Brooklyn Center for Independence of the Disabled et al v. Bloomberg et al
Filing
199
MEMORANDUM OPINION AND ORDER: For the reasons set forth within, the Court will take an intermediate approach and grant Plaintiff's request for an interim order requiring Defendants to comply with the settlement, subject to modification or re jection following notice to the class members and a fairness hearing pursuant to Rule 23(e). It is hereby ORDERED that, no later than October 7, 2014, the parties shall confer and submit a joint proposed order consistent with this Memorandum Opin ion and Order. The proposed order should include, among other things, the parties' proposed procedures for giving notice to the class (along with the proposed notice(s)) and a proposed schedule for (1) providing notice; (2) filing a motion (joint or on consent, as the case may be) for approval of the settlement; and (3) the fairness hearing. (Signed by Judge Jesse M. Furman on 10/1/2014) (ab)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
---------------------------------------------------------------------- X
:
BROOKLYN CENTER FOR INDEPENDENCE OF
:
THE DISABLED et al.,
:
:
Plaintiffs,
:
:
-v:
:
MICHAEL R. BLOOMBERG et al.,
:
:
Defendants.
:
:
---------------------------------------------------------------------- X
10/02/2014
11-CV-6690 (JMF)
MEMORANDUM OPINION
AND ORDER
JESSE M. FURMAN, United States District Judge:
On September 11, 2014, Plaintiffs submitted proposed procedures for the Rule 23(e) class
notice and fairness hearing process in this case. (Pls.’ Request for Status Conference (“Sept. 11
Letter”) (Docket No. 194)). Plaintiffs requested that the Court enter any Memoranda of
Understanding (MOUs) between the parties as an order, subject to modification after a fairness
hearing. (Sept. 11 Letter 1). Defendants stated that they did not object to Plaintiffs’ proposal,
“with the understanding that while the MOUs may be incorporated into a preliminary order of
approval, the stipulation of settlement would not be so-ordered until the conclusion of the
fairness hearing procedures required by Rule 23(e).” (Defs.’ Sept. 17, 2014 Letter (Docket No.
196) 1). Consequently, the Court adopted Plaintiffs’ recommendation and directed the parties to
notify it of any disagreements. (Docket No. 197).
On September 30, 2014, the parties reported that they had reached a settlement and
submitted a Stipulation of Settlement and Memoranda of Understanding. (Joint Letter Attaching
Stipulation Settlement & Defs.’ Request for Further Clarification Regarding Rule 23(e) (“Sept.
30 Letter”) (Docket No. 198)). Their cover letter, however, revealed disagreement about what
steps the Court should take prior to the fairness hearing. Plaintiffs ask the Court to “immediately
‘so order’ the Stipulation and the requested relief set forth in the MOUs, and issue a remedial
order” subject to modification after a fairness hearing, while Defendants contend that the Court
should instead “preliminarily approve the settlement, including the MOUs, for purposes of
permitting the notice of proposed settlement to issue to the class members.” (Sept. 30 Letter 23). Under Defendants’ proposal, Plaintiffs would not be entitled to any relief until after the
fairness hearing. (Id.). For the reasons explained herein, the Court agrees with Plaintiffs.
Rule 23(e) of the Federal Rules of Civil Procedure prohibits the voluntary dismissal,
settlement, or compromise of a class action absent court approval. The Rule further provides
that the court may approve a settlement only after giving notice to class members, holding a
hearing, and finding that the settlement is “fair, reasonable, and adequate.” Fed. R. Civ. P.
23(e)(1),(2). Nevertheless, several courts in the Second Circuit have adopted a “functional
interpretation” of Rule 23(e), under which strict compliance with the rule is not “uniformly
required.” Green v. Am. Exp. Co., 200 F.R.D. 211, 212 (S.D.N.Y. 2001); see, e.g., J.S. v. Attica
Cent. Schs., No. 00-CV-513S (WMS), 2012 WL 3062804, at *3-4 (W.D.N.Y. 2012); Town of
Greece v. Eastman Kodak Co., No. 06-CV-6579 (DGL), 2007 WL 2126277, at *1 (W.D.N.Y.
2007); Selby v. Mut. Life Ins. Co., No. 98-CV-5283 (RLC), 2003 WL 22772330, at *3-4
(S.D.N.Y. 2003). This “functional” approach recognizes that “‘if there is no evidence of any
collusion between the named plaintiffs and the defendants in seeking [settlement] and no
evidence of any prejudice to absent class members,’ the requirements of Rule 23 may not be
compulsory.” J.S., 2012 WL 3062804, at *2 (quoting In re Nazi Era Cases Against German
Defs. Litig., 189 F.R.D. 429, 442 (D.N.J. 2001)) (alteration in original).
2
Courts adopting the functional approach have relaxed Rule 23(e)’s requirements in
several situations, including: “(1) when the terms of the settlement provide near complete relief
to the plaintiffs, (2) when the settlement provides for only injunctive relief, and, therefore, there
is no potential for the named plaintiffs to benefit at the expense of the rest of the class, (3) when
there is no evidence of any collusion between the parties, and (4) when the cost of notice would
risk eviscerating the settlement agreement.” Green, 200 F.R.D. at 212; see also id. n.1 (noting
that some courts take a “more enlightened approach” to Rule 23(e) under which “[i]f neither loss
of benefit to the class nor evidence of collusive agreement is present, notice is unnecessary”
(quoting Newberg on Class Actions § 11.72)). They have also considered whether strict
compliance with Rule 23(e) would “entail substantial delay and concomitant cost, all to the
detriment of the class itself.” Doe v. Perales, 782 F. Supp. 201, 207 (W.D.N.Y. 1991).
Many of these factors are present here. The proposed settlement provides only injunctive
relief, and there is no evidence of collusion between the parties. See Green, 200 F.R.D. at 212.
To the contrary, Defendants vigorously contested their liability at trial, resulting in a 119-page
opinion from this Court (Docket No. 159), and the settlement agreement on remedies was
reached only after a lengthy, arms’ length mediation process overseen by both this Court and an
independent mediator. Additionally, upon preliminary review, the settlement appears to provide
Plaintiffs with “near complete relief” given the Court’s findings and conclusions with respect to
liability. Green, 200 F.R.D. at 212. The seven MOUs lay out in detail concrete steps that
Defendants will take in planning for, and responding to, emergencies and disasters to better
accommodate people with disabilities. (See Sept. 30 Letter, Exs. 2-8). Perhaps most importantly,
given the nature of the issues in this case and the fact that a disaster could strike at any time,
3
Plaintiffs could be significantly harmed if they were forced to wait until after a fairness hearing
for Defendants to begin rectifying the inadequacies in its emergency preparedness and plans.
In cases where a flexible approach is called for, several courts have been willing to
approve a settlement without even notifying the class members or holding a fairness hearing.
See, e.g., Doe, 782 F. Supp. at 207; Selby, 2003 WL 22772330, at *5. In this case, Plaintiffs
have not asked the Court to go so far, and the Court is not inclined to go so far. Instead, the
Court will take an intermediate approach and grant Plaintiff’s request for an interim order
requiring Defendants to comply with the settlement, subject to modification — or rejection —
following notice to the class members and a fairness hearing pursuant to Rule 23(e).
For the foregoing reasons, it is hereby ORDERED that, no later than October 7, 2014,
the parties shall confer and submit a joint proposed order consistent with this Memorandum
Opinion and Order. The proposed order should include, among other things, the parties’
proposed procedures for giving notice to the class (along with the proposed notice(s)) and a
proposed schedule for (1) providing notice; (2) filing a motion (joint or on consent, as the case
may be) for approval of the settlement; and (3) the fairness hearing.
SO ORDERED.
Date: October 1, 2014
New York, New York
4
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?