Geneva Rock Products, Inc. v. United States
119 Fed. Cl. 581
| Fed. Cl. | 2015Background
- Rails-to-trails class action challenging NITU-based trail use on a 3.23-mile rail corridor; plaintiffs allege a Fifth Amendment taking.
- Litigation progressed through certification, partial summary judgment on liability and damages, and settlement negotiations for the entire class.
- Settlement provides just compensation plus interest, plus a set amount of statutory attorneys’ fees and costs under the Uniform Relocation Act.
- Two class members’ claims were dismissed with prejudice; twenty-two other class members opted in and received notices and comments opportunities.
- Class counsel sought RCFC 23(h) approval of a 35% contingent fee against total recovery; concerns arose over fee structure and lodestar cross-check.
- Court conducted a fairness and reasonableness review under RCFC 23(e) and evaluated fee reasonableness with a lodestar cross-check.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the settlement is fair, reasonable, and adequate under RCFC 23(e). | Geneva Rock argues terms are fair given risks and recovery; negotiations were arm's-length. | Government contends terms may overstate value or be affected by fee structure; partially opposes. | Settlement approved as fair, reasonable, and adequate. |
| Whether 17.5% contingent fee is reasonable under RCFC 23(h). | Counsel contends high value case, complex litigation, and contingent fee justified by results. | Government questions presumptions of reasonableness and argues lack of written contingency with Geneva Rock. | 17.5% contingent fee approved; lodestar cross-check supports reasonableness. |
| Whether statutory fee allocation and class crediting against the contingent fee are proper. | Credit to class for statutory fees reflects dollar-for-dollar offset against contingency. | Disagrees on calculation mechanics; seeks appropriate alignment with Uniform Relocation Act. | Statutory fee retained by counsel, with dollar-for-dollar credit to class; overall allocation approved. |
| Whether the government has standing to challenge the fee or the fee methodology in this RCFC 23(h) context. | No class member objections; government should be bound by settlement terms. | Government claims standing to challenge fee as party to action. | Government lacks standing to object to the attorney’s fee amount; court reviews independently. |
Key Cases Cited
- Weinberger v. Kendrick, 698 F.2d 61 (2d Cir. 1982) (court approved settlement oversight standards for class actions)
- Christensen v. United States, 65 Fed. Cl. 625 (2005) ( RCFC 23(e) fairness analysis and factors)
- Dauphin Island Prop. Owners Ass’n v. United States, 90 Fed. Cl. 95 (2009) (notice, fairness considerations for settlements in government takings)
- Sabo v. United States, 102 Fed. Cl. 619 (2011) (class action settlement fairness and notification considerations)
- Raulerson v. United States, 108 Fed. Cl. 675 (2013) (lodestar considerations in fee awards under Uniform Relocation Act)
- Moore v. United States, 63 Fed. Cl. 781 (2005) (lodestar method and reasonableness mechanics)
- Haggart v. United States, 116 Fed. Cl. 131 (2014) (contingent fee and lodestar cross-check in rails-to-trails context)
- In re Rite Aid Corp. Sec. Litig., 396 F.3d 294 (3d Cir. 2005) (lodestar cross-check and common fund concept in fee awards)
- Brandt v. United States, 134 S. Ct. 1257 (2014) (Supreme Court on takings and rail alignment; referenced in context of damages)
- Hash v. United States, 403 F.3d 1208 (Fed. Cir. 2005) (interpretation of easements and takings authority)
- Boeing Co. v. Van Gemert, 444 U.S. 472 (1980) (standing in common fund fee disputes)
- Copeland v. Marshall, 641 F.2d 880 (D.C. Cir. 1980) (fee award dynamics in class actions)
- Marvin M. Brandt Revocable Trust v. United States, 134 S. Ct. 1257 (2014) (Supreme Court takings interpretation cited in background)
