Keech v. Sanimax USA, LLC

Background

Patricia Keech and David Newfield brought the case on behalf of themselves and others similarly situated. The opinion does not describe the specific legal claims in detail, but the settlement’s released claims arose from the conduct alleged in the amended complaint and emissions of pollutants, contaminants, or odors from Sanimax USA, LLC’s facility through the end of the implementation period.

The court had previously granted preliminary class certification and preliminary approval of the proposed settlement. The court held a settlement fairness hearing on May 18, 2020. The plaintiffs sought final approval of the settlement, certification of the settlement class, appointment of the class representatives and class counsel, attorneys’ fees and expenses, incentive awards, and allocation of the remaining settlement funds. The defendant sought a determination that the aggregate consideration provided to the settlement class was a fair, reasonable, and adequate resolution of the litigation and released claims.

Notice, objections, and settlement class

Notice was sent to potential class members and to the required federal, state, and local agencies. The court found that the notice was the best practicable under the circumstances, reasonably informed potential class members of the litigation and settlement, and satisfied applicable legal and due-process requirements.

More than 10,000 prospective settlement class members received notice. Seven opted out and three objected. The court considered and overruled all objections that were timely and properly made.

For settlement purposes only, the court certified this class:

- All current or former owners or occupiers of residential property within a two-mile radius of Sanimax’s facility at 505 Hardman Avenue, South Saint Paul, Minnesota; and - Owners or occupiers of residential property outside that radius who submitted a residential data sheet to class counsel by July 15, 2019, concerning odors or emissions from South Saint Paul.

The people and entity that opted out were excluded from the settlement class. The court appointed Patricia Keech and David Newfield as class representatives and Steven D. Liddle, Laura L. Sheets, and Jeffrey S. Storms as class counsel.

Fairness findings

Under Federal Rule of Civil Procedure 23(e), a court may approve a class settlement only after a hearing and a finding that it is fair, reasonable, and adequate. The court considered the strength of the plaintiffs’ case compared with the settlement, the defendant’s financial condition, the complexity and expense of further litigation, and the amount of opposition. It also considered whether the class representatives and counsel adequately represented the class, whether the settlement was negotiated at arm’s length, whether the relief was adequate, and whether class members were treated equitably relative to one another.

The court found that the plaintiffs and class counsel adequately represented the proposed settlement class. It found that the settlement was negotiated at arm’s length over a sustained period with help from a neutral mediator. The court stated that the outcome of the litigation was uncertain: the class might recover more at trial, but it might also recover less or nothing, and the defendant might defeat class certification. The court concluded that the value of an immediate recovery outweighed the possibility of obtaining future relief only after extended litigation and appeals.

The court found that the settlement’s total consideration, including the settlement fund and the defendant’s improvement measures, was commensurate with the claims being released. It approved the settlement as fair, reasonable, adequate, and in the best interests of the settlement class and its members.

Settlement obligations and releases

The defendant must deposit $750,000 into a qualified settlement fund after the order becomes final and after receiving payment instructions. The defendant must also implement the improvement measures described in the settlement agreement within four years after the order becomes final. During the implementation period, the defendant must report at least annually to class counsel, and class counsel and the defendant must submit reports to the court twice each year in chambers.

The court ordered that every settlement class member is bound by the settlement and the order, including the releases and promises not to sue in the settlement agreement, regardless of whether the member objected, submitted a claim form, or otherwise participated. The order states that all claims against the defendant are dismissed on the merits and with prejudice. It also states that all released claims are released, extinguished, and permanently discharged, and permanently bars settlement class members from bringing or continuing those claims against the released parties.

The settlement and order are not admissions or concessions by the defendant or the plaintiffs about liability, wrongdoing, or the validity or merits of the claims. The court retained jurisdiction over interpreting, carrying out, and enforcing the settlement and order, including distributing the settlement fund.

Fees, costs, and final judgment

The court approved incentive awards of $1,500 each for Patricia Keech and David Newfield. It awarded $217,807.17 in attorneys’ fees to Liddle & Dubin, P.C.; awarded that firm $27,741.04 in costs; and awarded $54,451.79 in attorneys’ fees to Newmark Storms Dworak LLC.

The court directed the clerk to enter the order as a final judgment under Rule 54(b). If the order does not become final and nonappealable, including because it is reversed or the settlement is terminated, the order and related preliminary-approval orders will automatically become void, and the parties and putative class members will return to their positions before seeking preliminary approval.