Appendix — Sanchez v. Tucson Unified School District No. 1

No. 80-759

-

°

In the Supreme Court of the Hnited States

OCTOBER TERM, 1980

ALBERTO SANCHEZ, ET AL., PETITIONERS

V.

TucsoN UNIFIED SCHOOL District No. I, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES

IN OPPOSITION

WADE H. McCREE, JR.

Solicitor General

JAMES P. TURNER

Acting Assistant Attorney General

JESSICA DUNSAY SILVER

JAMES W. CLUTE

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 633-2217

—

In the Supreme Court of the United States

OcToRreR TERM, 1980

No. 80-759

ALBERTO SANCHEZ, ET AL., PETITIONERS

Vv.

TUCSON UNIFIED SCHOOL DISTRICT No. 1, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES

IN OPPOSITION

QUESTIONS PRESENTED

1. Whether the due process guarantees of the Constitu-

tion require that individual notice of a settlement hearing be

given to all readily ascertainable members of a plaintiff

class, regardless of the efficacy of other forms of notice.

2. Whether the notice of the Proposed settlement pro-

vided members of the plaintiff classes with sufficient infor-

mation about the terms of the settlement to satisfy the

requirements of due process.

3. Whether the district court improperly refused to con-

sider objections to the previously approved desegregation

plan at the settlement hearing.

4. Whether the district court was required to disapprove

a proposed settlement of a class action solely because attor-

neys fees were negotiated as part of the settlement.

TABLE OF CONTENTS

Page

WI 5 oun u aac es (Ue ke ee l

“ccs guoepesaee TT Pe Or Pe te een oT Re l

PE iss sre Wieeees hoes l

TS Bis CU ea ath ae kde 5

RS gs ene hat eth Et rs Cee Ws 14

TABLE OF AUTHORITIES

Cases:

Armstrong v. Board of School Directors,

Prey eres oe obs 7

Brick v. CPC Intern, Inc., 547 F.2d 185 ....... 12

Cafeteria Workers v. McElroy, 367 U.S. 886 ..... 6

Eisen v. Carlisle & Jacquelin, 417 U.S. 156 ...... 8

Fowler v. Birmingham News Co., 608 F. 2d

vc HORN LEE TEE TEETER TSS ime se CO 6

Graver Mfg. Co. v. Linde Co., 336 U.S.

Bey Phe ahead etsy feck eae kee 10

Grunin v. International House of Pancakes,

513 F. 2d 114, cert. denied, 423 U.S. ”

icp ET OE EO PR RT RST 6, 8

Gypsum Antitrust Cases, In re, 565 F. 2d 1123 ... 8

McDonald v. Chicago Milwaukee Corp.,

ates ke doa ET OO TP eee 12, 13

Mullane v. Central Hanover Bank & Trust Co.,

Pe OMI nis nediaa.d as ee eek cue 6, 7,8

Pettway v. American Cast Iron Pipe Co.,

576 F. 2d 1156, cert. denied, 439 U.S.

SOR Seva seed ninieteracesuuwees tae Je 10, 11

PREVIOUS PAGE WAS BLANK

IV

Page

Cases—Continued:

Reynolds v. National Football League,

8 EE Re ere re ar 9-10, 12

EW Wii ONE ob oc tiecccecsevowse 8

Sussman v. Lincoln American Corp.,

a eee eia 12

West Virginia v. Chas. Pfizer & Co.,

440 F. 2d 1079, cert denied, 404 U.S.

(a OAL SS FE SS PIB. 071 Re 6-7

Statute and rules:

ee eee a a atw ea 12

Fed. R. Civ. P.:

i aig 5

i ee CONE L i cate 6s dane Oe en eae. 2

hs aaa He x oe nko ae awa 8

re ees ee be eau Gas ale conten 8

i toc. dete sys 6 Vee be kk been 8

OPINIONS BELOW

The opinion of the court of appeals is reported at 623

F. 2d 1338 (Pet. App. A). The findings of fact and conclu-

sions of law of the district court are unreported (C.A.R.

2326-28 16).! Orders of the district court pertaining to issues

raised by the petitioners are also unreported (Pet. Apps.

B-I).

JURISDICTION

The judgment of the court of appeals was entered on June

27, 1980 (Pet. App. A), and an order denying a timely

petition for rehearing was entered on August 11, 1980 (Pet.

App. K). The petition for a writ of certiorari was filed on

November 10, 1980. The jurisdiction of this Court is

invoked under 28 U.S.C. 1254(1).

STATEMENT

1. This case involves a constitutional challenge to the

procedures leading to the district court’s order approving

settlement of a school desegregation case. The petitioners,

twenty-nine individuals who are members of the Mexican-

American plaintiff class, one of two plaintiff classes, con-

tend that they were denied due process of law because: (1)

the notice of the settlement hearing was inadequate; (2) the

legality of the school district’s desegregation plan, which the

district court approved prior to the settlement hearing, was

not open to attack at the hearing; and (3) the Mexican-

American plaintiff class was denied fair representation and

a fair and adequate settlement because attorneys fees for

counsel for the plaintiff classes were negotiated as part of

the settlement of the remaining issues in the case.

2. Tuscon School District Number | (hereinafter the

District) and its governing officials were sued in May 1974

by the Fisher plaintiffs, black students and their parents, for

Operating a racially segregated school system (Pet. App.

™C.A.R.” refers to the Record in the court of appeals.

2

4). Later that year, the Mendoza plaintiffs filed a separate

complaint against the District on behalf of Mexican-

American students (ibid.).2 The Fisher plaintiffs and the

Mendoza plaintiffs were certified as representatives of

black and Mexican-American classes respectively and the

cases were consolidated for trial (id. at 4-5).3 Two inter-

venors entered the suit before trial: White parents opposed to

busing (Sidney L. Sutton, e¢a/.) intervened as defendants in

the Fisher suit but not the Mendoza suit (id. at 5). The

United States intervened as a plaintiff in both the Fisher

and Mendoza suits in December 1976 (ibid.). After exten-

sive discovery the case was tried in January 1977 (id. at 6).

On June 5, 1978, the district court entered voluminous

findings of fact and conclusions of law (C.A.R. 2326-28 16).

The district court found that the District had failed to

dismantle its dual school system for blacks and non-blacks

and had continued to discriminate against blacks since

1954, but it found no unconstitutional segregation of

Mexican-American students nor any evidence of inten-

tional, system-wide discrimination against them (Pet. App.

6-7). The court ordered the District to devise plans for the

desegregation of nine schools (id. at 6) to remedy the consti-

tutional violation.‘ The District filed several plans for deseg-

regating the nine schools identified in the court’s June 5

?The original Mendoza complaint, which alleged unlawful racial

segregation, was later amended to include allegations of (1) mainte-

nance of a tri-ethnic segregated school system; (2) discriminatory track-

ing; (3) inferior curricula and facilities for minorities; (4) discrimination

in the hot lunch programs; (5) discrimination in special education

programs; (6) failure to take into account bilingual differences; and (7)

lack of bilingual notices (Pet. App. 6).

‘Both classes were certified pursuant to Rule 23(b)(2), Fed. R. Civ. P.

(C.A.R. 66-67, 3837). The two classes together contained approxi-

mately 18,500 students (Pet. App. 118).

‘The order also required the parties to take reasonable steps to insure

that residents of the school district and class members knew of the

3

order, indicating which options it preferred (Pet. App. 8-9).

The district court held hearings on the District's proposed

desegregation plan on August 8 and 9 (id. at 12).5 The court

concluded that the District’s preferred plan was adequate to

remedy the constitutional violation it had found and

approved the District’s desegregation plan on August 11,

1978 (id. at 13).

3. Petitioner Alberto Sanchez became actively involved

in the case after the District filed its desegregation plans. He

objected to the plans because they called for the closure of

three predominantly Mexican-American schools which, he

felt, would unfairly burden some members of the Mexican-

American class (Pet. App. 11). On July 27, 1978, Sanchez

moved the court to substitute counsel for himself and a class

he wished to represent (Pet. 6).° The district court ordered

substitution of counsel for Sanchez and his children (ibid.).’

contents of the proposed desegregation plans and had an Opportunity to

participate in the selection among them (Pet. App. 66-67). The order

invited residents of the school district to address written comments to

the court on any proposed plans and made provision for residents of the

school district to be heard in open court concerning their objections or

alternative suggestions (id. at 68-70). The District filed a report with the

court prior to the hearing on the plan detailing the efforts it had made to

publicize the plans (Pet. App. M).

‘Petitioner Sanchez and defendant-intervenors Sutton, et al. lodged

their objections to the proposed desegregation plans and presented

alternatives (Pet. App. A13). Counsel for the United States and the

Fisher and Mendoza classes did not cross examine witnesses or propose

alternative plans because they had tentatively agreed to support the

District's proposal pending approval of a settlement (id. at 12-13).

Sanchez requested substitution of his own counsel for the Mendoza

class counsel because of his dissatisfaction with Mendoza counsel's

acquiescence in the school closures (Pet. App. 11).

"Sanchez also moved the district court to create a subclass of

Mexican-American parents and children residing in the attendance

zones of the three schools that were subject to the closure proposal (Pet.

App. 11-12). The district court heard argument on the motion but

4

4. On August 4, 1978, four days before the hearing on the

desegregation plan, the parties advised the district court

that they had reached a settlement (Pet. App. 9). The pro-

posed settlement was filed with the court on August 11,

1978 (Pet. App. J). It included, inter alia, the desegregation

plan previously approved by the district court; it provided

for parental involvement in the alteration of student

assignment patterns, non-discrimination in suspension,

expulsion, and student placement testing, the reassignment

of black faculty in certain schools and the creation ofa pilot

bilingual reading program. The settlement also provided

that the District pay counsel for the plaintiffs $500,000 in

attorneys fees and costs. On August 14, 1978, the district

court approved the settlement notice to class members (Pet.

App. 14). Petitioner Sanchez was given the opportunity to

obtain discovery on each element of the settlement, but not

on the terms of the desegregation plan which had already

been approved by court order. The court held a settlement

hearing on August 30 and 31 to determine whether the

settlement was “fair, just and adequate” (id. 15). The court

declined to permit reexamination of the merits of the deseg-

regation plan because it had already determined its consti-

tutional adequacy and approved it as a judicial remedy.

After considering all of the testimony at the settlement

hearing,* the district court approved the settlement finding

it reasonable, adequate and fair to both the black and

Mexican-American class members (id. at 123).

denied it (Pet. App. F). This ruling was unsuccessfully challenged in the

court of appeals; that challenge is not raised in this Court.

‘Despite the court's stated desire to avoid testimony on the merits of

closure of the schools, much of the testimony at the hearing centered on

dissatisfaction with the closures (Pet. App. 116). The parties to the

settlement supported the agreement (id. at A15). Counsel for Sanchez

filed objections to the settlement (ibid.). He indicated he represented 21

objectors, seven or eight of whom appeared and testified (id. at

5. Petitioners appealed the district court’s orders approv-

ing the District’s desegregation planand the settlement, and

its other rulings regarding notice and Opportunity for in-

volvement in the hearings on the plan and the settlement.

The court of appeals upheld the desegregation plan as an

adequate remedy and concluded that the district court had

not abused its discretion in approving the settlement. It held

that the notice of the settlement hearing was constitution-

ally adequate to both as to form and content, and that

because the district court’s order approving the District’s

preferred desegregation plan was entered after the district

court had independently assessed the constitutional ade-

quacy of the plan, that court had correctly ruled that the

pian was nota subject of the settlement hearing. Although

the court of appeals disapproved the practice of negotiating

attorneys fees as part of the settlement in a class action,

stating “we strongly discourage the simultaneous negotia-

tion of attorneys’ fees and substantive issues in class action

settlement negotiations” (Pet. App. 58), it concluded that

the settlement, including the fees, was fair, and that under

all the circumstances, the settlement should not be set aside

just because it contained a provision for attorneys fees.

ARGUMENT

Rule 23 of the Federal Rules of Civil Procedure sets forth

certain procedural requirements for managing class actions,

which are designed to assure that any divergent interests of

class members are adequately accommodated. District

courts have broad discretion in managing the litigation and

settlement of class actions to enable them to respond to the

App. 117). Eleven class members testified in Opposition to the settle-

ment and the court received six letters opposed to it (ibid.), Addition-

ally, some of the objectors obtained approximately ninety signatures on

a petition listing objections to the proposed settlement (ibid.}. The

district court noted that the objectors totalled 121 out of two Classes

comprised of 18,500 students (id. at | 18).

6

particular needs and circumstances of each case. As the

court of appeals noted, petitioner challenges “the District

Court’s choices of how the required procedures were to be

implemented” (Pet. App. 21), and the district court was ina

better position than the appellate court to assess the ade-

quacy of notice and the overall fairness of the settlement

because of its long involvement with the case (id. at 37). The

settlement occurred after a lengthy trial on liability, issu-

ance of voluminous findings of fact and conclusions of law

and hearings on the remedy and on the settlement (id. at

31-32). In sum, the petitioners have simply failed to demon-

strate, either in the court of appeals or in their petition in

this Court, that the procedures the district court chose to

employ were prejudicial or inadequate, still less that those

procedures were so faulty as to deny them due process of

law. Moreover, the court of appeals applied the principles

of law as set down by this Court, and the decision below is

not in conflict with any decision of any other court of

appeals. Thus, there is no reason for this Court to grant

plenary review.

1. In arguing that the notice of settlement was inade-

quate, the petitioners do not show that notice was ineffec-

tive or that the district court was unaware of relevant facts

or objections at the hearing on the settlement. Instead, they

urge this Court to rule that the Constitution requires that in

order to settle a class action “ii]Jndividual notice must * * *

be mailed to each person whose identity and whereabouts

are readily ascertainable.” (Pet. 18). The court of appeals’ re-

fusal to adopt such a per se rule is consistent with previous

decisions of this Court (Cafeteria Workers v. McElroy, 367

U.S. 886, 895 (1961); Mullane v. Central Hanover Bank &

Trust Co., 339 U.S. 306, 314-315 (1950)) and with the

decisions of other courts of appeals (Grunin v. Interna-

tional House of Pancakes, 513 F. 2d 114, 120-123 (8th Cir.),

cert. denied, 423 U.S. 864 (1975): Fowler v. Birmingham

News Co., 608 F. 2d 1055 (Sth Cir. 1979); West Virginia

7

v. Chas. Pfizer & Co., 440 F. 2d 1079, 1090-1091 (2d Cir.),

cert. denied, 404 U.S. 871 (1971)).9

Due process requires “notice reasonably calculated,

under all the circumstances, to apprise interested parties of

the pendency of the action and afford them an Opportunity

to present their objections.” Mullane v. Central Hanover

Bank & Trust Co., supra, 339 U.S. at 314. Whether publica-

tion or other forms of notice of a settlement hearing afford

due process depends on the “practicalities and peculiarities

of the case” (ibid.). Here the notice of the settlement hearing

was published in English and Spanish in two Tucson news-

papers for approximately a week before the settlement hear-

ing and notices were distributed widely throughout the

community, although not mailed to each individual.! The

court of appeals carefully reviewed the form of notice that

was given and the indicia of its effectiveness using the due

process standard set forth in Mullane v. Central Hanover

Bank & Trust.'' It observed that the district court was

aware of the widespread local publicity (Pet. App. 49),

*Contrary to petitioners’ assertion, Armstrong v. Board of School

Directors, 616 F. 2d 305 (7th Cir. 1980), is not in conflict with the

decision here (Pet. 20). In Armstrong, the court of appeals simply noted

that notice of a settlement ina school desegregation case was sent to all

class members and published in newspapers; it did not consider whether

individual notice was constitutionally necessary (616 F. 2d at 310).

‘For the first three days of publication the notice appeared in the fine

print used for legal notices, but for the remainder of the time it appeared

in standard type and was highlighted with a black border (Pet. App. 14

n.3). Copies of the notice were distributed to community groups and to

merchants and churches in the class members’ neighborhoods and were

made available to local radio and television Stations (id. at 14, 49). The

district court's order approving the notice remarked that there was a

“great amount of local publicity concerning all prior orders and pro-

ceedings” (id. at 49).

''The court of appeals found that “{a}ll members of the class necessar-

ily lived within the Tucson School District No. I, an area served by

newspapers carrying the notice, and were subject to all of the additional

publicity generated by the suit” (Pet. App. 49).

8

and it concluded that “there was widespread actual notice of

the settlement and the hearing as a result of the published

notice and other sources, and a number of class members

did in fact come forward to object. It being reasonably

concluded that this form of notice would be effective, and

with the subsequent indications that it did in fact reach large

numbers of the class, we find no abuse of discretion or

violation of due process in the form of notice provided” (id.

at 50-51).

The petitioners’ reliance on Mullane v. Central Hanover

Bank & Trust Co., supra, and Eisen v. Carlisle & Jacquelin,

417 U.S. 156 (1974), for the proposition that individual

mailed notice of a settlement hearing must be given when-

ever practical is misplaced. In Mullane, this Court ruled

that notice simply by publication ina New York newspaper

denied due process to known beneficiaries of a common

trust fund, many of whom resided outside of New York,

because it was not reasonably calculated to apprise the

beneficiaries of the initiation of litigation which could

deprive them of substantial property interests in the com-

mon trust fund. In contrast, this case involves notice of a

proposed settlement of a highly publicized class action seek-

ing injunctive relief on behalf of a geographically concen-

trated class of individuals, whose interests were represented

by counsel during all phases of the four-year period of

litigation that preceded settlement. Notice by publication

was found to be improper in Eisen because it was a Fed. R.

Civ. P. 23(b)(3) class action governed by the special notice

requirements of Rule 23(c)(2), designed to inform class

members of the pendency of the class action. Those notice

requirements are unique to Rule 23(b)(3) class actions,

which involve property interests similar to those at stake in

Mullane.'? Eisen v. Carlisle & Jacquelin, supra, 417 U.S. at

'2The individual notice requirement articulated in Mullane was

incorporated in Rule 23(c)(2) when it was revised in 1966. Eisen v.

Carlisle & Jacquelin, supra, 417 U.S. at 173-174.

9

177 n.14; Sosna v. Iowa, 419 U.S. 393, 397 n.4 (1975). In

contrast, Rule 23(e) (which governs notice of proposed

settlements of class actions) vests the district court with

discretion to determine the form of notice “subject only to

the broad ‘reasonableness’ standards imposed by due pro-

cess.” Grunin v. International House of Pancakes, supra,

513 F. 2dat 121; seealso Inre Gypsum Antitrust Cases, 565

F. 2d 1123, 1126-1127 (9th Cir, 1977).

2. The petitioners argue that the desegregation plan was

part of the settlement in this case and that therefore its

provisions should have been set forth in greater detail in the

notice of the settlement hearing!} and the plan should have

been subject to review at the settlement hearing. But both

the district court (Resp. TUSD App. XI, Tr. Vol. IV 480)

"Specifically, petitioners argue that the notice of settlement should

have stated that three schools would be closed as part of the desegrega-

tion plan. The fact that the desegregation plan was not a part of the

settlement disposes of the argument that the notice should have pro-

vided greater details of the desegregation plan. Moreover, each resident

of the school district was mailed an English/Spanish newsletter just

three weeks before the trial court approved the settlement notice (Pet.

App. 169). It set forth the details of the District's preferred desegrega-

tion plan and identified the three schools to be closed (Resp. TUSD Br.

18; Resp. TUSD App. 1).

Petitioners also claim that the notice was defective because it failed to

specify that certain counts in the Mendoza amended complaint relating

to the adequacy of education for Mexican-American students would be

dismissed. Counts 2, 5, and 6 of the complaint were severed before trial

because the Department of Health, Education, and Welfare had

approved the District's compliance plan (Pet. App. 6). However, the

severance was conditioned on the understanding that “all evidence

presented during the course of trial * * * may be considered by the

Court in any ultimate disposition of said counts” (C.A.R. 3995). The

district court found “at the time of trial all of the District's educational

services were in full compliance with federal standards” (id. at 2495).

Thus, dismissal of these counts simply recognized the effect of that

finding; it was acarcely a significant aspect of the settlement. In these

circumstances, it was enough that the settlement notice warned class

members of the binding effect of approval of the settlement (Pet. App.

163).

10

and the court of appeals (Pet. App. 22-24, 27) found that the

desegregation plan was not part of the parties’ settlement

agreement, but was instead the independent result of the

district court’s approval of the plan submitted by the Dis-

trict. Thus petitioner’s argument is simply an attack on the

lower courts’ factual findings that the plan was not nego-

tiated as part of the settlement. They do not suggest any

other basis for requiring reconsideration of the desegrega-

tion plan in the settlement hearing, and we are aware of

none. See Reynolds v. National Football League, 584 F. 2d

280, 285 (8th Cir. 1978); Pettway v. American Cast Iron

Pipe Co., 576 F. 2d 1156, 1168-1170 (Sth Cir. 1978), cert.

denied, 439 U.S. 1115 (1979). Absent “a very obvious and

exceptional showing of error” (Graver Mfg. Co. v. Linde

Co., 336 U.S. 271, 275 (1949)), which is not present here,

this Court will not interfere with concurrent findings of fact

of two lower courts.

Those findings are in any event correct.'4 The court of

appeals, consistent with the approach taken by other cir-

cuits (see Pettway v. American Cast Iron Pipe Co., supra;

cf. Reynolds v. National Football League, supra), consid-

ered the process by which the plan was created.'5 After a full

trial on the merits of the unlawful segregation claim, the

district court found that nine schools still suffered from the

effects of past segregation, and ordered the District to pro-

'*Contrary to petitioners’ claim (Pet. 43-44), it is not significant that

the settlement agreement incorporated the provisions of the desegrega-

tion plan. The settlement was not filed until the court had approved the

plan. Accordingly, it is scarcely surprising that the parties’ agreement

reflected the court's decision.

'SIn Pettway, the court of appeals observed that “isjettlements and

court judgments are not distinguished by different platonic essences,

but by the processes of their creation” (576 F. 2d at 1170). In this case

the court of appeals properly focused on the process of approval of the

desegregation plan, rather than the specific language used in the order

approving the desegregation plan or the stipulation of settlement (id. at

1172).

—~—

pose a desegregation plan for those schools and submit it

for review (Pet. App. 6-7, 62).!6 The court holda hearing on

the submitted plans at which “Sanchez and others” pre-

sented their objections to the proposed closings (id. at 39-

40). The district court’s order approving the District’s plan

shows that it carefully evaluated those objections before

approving the plan (Pet. App. 84-85, 88). As the court of

appeals noted, the trial judge was fully able to make an

independent assessment of the constitutionality of the deseg-

regation plan because of his thorough familiarity with the

case (id. at 39 n.11),!7

3. Petitioners argue that the settlement should be set

aside because it was negotiated simultaneously with the

provision for attorneys’ fees for plaintiffs’ counsel (Pet.

32-42). The court of appeals joined other circuit courts in

condemning this practice on the ground that it frequently

creates the appearance of impropriety (Pet. App. 58). The

court held, however, that in the circumstances of this case,

the settlement should not be set aside (id. at 60). The peti-

tioners apparently urge adoption of a per se rule which

would require nullification of any settlement when such

‘The district court did not engage in any negotiations concerning the

content of the desegregation plan. Com pare Pettway v. American Cast

Iron Pipe, supra, 576 F. 2d at 1173-1174. Furthermore, the court of

appeals found that “there is no evidence that the plan itself was a

product of settlement negotiations” (Pet. App. 39 n.11).

'’For example, the district court carefully analyzed the reasons for

closing the schools and the impact the plan would have on students

attending those schools (Pet. App. 85-96). It found that the reasons for

closing the schools were non-racial: declining enrollment, inadequate

sites and classroom sizes, and the need for extensive repairs and

improvements. Moreover, it concluded that as a result of closing these

schools minority students would attend more modern facilities with a

broader range of educational programs.

The district court's familiarity with the facts of the case and the legal

principles to be applied is also reflected in its voluminous findings of

fact and conclusions of law at the liability stage of the case (C.A.R.

2326-28 16).

12

negotiations have taken place.'8 No court has adopted such

a rule; instead the court of appeals’ more flexible approach

is consistent with the decisions of other courts of appeals.

See Reynolds v. National Football League, supra, 584 F.

2d at 285-287; McDonald v. Chicago Milwaukee Corp.,

565 F. 2d 416, 421-423 (7th Cir. 1977); Sussman v. Lincoln

American Corp., 561 F.2d 86 (7th Cir. 1977); Brick v. CPC

Intern, Inc., 547 F. 2d 185 (2d Cir. 1976).

The court of appeals did not find any actual improprieties

in the negotiation of the settlement (Pet. App. 57). More-

over, it concluded that in the particular circumstances of

this case, there were sufficient factors to “neutralize the

potential for impropriety” (ibid. ). The Justice Depart-

ment’s involvement in the case since before the trial on the

merits was “a significant factor in quieting the potential for

unfair treatment of minority interests within the plaintiff’s

class. | Marshall v.] Holiday Magic, 550 F. 2d {1 173] at

1178 {9th Cir. 1977]. See Developments [in the Law—Class

Actions, 89 Harv. L. Rev. 1318,] supra, at 1563[1976]” (Pet.

'’Petitioners do not contend that the fees awarded were excessive.

Although they do suggest that the remedy negotiated for the Mexican-

American plaintiff class casts doubt on the adequacy of their represen-

tation, they do not directly challenge the adequacy of the settlement

here, nor did they challenge it below. In any event, the terms of the

settlement do not support the contention that the Mexican-American

class received substantially fewer benefits than the black class. Most of

the provisions were equally applicable to both plaintiff classes (Pet.

App. 129-133 paras. 4-8, 134, para. 11, 134-136, paras. 12-15, 138-139,

paras. 17-19). Only three provisions were directed at a particular class

(id. at 133-134, paras. 9, 10, (blacks), 16) (Mexican-Americans)).

Moreover, the court had determined in the liability stage of the case that

the District had not unlawfully segregated Mexican-American students

and had not engaged in system-wide discrimination against them (Pet.

App. 7). By contrast, it found that black students had been subjected to

racial segregation, the effects of which continued after 1954 (ibid.).

Finally, as the district court noted, it is of some significance in assessing

the adequacy of the settlement that only 121 persons out of the

13

App. 59).'9 The court also found it significant that there is

statutory authorization (20 U.S.C. 3204) for the award of

attorneys’ fees in cases such as this (Pet. App. 59).2°

The district court here was ina particularly good position

to judge the fairness of the settlement to all the plaintiff

classes because of its long familiarity with the case. The

settlement was achieved only after years of discovery, a full

trial on the merits, a finding of liability, and a hearing on the

constitutional adequacy of the District’s desegregation

plan. In addition, the district court took steps to insure that

divergent views were represented when it appointed counsel

to represent Sanchez, allowed discovery on issues pertain-

ing to the settlement and held a hearing on the proposed

settlement. See McDonald v. Chicago Milwaukee Corp.,

supra, 565 F. 2d at 422-423.

In sum, the court of appeals’ approval of the simultane-

ous negotiation of attorneys fees and the settlement agree-

ment turns on the particular facts of the case, in which there

was neither any actual impropriety nor any significant

potential for impropriety. The decision below scarcely

approximately 18,500 members of the plaintiff classes objected to it (see

note, 8, supra). Compare Pettway v. Americam Cast Iron Pipe Co.,

supra, 576 F. 2d at 1217-1218.

‘Although the government lawyers did not participate in the fee

negotiations, they did agree that the settlement terms were fair, and

adequately protected the rights of all affected minority groups.

0In addition, although it emphasized that the potential for a conflict

of interest does not depend on the existence of a common fund to be

divided among class members, or even on claims for money damages,

the court of appeals recognized (Pet. App. 56n.19) that the potential for

conflict “may not be as great” where, as here, only injunctive relief is

sought.

14

establishes any broad precedent favoring such simultane-

ous negotiations.?! Accordingly, further review by this

Court is not warranted.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

WADE H. McCreEE, Jr.

Solicitor General

JAMES P. TURNER

Acting Assiistant Attorney

General

JESSICA DUNSAY SILVER

JAMES W. CLUTE

Attorneys

JANUARY 198]

*!Indeed, the court warned (Pet. App. 57): “fiJt would rarely be an

abuse of discretion for a trial court to reject a settlement proposal where

such combined negotiation took place.”

DOJ-1981-01