861 F.3d 481
3rd Cir.2017Background
- Class action by Jersey City residential property owners (Classes A & C; 3,497 properties) alleging diminution of property value from hexavalent chromium (COPR) disposals at two plant sites; settlement covers only Honeywell (claims against PPG litigated separately).
- Settlement: $10,017,000 non-reversionary fund (after fees/costs net ~$6,133,447.36); valid claims from 2,085 properties produced per-property distributions (~$2,926 final).
- Plaintiffs pursued common-law torts (nuisance, strict liability, trespass, negligence, civil conspiracy) seeking only economic property-damage relief; no personal-injury or medical-monitoring claims released.
- District Court certified settlement-only class under Fed. R. Civ. P. 23(a) and 23(b)(3), approved settlement under Rule 23(e), and awarded attorneys’ fees and costs under Rule 23(h); objector Chandra appealed.
- District Court evaluated settlement via Girsh/Prudential factors, found substantial litigation risks (lack of property testing, causation and statute-of-limitations issues), significant class uptake and few opt-outs/objections, and that the settlement provided immediate tangible benefits.
- Third Circuit: affirmed class certification, settlement approval, and attorneys’ fees award; vacated and remanded the costs award for further explanation regarding commingled expenses incurred jointly against Honeywell and PPG.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Adequacy of record re: contamination (need for property testing/expert proof) | Chandra: settlement approval was improper without expert proof of on-property COPR contamination. | Honeywell/settling parties: available studies and discovery created a sufficient record; valuation speculative and litigation risky. | Court: No abuse of discretion; precise aggregate valuation unnecessary where record and litigation risks allow a fairness judgment. |
| Availability of remediation under NJ Spill Act | Chandra: Spill Act remedies are not practically available (administrative delay), so reliance on them is erroneous. | Defendants/settling parties: Spill Act remedies remain legally available and factor into settlement fairness. | Court: Not clear error; Spill Act availability may be considered when assessing fairness. |
| Release scope (unknown/unforeseen claims and in-ground contamination) | Chandra: Release is overbroad—sweeps unknown future claims and in-ground contamination without adequate record. | Defendants: Comprehensive releases are standard and reasonable given claims asserted (economic loss only) and litigation risks. | Court: Release not overbroad as applied to the asserted diminution claims; District Court did not abuse discretion. |
| Notice and sufficiency of disclosure for attorneys’ fees and costs | Chandra: Notice under Rule 23(h) was deficient (fee % presented before deduction of costs; costs detailed only in camera). | Defendants: Notice gave the critical fee amount; costs disclosure and in camera review were appropriate. | Court: Fee award affirmed (applying NJ Rule 1:21-7 does not change result); cost award remanded for clearer reasoning on commingled PPG/Honeywell expenses. |
Key Cases Cited
- Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (class settlement fairness and certification principles)
- In re Prudential Ins. Co. America Sales Practice Litig., 148 F.3d 283 (Prudential) (Girsh/Prudential fairness factors expansion)
- Girsh v. Jepson, 521 F.2d 153 (nonexclusive factors for settlement fairness)
- In re Pet Food Prods. Liab. Litig., 629 F.3d 333 (3d Cir.) (need for record support when portions of fund are capped or valuation readily calculable)
- In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768 (treating valuation and settlement reasonableness in common-fund cases)