United States District Court, S.D. New York
June 6, 2005.
CAROLYN FEARS, DONNA GIBBS, CAROL McILVAINE (a.k.a. CAROL ALSTON), SHARON SIMON, and TIFFANY CONNOR, on their own behalf and on behalf of a class of similarly situated persons, Plaintiffs,
WILHELMINA MODEL AGENCY, INC., FORD MODELS, INC., (f.k.a. FORD MODEL AGENCY), GERARD W. FORD, ELITE MODEL MANAGEMENT, INC., CLICK MODEL MANAGEMENT, INC., NEXT MANAGEMENT CORP., MFME MODEL MANAGEMENT CO., LTD. (a.k.a. COMPANY MANAGEMENT), BOSS MODELS, INC., ZOLI MANAGEMENT, INC., QUE MODEL MANAGEMENT, DNA MODEL MANAGEMENT, LLC, IMAGES MANAGEMENT, IMG MODELS, INC., and MODEL MANAGEMENT CORPORATION (f.k.a. INTERNATIONAL MODEL MANAGERS ASSOCIATION, INC.), Defendants.
The opinion of the court was delivered by: HAROLD BAER, JR., District Judge
OPINION & ORDER
On May 19, 2005, Plaintiffs, by and through their counsel of
record, moved this Court, pursuant to Rule 6.3 of the Local Civil
Rules of the S.D.N.Y ("Rule 6.3"), to reconsider its May 5, 2005
Order and Opinion. See Fears v. Wilhelmina Model Agency,
Inc., No. 02 Civ. 4911, 2005 WL 1041134 (S.D.N.Y. May 5, 2005)
("Settlement Approval Order"). For the reasons set forth below,
Plaintiffs' motion is GRANTED-in-part and DENIED-in-part.
I. STANDARD OF REVIEW
Rule 6.3 requires the party seeking reconsideration to "set ?
forth concisely the matters or controlling decisions which
counsel believes the court has overlooked" and "that might
reasonably be expected to alter the conclusion reached by the
court." Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir.
1995) (citing to Rule 6.3); see Tamayo v. City of New
York, No. 02 Civ. 8030, 2004 WL 725836, at *3 (S.D.N.Y. Mar. 31,
2004) (Baer, J.). The standard for granting a motion for reconsideration is strict, id., however,
a court may grant a motion for reconsideration "to correct a
clear error or prevent manifest injustice." Doe v. New York City
Dep't of Soc. Servs., 709 F.2d 782, 789 (2d Cir. 1983)
(quotation marks and citation omitted); see also U.S. Titan,
Inc. v. Guangzhou Zhen Hua Shipping Co., Ltd., 182 F.R.D. 97,
100 (S.D.N.Y. 1998) ("Local Civil Rule 6.3 provides the Court
with an opportunity to correct manifest errors of law or fact,
hear newly discovered evidence, consider a change in the
applicable law or prevent manifest injustice.").
Motions for reconsideration "shall be served within ten (10)
days after the docketing of the court's determination of the
original motion" and "[n]o affidavits shall be filed by any party
unless directed by the court." Rule 6.3. If the motion for
reconsideration is filed "after the tenday window permitted under
Local Rule 6.3 . . . Plaintiffs' motion could be denied on this
basis alone." Am. Hotel Intern. Group Inc. v. OneBeacon Ins.
Co., No. 01 Civ. 654, 2005 WL 1176122, at *2 (S.D.N.Y. May 18,
2005); see also, Gibson v. Wise, 331 F. Supp. 2d 168, 169
(E.D.N.Y. 2004) (denying motion for reconsideration as untimely);
Siemans Westinghouse Power Corp. v. Dick Corp., 219 F.R.D. 552,
554 (S.D.N.Y. 2004) (same); Snall v. City of New York, No. 97
Civ. 5204, 1999 WL 1129054, at *3-4 (E.D.N.Y. Oct. 19, 1999)
Here, Plaintiffs' motion for reconsideration was both untimely
filed and accompanied by four volumes of affidavits and exhibits
estimated at over one thousand pages. The Settlement Approval
Order was signed, docketed, and entered on May 5, 2005. Excluding
weekends and holidays, that provided Plaintiffs' until May 19,
2005 to move for reconsideration. However, Plaintiffs' counsel
waited until May 20, 2005 to move for reconsideration. Further,
while the inclusion of affidavits is not fatal to Plaintiffs'
motion, they will not be considered in support of the motion.
Overlooking the motion's procedural deficiencies in the
interest of deciding matters on their merits, as directed by the
Federal Rules, Plaintiffs raised a host of issues in their
motion, several of which are arguably meritorious and, at least,
worthy of comment, including: (A) the damage award and
prejudgment interest; (B) award of attorneys' fees; (C)
application of the cy pres doctrine; and, (D) incentive awards.
The balance have been reviewed and found not deserving of further
comment. A. Treble Damages and Prejudgment Interest
Plaintiffs' primary contention is that the Court's decision to
award single, instead of treble, damages and failure to award
prejudgment interest was a fundamental error. However,
Plaintiffs' contentions are belied by the terms of the Settlement
Agreement and law in the Second Circuit.
In December 2004, the parties to the instant action agreed to,
and submitted, the proposed settlement agreement for Court
approval pursuant to Rule 23 of the Federal Rules of Civil
Procedure. A settlement agreement is akin to any other contract.
Bank of N.Y. v. Amoco Oil Co., 35 F.3d 643, 661 (2d Cir. 1994).
Consequently, "because class settlements are contracts, courts do
not generally have the authority to modify them." Dashingo v.
Caribbean Cruises, Ltd., 312 F. Supp. 2d 440, 446 (S.D.N.Y.
2004). The Second Circuit has advised that because the "compass
of a settlement agreement must be found within its four corners,"
Scottish Air Int'l, Inc. v. British Caledonian Group, PLC,
81 F.3d 1224, 1230 (2d Cir. 1996), a district court "should approve
or disapprove a proposed agreement as it is placed before him and
should not take it upon himself to modify its terms." In re
Agent Orange Prod. Liab. Litig., 821 F.2d 139, 144 (2d Cir.
1987) (citation omitted); see also Daigle v. West,
225 F. Supp. 2d 236, 245 (2d Cir. 2002) ("since the terms of the
settlement agreement are clear and unambiguous, this court should
not look beyond the four corners of the agreement itself");
Huertas v. East River Hous. Corp., 993 F.2d 1263, 1266 (2d Cir.
1993) ("courts should not go beyond the terms of the agreement
when interpreting it"); Suarez v. Ward, 896 F.2d 28, 30-1 (2d
Cir. 1990) ("if the language of a settlement agreement is
unambiguous, its meaning must be discerned within the four
corners of the agreement").
There are, however, limited circumstances in which a district
court is authorized to impose or amend terms of a settlement
agreement. For example, a court may alter or impose terms to
allocate Settlement proceeds to class members equitably,
Dashingo, 312 F. Supp. 2d at 446-7, modify benefit allocation
if the plan's formula would lead to an inequitable result,
Beecher v. Able, 575 F.2d 1010, 1016 (2d Cir. 1978), amend the
agreement when the terms were not the result of negotiations
between the parties, id., and to determine reasonable
attorneys' fees, Jones v. Amalgamated Warbasse Houses, Inc.,
721 F.2d 881, 885 (2d Cir. 1983).
Here, the Settlement Agreement lacks any mention of either
treble damages or prejudgment interest.*fn1 The thirty-page agreement is
noticeably silent as to damages, treble or otherwise. As such,
the Court did not insert treble damages or prejudgment interest
into the four corners of the Settlement Agreement and it would
have been wrong to do so. See Daigle, 225 F. Supp. 2d at 245.
Plaintiffs fail even to allege that the allocation formula leads
to an inequitable result, and joins in the thought that the
Settlement Agreement was the result of hard fought negotiations
between sophisticated parties. According to the Plaintiffs'
characterization of the negotiations:
Each settlement was negotiated extensively and at
arm's length by highly experienced and qualified
counsel, with a full knowledge of the facts of the
case, who were therefore uniquely situated to assess
the relative strengths and weaknesses of their
respective positions. .
(Pl. Mem. of Points and Auth. in Sup. of Final App. Of
Settlements and Prop. Alloc., at 10).
Accordingly, as none of the limited exceptions are applicable
and the Court having allocated the settlement funds in accordance
with the express terms of the Settlement Agreement, that branch
of the motion seeking the inclusion of either treble damages or
prejudgment interest is DENIED. B. Attorneys' Fees
The law in the Second Circuit is unequivocal; attorneys' fees,
"whether calculated pursuant to the lodestar or the percentage
method . . . may not exceed what is `reasonable' under the
circumstances" and the determination of "reasonableness" is
within the sound discretion of the district court. Goldberger v.
Integrated Res., Inc., 209 F.3d 43, 47 (2d Cir. 2000); In re
Interpublic Sec. Litig., 02 Civ. 6527, 2004 WL 2397190, at *10
(S.D.N.Y. Oct. 26, 2004) (same); In re Worldcom, Inc. Erisa
Litig., 02 Civ. 4816, 2004 WL 2338151, at *10 (S.D.N.Y. Oct. 18,
2004) (same); In re Austrian and German Bank Holocaust Litig.,
No. 98 Civ. 3938, 2003 WL 402795, at *5 (S.D.N.Y. Feb. 21, 2003)
(same); In re Sterling Foster & Co., Inc.,, Sec. Litig.,
238 F. Supp. 2d 480, 486 (E.D.N.Y. 2002) (same); In re Twinlab Corp.
Sec. Litig., 187 F. Supp. 2d 80, 84 (E.D.N.Y. 2002) (same).
While Plaintiffs' counsel objects to this Court's attorneys'
fee award of 17.2% of the entire fund, they failed to demonstrate
any abuse of discretion, or that the Court overlooked any matters
or controlling decisions that may have resulted in a different
outcome. Indeed, an award of this nature was made in any number
of class action cases.*fn2 As such, the Plaintiffs' motion
to reconsider the Court's award of attorneys' fees is DENIED.
C. Cy Pres Doctrine
Plaintiffs' maintain that the Settlement Allocation Order
incorrectly applied the cy pres doctrine and resulted in the
misapplication of the relevant law and facts. (Pl. Mot. to
Reconsid. at 8.) However, Plaintiffs' argument is belied by the
facts of this case and contravened by wellestablished law.
Pursuant to the express terms of the Settlement Agreement, an
agreement by the way in which the Court had no role, I was
explicitly authorized to distribute any excess funds in any
manner it saw fit: If the sum of the Total Recognized Losses of all
Authorized Claimants who submit valid and timely
proof of claim forms is less than the amount of the
Net Settlement Fund, then the Court shall, in its
discretion, determine the disposition of the amount
representing the differences between the two figures,
after hearing the views of the parties hereto as to
Settlement Agreement, ¶ D.2.(b)(4) (emphasis added).
In addition to the plain language of the Settlement Agreement,
there is also Plaintiffs' counsel's correspondence with this
Court. While Plaintiffs' counsel complains about this Court's
decision to distribute funds to charitable organizations,
Plaintiffs' counsel gave at least tacit approval to the
distribution scheme by proposing charitable organizations of his
own. In particular, on March 31, 2005, and again on April 6,
2005, Lead Plaintiffs' Counsel submitted via fax proposed
charitable organizations that "are of particular relevance to the
mental and physical health concerns of the members of the
plaintiff class," including "the Center for Women's Health, the
Center for Women's Mental Health, the Division on Substance
Abuse, the Eating Disorders Clinic" and "the Legal Aid Society
[which] provides programs and services that are also of
significant potential value to the members of the Class." (Ltr.
from Andrew Hayes, Att'y for Pl. to Judge Baer, dated Mar. 31,
2005; Ltr. from Andrew Hayes, Att'y for Pl. to Judge Baer, dated
Apr. 6, 2005). Indeed, it should also be noted that Plaintiffs'
recommendations were made without reservation and without any
statement in opposition to such a distribution. Ultimately, while
Plaintiffs' may disagree with the Court's allocation, they have
failed to demonstrate any abuse of discretion, or that the Court
overlooked any matters or controlling decisions that would result
in a different outcome.
Here, the Settlement Approval Order strictly adhered to the
Second Circuit's decision in Agent Orange Prod. Liab. Litig.,
818 F.2d 179, 185 (2d Cir. 1987), and the terms of the Settlement
Agreement which "require the Court to distribute any residual or
unclaimed funds." Fears, 2005 WL 1041134, at *10. The Court
allocated excess or unclaimed funds to specified charities only
after the charities were thoroughly vetted and agreed, for the
most part, "to waive any and all administrative costs," and
"where appropriate," in each case to the inclusion of "broader
outreach program[s] aimed at reaching more women." Fears, 2005
WL 1041134, at *12. Moreover, and pursuant to the requirements
articulated by the Second Circuit in Agent Orange, the Court
retained jurisdiction over the funds, supervised the
distribution, required an annual report as to the use of the funds, and staggered the
distribution of funds so as to ensure compliance with the terms
of the Settlement Approval Order and avoid any impermissible
delegation of judicial responsibility. Id. at *18-24.*fn3
Accordingly, it is clear that the cy pres remedy fashioned by
this Court was not an abuse of discretion. The allocation was
reached only after the Court carefully weighed all of the
considerations and tailored its remedy to reflect the intent of
the parties regarding the unclaimed funds. This aspect too must
D. Incentive Awards
This Court approved the incentive awards as provided for in the
Settlement Agreement and detailed in the Settlement Approval
Order. (Settlement Approval Order, at 5-6).
For the aforementioned reasons, Plaintiffs' motion to
reconsider the allocation of Settlement funds, attorneys' fee
award, and application of the cy pres doctrine, is DENIED.
Plaintiffs' motion for a clarification as to whether incentive
awards were in fact awarded to the class representatives is
GRANTED and the Court APPROVED incentive awards to class
representatives for the reasons set forth in the Settlement
Approval Order (see Settlement Approval Order, at 5-6).
The Clerk of the Court is instructed to close this motion.
IT IS SO ORDERED