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Collins v. Olin Corp.

April 21, 2010


The opinion of the court was delivered by: Christopher F. Droney United States District Judge


This case arises out of a class action suit brought by the plaintiffs, homeowners in the Newhall section of Hamden, Connecticut, against several defendants, including Olin Corporation ("Olin"). The plaintiffs alleged that the soil and groundwater on their properties was contaminated as a result of the defendant's conduct. For the following reasons, this Court finds that the proposed settlement is procedurally and substantively fair, the distribution of settlement proceeds is reasonable and adequate, and grants the motion for settlement. The motion for attorneys' fees and expenses is also granted.

I. Factual Background and Procedural History

In May of 2003, the plaintiffs brought this action against Olin and the Town of Hamden. They alleged that industrial wastes produced by the Winchester plant in New Haven were deposited in their neighborhood in Hamden (the Newhall neighborhood) and have contaminated their properties. The plaintiffs sought relief for negligence; recklessness; violation of the Connecticut Environmental Protection Act of 1971, Conn. Gen. Stat. § 22a-15 et seq.; engaging in abnormally dangerous activity; intentional infliction of emotional distress; and recovery of response costs under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9607. The Court has certified a class comprised of all persons who owned property on May 2, 2003 in the Newhall neighborhood, and three subclasses: (1) the Contaminated Properties Subclass, (2) the Stigma Subclass, and (3) the Response Costs Subclass.

Counsel for the parties eventually agreed on a proposed settlement agreement. The terms of this proposal include a settlement fund in the amount of $1,391,500 to be distributed among the plaintiffs. A Remedial Action Plan approved by the Connecticut Department of Environmental Protection, although not part of this proposed settlement, has been initiated, and is separately funded in the amount of $40,000,000.

II. Legal Standards and Discussion

Under the Federal Rules of Civil Procedure, a proposed settlement which binds class members may be approved only "after a hearing and on finding that it is fair, reasonable, and adequate." Fed. R. Civ. P. 23(e)(2). In addition, a fair settlement may not have been the product of collusion. See Joel A. v. Giuliani, 218 F.3d 132, 138 (2d Cir. 2000).

To determine the fairness of a proposed settlement, a Court must examine both its procedural and substantive fairness. See D'Amato v. Deutsche Bank, 236 F.3d 78, 85 (2d Cir. 2001) (noting that "[t]he District Court determines a settlement's fairness by examining the negotiating process leading up to the settlement as well as the settlement's substantive terms"). Procedural fairness looks to "the negotiating process by which the settlement was reached."

Weinberger v. Kendrick, 698 F.2d 61, 74 (2d Cir. 1982). A procedurally fair settlement must be "the result of arm's-length negotiations" wherein plaintiffs' counsel "possessed the experience and ability, and . . . engaged in the discovery, necessary to effective representation of the class's interests." Id., citing City of Detroit v. Grinnell Corp., 495 F.2d 448, 463-66 (2d Cir. 1974). To decide if the substantive terms of the proposed settlement are fair, the Court must consider the nine Grinnell factors:

"(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, (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation."

Grinnell, 495 F.2d at 463 (internal quotations omitted).

Moreover, a presumption of fairness, adequacy, and reasonableness may attach if the Court finds that arm's length negotiations took place between experienced counsel after a period of meaningful discovery. See Wal-MartStores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 116 (2d Cir. 2005), citing Manual for Complex Litigation, Third, § 30.42 (1995). Federal courts have adopted a "strong judicial policy in favor of settlements, particularly in the class action context." In re Painewebber Limited Partnerships Litigation, 147 F.3d 132, 138 (2d Cir. 1998), citing In re General Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 784 (3d Cir. 1995) and In re Pacific Enters. Sec. Litig., 47 F.3d 373, 378 (9th Cir. 1995).

A. Procedural Fairness

Since the plaintiffs in this case were adequately represented and, as a result, the proposed settlement was the product of "arm's length negotiations," see Weinberger, 698 F.2d at 74, the proposed settlement is procedurally fair. This case was originally filed in May 2003. See, e.g. Notice of Removal, Civil Action No. 03-cv-945 (CFD), Dkt. # 1. Since that time, counsel for the plaintiffs consulted experts, conducted many depositions, interviewed fact witnesses, and requested production of numerous documents. See Plaintiffs' Proposed Ruling, Civil Action No. 03-cv-945 (CFD), Dkt. # 317, p. 10. As a result, counsel developed a sufficient level of ...

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