McDOWELL v. PHILADELPHIA HOUSING, et al
MEMORANDUM OPINION. SIGNED BY HONORABLE MITCHELL S. GOLDBERG ON 5/24/2013. 5/24/2013 ENTERED AND COPIES MAILED AND E-MAILED. (aeg, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
JACKIE MCDOWELL, et al.,
AUTHORITY, et al.,
May 24, 2013
Presently before the Court is the parties’ Joint Memorandum of Law in Support of Court
Approval of the Proposed Class Action Settlement, which we will construe as a joint motion for
final approval of the settlement. For the reasons set forth below, the motion will be granted.
FACTUAL AND PROCEDURAL BACKGROUND1
In April 1997, named Plaintiff Jackie McDowell, a tenant in Philadelphia’s public
housing system, filed this class action against the Philadelphia Housing Authority (“PHA”), et al.
(“Defendants”). McDowell alleged that Defendants had deprived her of her federal rights by
failing to factor rising gas rates into the gas utility allowances she was entitled to receive under
the United States Housing Act of 1937, 42 U.S.C. § 1437 et seq. McDowell sought relief for
herself and for similarly situated PHA tenants. The plaintiff class was certified by Order dated
Given the protracted nature of this matter, which encompasses a time frame of over ten years
from the date of the first contempt motion (and sixteen years since inception), 270 district court
docket entries, and adjudication in this district by two district court judges, a magistrate court
judge and a special master, we limit the background to only a basic summary.
May 22, 1997 (Doc. No. 6), and the case was subsequently settled via a Stipulation and Consent
Decree (“Consent Decree”) in January 1998.
The instant settlement agreement pertains to Defendants’ alleged violations of the
Consent Decree. Specifically, Plaintiffs contend that Defendants failed to factor rising gas rates
into the gas utility allowances, as required under the Consent Decree and 24 C.F.R. § 965.507,
for the following periods: (1) July 1, 1999 through December 21, 2002, and (2) October 31, 2005
through November 30, 2006. In August 2010, Harris T. Bock was appointed as master and given
the authority to make reports and recommendations concerning the identification of class
members and the proper calculation and payment of compensation by Defendants. Beginning in
March 2011, the parties commenced extensive negotiations, both independently and with the
assistance of the Honorable L. Felipe Restrepo, United States Magistrate Judge, which
culminated in the instant settlement agreement.
The settlement establishes a fund in the amount of $2,650,000 to be distributed among
5,642 class members.2 Defendants also agreed not to oppose a payment of fees and costs in the
amount of $730,000 to Plaintiffs’ counsel.
On January 28, 2013, this Court granted the parties’ joint motion preliminarily approving
settlement and the notice of proposed settlement to the class. Following that Order, a notice of
proposed settlement and of the settlement hearing (“Notice”) was sent to the class. The Notice
was also posted in the Philadelphia Daily News, Philadelphia Tribune and Al Dia, as well as in
PHA’s management offices. No objections to the proposed settlement were filed with the
The settlement also provides for a calculation related to set-offs for unpaid rent and property
damages with respect to each individual class member. Any reduction to a class member’s
hypothetical share as a result of set-offs (which each class member can challenge through the
procedure established in the agreement) does not affect the total amount placed in the settlement
Clerk’s office within the thirty-day period provided for in the Notice. In addition, no objections
were raised at the fairness hearing that was held on April 15, 2013.
“[A] class action cannot be settled without the approval of the court and a determination
that the proposed settlement is fair, reasonable and adequate. In re Pet Food Prods. Liab. Litig.,
629 F.3d 333, 349 (3d Cir. 2010). Approval of the settlement is left to the sound discretion of
the trial court. In re Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions, 148 F.3d 283,
299 (3d Cir. 1998) (internal quotation marks omitted). Under Federal Rule of Civil Procedure
23(e), trial judges bear the responsibility of protecting absent class members, “which is executed
by the court’s assuring that the settlement represents adequate compensation for the release of
the class claims.” In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d
768, 805 (3d Cir. 1995).
The United States Court of Appeals for the Third Circuit has articulated nine factors to be
considered when determining the fairness of a settlement:
(1) the complexity, expense and likely duration of the litigation;
(2) the reaction of the class to the settlement; (3) the stage of the
proceedings and the amount of discovery completed; (4) the risks
of establishing liability; (5) the risks of establishing damages; (6)
the risks of maintaining the class action through the trial; (7) the
ability of the defendants to withstand a greater judgment; (8) the
range of reasonableness of the settlement fund in light of the best
possible recovery; and (9) the range of reasonableness of the
settlement fund to a possible recovery in light of all the attendant
risks of litigation.
We note that the current settlement agreement is more precisely a resolution of Plaintiffs’
“Motion[s] to Enforce Consent Decree[ and] to Cite Defendants for Civil Contempt” (Doc. Nos.
14, 119). These motions are a continuation of a class action matter. As such, in approving the
most recent settlement, we will apply the standards for class action settlements as set forth in
Part II of this Memorandum Opinion.
Girsh v. Jepson, 521 F.2d 157, 156 (3d Cir. 1975) (quoting City of Detroit v. Grinnell Corp., 495
F.2d 448, 463 (2d Cir. 1974) (ellipses omitted)). The burden of establishing fairness lies with the
proponents. In re. Gen Motors, 55 F.3d at 785.
After careful consideration, we conclude that the parties’ proposed settlement is fair,
reasonable and adequate. The settlement reflects good faith, arms-length negotiations between
the parties as to the reasonable valuation of Plaintiffs’ claims and the attorneys’ fees expended.
It was reached with the assistance of Judge Restrepo and contemplated the risks related to
establishing liability and damages, the complexity of outstanding issues and the expense and
delay attendant in fully litigating the case. We also note that Plaintiffs were represented by
experienced and reputable counsel. Plaintiffs’ attorneys are staff members at Community Legal
Services, an institution dedicated to representing low income residents of Philadelphia. Further,
the settlement fund is adequate and will provide recovery for all of the class members without
delay or the risk of an adverse determination. Moreover, no class member has objected to the
For the foregoing reasons, we will grant the parties’ joint motion for final approval of the
proposed class action settlement.
An appropriate Order follows.
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