Wednesday, February 20, 2013

cy pres- class action settlements - 3d Cir.

In re Baby Products Antitrust Litigation – 3d Cir. – February 19, 2013

We address for the first time the use of cy pres distributions in class action settlements.  “The term ‘cy pres’  is derived from the Norman French expression cy pres comme possible, which means ‘as near as possible.’” . . . .When class actions are resolved through settlement, it may be difficult to distribute the entire settlement fund, after paying attorneys’ fees and costs along with fund administration expenses, directly to its intended beneficiaries—the class members. Money may remain unclaimed if class members cannot be located, decline to file claims, have died, or the parties have overestimated the amount projected for distribution for some other reason. It may also be economically or administratively infeasible to distribute funds to class members if, for example, the cost of distributing individually to all class members exceeds the amount to be distributed. In these circumstances, courts have permitted the parties to distribute to a nonparty (or nonparties) the excess settlement funds for their next best use—a charitable purpose reasonably approximating the interests pursued by the class.

The cy pres award in this case was part of a settlement of consolidated antitrust class actions brought by several named plaintiffs (collectively, the “Plaintiffs”) on behalf of consumers against retailers Toys “R” Us, Inc. and Babies “R” Us, Inc. along with several baby product manufacturers (the retailers and manufacturers are collectively referred to as the “Defendants”). Pursuant to that settlement, which was approved by the District Court, all settlement funds remaining after attorneys’ fees and costs are paid, and individual distributions are made to claimants, would go to one or more charitable organizations proposed by the parties and selected by the Court. The Court indicated it would ensure the funds are used for a purpose underlying the interests of the class.
Kevin Young, an unnamed class member who objected to the settlement before the District Court, raises the following three issues relating to the cy pres provision on appeal.3
(1) The District Court erred in approving a settlement that would result in funds being distributed to one or more cypres recipients in lieu of fully compensating class members for their losses.
(2) The Court should have discounted the value of the cy pres distribution for purposes of calculating attorneys’ fees, which were awarded on a percentage-of-recovery basis.
(3) The class notice was deficient because it did not identify the recipients that would receive the cy pres distributions.

Young’s overarching concern, and ours as well, is that the settlement has resulted in a troubling and, according to counsel for the parties, surprising allocation of the settlement fund. Cy pres distributions, while in our view permissible, are inferior to direct distributions to the class because they only imperfectly serve the purpose of the underlying causes of action—to compensate class members. Though the parties contemplated that excess funds would be distributed to charity after the bulk of the settlement fund was distributed to class members through an exhaustive claims process, it appears the actual allocation will be just the opposite. Defendants paid $35,500,000 into a settlement fund. About $14,000,000 will go to class counsel in attorneys’ fees and expenses. Of the remainder, it is expected that roughly $3,000,000 will be distributed to class members, while the rest—approximately $18,500,000 less administrative expenses—will be distributed to one or more cy pres recipients.
We vacate the District Court’s approval of the settlement because the Court was apparently unaware of the amount of the fund that would be distributed to cy pres beneficiaries rather than being distributed directly to the class. On remand, the Court should consider whether this or any alternative settlement provides sufficient direct benefit to the class before giving its approval.

We also vacate the attorneys’ fees award because its approval was based on the terms of a settlement that are no longer in effect and may be altered on remand. Addressing Young’s argument that attorneys’ fees should be reduced, we confirm that courts need to consider the level of direct benefit provided to the class in calculating attorneys’ fees. We leave it to the District Court’s discretion to assess what effect, if any, that consideration should have on any future fee award in this case. As there was no error in the notice provided to the class, we do not reverse on that basis.

custody - Hague Convention - Chafin v. Chafin

                                          SUPREME COURT OF THE UNITED STATES



No. 11–1347. Argued December 5, 2012—Decided February 19, 2013

The Hague Convention on the Civil Aspects of International Child Ab­duction requires the judicial or administrative authority of a Con­tracting State to order a child returned to her country of habitual res­idence if the authority finds that the child has been wrongfullyremoved to or retained in the Contracting State. The International Child Abduction Remedies Act (ICARA) implements the Convention in the United States, granting federal and state courts concurrent ju­risdiction over Convention actions and directing those courts to de­cide cases in accordance with the Convention. ICARA also requires defendants to pay various expenses incurred by plaintiffs associatedwith the return of children. Petitioner Mr. Chafin, a United States citizen and member of the military, married respondent Ms. Chafin, a United Kingdom citizen, in Germany, where they later had a daughter, E. C. When Mr. Chaf­in was deployed to Afghanistan, Ms. Chafin took E. C. to Scotland.Mr. Chafin was later transferred to Huntsville, Alabama, and Ms. Chafin eventually traveled there with E. C. Soon after Ms. Chafin’s arrival, Mr. Chafin filed for divorce and child custody in Alabama.Ms. Chafin was subsequently deported, but E. C. remained in Ala­bama with Mr. Chafin. Several months later, Ms. Chafin filed a peti­tion under the Convention and ICARA, seeking E. C.’s return to Scot­land. The District Court concluded that E. C.’s country of habitualresidence was Scotland and granted the petition for return. Ms. Chafin immediately departed for Scotland with E. C. Ms. Chafin then initiated custody proceedings in Scotland and was granted inter­im custody and a preliminary injunction prohibiting Mr. Chafin fromremoving E. C. from Scotland. Mr. Chafin appealed the DistrictCourt’s order, but the Eleventh Circuit dismissed the appeal as moot, on the ground that once a child has been returned to a foreign coun­try, a U. S. court becomes powerless to grant relief. On remand, the District Court ordered Mr. Chafin to reimburse Ms. Chafin for court costs, attorney’s fees, and travel expenses.

 Held: The return of a child to a foreign country pursuant to a Conven­tion return order does not render an appeal of that order moot. Pp. 5–14.

(a) Article III restricts the power of federal courts to “Cases” and“Controversies,” and this “requirement subsists through all stages of [the] proceedings,” Lewis v. Continental Bank Corp., 494 U. S. 472, 477. No case or controversy exists, and a suit becomes moot, “whenthe issues presented are no longer ‘live’ or the parties lack a legallycognizable interest in the outcome,” Already, LLC v. Nike, Inc., 568 U. S. ___, ___. But a case “becomes moot only when it is impossiblefor a court to grant any effectual relief whatever to the prevailing party,” Knox v. Service Employees, 567 U. S. ___, ___. As “long as theparties have a concrete interest, however small, in the outcome of thelitigation, the case is not moot,” ibid. Pp. 5–6.

     (b) Because the Chafins continue to vigorously contest the questionof where their daughter will be raised, this dispute is very much alive. This case does not address “a hypothetical state of facts,” Lew­is, supra, at 477, and there continues to exist between the parties“that concrete adverseness which sharpens the presentation of is­sues,” Camreta v. Greene, 563 U. S. ___, ___. Pp. 6–11.
                       (1) Mr. Chafin seeks typical appellate relief: reversal of the Dis­trict Court determination that E. C.’s habitual residence was Scot­land and, upon reversal, an order that E. C. be returned to the Unit­ed States. The question is whether such relief would be effectual. In arguing that this case is moot because the District Court has no au­thority to issue a re-return order either under the Convention or pur­suant to its inherent equitable powers, Ms. Chafin confuses mootness with the merits. See, e.g., Powell v. McCormack, 395 U. S. 486, 500. Mr. Chafin’s claim for re-return cannot be dismissed as so implausi­ble that it is insufficient to preserve jurisdiction, and his prospects ofsuccess are therefore not pertinent to the mootness inquiry. As to the effectiveness of any relief, even if Scotland were to ignore a re-return order, this case would not be moot. The U. S. courts continue to have personal jurisdiction over Ms. Chafin and may command her to takeaction under threat of sanctions. She could decide to comply with anorder against her and return E. C. to the United States. Enforcement of the order may be uncertain if Ms. Chafin chooses to defy it, but such uncertainty does not typically render cases moot. Pp. 7–10.

                         (2) Mr. Chafin also seeks, if he prevails, vacatur of the District Court’s expense orders. That too is common relief on appeal, and the mootness inquiry comes down to its effectiveness. In contending that this case is moot due to Mr. Chafin’s failure to pursue an appeal ofthe expense orders, which were entered as separate judgments, Ms. Chafin again confuses mootness with the merits. Because there is authority for the proposition that failure to appeal such judgments separately does not preclude relief, it is for lower courts at later stag­es of the litigation to decide whether Mr. Chafin is in fact entitled tothe relief he seeks. That relief would not be “ ‘fully satisfactory,’ ” but “even the availability of a ‘partial remedy’ is ‘sufficient to prevent [a] case from being moot,’ ” Calderon v. Moore, 518 U. S. 149, 150. Pp. 10–11.

(c) Manipulating constitutional doctrine and holding these cases moot is not necessary to achieve the ends of the Convention and IC-ARA, and may undermine the treaty’s goals and harm the children meant to be protected. If these cases were to become moot upon re­turn, courts would be more likely to grant stays as a matter of course, to prevent the loss of any right to appeal. Such routine stays wouldconflict with the Convention’s mandate of prompt return. Courts should instead apply traditional factors in considering whether to stay a return order, see, e.g., Nken v. Holder, 556 U. S. 418, 434, thus ensuring that each case will receive the individualized treatmentnecessary for appropriate consideration of the child’s best interests.Finally, at both the district and appellate court level, courts should take steps to decide these cases as expeditiously as possible. Pp. 11–14. Vacated and remanded.

 ROBERTS, C. J., delivered the opinion for a unanimous Court. GINSBURG, J., filed a concurring opinion, in which SCALIA and BREYER, JJ., joined.



disability - drugs and alcohol - SSR 13-2p

Federal Register Volume 78, Number 34 (Wednesday, February 20, 2013)]

[Pages 11939-11947]






[Docket No. SSA-2012-0006]



Social Security Ruling, SSR 13-2p.; Titles II and XVI: Evaluating

Cases Involving Drug Addiction and Alcoholism (DAA)


AGENCY: Social Security Administration.


ACTION: Notice of Social Security Ruling (SSR).




SUMMARY: We are giving notice of SSR 13-2p, in which we explain our

policies for how we consider whether ``drug addiction and alcoholism''

(DAA) is material to our determination of disability in disability

claims and continuing disability reviews. This SSR rescinds and

replaces SSR 82-60, Titles II and XVI: Evaluation of Drug Addiction and

Alcoholism. This SSR obsoletes EM 96-200.


DATES: Effective Date: March 22, 2013.