297 F.R.D. 136
D.N.J.2013Background
- Multi-district antitrust/RICO litigation (MDL No. 1663) by purchasers of excess casualty and commercial umbrella insurance against insurers and brokers alleging an industry-wide conspiracy tied to policies placed through Marsh & McLennan (claims covering 1/1/1998–12/31/2004).
- Extensive, long-running litigation: multiple dismissals and appeals (Third Circuit vacated and remanded some federal claims), millions of pages produced, ~300 depositions, and four prior approved settlements with many defendants (Zurich, Gallagher, Marsh, Global) totaling hundreds of millions.
- Parties negotiated a fifth settlement by mediation: settling defendants (ACE, Chubb, Munich Re groups) funded a $10.5 million common fund; class divided into Regulatory Settlement Class Members (who previously received regulatory payments) and Non‑Regulatory Class Members; allocation pro rata by premiums, with minimum $10 payments.
- Court preliminarily approved the settlement, provided notice (postcards, publication, website), received two opt‑outs and no objections to the settlement (one objection to fees), and held a fairness hearing.
- The Court certified the settlement class for settlement purposes, found the settlement and plan of allocation fair, reasonable, and adequate under Fed. R. Civ. P. 23 and Girsh factors, and approved attorneys’ fees (33% = $3.465M), expenses (~$1.023M), and $1,000 incentive awards for each named plaintiff.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Final approval of settlement (fairness/adequacy) | Settlement provides immediate, substantial recovery given protracted, risky litigation; reached after extensive discovery and arm’s-length mediation. | Settling defendants did not oppose approval; no material contrary argument presented. | Court granted final approval: Girsh factors weigh in favor of settlement. |
| Class certification for settlement purposes (Rule 23(a) and 23(b)(3)) | Class meets numerosity, commonality, typicality, adequacy; common questions predominate in antitrust/RICO context; superiority satisfied. | Defendants likely to contest certification at trial, but no opposing certification argument at settlement stage. | Court certified settlement class for settlement purposes only. |
| Notice sufficiency | Notice plan (individual postcards, detailed notice online, publication) satisfied Rule 23 requirements and provided practicable individual notice. | No substantive challenge to notice plan. | Court found notice adequate and best practicable under Rule 23. |
| Fee, expense, and incentive award approval | Requested 33% fee, expenses ~$1.023M, $1,000 per named plaintiff; counsel endured contingency risk, massive lodestar (~$182M), extensive work; fee within market range. | Sole objector (Corman Partnership) argued fee should be 25% and complained about net recovery disclosure. | Court approved fees, expenses, and $8,000 total incentives — applying percentage-of-recovery with lodestar cross-check (multiplier .32) and finding request reasonable. |
Key Cases Cited
- In re Cendant Corp. Litig., 264 F.3d 201 (3d Cir.) (court must independently evaluate fairness of class settlement)
- Girsh v. Jepson, 521 F.2d 153 (3d Cir.) (nine-factor test for settlement approval)
- In re Warfarin Sodium Antitrust Litig., 391 F.3d 516 (3d Cir.) (presumption of fairness where arm’s-length negotiation, adequate discovery, experienced counsel, few objectors)
- Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (U.S.) (settlement-only class certification framework)
- Wal‑Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (U.S.) (commonality requires a common contention capable of classwide resolution)
- Gunter v. Ridgewood Energy Corp., 223 F.3d 190 (3d Cir.) (factors for assessing fee awards)
- In re Rite Aid Corp. Sec. Litig., 396 F.3d 294 (3d Cir.) (lodestar cross-check and Gunter factors application)
- In re General Motors Corp. Pick‑Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768 (3d Cir.) (discussion of percentage‑of‑fund method and range of fee awards)