484 F. App'x 429
11th Cir.2012Background
- Mead Johnson settled a nationwide Enfamil LIPIL class action alleging deceptive marketing.
- Nelson filed and the district court certified a nationwide class for settlement purposes.
- Five related Enfamil actions were consolidated in MDL and transferred to the Southern District of Florida.
- Settlement provided cash or Mead Johnson products to class members, with caps and pro rata reductions.
- Cy pres distribution funded by unclaimed amounts if total claims < $8 million, after ensuring full compensation to claimants.
- Pack objected; the district court approved the settlement and later denied Pack’s appeal bond request.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Appropriateness of the settlement under Rule 23(e) factors | Pack argues unfair, inadequate, and collusive settlement | Mead Johnson argues settlement is fair, adequate, and reasonable | The district court did not abuse discretion; factors supported approval |
| Cy pres distribution propriety | Cy pres was improper unless all class members fully compensated | Cy pres permissible if funds remain after pro rata payments to class members | Cy pres permitted; used only after full compensation to class members and when surplus exists |
| Attorneys’ fees and notice | Fees/notice were inadequate and show collusion | Fee award reasonable; notice sufficient; negotiations arms-length | Fees approved at $3.5M with $140k costs; reasonable in common-fund context |
Key Cases Cited
- Bennett v. Behring Corp., 737 F.2d 982 (11th Cir. 1984) (settlement fairness factors; not product of collusion)
- Leverso v. SouthTrust Bank of Ala., 18 F.3d 1527 (11th Cir. 1994) (abuse of discretion standard for settlement approval)
- Cotton v. Hinton, 559 F.2d 1326 (5th Cir. 1977) (courts defer to experienced counsel’s judgment in settlements)
- In re Pharm. Indus. Average Wholesale Price Litig., 588 F.3d 24 (1st Cir. 2009) (cy pres distributions permissible with court approval)
- Nelson v. Greater Gadsden Hous. Auth., 802 F.2d 405 (11th Cir. 1986) (cy pres distributions to improve related programs allowed)
- Faught v. American Home Shield Corp., 668 F.3d 1233 (11th Cir. 2011) (25% fee in common fund cases deemed reasonable)