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Parker v. Anderson - 667 F.2d 1204 (5th Cir. 1982)

Rule:

In evaluating class action settlement proposals, six factors should be considered: (1) whether the settlement was a product of fraud or collusion; (2) the complexity, expense, and likely duration of the litigation; (3) the stage of the proceedings and the amount of discovery completed; (4) the factual and legal obstacles prevailing on the merits; (5) the possible range of recovery and the certainty of damages; and (6) the respective opinions of the participants, including class counsel, class representative, and the absent class members.

Facts:

In March 1975, Sarah Parker and Curtis Ford filed a class action suit against Bell Helicopter Company, a division of Textron, Inc., and certain unions, alleging discrimination in employment against blacks and females, in violation of Title VII of the Civil Rights Act of 1964.  Between 1975 and 1979 six other lawsuits brought by nine plaintiffs alleged identical discrimination by Bell. Two of these suits included unions as defendants. Thereafter, the claims of the individual named plaintiffs were severed from those of the class. The trial court approved a class settlement, over the objections of many of the named plaintiffs. The objectors maintained that the settlement should be rejected because the terms are not fair and reasonable, the class attorneys did not properly represent the class in negotiations, and the payment of attorneys' fees out of the class settlement fund creates an impermissible conflict of interest.

Issue:

Should the class settlement be approved, notwithstanding the objections raised by several plaintiffs?

Answer:

Yes.

Conclusion:

The appellate court affirmed the approval of the settlement, holding that the trial court properly considered the six factors relevant to its approval. The court also rejected the employees' argument that they were not fairly and adequately represented, stating that the record did not support allegations that counsel failed to consult with them, withheld certain information, and misrepresented material matters. The award of attorney fees, although presenting a potential for abuse, was affirmed, as no impropriety was found after an examination of the 14 factors relevant to the inquiry of the trial court.

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