Bailey, Jr. v. United States
128 Fed. Cl. 550
| Fed. Cl. | 2016Background
- Thirty-six Mississippi landowners alleged a Fifth Amendment taking after the Surface Transportation Board issued a Notice of Interim Trail Use (NITU) for a 21-mile rail corridor formerly under a railroad easement, authorizing recreational-trail use.
- Plaintiffs (Bailey, Goldman, Roberson, et al.) sued the United States in the Court of Federal Claims as a class, alleging the NITU effected a taking without just compensation; the court certified the class.
- The parties selected joint appraisers, who inspected representative parcels, produced valuations, and extrapolated values to non-inspected parcels; class counsel and the government reviewed the work.
- The parties negotiated a settlement: total payment $622,374.12 (principal $324,928.65; interest $57,445.47 accrued through 9/20/2016; $240,000 in statutory attorneys’ fees and costs under 42 U.S.C. § 4654(c)); one claimant’s claim (Annie Steen) was dismissed because her land only touched the corridor at a point.
- Court preliminarily approved notice; 26 of 36 class members affirmatively approved and none objected; a fairness hearing occurred on Sept. 26, 2016, with both sides supporting the settlement.
- The court evaluated procedural and substantive fairness under RCFC 23(e) and (h) and approved the settlement and attorneys’ fees, ordering judgment and post-judgment interest at 3.55% compounded annually until paid.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the class settlement is fair, reasonable, and adequate under RCFC 23(e) | Settlement reflects joint appraisal and provides fair compensation to class members; avoids litigation risks and delay | Same—government supported the agreement reached after joint appraisal and negotiation | Approved: court found procedural and substantive fairness and granted settlement approval |
| Whether the negotiation process was procedurally fair (arms-length, adequate representation) | Counsel used joint appraiser, kept class informed, and negotiated diligently | Government participated in joint appraisal and arms-length negotiations | Approved: court found arms-length negotiations, adequate discovery/appraisal, and zealous class representation |
| Whether notice and class reaction support approval | Notice was comprehensive; majority responded favorably and no objections were raised | Government concurs notice was adequate and no objections exist | Approved: court found notice adequate and class reaction supportive of settlement |
| Whether $240,000 in statutory attorneys’ fees and costs is reasonable under RCFC 23(h) and 42 U.S.C. § 4654(c) | Fee reflects >833 hours and reasonable out-of-pocket expenses; approved by AG representative | Government agreed to the statutory fee amount | Approved: court found fees reasonable and awarded $240,000 as agreed |
Key Cases Cited
- Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414 (1968) (framework for evaluating class settlements)
- Weinberger v. Kendrick, 698 F.2d 61 (2d Cir. 1982) (factors for settlement fairness assessment)
- D’Amato v. Deutsche Bank, 236 F.3d 78 (2d Cir. 2001) (procedural fairness considerations)
- Christensen v. United States, 65 Fed. Cl. 625 (2005) (settlement review in takings/class-action context)
- Dauphin Island Prop. Owners Ass’n v. United States, 90 Fed. Cl. 95 (2009) (factors for class settlement approval)
- Geneva Rock Prods., Inc. v. United States, 119 Fed. Cl. 581 (2015) (consideration of risks and rewards in settlement review)
- Raulerson v. United States, 108 Fed. Cl. 675 (2013) (weight given to plaintiff counsel’s judgment in settlement adequacy)
- Sabo v. United States, 102 Fed. Cl. 619 (2011) (expediency and certainty favor settlements)
- Berkley v. United States, 59 Fed. Cl. 675 (2004) (uniform availability and tailored allocation in class settlements)
- Barnes v. United States, 68 Fed. Cl. 492 (2005) (similarities between RCFC 23 and Fed. R. Civ. P. 23)