adopting a reasonableness test when an attorney’s fees and costs are taken out of a settlement awarded to a minor plaintiff
How later courts described this case
- adopting a reasonableness test when an attorney’s fees and costs are taken out of a settlement awarded to a minor plaintiff
Written by the judges who cited it.
The opinion
IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, NORTHERN DIVISION
J. P., as parent and next )
friend of A.W., a minor, )
)
Plaintiff, )
) CIVIL ACTION NO.
v. ) 2:19cv636-MHT
) (WO)
ELMORE COUNTY BOARD OF )
EDUCATION, )
)
Defendant. )
OPINION
Plaintiff J.P. brought this lawsuit against
defendant Elmore County Board of Education on behalf of
her minor son, A.W., who has serious physical and mental
disabilities. J.P. claims that the school board
discriminated against A.W. by refusing to allow him to
attend school due to his disabilities. J.P. relies on
Title II of the Americans with Disabilities Act (ADA),
42 U.S.C. § 12132; Section 504 of the Rehabilitation Act
of 1973, 29 U.S.C. § 794; and the Individuals with
Disabilities Education Act (IDEA), 20 U.S.C. § 1400.
This court has proper jurisdiction pursuant to 28 U.S.C.
§ 1331 (federal question); 28 U.S.C. § 1343(a)(3)-(4)
(civil rights); 29 U.S.C. § 794a (Section 504), and 20
U.S.C. § 1415(i)(3)(A) (IDEA).
J.P. and the school board have now reached a
settlement of A.W.’s claim for damages. Because A.W. is
a minor as referenced in Federal Rule of Civil Procedure
17(c), the parties have asked the court to approve their
proposed settlement. At the pro ami hearing held on
February 1, 2022, the court heard from the following
persons: J.P., A.W.’s court-appointed guardian ad litem,
and counsel for the parties. For the reasons described
below, the court will approve the settlement.
I. BACKGROUND
This lawsuit arises out of A.W.’s exclusion from
school and denial of access to his court-ordered services
for the majority of the 2018-2019 school year.
J.P. seeks damages for A.W.’s “mental anguish and
emotional distress.” See Amended Complaint (Doc. 6) at
¶ 120. She alleges that the school system violated
2
A.W.’s rights under both the ADA and Section 504, for
excluding and denying him access to benefits because of
his disabilities, including his profound hearing loss.
See id. at ¶¶ 108-09. The school board denies that it
discriminated against A.W. in violation of ADA and
Section 504.
The parties have reached a proposed $ 60,000
settlement of J.P.’s claim on behalf of A.W., and they
say that the settlement would resolve the claim for
damages asserted by J.P. as legal guardian of her son
A.W. that arise out of, or relate to, his exclusion from
school and denial of benefits.1
To represent A.W.’s interest in the determination of
whether to approve the proposed $ 60,000 settlement, the
court appointed a guardian ad litem, Honorable Rebekah
Keith McKinney, whose fees and expenses, by agreement of
1. The proposed settlement does not resolve the claim
that J.P. brought against the school board on her own
behalf in another federal lawsuit. See Palmer v. Elmore
Cnty. Bd. of Educ., No. 2:21cv49-MHT (M.D. Ala.)
3
the parties, are not to come out of A.W.’s settlement
proceeds but rather are to be paid by the school board.
II. LEGAL STANDARD
Federal Rule of Civil Procedure 17(c) provides that
a “representative” may sue “on behalf of a minor.”
However, the rule does not prescribe any framework for
evaluating a settlement of claims brought by such
representative. See Fed. R. Civ. P. 17. J.P. has brought
her damages claim on behalf of her son A.W. pursuant to
Rule 17.
It is unclear whether federal or state law governs
whether a federal court should approve the settlement of
a federal claim, brought by, or otherwise implicating the
interest of, a minor;2 it is also unclear what the binding
2. This court has already held that, when there is
solely a state claim presented, state law would clearly
govern. See Casey v. Gartland, No. 2:18-cv-890, 2020 WL
4470444, at *1 n. 1 (M.D. Ala. Aug. 4, 2020) (Thompson,
J.) (citing K.J. v. CTW Transportation Servs., Inc., No.
2:18-cv-19, 2018 WL 3656305, at *1 (M.D. Ala. Aug. 2,
2018) (Thompson, J.).
4
federal law, if it does govern, is.3 However, this court
has previously held that in this circumstance it is
appropriate to apply Alabama law. See Casey v. Gartland,
No. 2:18-cv-890, 2020 WL 4470444, at *1 (M.D. Ala. Aug.
4, 2020) (Thompson, J.). Alabama law establishes a
straightforward pro ami procedure and is fairly settled
and easily discernable, unlike federal law. See id. For
those reasons this court will apply Alabama law in this
case.
“Alabama law requires that a court hold a fairness
hearing before a minor plaintiff’s case may be settled,”
Casey, 2020 WL 4470444, at *1 (citing Large v. Hayes by
and through Nesbitt, 534 So. 2d 1101, 1105 (Ala. 1988))
(further citations omitted.) The hearing must involve
“an extensive examination of the facts, to determine
whether the settlement is in the best interest of the
3. Federal Rule of Civil Procedure 17(c)(2) requires
the appointment of a guardian ad litem for a minor
plaintiff in a case such as this, but does not prescribe
any framework for evaluating a settlement of the minor's
claim. See Casey, 2020 WL 447044, at *1 n.2.
5
minor.” Id. at *1 (citing Large, 534 So. 2d at 1105)
(internal citation omitted). See also William E. Shreve,
Jr., Settling the Claims of a Minor, 72 Ala. Law 308
(2011). Because a minor cannot ordinarily be bound by a
settlement agreement, a fairness hearing and approval of
the settlement are required in order for the settlement
to be valid and binding and to bar a subsequent action
by that person to recover for the same injuries. See
Casey, 2020 WL 4470444, at *1 (citing Shreve, Settling
the Claims of a Minor, supra, at 310) (internal citation
omitted).
III. APPROVAL OF THE SETTLEMENT
A. J.P.’s claim for damages on behalf of A.W.:
Having reviewed the pleadings in this case, the report
of the guardian ad litem, and having heard detailed
testimony and argument at the pro ami hearing, the court
finds that the terms and conditions of the proposed
settlement are fair, just, and reasonable under the
6
circumstances. As stated, the parties have agreed to
settle A.W.’s claims for $ 60,000.
First, the decision to settle is logical here. As
observed by the guardian ad litem, A.W.’s inability to
communicate prevents him from describing to the jury the
harm that he experienced. Even if a jury believes that
the school discriminated against A.W., the guardian
continues, the amount of damages the jurors awarded A.W.
might be limited, for it is also possible that the jury
may believe that the school board’s actions were
motivated by A.W.’s behaviors (which were apparently
quite disruptive) on and off school grounds, and that
this behavior was unrelated to a disability. By
settling, the guardian concludes, J.P. is avoiding the
risk of losing the case altogether or being awarded
nominal damages. The court agrees with the guardian and
finds that the decision to settle the case prior to the
parties engaging in a jury trial is reasonable.
Second, the court agrees with the guardian and finds
that the settlement amount of $ 60,000 to be fair and
7
reasonable in this case. While it is true the jury would
have evidence that, because of the school board’s alleged
discriminatory actions, A.W. was not able to attend
school and did not receive any of the services previously
ordered by a ‘due process hearing officer,’ J.P. would
still have trouble demonstrating A.W.’s damages to the
jury. A.W. did not suffer any physical injuries, medical
costs, or other monetary losses that the jury could use
to estimate damages. Moreover, A.W. would not be able
to communicate to the jury the “mental anguish and
emotional distress” that he experienced. See Amended
Complaint (Doc. 6) at ¶ 120. As the guardian put it,
agreeing to the settlement amount ensures that A.W.
receives some compensation.
At the hearing, the court heard testimony from J.P.
that she understands that the $ 60,000 award is to be
used solely for the benefit of her son. Additionally,
she was present at both mediations and has agreed to the
$ 60,000 settlement.
8
Therefore, in light of the injuries sustained by
A.W.; the length of time he remained out of school and
without services; the difficulty the jury may have in
calculating damages for A.W.; J.P.’s agreement with the
terms; and the recommendation of the guardian ad litem,
the court finds that the $ 60,000 settlement is fair,
just, and reasonable, and in the best interest of A.W.
B. The two attorneys' fee settlements: This
litigation involved not only J.P.’s claim on behalf of
A.W. for damages under the ADA and Section 504 for
intentional discrimination, which damages claim was
asserted in count one of the complaint and was settled
as described above. The case also involved two other
issues: an attorneys’ fee issue in count one and two more
attorneys’ fee issues in count two.
The remaining fee issue in count one was that, if
J.P. were entitled to recover damages, how much would her
attorneys be entitled to recover in fees and expenses.
J.P.’s attorneys did not adopt a contingency fee
arrangement for their representation of A.W. and thus
9
they were not entitled to recover a fee out of A.W’s
award. A.W. would receive the entire $ 60,000
settlement.
In count two of the complaint in this court, J.P.
sought attorneys' fees expenses under the IDEA for her
counsel's time spent litigating two underlying
due-process administrative proceedings. This court
found, on summary judgment, that J.P. was the prevailing
party in both due-process proceedings and awarded her
attorney fees in the amount of $ 83,556.84. See J.P. as
next friend of A.W. v. Elmore Cnty. Bd. of Educ., 2021
WL 2012303, at *9 (M.D. Ala. May 20, 2021) (Thompson,
J.); J.P. as next friend of A.W. v. Elmore Cnty. Bd. of
Educ., 2021 WL 1270463, at *6 (M.D. Ala. Apr. 6, 2021)
(Thompson, J.). The remaining issue as to count two was
how much were J.P.’s attorneys entitled to recover in
fees and expenses for successfully litigating their count
two claim for fees, a matter that has been referred to
as J.P.’s count two ‘fee-on-fee’ issue.
10
The parties have settled these two fee issues: J.P.’s
count one attorneys’ fee issue, for $ 65,928; and her
count two fee-on-fee issue, for $ 62,747.
Nevertheless, at the pro ami hearing, a concern arose
as to whether J.P.’s attorneys might have had a conflict
in settling A.W.’s damages claim and the attorneys’ two
fee issues. In particular, the court was concerned as
to whether A.W.’s damage claim was resolved separately
and independently, so as to avoid any conflict for the
attorneys. J.P.’s attorneys and defense counsel
disagreed on whether negotiations for A.W.’s settlement
or the attorney’s fee settlements occurred first. The
court need not resolve this dispute, for J.P. (who was
present for the negotiations), the guardian ad litem (who
spoke with the mediator), and all of the attorneys agreed
that there were separate negotiations for A.W.’s damages
claim and the attorneys’ fee awards. At no point was
there a demand for a lump sum to be allocated between
A.W. for his damages claim and the attorneys for their
two fee issues.
11
Because A.W.’s damages claim and the attorneys’ two
fee issues were negotiated and settled separately, and
because the two fee awards are not being paid out of
A.W.’s settlement, the court need not need analyze and
determine the reasonableness of the fee awards. Cf.
Peebles v. Miley, 439 So. 2d 137, 138-39 (Ala. 1983)
(adopting a reasonableness test when an attorney’s fees
and costs are taken out of a settlement awarded to a
minor plaintiff); Shreve, Settling the Claims of A
Minor, supra, at 13 (“If an attorney's fee is to be paid
out of the settlement, the order should specify the fee,
determine that it is reasonable and direct the clerk of
court to pay the fee out of the settlement proceeds”).
C. The placement of A.W.’s settlement in the Alabama
Family Trust: The court also finds that it is in A.W.’s
best interest to place his $ 60,000 award in the Alabama
Family Trust. “The Alabama Family Trust is governed by
a Board of Trustees who are appointed by the governor of
Alabama, the presiding officer of the Alabama Senate and
the speaker of the Alabama House of Representatives. All
12
appointments are then confirmed by the Alabama Senate.
The Board represents the interests of persons with mental
and physical impairments and developmental disabilities
who depend on supplemental needs disability trusts. All
board members serve without compensation and are
appointed to three-year terms.” Our Board, Alabama
Family Trust ,
https://www.alabamafamilytrust.com/about/board-of-
directors/ (last visited Feb. 04, 2022); see also Ala.
Code §§ 38-9b-1 through -7 (establishing the “Alabama
Family Trust”).
J.P.’s counsel recommended that the award be placed
in this trust. The guardian ad litem approved of this
placement, so that A.W. can continue to financially
qualify for Social Security and other benefits. At the
pro ami hearing, J.P. testified that she has already
completed the necessary paperwork for the trust
placement.
D. The confidentiality provision: A.W.’s settlement
also provides that it be placed under seal with the court
13
and kept confidential. The court informed the parties
that it had concerns that it could approve and grant the
sealing request, see Clark v. Bamberger, No.
1:12-cv-1122, 2016 WL 1183180, at *1 (M.D. Ala. 2016)
(Thompson, J.) (“Most documents filed in court are
subject to the common-law right of access. ‘The
operations of the courts and the judicial conduct of
judges are matters of utmost public concern, ... and
[t]he common-law right of access to judicial proceedings,
an essential component of our system of justice, is
instrumental in securing the integrity of the
process.’ Romero v. Drummond Co., 480 F.3d 1234, 1245
(11th Cir. 2007) (internal citations and quotation marks
omitted)”), especially since the settlement involved the
expenditure of public funds. In any event, the parties
then withdrew their request and waived the confidentially
agreement to this extent.
***
14
In sum, for all of the above reasons, separately and
together, the court finds that A.W.’s $ 60,000 settlement
is fair, just, and reasonable, and in the best interest
of A.W. The court will therefore approve the settlement.
The parties further agree that, upon payment of
A.W.’s $ 60,000 settlement, along with payment of the two
attorneys’ fee settlements of $ 65,928 and
$ 62,747--which, according to all counsel, should take
about 10 business days for all three payments--J.P.’s
attorneys are to move for dismissal of this case in its
entirety with prejudice, and the court is to grant the
motion.
An appropriate order will be entered.
DONE, this the 7th day of February, 2022.
/s/ Myron H. Thompson
UNITED STATES DISTRICT JUDGE
15