinion.

                             COUNSEL

ARGUED: Arthur McKee Wisehart, WISEHART & KOCH, New
York, New York, for Appellants. William Francis Hanrahan,
GROOM LAW GROUP, CHARTERED, Washington, D.C.; Barbara
J. Kraft, BEINS, AXELROD & KRAFT, P.C., Washington, D.C.;
Kenneth M. Johnson, TUGGLE, DUGGINS & MESCHAN, P.A.,
Greensboro, North Carolina, for Appellees. ON BRIEF: KAHN,
SMITH & COLLINS, P.A., Baltimore, Maryland, for Appellants.
Leonie Hassel, GROOM LAW GROUP, CHARTERED, Washington,
D.C., for Appellees Scardelletti, et al.

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

                             OPINION

PER CURIAM:

   In this case, appellant Robert Devlin seeks to challenge a class
action settlement in the United States District Court for the District
                        SCARDELLETTI v. DEVLIN                        5
of Maryland. Previously, we held that the district court did not abuse
its discretion in denying Devlin leave to intervene, that Devlin could
not appeal the district court’s approval of the settlement because he
was not a party to the district court litigation, and that the district
court was required to explain, pursuant to Federal Rule of Civil Pro-
cedure 65, its reasons for granting an injunction under the All Writs
Act, 28 U.S.C.A. § 1651(a) (West 1994). Scardelletti v. Debarr, 265
F.3d 195, 213 (4th Cir. 2001), rev’d sub nom. Devlin v. Scardelletti,
___ U.S. ___, 122 S. Ct. 2005 (2002); id. at 216 (Michael, J., concur-
ring in part and concurring in the judgment) (concluding that Devlin
could appeal the district court’s settlement approval but rejecting his
challenges on the merits). The Supreme Court reversed and
remanded, holding that "nonnamed class members like [Devlin] who
have objected in a timely manner to approval of the settlement at the
fairness hearing have the power to bring an appeal without first inter-
vening." Devlin v. Scardelletti, 122 S. Ct. 2005, 2013 (2002). The
Supreme Court did not disturb our affirmance of the district court’s
denial of intervention or our reversal and remand of the district
court’s All Writs Act injunction. Id. Devlin has separately appealed
the district court’s renewed entry of an All Writs Act injunction, and
that separate appeal is not at issue here. Instead, in this appeal, we
must determine the merits of Devlin’s challenges to the district
court’s approval of the settlement.1

                                   I.

   The underlying facts of this dispute are adequately stated in our
and the Supreme Court’s prior opinions in this case. Scardelletti v.
Debarr, 265 F.3d 195, 212 (4th Cir. 2001), rev’d sub nom. Devlin v.
Scardelletti, ___ U.S. ___, 122 S. Ct. 2005 (2002). Devlin’s basic
substantive objection to the settlement is that it nullifies a 1991
amendment to the pension plan which granted a substantial cost-of-
living adjustment (COLA) to employees who retired prior to 1991.
Devlin argues that the district court erred in approving the proposed
settlement because it discriminates against retirees in favor of active
participants, lacks an opt-out provision, is the product of conflicts of
  1
   Because the merits of Devlin’s challenges to the settlement have
already been fully briefed and argued, we need not obtain additional
briefing to decide this appeal.
6                        SCARDELLETTI v. DEVLIN
interest on the part of class representatives and the pension plan
trustee, and is based on false claims of financial necessity. Devlin
asserts that the district court should have allowed discovery and heard
evidence that would have developed his allegations of conflicts of
interest. Devlin also contends that COLA benefits for pre-1991 retir-
ees constitute accrued benefits, the modification of which is subject
to various procedural requirements imposed by the Employee Retire-
ment Income Security Act (ERISA), and thus, that the settlement is
invalid because it violates ERISA. 29 U.S.C.A. § 1054(g)(1) (West
1999 & Supp. 2002).

   We review a district court’s approval of a proposed class action
settlement to "determine whether there [is] a clear showing that the
district court abused its discretion" in approving the settlement.
Kovacs v. Ernst & Young, 927 F.2d 155, 158 (4th Cir. 1991) (internal
quotation marks omitted). Federal Rule of Civil Procedure 23(e),
which provides that "a class action shall not be dismissed without the
approval of the court," contemplates a judicial inquiry into the fair-
ness and adequacy of the proposed settlement. Kovacs, 927 F.3d at
158. In determining whether a settlement is fair, the district court
should examine "(1) the posture of the case at the time settlement was
proposed, (2) the extent of discovery that has been conducted, (3) the
circumstances surrounding the negotiations, and (4) the experience of
counsel" in the relevant area of class action litigation. Id. at 159. In
determining whether a settlement is adequate, a district court should
consider "(1) the relative strength of the plaintiffs’ case on the merits,
(2) the existence of any difficulties of proof or strong defenses the
plaintiffs are likely to encounter if the case goes to trial, (3) the antici-
pated duration and expense of additional litigation, (4) the solvency
of the defendants and the likelihood of recovery on a litigated judg-
ment, and (5) the degree of opposition to the settlement."2 Id.

   The district court’s opinion demonstrates that it carefully applied
the Kovacs factors and gave close consideration to Devlin’s conten-
tions. The district court found, with adequate support, that the restora-
    2
   In addition, any award of attorney’s fees to class counsel must be rea-
sonable in comparison to the benefits conferred on the class through
counsel’s efforts. Reynolds v. Beneficial Nat’l Bank, 288 F.3d 277, 286
(7th Cir. 2002). Devlin does not challenge the settlement on this basis.
                        SCARDELLETTI v. DEVLIN                         7
tion of the COLA for pre-1991 retirees would threaten the stability
and solvency of the retirement plan, thereby damaging all plan benefi-
ciaries. See Debarr, 265 F.3d at 216 (Michael, J., concurring in part
and concurring in the judgment) (noting the district court’s reasonable
conclusion that Devlin’s position would "steer the ship onto the
rocks" and was "absolutely destructive of everybody’s rights and
interests"). The district court also reasonably found that there was a
strong risk on the part of the defendant classes that they would lose
on the merits if the case were litigated to final judgment, because the
same district court earlier had determined that the COLA benefits
were not accrued benefits for pre-1991 retirees and that the trustees
who granted the COLA had done so in breach of their fiduciary
duties. Scardelletti v. Bobo, No. JFM-95-52 (D. Md. Sept. 8, 1997).
The record demonstrates that the district court was adequately
informed as to the factual basis for Devlin’s conflict of interest and
inadequate representation claims and did not abuse its discretion in
declining to allow Devlin discovery on those claims. Flinn v. FMC
Corp., 528 F.2d 1169, 1173 (4th Cir. 1975) ("[I]t is entirely in order
for the trial court to limit its proceedings to whatever is necessary to
aid it in reaching an informed, just and reasoned decision"); see also
Debarr, 265 F.3d at 204 n.10 (finding the district court’s decision not
to allow Devlin discovery to have been reasonable). Further, Devlin
cannot show that, by authorizing elimination of the COLA, the settle-
ment "authorizes the continuation of clearly illegal conduct" under
ERISA, such that its approval by the district court was improper. Isby
v. Bayh, 75 F.3d 1191, 1197 (7th Cir. 1996) (internal quotation marks
omitted).

                                   II.

   In conclusion, Devlin’s challenges to the district court’s approval
of the settlement fail. The district court carefully weighed all relevant
considerations and did not abuse its discretion in approving the settle-
ment in this case. Accordingly, we affirm the district court’s approval
of the settlement.

                                                            AFFIRMED