Haggart v. United States
133 Fed. Cl. 568
| Fed. Cl. | 2017Background
- This is a rails-to-trails takings class action involving 520 class members; parties reached a 2014 Settlement Agreement for $110 million (plus interest) to be allocated among class members; 253 class members were to be paid and 267 dismissed without compensation.
- The Claims Court approved the settlement and awarded common-fund attorneys’ fees; the attachment allocating payments to each class member did not show the per-member reduction for those fees.
- Class members Gordon and Denise Woodley appealed, arguing class counsel failed to provide written documentation (spreadsheets) enabling class members to verify allocations; the Federal Circuit agreed the documentary disclosure was inadequate, reversed approval of the settlement and the common-fund fee award, and remanded for further proceedings.
- The Federal Circuit did not dispute the Settlement Agreement’s substantive terms (total amount, interest, which plaintiffs were included); it limited its reversal to approval of the settlement and the fee award based on inadequate disclosure.
- On remand the government initially accepted the limited scope but later changed position, relying on a Washington district-court decision to argue most class members hold no compensable property interests and asserting the Settlement Agreement is unenforceable or abandoned.
- The Claims Court denied the government’s motion for reconsideration, holding the Federal Circuit’s mandate did not disturb the underlying Settlement Agreement or earlier liability determinations (mandate rule / law of the case), that the government failed to prove abandonment, and that the allocation spreadsheet disclosures and reallocation (to remove common-fund fee reductions) are permissible to effect the unchanged $110 million settlement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Effect of Federal Circuit mandate | Woodleys: mandate required only additional written disclosure about allocation methodology; settlement otherwise stands | Gov: mandate vacated prior judgment in full, rendering Settlement Agreement unenforceable | Court: mandate only reversed approval for lack of disclosure and the fee award; Settlement Agreement’s substantive terms remain intact (mandate rule) |
| Adequacy of disclosure of allocation methodology | Plaintiffs: produced spreadsheets and complied with mandate by making documents available and reopening discovery | Gov: class counsel failed to disclose two of three spreadsheets and thus noncompliant | Court: parties had access via discovery; spreadsheets were filed as exhibits; disclosure issue addressed on remand and does not justify rescinding settlement |
| Whether parties abandoned or rescinded the Settlement Agreement | Plaintiffs: counsel’s communications showed compliance with mandate, not intent to abandon; plaintiffs moved to enforce settlement | Gov: class counsel’s statements and subsequent motions show abandonment or that the government may withdraw assent | Court: abandonment requires unequivocal acts; government failed to meet burden to show abandonment; Agreement remains binding |
| Reallocation and attorneys’ fees (common-fund deduction) | Plaintiffs/Woodleys: allocation Attachment B can stand without common-fund reductions; Woodleys may receive additional funds from statutory fees, not $110M pot | Gov: removing fee deduction or reallocating alters essential terms and mutual consent; court cannot bind government to new allocations | Court: reallocating individual allocations to eliminate common-fund reductions is consistent with the Agreement and the mandate; court may enforce the contract and allocate the full $110M among class members |
Key Cases Cited
- Haggart v. Woodley, 809 F.3d 1336 (Fed. Cir. 2016) (reversed Claims Court approval of settlement and common-fund fee award for inadequate disclosure)
- Ehrheart v. Verizon Wireless, 609 F.3d 590 (3d Cir. 2010) (judicial approval is a condition subsequent; underlying class settlement remains a binding contract)
- Klamath Irrigation Dist. v. United States, 635 F.3d 505 (Fed. Cir. 2011) (party asserting rescission bears burden of proof)
- Laitram Corp. v. NEC Corp., 115 F.3d 947 (Fed. Cir. 1997) (scope and effect of appellate mandate; district court may act on matters left open by mandate)
- Engel Indus., Inc. v. Lockformer Co., 166 F.3d 1379 (Fed. Cir. 1999) (mandate rule precludes reconsideration of issues within scope of the judgment appealed from)
- Whitlock v. FSL Mgmt., LLC, 843 F.3d 1084 (6th Cir. 2016) (court’s approval role protects absent class members; defendant’s change of position does not nullify a binding settlement)
- Exxon Chem. Patents, Inc. v. Lubrizol Corp., 137 F.3d 1475 (Fed. Cir. 1998) (appellate mandate interpreted in context of opinion; scope discerned from judgment plus opinion)