# Opposition Brief — Koerner v. Class Representatives

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_0952%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1986
- **Citation:** 474 U.S. 1057

## Text

mt

Supreme Court, U.S,
FILED

DEC 12 1985

No. 85-712 JOSEPH F. SPANIOL, JR.
CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1985

JOHN E. KOERNER & Co., INC.
AND IMPERIAL PRODUCTS CORP.,
Petitioners,
VU.
PLAINTIFF CLASS REPRESENTATIVES AND
THE PLAINTIFF CLASS,
Respondents,

IN RE: CORN DERIVATIVES ANTITRUST LITIGATION
MDL 414

BRIEF IN OPPOSITION OF RESPONDENTS

David Berger Clive S. Cummis
BERGER & SILLS, BECK, CUMMIS,
MONTAGUE, P.C. ZUCKERMAN, RADIN,
1622 Locust Street TISCHMAN & EPSTEIN
Philadelphia, PA 19103 33 Washington Street
(215) 875-3030 Newark, NJ 07102-3179
Attorneys for Respondent, (201) 643-3232
Golden Quality Ice Attorneys for Respondent,
Cream Company Food Foundation, Inc.

(SEE INSIDE FRONT COVER FOR NAMES
OF ADDITIONAL RESPONDENTS)

BEST AVAILABLE COPY (amma

QUESTIONS PRESENTED FOR REVIEW

This Petition concerns the settlement of an antitrust
class action suit. Following notice to all class members of
the proposed settlement and hearing thereon, the district
court gave final approval to the settlement. The Court of
Appeals for the Third Circuit affirmed.

The Petition presents two questions for review. They
are as follows:

1. Did the district court abuse its discretion in
approving the settlement of this case?

2. Was the notice of proposed settlement
adequate?

STATEMENT REQUIRED BY RULE 28.1

Respondents are class representatives of the plaintiff
class, a class of purchasers of corn derivatives products,
and include the following class representatives:

Bear Stewart & Corp.

Bodines, Inc.

Cumberland Farms Dairy, Inc., whose parent
is Delaware Food Stores, Inc.

Consolidated Packaging Corp.

Eastern Candy Company, Inc.

Food Foundation, Inc.

Golden Quality Ice Cream Company

G. Heileman Brewing Company, Inc.

Health Care Industries, Inc.

Kalva Corp.

Korbro Oil Corp.

Land O’Lakes, Inc., whose partially owned
subsidiaries are Norris Creameries, Inc.;
Imperial Packaging, Inc.; Imperial, Inc.;
and Lakeside Dairy Company

Plantation Confection Company, Inc.

Virnelson Bakery, Inc.

il

TABLE OF CONTENTS

Page
QUESTIONS PRESENTED FOR REVIEW ...... ef
STATEMENT REQUIRED BY RULE 28.1....... ii
py Fe Sy fe | y 5 | hr iv
ty ee 8g ee ies. Se. Sea re 2
REASONS FOR DENYING THE WRIT......... 4
I. The Petition Raises No Important Unsettled
Question of Federal Law................... 4
II. No Conflict Among the Circuits Is Presented
ESI OTT RTT TC CTT EET TE 5

III. The Third Circuit Did Not Sanction A Depar-
ture From the Accepted and Usual Course of
ee 7

RS eee 8

TABLE OF AUTHORITIES
CASES:
In re Corrugated Container Antitrust Litigation,
643 F.2d 195 (Sth Cir. ) affd. 659 F.2d 1322 (Sth
Cir. 1981) cert. denied 456 U.S. 998 (1982)...

Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir.

Sea ce wy ca eps Me 88 eee ED Ok GOR 4,<

Dimmitt Agri Industries, Inc. v. CPC International,
Inc., 679 F.2d 516 (Sth Cir. 1982)...........

In re General Motors Corp. Engine Interchange Lit-
igation, 594 F.2d 1106 (7th Cir.) cert. denied,
ae 0 Wk Seed CE wk a os adh eee ks oes

in re General Tire & Rubber Co. Securities Litiga-
tion, 726 F.2d 1075 (6th Cir. 1984).........

Girsh v. Jepson, 521 F.2d 153 (3d Cir. 1975) ....

Grunin v. International House of Pancakes, 513
F.2d 114 (8th Cir.) cert. denied, 423 U.S. 864
4 og) eee rer rr rarer cee e 4,

Officers for Justice v. Civil Service Commission, 688

Fo). Gi he : ) eee arenes -

Parker v. Anderson, 667 F.2d 1204 (5th Cir.

KN ake eek Sa Ww ROS Gee cae ww

Robertson v. National Basketball Association, 556
fe Eh Re Rg 4 Geena ta er

Saylor v. Lindsey, 456 F.2d 896 (2d Cir. 1972)...

TBK Partners, Ltd. v. Western Union Corp., 675
Pee ee Coe Gi BED bos ocak eek bane

Weinberger v. Kendrick, 698 F.2d 61 (2d Cir.
Ei asc aes ek wee he are

Page

4

6

TABLE OF AUTHORITIES—(Continued)

STATUTES:
Page
Oe & * ) Pere Vieeds eae anaes Mae 4,5
OTHER AUTHORITIES:
H. Newberg, Newberg on Class Actions (Second
Re: See, SEEM ees hike eee 6

No. 85-712

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1985

JOHN E. KOERNER & Co., INC.
AND IMPERIAL PRODUCTS CORP.,
Petitioners,
U.
PLAINTIFF CLASS REPRESENTATIVES AND
THE PLAINTIFF CLASS,
Respondents,

IN RE: CORN DERIVATIVES ANTITRUST LITIGATION
MIL 414

BRIEF IN OPPOSITION OF RESPONDENTS

Pursuant to Rule 27.2(b) of the rules of this Court,
RESPONDENTS, plaintiff class representatives and the
plaintiff class in the Court below, file this brief in oppo-
sition to the Petition for a Writ of Certiorari which seeks
to overturn a decision of the Court of Appeals for the
Third Circuit affirming the approval of a class action set-
tlement. It is respectfully requested that this Court deny
the Petition for Writ of Certiorari.

2
STATEMENT OF THE CASE

The Petition has been filed on behalf of two objectors
to a class action settlement approved by the District
Court and affirmed by the Court of Appeals.

These consolidated antitrust actions were com-
menced in late 1979 and 1980 by more than thirty direct
purchasers of corn derivative products on behalf of them-
selves and a class of more than 35,000 similarly situated
direct purchasers. The thrust of the actions was that the
twelve defendants, who refine corn into derivative prod-
ucts such as syrup, oil, dextrose and starch, allegedly
combined and conspired to fix, raise, maintain and sta-
bilize the prices of corn derivative products.

On March 28, 1980, all actions were transferred by
the Judicial Panel on Multidistrict Litigation to the Dis-
trict of New Jersey.

Large amounts of discovery materials relating to the
merits of Respondents’ claims were reviewed by Respon-
dents’ counsel, including voluminous documentary ma-
terials voluntarily produced by defendants. In addition,
Respondents’ counsel interviewed managerial pricing
personnel of various defendants and reviewed the record
and the extensive discovery developed in a related anti-
trust suit involving the corn derivatives industry, Dim-
mitt Agri Industries, Inc. v. CPC International Inc., 679
F.2d 516 (Sth Cir. 1982).

Concurrently with the document inspection and wit-
ness interviews, settlement negotiations were conducted
between counsel for the respective parties and proposed
settlements were reached. On April 12, 1983 a hearing
was held to determine whether the settlements appeared
to be sufficiently fair, reasonable and adequate to justify
sending notice thereof to class members and to set a
hearing for final approval of the proposed settlements.
On April 21, 1983 the court filed its Opinion and Order

3

establishing a setthkement class, preliminarily approving
the settlements, directing notice to the class, and setting
a hearing for final approval on June 30, 1983.

At the request of certain class members who ap-
peared at the June 30 hearing, the hearing on final ap-
proval was centinued by the Court to August 17, 1983.

During the interim, the Court afforded counsel for
Petitioners the opportunity to review the entire record
and the extensive discovery materials assembled by
counse! for Respondents. Counsel for Petitioners chose
io review only small portions of the material made avail-
able.

At the August 17 hearing only three of some 35,000
class members objected to the proposed settlement,
rather than exercise their right to opt-out. Two of them,
represented by the same counsel, have filed the instant
Petition.

Following the hearing, the District Court entered an
Order and Judgment finding the settlements fair, rea-
sonable and adequate. The District Court made detailed
findings on all the criteria applicable to the question of
whether to approve a proposed class action settlement.

The three objectors appealed the District Court's ap-
proval of the setthement. By opinion dated August 26,
1985 the Third Circuit affirmed the Order of the District

Court.

4

REASONS FOR DENYING THE WRIT

Nothing in the petition supports the granting of a
Writ of Certiorari, and none of the points raised by Pe-
titioners is worthy of review. Far from attempting to de-
lineate the issues that make this case one of
jurisprudential importance, the Petition simply reiterates
the arguments raised by Petitioners below concerning
the merits of the district court’s approval of the settle-
ment.

First, the Petition raises no important, unsettled
question of federal law. The standards for approval of
class action settlements and the requisites of Rule 23(e)
notice have been the subject of considerable scrutiny at
all Jevels of the federal court system.

Second, no conflict among the Circuit Courts of Ap-
peals is presented by the Decision of the Third Circuit.
There is agreement in the courts as to the criteria for
settlement approval and notice of proposed settlement.

Finally, this case clearly is not one in which the
Court of Appeals sanctioned a departure from the ac-
cepted and usual course of judicial proceedings, and
therefore the exercise of the Supreme Court’s supervi-
sory power is unwarranted.

I. The Petition Raises No Important Unsettled Question
of Federal Law.

The general criteria for the approval of class action
settlements have been enunciated frequently by the fed-
eral courts. See, e.g., Detroit v. Grinnell Corp., 495 F.2d
448 (2d Cir. 1975); Girsh v. Jepson, 521 F.2d 153 (3d
Cir. 1975); Grunin v. International House of Pancakes,
513 F.2d 114 (8th Cir.), cert. denied, 423 U.S. 864
(1975); In re Corrugated Container Antitrust Litiga-
tion, 643 F.2d 195 (5th Cir.), aff’d, 659 F.2d 1322 (Sth
Cir. 1981); cert. denied, 456 U.S. 998 (1982). The re-
quirement of F.R. Civ. P. 23(e) that the district court
approve every proposed settlement quite naturally has

5

resulted in a proliferation of opinions concerning the req-
uisites for approval.

Every factor raised by Petitioners — the adequacy of
discovery for objectors; the need for an evidentiary hear-
ing; the adequacy of notice of the proposed settlement;
the balancing of the settlement figure against the ulti-
mate likelihood of obtaining a higher figure — has been
the subject of extensive discussion in the courts. See,
e.g., In re General Motors Corp. Engine Interchange Lit-
igation, 594 F.2d 1106 (7th Cir. ), cert. denied, 444 U.S.
870 (1979) (discovery); Saylor v. Lindsey, 456 F.2d 896
(2d Cir. 1972) (discovery, evidentiary hearing);
Robertson v. National Basketball Association, 556 F.2d
682 (2d Cir. 1977) (discovery concerning settlement pro-
cess); Officers for Justice v. Civil Service Commission,
688 F.2d 615 (9th Cir. 1982) (notice); Grunin supra (no-
tice); Plummer v. Chemical Bank, 668 F.2d 654 (2d Cir.
1982) (balancing settlement offer against strength of
case); Grinnell Corp., supra (balancing).

Furthermore, the standard of appellate review of a
trial court’s approval of settlement has been addressed
repeatedly by the Courts of Appeals. See, e.g., Grinnell
Corp., supra (abuse of discretion).

Accordingly, the Petition presents no important un-
settled questions of federal law. Indeed, in Respondents’
view, the Petition presents no questions of law whatso-
ever, but merely seeks a reapplication of settled princi-
ples of law to the circumstances of the instant case.

II. No Conflict Among the Circuits Is Presented By the
Petition.

The Petition is totally lacking in any demonstration
that the Third Circuit’s affirmance of the settlement in
this case presents a conflict with the views of any other
Circuit. There is no conflict among the Circuits.

While Rule 23(e) is silent with regard to the stan-
dards by which a proposed class action settlement is to be

6

evaluated, the courts have all started with the basic
premise that the settlement must be fair, adequate, and
reasonable under all the circumstances. See, e.g., Offic-
ers for Justice, supra; Parker v. Anderson, 667 F.2d
1204 (5th Cir. 1982); Girsh, supra; TBK Partners, Ltd.
v. Western Union Corp., 675 F.2d 456 (2d Cir. 1982). In
assessing what is fair, adequate, and reasonable, the
courts have considered a mix of factors. No single factor
is necessarily determinative, as each case is unique.
Among the factors which all the circuits agree should be
taken into consideration are the following: (1) the com-
plexity, expense, and likely duration of the litigation; (2)
the reaction of the class to the settlement; (3) the stage
of the proceeéings and the amount of discovery com-
pleted; (4) the risks of establishing liability; (5) the risks
of establishing damages; (6) the risks of maintaining the
class action through trial; (7) the ability of the defen-
dants to withstand a greater judgment; (8) the range of
reasonabieness of the settlement fund in light of the best
possible recovery; and (9) the range of reasonableness of
the settlement fund to a possible recovery in light of all
the attendant risks of litigation. See, e.g., Girsh, supra;
Grinnell Corp., supra; Parker, supra; Grunin, supra.
Each of these factors has been applied quite flexibly. See
also H. Newberg, Newberg on Class Actions (Second
Edition, 1985), §11.42.

There is no conflict among the circuits as to the ob-
ligation of the district court to review these various fac-
tors. Settlement approval is a matter left to the sound
discretion of the trial court, and the trial court must
weigh and evaluate these factors as is appropriate in the
circumstances of the particular case.

The Courts of Appeals are also in agreement as to the
requisites of an adequate notice to class members. The
notice must be reasonably calculated to apprise inter-
ested parties of the pendency of the actions, inform them
of their opportunity to object and must generally de-
scribe the terms of the setthkement. The notice must be

ri

scrupulously neutral. See, e.g., In re General Tire and
Rubber Co. Securities Litigation, 726 F.2d 1075 (6th
Cir. 1984); Weinberger v. Kendrick, 698 F.2d 61 (2d Cir.
1981); Grunin, supra. The Third Circuit decision in this
case is completely consistent with the standards enun-
ciated by all other circuits.

Accordingly, the Petition presents no conflict be-
tween the Circuits requiring a resolution.

III. The Third Circuit Did Not Sanction A Departure
From the Accepted and Usual Course of Judicial
Proceedings.

No exercise of this Court’s supervisory powers is
called for in this case because, as the Third Circuit rec-
ognized, the district court treated the settlement of this
case in a thorough and altogether appropriate manner.

Respondents believe that the district court properly
approved the proposed settlement. Petitioners disagree.
However, Petitioners’ reargument in this Court of the
merits of approval can in no way cast suspicion on the
district court’s conduct of the settlkement process or its
ultimate decision regarding settlement.

The proposed settlement was the subject of lengthy
briefing and argument before the district court. The Pe-
titioners were allowed a full opportunity to make their
objections known. Following hearing, the district court
wrote a lengthy opinion discussing and weighing all the
factors relevant to the approval or disapproval of setile-
ment. The length and comprehensiveness of the district
court’s opinion make frivolous any accusation of insuf-
ficient attention to the case or failure of the district court
to act in the best interests of class members. The Court
of Appeals could find no basis for disturbing the judg-
ment of the trial court.

CONCLUSION

Petitioners have failed to demonstrate an important
issue of unsettled federal law, a conflict between the Cir-
cuits, or a departure from the acce~*ed and usual course
of judicial proceedings. Accordingly, for the reasons set
forth above, the Petition for Writ of Certiorari should be

denied.

Respectfully submitted,

DATED: December 13, 1985

David Berger

BERGER &
MONTAGUE, P.C.

1622 Locust Street

Philadelphia, PA 19103

(215) 875-3030

Attorneys for Respondent,
Golden Quality Ice
Cream Company

Michael H. King

ROSS & HARDIES

150 N. Michigan Avenue
Suite 2500

Chicago, IL 60601

(312) 558-1000

Attorneys jor Respondent,
Consolidated Packaging
Corp.

Clive S. Cummis

SILLS, BECK, CUMMIS,
ZUCKERMAN, RADIN,
TISCHMAN & EPSTEIN

33 Washington Street

Newark, NJ 07102-3179

(201) 643-3232

Attorneys for Respondent,
Food Foundation, Inc.

Harold E. Kohn

Dianne M. Nast

KOHN, SAVETT, MARION
& GRAF, P.C.

One Reading Center,
24th Floor

1101 Market *treet

Philadelphia, PA 19107

(215) 238-1700

Attorneys for Respondents,
Bodines, Inc. and
Cumberland Farms
Dairy, Inc.

Joel C. Meredith Douglas V. Rigler
MEREDITH & COHEN KAPLAN RUSSIN
117 S. 17th Street, & VECCHI
22nd Floor . 1218 Sixteenth Street, NW
Philadelphia, PA 19103 Washington, D.C. 20036
(215) 564-5182 (202) 638-0060
Attorneys for Respondent, Attorneys for Respondent,
Eastern Candy Company, G. Heileman Brewing
Inc. Company, Inc.
Guido Saveri Robert A. Skirnick
SAVERI & SAVERI WOLF, POPPER, ROSS,
111 Sutter Street, Suite 2140 WOLF & JONES
San Francisco, CA 94104 845 Third Avenue
(415) 391-0300 New York, NY 10022
Attorneys for Respondents, (212) 759-4600
Bear Stewart & Corp., Attorneys for Respondents,
Easterr: Candy Company, Eastern Candy Company
Inc., Health Care Inc., Korbro Oil Corp.,
Industries, Inc.. Plantation Confection
G. Heilman Brewing Company, Inc.

Company, Inc., Kalva Corp.,
Korbro Oil Corp.,
Virnelson Bakery, Inc.

Eugene M. Warlich

DOHERTY, RUMBLE &
BUTLER

1500 First National
Bank Building

St. Paul, MN 55101

(612) 291-9270

Attorneys for Respondent,
Land O'Lakes, Inc.

Michael H. King

ROSS & HARDIES

150 N. Michigan Avenue
Suite 2500

Chicago, IL 60601

(312) 558-1000

Attorneys for Respondent,
Consolidated Packaging
Corp.

Joel C. Meredith
MEREDITH & COHEN
117 S. 17th Street,
22nd Floor
Philadelphia, PA 19103
(215) 564-5182
Attorneys for Respondent,
Eastern Candy Company,
Inc.

Guido Saveri

SAVERI & SAVERI

111 Sutter Street, Suite 2140

San Francisco, CA 94104

(415) 391-0300

Attorneys for Respondents,
Bear Stewart & Corp.,
Eastern Candy Company,
Inc., Health Care
Industries, Inc.,
G. Heilman Brewing
Company, Inc., Kalva Corp.,
Korbro Oil Corp.,
Virnelson Bakery, Inc.

Eugene M. Warlich

DOHERTY, RUMBLE &
BUTLER

1500 First National
Bank Building

St. Paul, MN 55101

(612) 291-9270

Attorneys for Respondent,
Land O’Lakes, Inc.

Harold E. Kohn

Dianne M. Nast

KOHN, SAVETT, MARION
& GRAF, P.C.

One Reading Center,
24th Floor

1101 Market Street

Philadeiphia, PA 19107

(215) 238-1700

Attorneys fer Respondents,
Bodines, Inc. and
Cumberland Farms
Dairy, Inc.

Douglas V. Rigler
KAPLAN RUSSIN
& VECCHI
1218 Sixteenth Street, NW
Washington, D.C. 20036
(202) 638-0060
Attorneys for Respondent,
G. Heileman Brewing
Company, Inc.

Robert A. Skirnick

WOLF, POPPER, ROSS,
WOLF & JONES

845 Third Avenue

New York, NY 10022

(212) 759-4600

Attorneys for Respondents,
Eastern Candy Company
Inc., Korbro Oil Corp.,
Plantation Confection
Company, Inc.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_0952%3A2. Public record. Not legal advice.