A California attorney has filed an objection to the proposed $105 million settlement over atrazine.
On behalf of Public Water Supply District 1 of Clinton County, Mo. and the Nocona Water Department in Texas, attorney Darrell Palmer asserts in an objection filed last week that the attorneys’ fee request is excessive and that the settlement fund is minimal considering the claims.
Palmer also contends that neither the notice nor the proposed settlement provides information as to how much money class members can expect to receive and although attorneys have contracted to get paid within 14 days of the settlement’s approval, there is no deadline for the payment of claims to class members.
In addition, Palmer claims that some class members, including one of his clients, never received notice of the settlement.
The proposed settlement, which is set for a final fairness hearing next month, stems from the class action lawsuit St. Louis attorney Stephen Tillery brought in 2010 on behalf of the city of Greenville, as well as several other Midwestern water providers, and against Syngenta Crop Protection and Syngenta AG.
The plaintiffs claim that atrazine, a common agricultural herbicide manufactured and sold by the Syngenta defendants, ran off farm fields and into their drinking water supplies, forcing them to incur expenses related to the testing, monitoring and filtering of their water.
After more than a year of negotiations, the Syngenta defendants in May agreed to pay $105 million to resolve claims of nearly 2,000 water providers.
Attorneys at Tillery’s firm, Korein Tillery, and fellow class counsel at Baron & Budd in Texas have requested about one-third of the pending settlement –nearly $35 million– in attorneys’ fees. A handful of attorneys last month submitted declarations in support of that amount.
Tillery’s firm responded to Palmer’s objection on Friday, the day after the California attorney filed the objection.
In their response, attorneys at Tillery’s firm note that although Federal Rule 23 gives class members the opportunity to object to class action settlements, something that can play a valuable role in the process, “there are also ‘serial’ or ‘professional’ objectors who file meritless objections in an effort to extract payment in exchange for dismissal of their frivolous claims.”
Palmer, they contend, fits into that category.
“Mr. Palmer is a self-proclaimed serial objector, who parasitically files stock objections in case after case, with the only impact on the class being to delay the distribution of relief,” Tillery’s firm claims.
“Incredibly, this statement is not hyperbole. Mr. Palmer gladly acknowledges his position and has even gone so far as to brag of his success.”
To support that statement, Tillery’s firm points to an Oct. 17, 2011 entry on ClassActionBlawg.com about a panel discussion at the American Bar Association’s 15th Annual National Institute on Class Actions.
The blog entry notes that Palmer, who served as a panelist at the event, told attendees that “objecting is a hobby for me” and admitted that he has accepted “a lot” of money over the years to drop his objections.
“Mr. Palmer seeks to add this case to that long list of conquests,” Tillery’s firm contends.
In his objection, Palmer states that data provided by class counsel in its motion for fees was “incomplete.”
While they claim that one-third of recovery is normal in complicated class actions such as this one, Palmer contends that most studies on class action fee awards have found that the normal rate is about one-quarter of the settlement.
“Based on this empirical ‘market rate’ data, it is clear that the one-third requested here is excessive,” Palmer contends in his clients’ opposition. “It is particularly excessive given the likely damages each water district is due to incur versus the likely recovery it will receive.”
“For example, most lead plaintiffs estimate their damages at $75,000 per district … while American Water has estimated its damages in the millions of dollars,” Palmer wrote. “Accordingly, for class counsel to reduce the common fund by more than the usual market rate is improper and should be viewed with great scrutiny by this Court.”
In his clients’ objection, Palmer urges the court to utilize the so-called Lodestar method to determine attorneys’ fees.
Under this method, courts calculate attorneys’ fees by multiplying a reasonable hourly rate by the number of hours expended on the litigation.
“Here, class counsel state that the lodestar amount is in excess of $24 million for approximately 83,300 hours. This seems to be an excessive amount of lodestar and hours given the relative brevity of this case; which is only two years old,” Palmer asserts. “The class (clients) should be allowed to review the detailed billing records to uncover duplication and other practices which may have inflated the alleged lodestar.”
Tillery’s firm wrote in its response that Palmer’s reference to the case only being two years old is a factual error that demonstrates his “canned objection” is “both frivolous and based upon a complete lack of investigation into the facts and law of this case.”
Pointing to declarations previously submitted by Tillery and Scott Sumny of Baron & Budd in, attorneys at Tillery’s firm note that “the proposed settlement resolves litigation that has been pending for more than eight years.”
They are referring to the class action lawsuits Tillery filed in 2004 in Madison County, which appear to be covered under the proposed settlement.
Tillery’s firm also takes issue with Palmer’s accusation that class counsel included a “quick pay” provision in the settlement that would provide payment of attorneys’ fees before the resolution of any appeals in the settlement.
Palmer claims that the proposed settlement would let class counsel reap their fees within 14 days of the court’s final approval hearing, regardless of appeals.
“When attorneys negotiate a quick-pay provision for themselves, it is a clear indication that they are putting their own interests ahead of their clients,” Palmer wrote. “The attorneys ensure that they are paid immediately, while there is no contractual deadline for disbursement of the class funds and the class may be forced to wait out the appeal, while their lawyers have used this latest device to attempt to avoid that delay.”
Tillery’s firm, however, asserts that Palmer’s allegations that the proposed settlement doesn’t provide class members information on how claims are computed and fails to provide a timeline for claims to be processed are not “remotely true, as anyone who reviewed the settlement would know.”
“Contrary to the objectors’ claims, the proposed settlement includes a detailed Allocation Plan… that was approved by the Court and pursuant to its Order made available to all as an attachment to the settlement agreement on the settlement website,” Tillery’s firm contends.
This plan, Tillery’s firm states in its response to the objection, details the “exact method for calculating each class member’s share of the settlement proceeds,” which is a formula based on a fixed payment of $5,000, and explains that payment of approved claims will be issued within 30 days of the settlement’s final approval.
Tilley’s firm also claims that Palmer’s arguments over notice “are untethered to reality.”
In his clients’ objection, Palmer states that notice requirements under Federal Rule 23 were not met in this case.
This rule requires that absent class members receive “the best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort.”
“However, it appears that personal service of this notice was not accomplished here,” Palmer claims, adding that his client, Nocona Water, as well as its surrounding communities, did not receive notice of the settlement.
“And, why is it that the class counsel is allowed to advance the interests of certain class members ahead of others? Defendants no doubt demanded the broadest possible class definition, but the vast majority of class members know nothing about this case or the settlement,” he wrote. “What is truly remarkable is that as of last week, the National Rural Water Association had no information regarding this lawsuit.”
Tillery’s firm asserts that “each known class member was sent notice of this settlement on June 11 and August 2 by first class mail” and “notice of the settlement was also published in the July issues of American Water Works Association Magazine, Public Works Magazine, and
American City and County Magazine.”
“Furthermore, Class Counsel also either sent a third notice by first class mail or placed a personal phone call to each known class member beginning on August 13.”
On top of the legal and factual errors in Palmer’s objection, Tillery’s firm contends that “Palmer’s objection failed the most basic of procedural requirements: it was filed more than one week past the objection deadline.”
According to the atrazine settlement website, the deadline to file objections to the proposed settlement was August 28.
Court records show that the clerk of the federal court received Palmer’s objection on Sept. 4, but returned the document for failure to electronically file the document. He electronically filed it two days later on Sept. 6.
“Given these failures, Mr. Palmer’s presence in this matter will not assist the Court or any member of the class,” Tillery’s firm asserts in his response. “With the patent deficiencies in Mr. Palmer’s objection, he simply has no business before the Court.”
Attorneys at Tillery’s firm, however, wrote that the denial of Palmer’s pro hac vice application “would do nothing to prevent the damage from Mr. Palmer’s inevitable appeal.”
As such, they asked the court to delay considering Palmer’s application while plaintiffs pursue discovery to determine the bases, if any, of the objectors’ claims and Palmer’s alleged practice as a serial objector “so the court may make a more informed opinion on his fitness to appear in this matter.”
Tillery’s firm also noted in its response that it planned to serve Palmer notices of deposition and document requests to reveal the bases of the objectors’ claims, as well as his methods and motives.
In addition, Tillery’s firm stated in its response that it would file a motion seeking to shorten the time frame for responding to its discovery to make sure it can be completed before the court’s final fairness hearing, which is set for Oct. 22 in Benton.