Appendix — Daniel v. Pettway

83-1802

IN THE Supreme Court, U.S.

SUPREME COURT OF THE UNITED STATES Kb

October Term, 1983 ; MPR 30 198:

No. - -

ALEXANDER L. STEVAS

CTPRK

CHARLES L. DANIEL, et al.,

Petitioners,

VS.

RUSH PETTWAY, et al..

Respondents,

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

Respondent,

AMERICAN CAST IRON PIPE COMPANY

Respondent

APPENDIX TO

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

Ralph E. Coleman

2175 1Ith Court South

Birmingham, Alabama 35205

(205) 939-0444

Counsel of Record for Petitioners,

Charles L. Daniel, et al

Ronald L. Spratt

1929 North Third Avenue North

Smith Towers, Suite 3200

Birmingham, Alabama 35203

(205) 251-7180

Attorney for Petitioners,

Charles L. Daniel, et al

OF COUNSEL

COLEMAN & COLEMAN

2175 IIlth Court South

Birmingham, Alabama 35205

(205) 939-0444

TABLE OF CONTENTS

Final Judgment and Rule 54 Certificate

Findings of Facts and Conclusions of Law ....

United States Court of Appeals, Eleventh Circuit

Petition tor Rehearing and Rehearing En Banc

Supplemental Affidavit of Robert L. Wiggins, Jr

and Time Record

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IN THE UNITED STATES DISTRICT COURT FOR THE

NORTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

CIVIL ACTION NO, 66-315

RUSH PETTWAY, et al.,

Plaintiffs,

Vv.

AMERICAN CAST IRON PIPE

Defendant.

FINAL JUDGMENT AND

RULE 54 CERTIFICATE

With respect to the entry of the Consent Decree resolving all

Outstanding issues concerning monetary relief and fees and costs

associated therewith, itis hereby ORDERED, ADJUDGED and

DECREED in accordance with Rule 54 of the Federal Rules of

Civil Procedure:

1. That the Court hereby gives final approval to the proposed

Consent Decree which was tentatively approved on March 23,

1983,

2. That the Court directs the entry of final judgment pursuant

to the provisions of the Consent Decree, the terms of which are

incorporated herein by reference,

3. That the Court has determined that the terms of the

Consent Decree are fair, adequate and reasonable;

4. That this final judgment is binding and conclusive upon all

parties to this action and members of the plaintiff class consisting

of all black employees at America’s Birmingham, Alabama plant

who were employed as of, or hired subsequent to, July 2, 1965 to

the present;

5. That the entry of this final judgment and the Consent

Decree satisfy all the requirements of Rule 23 of the Federal

Rules of Civil Procedure; and

6. That the Court retains jurisdiction of the injunctive relief

aspects of this case as heretofore provided for in the Consent

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Decree of 1980 approved and entered by this Court on July 14,

1980

DONE this 12th day of May, 1983

SEYBOURN H. LYNNE

United States District Judge

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IN THE

UNITED STATES DISTRICT COURT

FOR THE

NORTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

CIVIL ACTION NO. 66-315

RUSH PETTWAY, et al.,

Plaintiffs,

v.

AMERICAN CAST IRON PIPE COMPANY,

Defendant.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The current case is before the Court once again on the tssue of

monetary relief which was first remanded by the Court of

Appeals in 1974. The history of this case scarcely needs repeating

at this late date. It has been adequately set torth in the previous

decisions of the Court of Appeals and this Court. Nevertheless,

there are certain salient events which should be stressed as

background to the consideration of the particular terms of the

proposed setilement and objections which are before the Court.

The case was tried in October, 1971 and findings of fact and

conclusions of law were entered in November, 1972. See, 7 FEP

Cases 1010 (N.D. Ala. 1972). The Court found that the

defendant's testing program violated Title VII under the

standards established in Griges v. Duke Power Co.,401 U.S. 424

(1971). It also concluded that the departmental seniority system

did not violate the Act and that the defendant had “practiced no

invidious racial discrimination in the administration of its

apprenticeship and journeyman programs.” 7 F’P Cases at

1018-1019, On the issue of back-pay, the Court concluded that it

should not be awarded “in view of the demonstrated good faith

compliance by defendant with Title VII... and because such an

award is not necessary to insure future compliance therewith.”

Id. 7 FEP Cases at 1019. On appeal the judgment was reversed

and remanded with instructions to award certain injunctive relief

and back-pay. Pettway v. American Cast Iron Pipe Co.,494 F.2d

211 (Sth Cir, 1974) (“Pettway". hereafter.).

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The proceedings on remand in 1974 and 1975 are accurately

summarized in the prior decrees and judgments of the Court

entered on May 14, 1975, June 12, 1975 and November 20, 1975.

On the latter date, the Court entered a Final-Order and Modified

Judgment in which the proceedings on remand from Pettway,

//I, supra, were summarized. A further description of the

proceedings which resulted in the June 12, 1975 Judgment is

found in the 1978 decision of the Court of Appeals in this case.

See, Pettway v. American Cast Iron Pipe Co., 576 F.2d 1157,

1172-1175 (1979), cert. denied, 439 U.S. L115 (1979) (“ Pettwas

/V". hereafter). The Court has carefully reviewed all of the prior

proceedings in this action and has taken such proceedings into

consideration in determining the fairness, reasonableness and

adequacy of the proposed settlement and the adequacy of the

representation of the class by the named plaintiffs and the

attorney for the class.

Pursuant to the Court's Final Order of November 20, 1975, the

Clerk of the Court entered a Judgment Setting Aside and

Annuliing Back-Pay Awards to 442 Persons Listed On Attached

Certified List on January 14, 1976. An appeal had been

previously taken by these 442 persons and by an assortment of

other segments of the class. The complicated procedural posture

of the case is accurately described in Pettway /V, supra at 1166-

1168. There were a total of 2242 class members as of 1975. Of that

group a subclass of 841 persons had been awarded back-pay in

the June 12, 1975 Judgment and 1401 class members had been

excluded from participating in the back-pay recovery. All of the

1401 members of the latter group were persons hired after July 2,

1965 whom the Court had determined not to have been

monetarily injured by the unlawful practices of the defendant.

Only 150 of these 1401 class members objected to their exclusion

from the back-pay subclass. The 841 members of the back-pay

subclass reacted to the 1975 back-pay award in different ways. As

already mentioned, 442 of such subclass members refused to

accept their back-pay tender and 399 accepted such tender and

executed a release. Of the latter group of 399 subclass members,

252 of them were characterized by the Court of Appeals as having

“accepted checks and not appealing decision.” Pettway /V, supra

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at 1167. The remaining 147 subclass members who cashed their

1975 back-pay checks were characterized as “objectors” by the

Court of Appeals. /d. The total number of back-pay subclass

members who were found to have either objected to the back-pay

or signed the notice of appeal in 1975 was 589. /d.

On remand from Pettway /V, supra, the procedural structure of

the class was further complicated. On October 25, 1979 the Court

ordered that every member of the class be given notice of the

status of the case and be given the opportunity to notify the Court

of their interest in participating in the back-pay proceedings on

remand. The notices to the class were sent by certified mail to the

homes of over 2400 persons in late October, 1979. They were

given until December |, 1979 to file a Notice of Intent to

Participate in Back-Pay. Approximately 1215 class members

timely returned such Notices to the Clerk of the Court. The

parties then settled the injunctive features of the cause that had

been remanded in the fourth appellate mandate. Notice o the

proposed entry of the Consent Decree of 1980 was given to the

class and a hearing was held on objections on July 14, 1980. A

number of the objections concerned the bifurcation of the

settlement process into injunctive and back-pay halves. The

Court carefully considered these objections in its Findings of

Fact and Conclusions of Law entered July 25, 1980 and reached

the following conclusion.

13. This Court has expressed ina writen Order entered

on June 18, 1980 its firm intent to ‘proceed forthwith with

all possible speed to adjudicate the back-pay claims of all

affected employees’. The Court informed counsel for

both parties at the close of the July 14, 1980 hearing that

it expected them to proceed immediately with

negotiations aimed at settling all remaining monetary

issues and that if such issues could not be settled with

some dispatch, the Court would set the wheels in motion

for a trial of the back-pay claims of each class member.

Such remains the intent of this Court. The parties are

again instructed to expedite their review of their

respective positions and to make all reasonable efforts to

resolve their differences over back-pay with all possible

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speed. If this cannot be accomplished, the Court will set

the back-pay claims down for trial at the earliest

opportunity after the parties have notified the Court that

their efforts have failed.

14. For these i:easons, the Court finds that the

objections concerning the bifurcation of the back-pay

issues from the injunctive issues are not supported by any

evidence or rationale and does not deprive the proposed

Consent Decree of the fairness, adequacy, and

reasonableness necessary for its approval.

It is significant that of the nine class members who objected to

the settlement of the injunctive relief separately from the back-

pay. only one of such class members has entered an objection to

the current back-pay settlement proposal.

The events surrounding the approval of the Consent Decree of

1980 bear some importance to the approval of the back-pay

settlement now before the Court. As just mentioned, the class was

informed by the Court at the July 14, 1980 hearing on the

injunctive settlement that the Court expected serious efforts at

settlement of the back-pay issue to be accomplished

expeditiously. The attorney for the class and the ciass

representatives told the class at its regular monthly meetings

during the latter half of 1980 that back-pay settlement efforts

were being made. Similar notice to the class was given by the class

attorney and the class representatives throughout 1981, both

orally and in writing. At no point did ‘any member of the class

step forward and object to back-pay settlement negotiations on

their behalf by the attorney for the class and the class

representatives. For this reason, among others, the Court is not

impressed with assertions by certain objectors that they were

excluded from the back-pay settlement process.

After approval of the injunctive settlement in July, 1980, the

parties attempted to reach an agreement that would settle the

remaining monetary issues in the case. The parties, however,

were very far apart in their veiw of an adequate back-pay award.

The greatest amount offered by the Company during that period

was approximately 1.4 million dollars. The latter amount

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included the approximately $483,000 which had been cashed in

1975 by 399 class members. Thus, the total additional amount of

mouey which was being offered in excess of the one million

dollars tendered in 1975 was less than $500,000. The attorney for

the class and the class representatives were in agreement that

settlement discussions in that range of recovery were

unacceptable. While the class attorney believed that negotiations

should be continued, the Committee For Equa! Job Opportunity

elected to terminate such discussions and begin preparation for

trial of the back-pay issues. This decision was reported to the

class at its regular monthly meetings in September and October,

1980 and was reported to the Court in the first week of October of

that year.

On October 20, 1980 the Court ordered that notice be given to

the class of its duty to individually answer interrogatories

propounded to the class by the defendant. The interrogatories

and the notice to answer them were mailed to all class members

who had filed a Notice Of Intent To Participate In Back-Pay.

They were given 90 days to answer such interrogatories and

another 90 days in extensions were subsequently granted by the

Court. Ultimately only 833 class members responded to the

interrogatories out of the 1215 persons who had given notice of

their intent to claim back-pay. All of such class members were

interviewed by and given the assistance of the attorney for the

class in responding to such interrogatories. In this regard, the

Court pauses to note that the current back-pay settlement does

not condition participation in the recovery on filing a response to

the interrogatory answers. A substantial number of the class

members who are scheduled to receive back-pay under the

proposed settlement would be excluded if the parties had

conditioncd participation on the filing of interrogatory answers.

Afier further discovery skirmishes which are too tedious to

men:ion, the plaintiff proposed that the Court appoint a Special

Master for the purpose of acting as a mediator in settlement

discussions. On June 2, 1981 the Court granted that request,

which was unopposed by the defendant, and appointed William

F. Gardner as a Special Master for the limited purpose of

conducting settlement negotiations. After numerous meetings

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between the parties and the Special Master, settlement

negotiations once again failed. This was reported to the Court by

the Special Master on July 7, 1981. The respective positions of

the partes were still far apart. Although a settlement offer was

never made by the defendant for an amount greater than the 1.4

million dollars that was rejected in September, 1980 by the

plaintiffs, the defendant did discuss figures which went as high as

1.7 or 1.8 million. Such amounts, however, continued to contain

offsets or credits for the $483,000 that was cashed in 1975. In

terms of “new” money, the Company did not contemplate any

offers greater than 700 or 800 thousand dollars more than had

been tendered in 1975.

After settlement efforts once again were terminated, the Court

held a conference with the parties on July 17, 1981 and entered an

Order of Referral to Special Master which referred the entire

back-pay issue for trial on an individual-by-individual basis. The

plaintiff class strongly opposed such a method of trial and also

opposed any effort by the Company to make an Offer of

Judgment directly to individual members of the class. An appeal

of the Court's allowance of the latter was immediately filed. A

Petition For Writ Of Mandamus was also filed challenging both

the permission to mail an Offer of Judgment directly to the class

members and the referral to a Special Master for individual-by-

individual trials. The Petition For Writ Of Mandamus was

denied but the plaintiffs then filed an appeal challenging the same

issues. The Court of Appeals accepted the interlocutory appeal

and vacated the Order of Referrai and the Order allowing direct

mailing of an Offer of Judgment. Pettway v. American Cast Iron

Pipe Co., 6&1 F.2d 1259 (11th Cir, 1982). Ina companion appeal,

the E.E.O.C. was also reinstated as an intervenor in the case.

Pettway v. American Cast Iron Pipe Co., 681 F.2d 1269 (11th

Cir. 1982). The Company then filed a Petition For Writ Of

Certiorari to the Supreme Court. That Petition is still pending

and will not be reviewed by the Supreme Court unless the

proposed settlement is disapproved by the Court.

The foregoing procedural background is important in

assessing the adequacy of the representation of the class and the

overall fairness of the proposed settlement. It is also important as

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a preface to the objections which have been filed by certain class

members. The Court now proceeds to consider whether the

proposed settlement should be approved.

I. THE TERMS OF THE PROPOSED SETTLEMENT

The proposed settlement involves a total payment from the

defendant of $3,983,401.91 in satisfaction of all monetary claims

for racial discrimination which have been asserted as a part of

this action. Of this amount, the defendant has aiready paid

$483,401.91 to 399 members of the class as a result of the abortive

settlement in 1975. The remaining $3,500,000 required to be paid

by the proposed Consent Decree has been gathering interest since

March 8, 1983 at a rate equivalent to the “open ended” REPO

rate on U.S. Treasury Bills quoted by the First National Bank of

Birmingham ona daily basis. The total value of the settlement of

the monetary issues in this case substantially exceeds four million

dollars when the interest provided in the proposed Decree is

included. This figure, of course, does not include the very

valuable benefits secured for the class as a result of the previous

settlement of the injunctive features of the case which are

embodied in the Consent Decree of 1980.

The approximately four million dollars secured by the

proposed settlement is not a fund which was negotiated in the

abstract by the parties. It is comprised of various funds which

were calculated and negotiated separately from one another.

These separate funds are set forth in the proposed Consent

Decree and need not be repeated herein. The various methods of

division of each of these funds among the class members meeting

the conditions of eligibility for participation within each fund is

set forth in the Schedule of Distribution and Division of Back-

Pay and Costs which was filed with the proposed Consent

Decree.

The proposed settlement does not call for each member of the

class to participate in the recovery. Only those class members

who filed a Notice of Intent to Participate in Back-Pay in 1979

are eligible to participate under the terms of the proposed

settlement. Of that group of 1215 persons, the parties have agreed

that no class member who had less than two years of service prior

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to January 1, 1979 coud have beer monetarily injured by the

unlawful practices found in this case.

Il. FACTORS FAVORING APPROVAL

Before considering the validity of the various objections that

have been filed, the Court must address the question of whether

the proposed settlement should be approved even in the absence

of any objections. The burden of proof of the fairness, adequacy,

and reasonableness of the proposed settlement is upon its

proponents. The proponents in this case are the defendant

Company, the class representatives, the attorney for the class, the

Committee For Equal Job Opportunity, and the vast majority of

the class itself. In addition, the Equal Employment Opportunity

Commission as an intervenor in this action has expressed its

approval of the proposed settlement. Unlike many class actions

in which the class is unaware of the terms of the settlement until

after it is reached, the class in the current case was kept informed

of the terms of the settlement and allowed to vote on itasa group

before it was ever incorporated into a Memorandum Of

Understanding between the parties. At the monthly meeting with

the class in January, 1983 the terms of the proposed settlement

which were eventually agreed upon in March were explained to

the several hundred class members in attendance and all but five

persons voted in favor of it. While such vote is not binding upon

the parties or the Court, it does signify that the proponents of the

settlement include more than the class representatives and the

class attorney. It includes the entire Committee For Equal Job

Opportunity and it includes over 95% of the class.

In a very real sense, this case is now the mirror image of itself as

it existed during the fourth appeal. In Pettway /V, supra, the

Court of Appeals observed that:

All of the active named plaintiffs, all of the elected

representatives on the Committee For Equal Job

Opportunity, and 70 percent of the subclass objected to

the settlement. ***If 100 percent of the subclass had

objected we could say with complete confidence that ‘the

class’ has not settled its claim. At least under the limited

circumstances of this case, our confidence is not shaken

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when the figure is reduced to 70 percent. Where sucha

large percentage of the class objects there must be

something, not necessarily rotten in Denmark, but unfair

to the principality consisting of a class as a whole. The

district court abused its discretion in approving this back-

pay agreement. /d. 576 F.2d at 1217-18.

Now we have the opposite and more compelling situation.

The Court, however, is not content to simply count the number

of objections and observe that they are less than 5% of the class.

The Court agrees with and is bound by the reasoning contained in

Pettwayv 1V, supra at 1217, to the following effect.

While majority rule is not the test in every case, in the

context of determining the total back-pay award

majority sentiment becomes highly relevant. We stress

that this is not a dispute over the allocation of a settlement

fund, with respect to which the court should not allow a

majority, no matter how large, to impose its decision on

the minority. In such circumstances, objection by a few

dissatisfied class members should trigger close judicial

scrutiny to ensure that the burden of the settlementis not

shifted arbitrarily to a small group of class members.

Here the dispute centers around the sufficiency of the

settlement fund. Each subclass member's interest in the

size of this fund is substantially the same and there are no

conflicts of interest among definable groups within the

subclass. The decision to approve this settlement thus

may appropriately be described as an intrinsically ‘class’

decision in which majority sentiments should be given

great weight. /d. 576 F.2d at 1157.

For these reasons, the Court places considerable weight on the

fact that over 95°7 of the class has not objected to the proposed

settlement insofar as the question of the adequacy of the total

award is concerned. As to the allocation of the total award,

however, the Court places less emphasis on the percentage of

objectors. Instead, close judicial scrutiny of the validity of the

allocation of the back-pay among the various segments and

members of the class is required.

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Even as to the adequacy of the total recovery, the Court does

not rely exclusively on the fact that the class representatives and

the majority of the class have expressed their approval. While the

Court has not reviewed the monetary value of the settlement ina

vacuum, it must be concluded that the amount obtained by the

plaintiffs is impressive standing alone. In no sense can it be

labeled as a token payment unworthy of the most serious

consideration by the class. The Court is unaware of any back-pay

recovery in the Northern District of Alabama which has

approached the magnitude of the recovery set forth in the

proposed Consent Decree in this case. There have been many

comparable cases in this District in the nearly eighteen years since

the Civil Rights Act of 1964 became effective and none of them

have involved a greater collective or average individual recovery

for the members of a class than does this case.

A comparison with similar cases is not the only benchmark

which tndicates the adequacy and reasonableness of the total

recovery. The experts for both parties have conducted extensive

calculations of back-pay based on differing reconstructions of

what would have been expected to occur in employee job

movements in the absence of the racial discrimination found in

this case. These calculations were done separately by each expert

based on a computerized data bank extracted from the employee

records of the defendants. The computer print-outs containing

the calculations of the plaintiffs’ expert were made available to

the attorneys for the objectors and to any objector who requested

it. Only one of the attorneys for the objectors took advantage of

this opportunity and examined the plaintiffs’ expert's

calculations. None of the objectors did so. The calculations of

the opposing experts differ from one another in the method of

calculation but, when considered together, demonstrate that the

proposed settlement amount is within the range of the total

recovery which could be expected to be obtained by the class at

trial.

Not unusually, the defendant's expert states that the total

settlement is on the high side of what the plaintiffs might have

expected to recover at trial while the plaintiffs’ expert states that

it is on the low side. This result, however, supports approval of

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the settlement, not disapproval. The surest indication of a fair

compromise is when two vigorous advocates have made

concessions to the point that they both believe the other side has

obtained the best of the bargain. That is exactly what has

occurred in the current case. A considerable part of the

dissatisfaction of the objecting class members is nothing more

than the lingering suspicion, engendered by hindsight, that

another dollar in concessions could have been wrung from the

process of negotiation. If approval of a settlement depended

upon the absence of such ever-present doubts, then no class

action would ever be settled.

None of the objectors have offered any basis upon which the

Court could conclude that the total recovery is less than what the

plaintiff class could realistically expect to recover at trial. Indeed,

they have shown a remarkable lack of interest on the entire

question of the adequacy of the overall settlement fund or in how

it was calculated. Not only did they fail to take advantage of the

Opportunity to inspect the detailed calculations of the experts,

but they failed to even request the opportunity to depose or cross-

examine either expert prior to or during the fairness hearing. If

there were any serious contention that such calculations were

unfair, unreasonable, or inadequate the Court would expect that

the objectors would have cross-examined the experts on such

contentions either at a deposition or at the fairness hearing.

For the Court's part, the expert calculations are found to be an

accurate and complete accounting of the monetary effects of the

racial discrimination involved in this case. The calculations

performed independently by the experts retained by both parties

fully support the contention that considerably less than the

amount provided in the proposed settlement might have been

recovered at trial. The Court can find no plausible basis to

conclude that the plaintiffs had a reasonable likelihood of

recovering a substantially greater amount at trial. For these

reasons, the Court concludes that the proponents of the

settlement have carried their burden of establishing the fairness,

adequacy and reasonableness of the total monetary recovery.

The objectors have failed to seriously content otherwise and the

evidence fully supports the position of the proponents.

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The contentions found in the formal objections filed prior to

the fairness hearing do not concern the adequacy of the total

amount recovered. Rather, they contend that the allocation or

distribution of the total settlement is unfair and unreasonable.

This contention takes several forms, some of which conflict with

one another. First, a group of 51 class members who cashed their

checks and executed releases in 1975 argue that they should have

received shares which were exactly equal to comparably senior

class members who rejected their individual awards in 1975.

Secondly, a group of 23 class members who rejected their 1975

back-pay awards argue that they should have received larger

individual shares of the total recovery.' Oddly enough, these two

groups of objectors do not support one another.

A. Treatment Of The Class Members Who Cashed

Their Checks And Executed Releases in 1975

As already mentioned, there were 399 class members who

accepted their back-pay awards and executed releases of all

claims in 1975. In late 1979 those 399 class members were given

the opportunity to file a Notice Of Intent To Participate In Back-

Pay. A Notice explaining their right to signify their interest in

participating in the back-pay proceedings was sent to the homes

of the 399 class members who cashed their 1975 checks in

October, 1979. Only 257 of them responded to the Notice by

filing a Notice Of Intent To Participate In Back-Pay. Of the 142

who did noi respond, eight have now filed objections to the

proposed settlement. At the hearing on objections held May 12,

1983, these eight class members failed to offer any excuse for not

following the instructions in the 1979 Notice to the class by filing

the required Notice Of Intent To Participate In Back-Pay. After

having cashed their checks and executed releases in 1975 and

having ignored the requirement of filing a Notice Of Intent To

Participate in 1979, it is too late for these eight class members to

expect the remainder of the class to give up the recovery

contained in the proposed Consent Decree so that they can

belatedly be included in the back-pay distribution. The

‘Objections which do not fall into these two groups are discussed at a later

point of this Opinion.

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proponents of the sett!zment have fully satisfied the Court that

the proposed seitiement is fair, adequate and reasonable in

conditioning distribution of the back-pay upon timely filing the

1979 Notice Of Intent To Participate.

The 257 class members who executed their back-pay checks

and the attached releases in 1975 and who filed the 1979 Notice

Of Intent To Participate are sharing in a total fund of $128,500.

Of these 257 class members, only 43 have objected to their

individual share of the recovery. The remaining 214 class

members are apparently in support of the proposed settlement,

even though there was an active effort on the part of the 43

objectors to solicit opposition against the settlement. The Court

does not fault the efforts to solicit those who cashed their 1975

back-pay checks against the settlement. Once that effort has

produced only 43 objections, however, that fact takes on some

degree of relevance in assessing the validity of the objector’s claim

that they were abusively treated during the settlement

negotiation process. It also bears on the Court's assessment of the

fairness, adequacy, and reasonableness of the overall recovery of

this particular segment of the class.

The relative paucity of objectors from the group of class

members who cashed their 1975 checks is not the only indication

of the lack of merit of the objections from this group. The

attorney for the class brought the contentions of this group to the

Court’s attention prior to the preliminary approval of the

Consent Decree. The Court considered these objections on a

preliminary basis in its Findings of Fact and Conclusion of Law

Giving Preliminary Approval To Proposed Consent Decree

entered March 23, 1983. Even though these findings were entered

six weeks prior to the fairness hearing on May 12, 1983, none of

the objectors have contended or submitted evidence which

suggests that any of such findings and conclusions were

erroneous. The Court has now considered such findings and

conclusions again in light of the evidence and arguments offered

at the May 12, 1983 fairness hearing. After doing so, the Court

finds that the preliminary findings and conclusions entered in

support of preliminary approval of the settlement are fully

supported by the evidence. The Court has given close scrutiny to

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the entire treatment of the class members who cashed their checks

and executed releases. That scrutiny has included a review of the

Court's own treatment of the objections of this group of class

members in the opinion giving preliminary approval to the

settlement. Even when considered in the light most favorable to

these objectors, however, the Court is convinced that their

interests have been adequately represented by the class

representatives and the attorney for the class and that the

settlement is fair, adequate and reasonable in the provisions

made for the class members who accepted their back-pay awards

in 1975.

The objections of these class members stem from a fallacy in

their view of the settlement negotiation process. Underlying their

entire position is the assumption that the parties negotiated the

total recovery as a lump sum and then set about to allocate it

among the different segments of the class according to some

arbitrary notion of relative merit. That assumption has been

shown by the evidence to be false. The total recovery is merely the

sum of its parts. Each amount allocated to the differing segments

of the class, and to the class attorney and expert, was negotiated

separately and independently from every other part. Each

discrete segment of the class had to stand on the strength of their

own claims rather than borrowing from the strength of some

other group in an effort to leverage a greater recovery than their

claims merited on their own. This is the real point of departure

for the dissatisfaction of the 43 objectors who cashed their checks

in 1975.

The Court is unable to fault the process of negotiation

followed by the parties in this case. There is nothing inherently

unfair in requiring the claims of each discrete segment of the class

to rise or fall in the negotiation process on the strength of their

own claims, rather than on the strength of some other segment of

the class. The claims of the group of class members who cashed

their checks and executed releases involved distinct legal

problems which wer» not involved in the claims of the remainder

of the class. These problems are correctly set forth in the Findings

Of Fact And Conclusions Of Law Giving Preliminary Approval

To Proposed Consent Decree entered on March 23, 1983. Those

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findings and conclusions are adopted and reaffirmed by the

Court on the basis of the evidence received at the hearing on

objections on May 12, 1983.

The objectors have not presented any persuasive evidence that

their claims were stronger than they were assessed by the class

representatives during the negotiation. There is no credible

evidence which indicates that any of the 43 objectors who cashed

their checks and executed releases were covered by the November

20, 1975 Order of this Court or by any other event which occurred

during that period. To a man, those checks and releases were

executed freely and voluntarily.

The Court finds that the value placed on the claims of this

group of objectors by the parties to the settlement ts fair,

adequate and reasonable. The Court of Appeals recognized in

Pettwav IV, supra at 1221, n.&2. that “some or all subclass

members might receive a smaller back-pay award on remand

than their present share of the settlement.” While the objectors

take the amounts they cashed in 1975 for granted, the parties to

the settlement and the Court do not. There was the very real

possibility that some or all of the class members executing their

back-pay checks in 1975 could have received less at trial and

would have had to retund their overpayment with interest to the

defendant. /d at 1221. The current settlement avoids that risk by

allowing the class members to keep the amount received in 1975

and to receive an additional sum in the current settlement. The

objectors have not presented any evidence which indicates that

they reasonably could expect to have received more by going to

trial. The recovery provided by the proposed settlement for the

class members who executed their back-pay awards in 1975

amounts to $611,901.91 in back-pay plus the value of the use of

the money for eight years and the increased monthly pension

payments resulting from the 1975 award. The Court finds that

under all the facts and circumstances presented, the proposed

settlement is fair, adequate and reasonable in the amount

allocated to this group of class members.

In addition to their objection that they were inadequately

represented in the settlement negotiations, this group of

objectors also included certain other contentions within their

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written objections. Each of the 43 objectors who accepted their

1975 back-pay awards filed the same form objection. All of them

contained several contentions which are frivolous on their face.

First, they state that the proposed monetary settlement “has not

been enforced by means of injunction.” The injunctive Consent

Decree of 1980 was entered by this Court in July, 1980 and is a

matter of court record. Each of these 43 objectors were given

notice of such Consent Decree and an opportunity to object.

None of them did so. The Court has retained jurisdiction over the

injunctive Consent Decree since July, 1980 for the purpose of

entering any additional or different relief which may be

appropriate but none of these objectors have ever come forward

to request such additional injunctive remedies. The Court finds

that this objection is without even the semblance of merit.

Secondly, the form objections state that “(p)lay rates, seniority

and promotion (were) not used to calculate the amount paid to

each class member.” The evidence presented at the hearing on

objections was to the contrary. The amounts received by the class

members who accepted their back-pay checks were calculated

according to a formula devised by the Court itself in the

Judgment entered June 12, 1975. That formula took into account

a class member's seniority and the highest job and pay rate he

attained with the defendant. The formula used to determine

individual shares in the current settlement also took into account

seniority and or the highest job and pay group attained by each

class member. The objectors have failed to present any evidence

which supports their contention on this point.

Thirdly, the form objections state that the “(c)heck cashers did

not agree to settlement fund made subject to notice.” Again, the

evidence fails to support this contention. Only 43 out of 257

“check cashers” who filed a Notice Of Intent To Participate In

Back-Pay have objected. All of the “check cashers” were allowed

to attend the meetings of the class held in January, February, and

March of this year and voice their objection to the proposed

settlement before it was agreed to by the class representatives.

None of them spoke against the “settlement fund” at tl 2se

meetings. The objectors have failed to present any contrary

evidence. Moreover, there is not any legal requirement that every

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individual member of the class “agree” to a settlement. It is

enough that the settlement be agreed to by the class

representatives so long as it 1s fair, adequate and reasonable.

Fourthly, the form objection states that the class members

filing it “(o)bject generally to subclassification of the check

cashers.” There has been no certification of the check —cashers as

a subclass in this case. No party or class member has ever moved

for such certification and the Court finds that it would have been

inappropriate and unnecessary even if they had so moved. The

class as a whole has been vigorously represented by the class

representatives and their attorney throughout the period since

the 1975 back-pay awards were accepted by these objectors. Not

only were the specific interests of the class members who accepted

their 1975 awards represented, but they were successfully

represented by the existing class representatives and attorney for

the class. The Court is unable to find any evidence which

supports a contention that subclasses should have been

structured or that the representation of the entire class has been

inadequate.

The remaining contentions contained in the form objectfons

filed by the class members who accepted their 1975 back-pay

awards have been carefully considered by the Court in light of all

of the evidence presented. The Court finds that such objections

are frivolous and without any evidentiary support in the record.

The Court also finds that the treatment of the class members who

cashed their checks in 1975 by the class representatives and the

provisions made for such class members in the proposed

settlement are fair, adequate and reasonable.

B. Class Members Who Are Not Participating

In The Proposed Back-pay Distribution

There are two groups of class members who have objected

because they have been excluded from participating in the

proposed back-pay distribution. One group of 8 objectors

complains about the reliance on timely filing of the Notice Ot

Intent To Participate In Back-Pay asa precondition for receiving

ack-pay. A second group of 24 objectors complains about the

requirement that a class member have at least two years of service

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prior to January, 1979 in order to be included in the back-pay

distribution. The Court finds both of these objections to be

without merit

Every person who has worked at the defendant's plant since

July 1, 1965 was eligible to participate in the back-pay

calculations if he met two Prerequisites: (1) he filed a timely

Notice Of Intent To Participate In Back- Pay in 1979. and (2) he

had at least two years of service prior t) January, 1979. These

requirements were-based on the knowledve of both parties that

notevery black employee desired to be promoted or was everina

position to be promoted. A large number of the 2400 members of

the class only worked a few days or weeks with the defendant

before they quit or were discharged.’ Another large sector of the

Class was hired after the remedial decrees in this case had ended

the unlawful testing and other discriminatory practices involved

in the case. For this reason, both parties desired to narrow the

Class to that group which had some plausible basis for making a

claim that they were denied a Promotional opportunity because

of their race. At a period in the case when there were no

settlement negotiations over the back-pay issue even

contemplated, the parties agreed that every member of the class

should be given notice of the status of the Case and an

Opportunity to signity his belief that he had been denied

Promotional opportunities because of their race. The Court,

independently from the parties, also determined that such Notice

should be provided Accordingly, the Court ordered on October

25, 1979 that notice be given to the class telling them that they

must file a Notice Of Intent To Participate In Back-Pay before

December |, 1979

When the responses to the Notice were received, it was learned

that approximately 160 of the 1215 Persons responding to the

Notice had not even completed the six month probationary

period after hiring. Since all employees, black and white. are

ineligible for promotion during such probationary period, it was

known by both parties that further refinement of the class eligible

to receive back-pay was needed. The parties independently

a

This action does not involve issues of hiring or discharge

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studied the question of which segments of the class had too little

seniority to have had a realistic expectancy of being promoted in

the absence of racial discrimination. Through such studies the

parties determined that no class member who did not have at

least two years of seniority before January 1, 1979 could have

been affected by the racially discriminatory practices which are

the subject of this action. The latter date corresponded to the

entry of the Interim Order by the Court after remand from

Pettway IV. supra. That Order provided all of the injunctive

relief to which the Court of Appeals had held the class entitled in

Pettway Ill and 1V. That date is consistent with the decision in

Pettway I11, supra at 258, which stated that “(t)he termination

date of the back-pay period for most claimants will be the date of

the district court’s decree implementing our decision . . .” /d.

Based on all of the evidence and the Court's intimate familiarity

with this lawsuit, the exclusion of any class members who had less

than two years service prior to January |, 1979 or who did not file

a Notice Of Intent To Participate in 1979 is fair, adequate, and

reasonable.

C. Class Members Who Claim Their Individual

Share Should Be Greater

There are 16 class members} who rejected their 1975 back-pay

awards who are scheduled to receive varying amounts under the

proposed decree ranging from greater than $16.000 to as little as

$3,000. There are also 6 class members hired after July 2, 1965

who did not participate in the 1975 back-pay tender who are

scheduled to receive varying amounts in the propose | settlement

based on their seniority with the defendant. Both of these groups

claim that their individual share of the total settlement should be

greater. Because the back-pay for these two groups was

calculated and negotiated according to different standards and

considerations, they are considered separately.

The six objecting class members hired after July 2, 1965 who

did not receive any back-pay in the 1975 tender are the following:

‘One objecting class member who fell into this category, Ben Clark, has

withdrawn his objection with the Court.

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Gregory Hrabowski

John Jenkins

James Mason

Cornelius Moon

Thomas Porter

William Skones

All of these class members were hired after 1969. None of them

were ever subjected to any of the pencil and paper tests which lie

at the heart of the liability of the defendant. The years that they

have spent in the defendant’s employ have been years in which

promotional opportunities have been under constant court

supervision and a series of remedial decrees designed to provide

equal opportunity for the black employees. In the Final Order

and Modified Judgment entered November 20, 1975 this Court

found “that no black employee employed subsequent to July 2,

1965 has suffered any economic loss due to the Company’s testing

and educational requirements or from any other alleged

discriminatory practice.” /d. at p.4. In Pettway /V, supraat 1210-

1213, the Court of Appeals recognized that this group of class

members had not yet entered Stage II proceedings in which they

were entitled to a presumption of back-pay.

The parties necessarily took the procedural and historical

status of the post-1965 segment of the class into account in

negotiating the settlement fund allocated in the proposed

Consent Decree for this group. The Court is satisfied that the

fund allocated to this group as a group is fair, adequate and

reasonable. There are 266 class members who are scheduled to

participate in the back-pay distribution who were hired aftez July

2, 1965. Only 6, or 2.2%, have objected to the amount allocated.

These 6 have failed to produce any evidence which indicates that

the group qua g-oup of post-1965 hires are entitled toan amount

greater than they are receiving in the proposed settlement. On the

other hand, the calculations of the experts retained by the parties

show that they could have received substantially less at trial. In

fact, the group as a group may have been excluded from even

entering Stage II proceedings under the mandate of Petrway /V,

supra at 1210-1213, if the settlement in this action had not been

reached.

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More importantly, the objections of these 6 class members are

not couched in terms of an objection to treatment of the post-

1965 group qua group. The objections actually focus on the

individual amounts scheduled to be received by each of them in

the settlement. In short, they want more. The formula used to

calculate their individual share, however, is a reasonable one. It is

based solely on seniority and is identical to the one approved by

Judge Guin in James v. Stockham Valves & Fittings Co., CA#

70-178-S (Option dated November 16, 1981). The Court of

Appeals in Pertway ///, supra at 260-261, recognized that any

method of calculation or division “creates a quagmire of

hypothetical judgments” and is nothing more that a “process of

conjecture.” /d. The proponents of the settlement have carried

their burden of proving that the method of calculating individual

shares is as fair, adequate and reasonable as any other method

that is available.

As to the group of 16 objectors who were hired before July 2,

1965 and who rejected their back-pay award in 1975, the Court

reaches the same conclusion. There are 426 class members who

are within the same category who support the settlement and

have not objected. This fact is entitled to considerable, although

not decisive, weight. See, Pertway /V, supra at 1217-1218. Of

equal importance is the fact that the amount allocated to this

group qua group is $2,520,083. In 1975 this Court found that

$516,598.10 was fair, adequate and reasonable for this same

group of class members. The Court of Appeals did not reverse

this finding per se but held thata settlement should not have been

forced upon the class in view of the large number of objections

which were found. Pertway Jb, supra at 1217-1218. The current

settlement has increased the back-pay fund available to this

segment of the class nearly 500°. The calculations of the experts

retained by both parties establish that the settlement fund

available to this largest group within the class is within the range

of what they could expect to receive at trial. The evidence is clear

and convincing that the fund allocated in the proposed settlement

for the class members who rejected the back-pay tender in 1975 1s

fair, adequate and reasonable. The 16 objectors from this group

have failed to present any evidence which wou'd support a

contrary conclusion.

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While the remaining contentions contained in the objections

filed by these 16 class members are obviously without merit, the

Court is compelled to address them out of an abundance of

caution. First, several of the objectors state that they were not

informed of the expected testimony of the expert retained by the

plaintiffs prior to receiving notice of the proposed settlement.

The evidence showed to the contrary. In numerous meetings with

the class at St. Paul’s United Methodist Church, the attorney for

the class reported the results of the expert's calculations. The

handful of class members who claim to be unaware of such

reports apparently were either absent or were not listening. The

Court cannot find any credible evidence to support a contention

that the expert’s conclusions were hidden from the class. Even if

they had been hidden, however, that would not be a ground for

disapproving a settlement which is otherwise fair, adequate, and

reasonable. There is no obligation on the part of the class

representatives and the attorney for the class to divulge the work

product of an expert to a large and diverse class prior to

negotiating a settlement. The plaintiffs have a strong interest in

preserving the confidentiality of expert reports during

negotiations with the defendant. No valid purpose would be

served by requiring an attorney for the class to divulge his efforts

at trial preparation to a class of laymen prior to the time that a

definite settlement is reached between the parties. Moreover, any

prejudice to any of the objectors raising this contention has been

cured by the dissemination of the expert findings to the attorney

for the objectors prior to the May 12, 1983 hearing. Nothing

within the expert calculations supports a finding that any term of

the settlement ts unfair, inadequate or unreasonable.

Secondly, several class members have complained about the

individual shares of the recovery scheduled for distribution to the

members of the Committee For Equal Job Opportunity. While

the Court considered such objections in the findings and

conclusions entered in support of preliminary approval of the

proposed Consent Decree, the Court has considered the matter

again in light of the evidence developed at the hearing on

objections. After doing so, the Court has independently

determined that the findings and conclusions entered on March

A-25

23, 1983 as a part of the preliminary approval of settlement are

correct and fully supported by the weight of the evidence. Only

six class members out of over 2400 have complained about the

relatively larger individual shares accorded to the leaders of the

class who have served on the Committee For Equal Job

Opportunity. For the reasons expressed in the findings and

conclusions entered by the Court on March 23, 1983, the Court

finds that the scheduled distribution to the members of the

Committee For Equal Job Opportunity is fair, adequate and

reasonable.

Il. POST-HEARING MOTIONS AN BJECTIONS

BY CLASS MEMBERS

After the hearing on the fairness of the propx settlement

two groups of objecting class members filed ions for

rehearing under Federal Rule of Civil Procedure 59. In these

motions a number of contentions were raised which were not

presented prior to or during the fairness hearing on May 12, 1983.

At this late stage of the case, the Court can find no justifiabie

reason for allowing class members to raise matters which should

have been presented prior to the fairness hearing and the April

22, 1983 deadline for objections. Under even the most liberal

reading of Rule 59, the movants have failed to demonstrate any

evidence which is newly discovered or could not have been

presented at the May 12, 1983 hearing. Indeed, the movants have

failed to even articulate what additional evidence they would

present at any rehearing. The Court gave the objecting class

members a full opportunity to present any evidence which they

considered relevant to the issue of whether the proposed

settlement should be approved. Although the attorneys for the

objectors were asked by the Court to minimize cumulative

testimony and evidence, they were not prohibited from

presenting any witness that they called to testify. After the last

witness was presented, the Court heard no objection to taking the

case under submission. There was no request by any class

member or attorney to present further testimony or to continue

the hearing until another day. Under these circumstances, the

motions for rehearing are due to be denied. Before doing so,

however, the Court is compelled to address several of the

A-26

contentions set forth in the post-hearing motions so that the

record is not cluttered with unfounded allegations of

impropriety.

The post-hearing motion filed by Ralph Coleman on behalf of

the thirteen class members he represents raises a number of

procedural questions about the fairness of the settlement

approval process which has been followed. First, the contention

is made that the notice to the class was insufficient because it

informed class members that they would have to support any

objections to the proposed settlement with evidence which was

subject to cross-examination. At the fairness hearing there were

no class members who came forward to say that they would have

objected to the proposed settlement in the absence of that

provision in the notice to the class. Certainly none of Mr.

Coleman's clients could have so testified since all of them filed

objections. Mr. Coleman has not informed the Court of any

identifiable class members who refused to object because of a fear

of cross-examination. While the Court is sensitive to any claim

that the official notice to the class “chilled” dissent, such a claim

must at least be raised by a person who has standing to raise it and

be supported by a threshold level of credible proof of the chilling

effect. The pending motion filed by Mr. Coleman fails on both

counts. It was not filed on behalf of any person who was actually

discouraged from objecting by the formal notice and it is not

supported by any credible evidence that such a person exists.

Similar to this contention is the allegation that class members

were given exaggerated opinions of the monetary value of the

proposed settlement in meetings with the class in January of this

year. The Court finds that this contention was unsupported by

any credible evidence at the fairness hearing. No additional

evidence on this subject has been identified to the Court since that

hearing. Even if the point were fully supported by the evidence,

however, it would not call the fairness of the settlement into

question because any exaggerated descriptions of the proposed

settlement were cured by the formal notice mailed to the homes of

every class member in April. That notice contained an accurate

and complete description of the proposed settlement prior to the

deadline for objections. There has been no evidence offered of

A-27

any class member who misunderstood the terms of the settlement

after the formal notice was mailed to their home in early April of

this year.

Secondly, the post-hearing motion filed on behalf of the class

members represented by Mr. Coleman contends that the fairness

hearing was itself unfair because it placed the burden of proof on

the objecting class members and because the evidence offered by

the proponents of the settlement was in affidavit form. The

motion is incorrect in both of these contentions. At every stage of

the settlement approval process the Court has imposed the

burden on the proponents of the settlement to prove that it is fair,

adequate and reasonable. The evidence from the proponents was

received by affidavit as the direct testimony of the witnesses, but

not as their entire testimony. Each of such witnesses was either

present or on call for the purpose of cross-examination. The

opponents of the proposed settlement were given as much time to

study the affidavits as they requested. The fairness hearing was

specifically adjourned for several hours for this purpose. When

the hearing reconvened there were no objections made to the use

of such affidavits for the purpose of direct examination by any

party, class member or attorney. Neither was there any effort at

cross-examination of such witnesses. The opponents of the

settlement were represented by licensed attorneys and did not

appear pro se. The Court cannot attribute the failure to object to

the receipt of the affidavits of the proponents’ witnesses to

anything other than a knowing decision by such attorneys to

allow such affidavits to be received as evidence without need of

cross-examination of the affiants. It is now entirely too late for

the opponents to complain about the use of affidavits. The expert

witnesses retained by the parties are from North Carolina and

Texas. The opponents’ failure to attempt cross-examination at

the fairness hearing or at a deposition prior to or since such

hearing can only be cured at great expense in time and money at

this late date. The opponents of the settlement represented by

Mr. Coleman have failed to show any justification for reopening

the record to do that which should have been done at the original

fairness hearing.

The motion for rehearing filed by Ronald Spratt on behalf of

A-28

the class members he represents contends that the Court “limited

testimony by the objectors” at the May 12, 1983 hearing. The

motion fails to identify any witnesses who were present at the

hearing who were not allowed to testify. It also does not describe

what additional evidence might be offered so that the Court can

evaluate whether it would be admissible or helpful on the issues at

hand. Most, if not all, of the testimony presented by the objectors

at the May 12, 1983 hearing did not focus on the issues relevant to

a determination of whether the settlement should be approved.

The Court pointed this out to the attorneys for the objectors

several times during the hearing, but they continued to put on

evidence which had only a marginal relevance. The Court is

unwilling to exercise its discretion to reopen the evidentiary

record without a specific identification of the evidence that would

be offered at such a rehearing.

In addition, the opponents of the settlement failed to object to

the Court taking the case under submission on May 12, 1983.

After the last witness was called by the opponents there was no

request for further opportunity to present evidence or to make

arguments. At some stage the proceedings in this case must come

to anend and not be subject to repeated efforts to delay the entry

of a final judgment that will allow the class to receive the back-

pay to which they were held entitled almost ten years ago. The

Court is firmly convinced that all of the parties and class

members have been given an ample opportunity to present the

evidence that is available on the question of the fairness of the

proposed settlement. Accordingly, the motions for rehearing

filed by the opponents are denied. A separate Order will be

entered on such motions.

IV. THE RIGHT TO OPT-OUT

One final contention which was raised during the fairness

hearing remains to be considered. The testimony presented by the

opponents attempted to fault the class representatives and

attorney for informing them that they could seek to opt-out of the

settlement and attempt to prove entitlement to a larger back-pay

award. The contention is made that this constituted a “threat”

which “improperly restrained” class members from objecting.

A-29

This contention reflects a misunderstanding of the law of the case

and the duty of the attorney for the class.

In Pettway /V the Court of Appeals considered the question of

opting out at some length. It concluded witha statement that “on

remand if another settlement is reached, the district court should

provide those claimants who decide to opt-out of the settlement

with an opportunity to assert their individual claims in this

action.” /d. 576 F.2d at 1220. The attorney for the class brought

this provision of the prior mandates to the attention of the class in

his meetings with them in January, February, Marchand April of

this year. It is undisputed that he informed class members in all of

these meetings that he would assist them in seeking to opt-out of

the settlement if they desired the opportunity to present their

individual claims for greater back-pay. After formal notice to the

class was mailed to each class member, the plaintiffs’ attorney

met individually with scores of class members in his office prior

to the May 12, 1983 fairness hearing. In these meetings the

Opportunity to opt-out was once again explained to the class

members, including many of the ones now objecting to the

proposed settlement. Presumably the attorneys for the objectors

also read the mandate in Pettway /V and informed their clients of

the opportunity to opt-out of the settkement and proceed

individually with a claim for a greater back-pay award.

Despite the repeated notice to the class of the opportunity to

opt-out of the settlement there has not been a single request to do

so by any member of the class. Instead, the objecting class

members have apparently decided that the opportunity to opt-

Out is something that is not in their best interests. According to

the papers before the Court and the testimony, this decision was

made with the advice and counsel of the objectors’ attorneys.

The Court and the class representatives, of course, cannot

force the objecting class members to seek the opportunity to opt-

out of the settlement and pursue their individual claim of

entitlement to more back-pay. The decision in Pettway /V only

mentions the “opportunity” to opt-out of the settlement. In the

circumstances now before the Court that opportunity has been

provided and no class member has expressed any interest init. In

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the absence of any request to opt-out and any objection based on

this ground, the Court concludes that the issue is moot.

V. AT®*RNEY AND EXPERT FEES

The Notice to the class fully described the amount of fees and

expenses which are scheduled to be paid to the attorney and the

expert for the class. Only two objections have mentioned the

reasonableness of the attorney's fees and none have mentioned

the reasonableness of the expert witness fees or the attorney's

expenses. The two objections which mentioned the attorney's

fees stated that they were contingent upon a showing of

reasonableness. At the fairness hearing on May 12, 1983 the

Court received evidence from the plaintiffs concerning the

reasonableness of the fees provided in the proposed settlement.

The opponents of the settlement declined to present any evidence

on the issue. Even in their arguments to the Court at the hearing,

the objecting class members and their attorneys did not oppose

the attorney's fees provided in the proposed settlement. The two

class members who mentioned the attorney’s fees in their written

objections prior to the hearing did not express such objections or

offer anything in support of them at the hearing.

Nevertheless, the Court is aware of its own independent

obligation to consider the reasonableness of the attorney's fees

and expert witness tees provided in the proposed settlement. The

Court has received testimony from the plaintiffs’ attorney and

two additional attorneys who are well respected for their

knowledge and expertise in litigation in this District. This

testimony was received as evidence in the form of affidavits

without objection from any party or class member. The

opponents of the settlement declined the opportunity to cross-

examine such witnesses.

The Court examined the reasonableness of attorney's fees

prior to giving preliminary approval to the proposed settlement.

See Findings Of Fact And Conclusions Of Law Giving

Preliminary Approval To Proposed Consent Decree, pp. 17-23

(entered March 23, 1983). The Court now has before it additiona!

evidence on the subject. Based on all of the evidence and the

Court's own independent knowledge of the efforts of the attorney

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for the class, the Court finds that each of the twelve factors set

forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714

(Sth Cir. 1974), support a finding that the attorney's fees

requested by the plaintiff's attorney are reasonable. More

specifically, as to each of the twelve Johnson, supra, factors, the

Court finds:

1. Novelty and Difficulty: This case has involved a series of

novel and difficult legal and factual issues throughout the eight

years that the plaintiffs’ attorney has devoted to prosecution of

the back-pay claims of the class. Many of the issues that have

been resolved in this case have been ones of first impression and

have resulted in a suibstantial body of precedent for guidance of

future cases.

2. Skill Requisite To Perform The Legal Services Properly.

The proper representation of the class in this case has required a

high degree of skill and effort at both the trial and appellate

levels.

3. Experience, Reputation And Ability Of The Plaintiffs’

Attorney: While the plaintiffs’ attorney had very little experience

or reputation at the beginning of his representation of the

plaintiffs, he has gradually gained a great deal of experience and

ability in this area of the law since 1975. The great majority of the

work for which he is currently being compensated involves the

1980-1983 period of time. During that period the plaintiffs’

attorney has been one of the most experienced and able

practitioners on the plaintiffs’ side of Title VII cases in this

District. The Court of Appeals in Johnson, supra at 719,

recognized that “(a)n attorney specializing in civil rights cases

may enjoy a higher rate for his expertise than others, providing

his ability corresponds with his experience.” The ability

displayed in this case has been commendable

4. Amount Involved and Results Obtained: The amount

involved in the case is substantial for this area of the law and this

District. The results obtained are in cvery sense impressive and

accord important remedies to a large class of black employees

5. The Customary Fee: The lead attorneys for the defendant

have charged between $90 and $100 per hour for the work they

A-32

have done on a non-contingent basis for the defendant in the last

three years in this case. The evidence before the Court indicates

that such rates are customary in this Distict for non-contingent

work of the type involved in this case since 1980.

6. The Contingency, Of The Fee: The plaintiffs’ attorney has

prosecuted this case on the basis of a fee that was contingent on

success and court approval. Since the remand in Petiway /?,

supra, and the entry of the injunctive Consent Decree in 1980, the

Company has taken the position that an award of further

attorney's fees was contingent upon continued success on the

remaining claims in the case. Throughout his representation of

the class since 1975 the plaintiffs’ attorney has been exposed to

the substantial risk of receiving nothing for his time and services.

7. Preclusion Of Other Employment: The number of hours

and the priority which has had to be given to this case because of

its age has foreclosed more than half of the time available for

work on the affairs of other clients during the last three years.

Because of this fact, the plaintiffs’ attorney has had to turndown

and transfer a substantial amount of other business which could

have provided him a more secure and predictable income.

8. Time Limitations Imposed By The Client And The

Circumstances: The plaintiffs’ attorney has had to work under

very tight time constraints at numerous points of the last three

years. While the case has appeared to drag very slowly at times,

that has only been because of the immense amount of work that

has gone into the case. Beginning in July, 1980 this Court and the

Court of Appeals have expedited the processing of the case and

placed short deadlines on virtually every aspect of the case. The

decision in Johnson, supra at 718, states that “(p)riority work

that delays the lawyer's other legal work ts entitled to some

premium. This factor is particularly important when a new

counsel is called into prosecute the appeal or handle other

matters at a late stage in the proceedings.” /d. That factor is fully

applicable to the work at bar.

9 Nature And Length Of Professional Relationship With

Client. The class in this case is large and, at times, very vocal as to

how it desires this case to be handled. The nature and length of

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the relationship between the attorney for the class and the class

itself has necessarily presented difficulties and aggravations

which are not associated with providing more routine or

traditional legal services.

10. Time And Labor Required: The plaintiffs’ attorney

expended 3,508 hours in the prosecution of the monetary claims

of the class priorto January 10, 1983. The contemporaneous time

records kept by him were made available during the fairness

hearing on May 12, 1983. Neither the attorneys nor any class

members who attended that hearing expressed any doubt as to

the reasonableness of any of the hours recorded in such time

records. There has been no duplication of work on behalf of the

plaintiffs. The plaintiffs’ attorney, Robert L. Wiggins, Jr., has

been the only attorney who has worked on this case for the

plaintiff class since 1975. All of the 3,508 hours for which he is

being compensated were expended on the monetary claims of the

class and not on any claims on which the plaintiffs were

ultimately unsuccessful. The Court has carefully considered the

recorded hours and has not been able to identify any which were

unreasonably or unproductively expended. See generally,

Fitzpatrick v. Internal Revenue Service, 665 F.2d 327 (11th Cir.

1982). The Court finds that all of these hours were reasonably

spent in the prosecution of the plaintiffs’ back-pay claims.

Among other facts which support this finding, the Court notes

that the defendant's attorneys spent a comparable number of

hours on this case during the same period of time.

11. Undesirability Of The Case: Based on all of the

circumstances surrounding this case since June, 1975, the Court

finds that it was a highly undesirable undertaking which very few

attorneys would have accepted. The acceptance of this case had a

negative effect on the practice of the plaintiffs’ attorney. The

delay of eight years in receipt of payment for his services has also

contributed to its undesirable character.

12. Award In Similar Cases: There are very few cases similar

to the one now before the Court. In one recent individual Title

VII action which lasted less than two years, another judge of this

District awarded the current plaintiffs’ attorney $90 per hour and

A-34

then doubled the fee because of the applicability of several of the

Johnson, supra, factors. Davis v. Construction Materials, Inc.,

CV# 81-C-1816-S (N.D. Ala. 1982). In two other cases in this

District the court has awarded $85.00 per hour and 10% of the

total recovery of the class to the plaintiff's attorney. Harper vy.

Federal Deposit Insurance Corp., CV# 79-HM-0921-S; South vy.

C. J. Hughes, CV# 80-HM-0397-S. See also, Neely v. City of

Grenada, 624 F.2d 547, 551 (Sth Cir. 1980). The Court finds that

the fee involved in the proposed settlement is less than what

might have been awarded in comparable cases that did not

involve a settlement. It is also less than what the defendant has

paid its own attorneys in this case.

The Court concludes that this is a case in which the plaintiffs’

attorney is entitled to some premium or enhancement of the fee

that he normally would be entitled to receive in less exceptional

circumstances. While the Court believes that all of the twelve

Johnson, supra, factors support some degree of enhancement,

the Court is particularly impressed with the amount involved and

the results obtained for the plaintiff class. See e.g., Neely v. City

of Grenada, supra at 551. As the Supreme Court has recently

recognized, “in some cases of exceptional success an enhanced

award may be justified.” Hensley v. Eckerhart, Slip Op. (May 16,

1983). The history of this lawsuit certainly marks it as one

involving “exceptional success.”

Based on a'l of the foregoing factors, the Court finds that the

attorney's fee and expenses set forth in the proposed Consent

Decree are reasonable for the period through January 10, 1983.

In reaching this finding the Court has reviewed the findings of

fact and conclusions of law entered in support of preliminary

approval of the attorney's fees on March 23, 1983. Those findings

and conclusions are fully supported by the evidence presented at

the May 12, 1983 hearing. The Court adopts and reaffirms such

findings and conclusions in support of the attorney's fee award.

In addition, the amount of fees set forth in the proposed

Consent Decree did not include any compensation for the period

since January 10, 1983. The plaintiffs’ attorney has expended 392

hours in representing the class in gaining approval of the

A-35

proposed settlement and in otherwise fulfilling his obligations to

the class on the monetary relief aspects of this case. The Court

finds that these hours were both necessary and reasonable and

that the attorney for the class should be compensated for them in

the amount of $100 per hour. Such fees will be paid in accordance

with the provisions of 47 and 9 12 of the proposed Consent

Decree. The plaintiffs’ attorney is entitled to be compensated for

all hours reasonably expended by him between June 22, 1983 and

the date that the back-pay is distributed to the members of the

class. Plaintiffs’ attorney shall, prior to the distribution of the

monetary sums set forth in the Consent Decree, provide the

Court witha summary of the hours expended since June 22, 1983.

Such payment shall also be at the rate of $100 per hour and shall

be paid from the funds provided in § 12 of the proposed

settlement.

CONCLUSION

The Court has carefully considered the terms of the proposed

settlement in light of all the evidence, arguments, and previous

decisions which have been entered in this action. The Court finds

that the parties have carried their burden of proving that all of the

terms and provisions of the settlement are within the range of

what could have reasonably been expected to have been recoverd

at trial. The Court also finds that the class representatives and the

attorney for the class have provided adequate representation of

the interests of every member of the class and that the settlement

is a fair, adequate and reasonable disposition of the claims of

each segment of the class.

DONE this 23rd day of June, 1983.

Sevbourn H. Lynne

United States District Judge

A-36

PETTWAY v. AMERICAN CAST IRON PIPE CO.

Rush PETTWAY, et al.,

Plaintiffs- Appellees,

Charles L. Daniel, et al.,

Plaintiffs-Appellants,

and

United States Equal Employment

Opportunity Commission,

Plaintiff-Intervenor-Appellee,

v.

AMERICAN CAST IRON PIPE COMPANY

Defendant-Appellee.

No. 83-7425

Non-Argument Calendar.

United States Court of Appeals,

Eleventh Circuit.

Nov. 21, 1983.

Black employees brought class action alleging employment

discrimination. The District Court, 332 F.Supp. 811, found

racial discrimination, but declined to find any damages, and the

Court of Appeals, 494 F.2d 211, remanded for determination of

back pay, and thereafter denied rehearing, 494 F.2d 1296.

Following remand, the District Court approved proposed

settlement and overruled motions by dissatisfied class members,

and the Court of Appeals, 576 F.2d 1157, affirmed in part,

reversed in part, and remanded. The Court of Appeals, 581 F.2d.

267, denied rehearing en banc, and the Supreme Court, 439 U.S.

1115, 99 S.Ct. 1020, 59 L.Ed.2d 74, denied certiorari. On remand,

the District Court ordered special master to proceed with

determination of back pay on individual-by-individual basis, but

the Court of Appeals, 681 F.2d 1259, vacated and remanded,

encouraging further effort at settlement. The United States

District Court for the Northern District of Alabama, Seybourn

H. Lynne, J., approved settlement agreement, and 58 dissatisfied

class members appealed. The Court of Appeals held that

A-37

evidence supported finding that 58 dissatisfied members of class

were treated fairly and received amounts to which they were

entitled in settlement of back pay claim.

Affirmed.

Federal Civil Procedure 1699

In class action alleging racial discrimination in employment,

evidence supported finding that 58 dissatisfied members of class

were treated fairly and received amounts to which they were

entitled in settlement of back pay claim.

Appeals from the United States District Court for the

Northern District of Alabama.

Before RONEY and CLARK, Circuit Judges, and TUTTLE,

Senior Circuit Judge.

PER CURIAM:

This is the sixth appearance of this case before this Court and

its predecessor, the Court of Appeals for the Fifth Circuit. The

belabored history of the litigation is fully stated in its last

previous appearance here, Pettway, et al. v. American Cast Iron

Pipe Co., 681 F.2d 1259 (11th Cir. 1983). Very briefly stated, the

history encompassed the following steps. Originally the trial

court found the existence of racial discrimination in the

employment and promotion practices of the defendant. The

court granted an injunction and then declined to find any

damages in favor of the plaintiff class. Upon appeal, this Court

remanded for a determination of back pay, 494 F.2d 211, leaving

open, of course, the possibility of a settlement between the

parties. Such a proposed settlement was recommended by the

class representatives and their counsel, in a sum amounting to

approximately $1,000,000. Because of the objection of some

seventy percent of the members of the class, and other defects

found by this Court to have occurred in the trial court's approval

of such settlement, this Court again reversed and remanded the

case for further proceedings. A substantial number of the

members of the class had accepted checks mailed out by the

A-38

defendant in accordance with the proposed settlement. Because

the trial court announced its intention of requiring proof by every

member of the class of his own amount of back pay to which he

considered himself entitled, this Court again reversed and

directed that the court determine whether it could not estimate a

back pay award due to the class as a whole. Again, this Court at

681 F.2d 1259, encouraged a further effort at settlement.

Settlement efforts finally succeeded and after due hearing upon

the recommendation of the class counsel, more than 95 percent of

the members of the class, with the concurrence of the Equal

Employment Opportunity Commission, approved the

settlement. Now, 58 members of the class, filed these appeals.

The principal argument presented by the present appellants is

that they did not receive amounts in the proposed distribution

equal to comparable members of the class. In effect, they contend

they should not be required to include as part of their final award,

the amount of the checks they cashed in 1975. With evidence at

the fairness hearing of the current value of the 1975 payments to

these employees, the court could properly conclude that the

parties were treated fairly.

We have carefully considered the record of the fairness hearing

conducted by the trial court, and the court's full discussion of

each issue raised at the hearing. As stated by the court at the

conclusion of the hearing, the court had been aware of the many

issues in the case fora period of 17 years, and it showed itself to be

completely aware of the relatively small number of objectors who

made competing claims as to the amounts they should have

received in the final settlement.

We find that the trial court had before it more than sufficient

evidence upon which it could, as it did, conclude that the

settlement was “fair and reasonable.”

We particularly note that, once all of the legal complications in

the case had finally been disposed of, during the many trips of this

case to the courts of appeals of this and the Fifth Circuit, the trial

court demonstrated unusual skill in apprehending each nuance

that was even suggested by the present objectors, the appellants

here. We conclude that the final determination of the trial court,

A-39

bolstered to some extent by the agreement, though without the

signature, of the Equal Employment Opportunity Commission,

cannot be faulted as having been an abuse of the trial court's

discretion.

All pending motions, not individually acted on, are hereby

denied.

The judgment is AFFIRMED.

A-40

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 83-7425

Rush PETTWAY, et al.,

Plaintiffs- Appellees,

Charles L. Daniel, et al.,

Plaintiffs- Appellants,

and

United States Equal Employment

Opportunity Commission,

Plaintiff-Intervenor-Appellee,

v.

AMERICAN CAST IRON PIPE COMPANY,

Defendant-Appellec.

Appeal from the United States District Court for the Northern

District of Alabama

ON PETITION FOR REHEARING AND SUGGESTION

FOR REHEARING EN BANC

(Opinion November 21, 1983, I! Cir., 198 , F.2d).

Betore RONEY and CLARK, Circuit Judges, and TUTTLE,

Senior Circuit Judge

PER CURIAM:

The Petition for Rehearing is DENIED and no member of this

panel nor other Judge in regular active service on the court

having requested that the Court be polled on rehearing en blanc

(Rule 35, Federal Rules of Appellate Procedure; Eleventh Circuit

Rule 26), the Suggestion for Rehearing En Banc is DENIED.

The Petition for Rehearing is DENIED and the Court having

been polled at the request of one of the members of the Court and

a majority of the Circuit Judges who are in regular active service

not having voted in favor of it (Rule 35, Federal Rules of

Appellate Procedure; Eleventh Circuit Rule 26), the Suggestion

for Rehearing En Banc is also DENIED.

A-4]

A member of the Court in active service having requested a poll

on the reconsideration of this cause en banc, and a majority of the

judges in active service not having voted in favor of it, rehearing

en banc is DENIED.

ENTERED FOR THE COURT:

Paul H. Roney

United States Circuit Judge

A-42

IN THE UNITED STATES DISTRICT COURT FOR THE

NORTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

CIVIL ACTION NO. 66-315

RUSH PETTWAY, et al.,

Plaintiffs,

v.

AMERICAN CAST IRON PIPE COMPANY

Defendant.

SUPPLEMENTAL AFFIDAVIT OF

ROBERT L. WIGGINS, JR.

STATE OF ALABAMA )

JEFFERSON COUNTY )

Comes Robert L. Wiggins, Jr. who, first being duly sworn

proposes and states as follows:

1. Since January 10, 1983 I have expended 392 hours in

representing the class in obtaining the monetary relief provided

for in the Consent Decree and in securing the agreement of the

class with such settlement. The hours spent by me on the

monetary remedies obtained in this case since January 10, 1983

were maintained on contemporaneous time records, The time

which was recorded on the contemporancous time records since

January 10, 1983 is summarized on the attached itemization of

time. The attached itemization is an accurate summary of the

time spent by me since January 10, 1983 on the monetary relief

obtained for the class

Robert L. Wiggins, Jr.

Attorney for Plaintiffs

Suite 716 Brown Marx Building

Birmingham, Alabama 35203

April 19,

April 22,

April 26,

April 27,

April 28,

April 29,

April 30,

, 1983

, 1983

1983

1983

1983

1983

1983

1983

1983

A-43

Prepare and attend meeting with

CEJO and class at St. Paul's

Meet with class members; draft letter

to Supreme Court on extension of

Petition For Cert

Meet with class members on settlement

all day; draft letters to class members

calling on telephone

Meet with class members; review status

of objections at Courthouse; talk to

Logan on telephone; meet with Bates

on objections

Review objections and draft joint

motion to require disclosure of facts by

objectors; draft letter to Logan

summarizing objections by categor-

ies—5 page letter

Meet with class members all morning

on settlement, prepare and meet with

Pat Logan on approach to objections;

meet with class members; draft ob-

jection to Petition to change LOP’s

Meet with class members all morning;

meet with class members all afternoon,

meet with Booker, Henley and

Blackmon on objections

Meet with class members all morning

Meet with class members all day

5.8

8.0

98

4.8

10.9

10.6

4.0

7.8

A-44

Respectfully submitted,

Lara $

Ralph E. Coleman

2175 tith Court South

Birmingham, Alabama 35205

(205) 939 0444

Counsel of Record for Petitioners,

Charles L. Daniel, et al

Ronald L. Spratt

1929 North Third Avenue North

Smith Towers, Suite 3200

Birmingham, Alabama 35203

(205) 251-7180

trrorney for Petitioners,

Charles L. Daniel, et al

OF COUNSEI

COLEMAN & COLEMAN

2175 tith Court South

Birmingham, Alabama 35205

(205) 939-0444