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For Opinion See 2005 WL 2206481 , 387 F.Supp.2d 1057
United States District Court, N.D. California.
Senorino Ramirez CRUZ; Leocadio de la Rosa; Liborio Santiago Perez; Felipe Nava; Ignacio Macias; and Rafael Nava on behalf of themselves and all others similarly situated, Plaintiffs,
UNITED STATES OF AMERICA; Estados Unidos Mexicanos; Wells Fargo Bank; Banco de Mexico; Banco Nacional de Credito Rural, S.N.C., as successor in interest to the Banco de Credito Agricola, S.A.; and Patronato del Ahorro Nacional, as successor in interest to the Banco del Ahorro Nacional, S.A., Defendants.
January 22, 2009.
Plaintiffs' Notice of Motion, Motion and Memorandum in Support of Final Approval of Class Settlement
Matthew J. Piers (admitted pro hac vice), Joshua Karsh (admitted pro hac vice), Hughes Socol Piers, Resnick & Dym, LLP, Three First National Plaza, 70 West Madison Street, Suite 4000, Chicago, IL 60602, Telephone: (312) 580-0100, Facsimile: (312) 580-1994.Elizabeth J. Cabraser (CA Bar No. 083151), Kelly M. Dermody (CA Bar No 171716), Jahan Sagafi (CA Bar No. 224887), Daniel Hutchinson (CA Bar No. 239458), Lieff, Cabraser, Heimann & Bernstein, LLP, Embarcadero Center West, 275 Battery Street, 30th Floor, San Francisco, CA 94111-3339, Telephone: (415) 956-1000, Facsimile: (415) 956-1008.Morris J. Baller (CA Bar No. 48928), Laura L. Ho (CA Bar No. 173179), Goldstein, Demchak, Baller, Borgen & Dardarian, 300 Lakeside Drive, Suite 1000, Oakland, CA 94612, Telephone: (510) 763-9800, Facsimile: (510) 835-1417.Bill Lann Lee (CA Bar No. 108452), Lewis Feinberg Lee Renaker & Jackson PC, 1330 Broadway #1800, Oakland, CA 94612-2519, Telephone: (510) 839-6824, Facsimile: (510) 839-7839, Attorneys for Plaintiffs.
Judge: Charles R. Breyer.
Date: February 6, 2009
Time: 10:00 a.m.
TABLE OF CONTENTS NOTICE OF MOTION AND MOTION FOR ORDER GRANTING FINAL APPROVAL OF CLASS SETTLEMENT ... 4
MEMORANDUM OF POINTS AND AUTHORITIES ... 4
I. INTRODUCTION ... 4
II. PROCEDURAL BACKGROUND AND SUMMARY OF SETTLEMENT TERMS ... 7
A. Procedural History of the Case ... 7
B. The Settlement Agreement and its Terms ... 7
1. The Documentation Requirements Imposed by the Settlement Are Stringent but Were Hotly Contested and are the Best that Could be Negotiated Given the Intransigence of the Mexican Defendants on this Point and the Precedent Set by the Prior Gobernación Claim Program in 2005, Which Had Virtually the Same Documentation Requirements ... 9
III. A SUBSTANTIAL NUMBER OF CLAIMS HAVE BEEN SUBMITTED ... 10
A. The Gobernación Claims Program in 2005 Provides a Useful Benchmark For Gauging the Number of Claims Filed During the Claims Period ... 11
IV. THE SETTLEMENT IS FAIR, REASONABLE AND ADEQUATE, AND THE COURT THEREFORE SHOULD BOTH GRANT IT FINAL APPROVAL AND ENTER JUDGMENT IN ACCORDANCE WITH THE SETTLEMENT AGREEMENT ... 12
A. Both the Settlement Terms and the Actual Notice of the Settlement Provided to the Class Satisfy All Relevant Legal Standards ... 12
1. Notice To The Class Satisfied Due Process ... 13
a. The success of the toll-free braceros settlement hot line ... 15
b. The success of interest notice ... 15
c. The success of published notice ... 15
d. The success of televised notice ... 16
e. The success of radio notice ... 16
f. The success of direct-mail notice ... 16
g. The success of grassroots community outreach ... 17
2. The Monumental Legal Risks Posed By This Case Support Final Approval of the Settlement Agreement ... 17
3. The Significant Monetary Relief Created by the Settlement Supports Final Approval of the Settlement Agreement ... 18
4. The Factual and Legal Investigation Completed and the Stage of Proceedings at the Time of Settlement Likewise Support Final Approval ... 19
5. The Experience and Views of Class Counsel Support Final Approval ... 19
6. That the Settlement is the Product of Extensive, Arms-Length Negotiations Should Be a Significant Factor Favoring Final Approval ... 19
7. The Objection Letters Sent to the Court Are Without Merit ... 20
a. The 43 Identical Form Letter Objections ... 21
b. Objection of Julie L. Flores and RoseMary Palacio ... 23
c. Objections of Abel Quiroga, Amelia Garcia, Eusebio Molero ... 24
d. Objection of Arnulfo Higuera-Gallardo and Jovita Gonzaález de Naranjo ... 24
V. THE PROPOSED, NEGOTIATED FEE IS LIKEWISE FAIR, REASONABLE, AND ADEQUATE ... 25
A. Plaintiffs' Fee Request Is Reasonable And Much Less Than Their Lodestar ... 27
VI. THE COSTS ACTUALLY INCURRED FOR WHICH CLASS COUNSEL SEEK REIMBURSEMENT ARE REASONABLE ... 28
CONCLUSION ... 28
TABLE OF AUTHORITIES CASES
Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964) ... 6
Boyd v. Bechtel Corp., 485 F. Supp. 610, 622 (N.D. Cal. 1979) ... 19
Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1291 (9th Cir. 1992) ... 13
Cotton v. Hinton, 559 F.2d 1326 (5th Cir. 1977) ... 20
County of Suffolk v. Long Island Lighting Co., 710 F. Supp. 1428, 1437 (E.D.N.Y, 1989) ... 20
Cruz v. United States, 219 F. Supp. 2d 1027, 1031 (N.D. Cal. 2002) ... 25
Deutsch v. Turner Corp., 324 F.3d 692 (9th Cir. 2003) ... 18
Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998) ... 12, 13, 19
Hwang Geum Joo v. Japan, 413 F.3d 45 (D.C. Cir. 2005) ... 18
In re Anthracite Coal Antitrust Litig., 79 F.R.D. 707, 712-13 (M.D. Pa. 1978) ... 20
In re Holocaust Victim Assets Litigation, 105 F. Supp. 2d 139 (E.D.N.Y. 2000) ... 9, 10
In re Pac. Enter.Sec. Litig., 47 F.3d 373, 379 (9th Cir. 1995) ... 27
Moore v. City of San Jose, 615 F.2d 1265, 1271 (9th Cir. 1980) ... 12
Muehler v. Land O'Lakes, Inc., 617 F. Supp. 1370, 1375 (D. Minn. 1985) ... 26
Officers for Justice v. Civil Serv. Comm'n, 688 F.2d 615, 625 (9th Cir. 1982) ... 13
Reed v. General Motors Corp., 703 F.2d 170 (5th Cir. 1983) ... 20
Staton v. Boeing Co., 327 F.3d 938, 963 (9th Cir. 2003) ... 26
TBK Partners, Ltd. v. Western Union Corp., 675 F.2d 456, 462 (2d Cir. 1982) ... 20
Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002) ... 27, 28
Fed. R. Civ. Proc. 23(e)(2) ... 12
Rule 23(e) (1) ... 13
NOTICE OF MOTION AND MOTION FOR ORDER GRANTING FINAL APPROVAL OF CLASS SETTLEMENT TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
Please take notice that on February 6, 2009 at 10:00 a.m., or as soon thereafter as the Court may allow, at Courtroom 8, 450 Golden Gate Avenue, San Francisco, California, Plaintiffs will move this Court for final approval of the Settlement that was preliminarily approved by the Court on October 10, 2008.
This motion is based upon this Notice of Motion, Motion and the Memorandum of Points and Authorities in Support of it; the Supplemental Declaration of Matthew J. Piers in Support of Order of Final Approval (“Piers Suppl. Decl.”); the Declaration of Jim Estrada (“Estrada Decl.); the Declaration of Andrea Cristancho (“Cristancho Decl.”); the Declaration of Raul Ross Pineda (“Ross Decl.”); the Declaration of Daniel Hutchinson (“Hutchinson Decl.”); declarations previously filed in connection with the Motion for Preliminary Approval; the record in this action; and such other documentary and oral evidence or argument as may be presented to the Court at the hearing of this motion.
MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION During the half century between 1947 and 1999, when class counsel began preparing this lawsuit, the entreaties of World War II-era braceros to recover wages owed them languished in relative obscurity, not forgotten but not advancing, while the population of surviving braceros grew older, smaller and often increasingly impoverished. As a result of this lawsuit, reparation payments have been and are being made to braceros for the first time ever. This litigation has also helped draw public attention to the plight and history of the braceros. See generally The Smithsonian Institute, Bittersweet Harvest: The Bracero Program 1942-1964 (2002), available at http:// tinyurl.com/7z95tc; The Bracero Archive, available at http://braceroarchive.org/.
The case has been an unusual one in many ways. It was clear from the outset that success would require battle on multiple fronts, versatile skills and creative approaches. Accordingly, legal, legislative, media and community organizing and advocacy strategies were each developed and deployed by class counsel. Conventional courtroom lawyering alone would not have been adequate.
In the early stages of the litigation, class counsel engaged in intensive legislative lobbying both at the state and federal levels and in Mexico. Piers Suppl. Decl. ¶¶ 3-7. Initially, redress of class members' claims through federal legislation in the United States appeared to be a realistic possibility. Class counsel retained a lobbyist and met with Congressional leaders. See Menna Demessie, Gutierrez Introduces Bill to Help Seek Justice for the Braceros, civilrights.org, June 14, 2002, available at http:// tinyurl.com/7g2zy4; Piers Suppl. Decl. ¶ 6. Upon his inauguration in January 2001, President Bush had identified immigration reform as one of his top priorities. Class counsel lobbied for federal resolution of braceros' claims to be part of that reform, while also urging that resolution was needed before passage of any 21st-century guest-worker program. Then came the terrorist attacks of September 11 and a realignment of federal priorities and agendas. As a result, federal immigration initiatives, including federal initiatives to resolve braceros' claims, stalled.
At the state and local levels, however, class counsel continued legislative efforts and with better results, including successfully obtaining passage of a favorable statute of limitations for class members' claims in the California General Assembly. Piers Suppl. Decl. ¶ 7; CCP § 354.7(c) (“Notwithstanding any other provision of law, any action brought by a bracero, or heir or beneficiary of a bracero, arising out of a failure to pay or turn over savings fund amounts shall not be dismissed for failure to comply with the otherwise applicable statute of limitations, provided the action is filed on or before December 31, 2005”).
The passage of CCP § 354.7 was vital to keeping these legal claims alive. It became both an important basis of this court's ruling in June 2005 denying the Mexican defendants' renewed motion to dismiss and an essential predicate to subsequent settlement negotiations. At the same time, community activists, encouraged by this litigation, were also gaining momentum. See, e.g., Gariot Louima, Bracero Protest ‘Caravan’ Comes to L.A., L.A. Times, April 11, 2002, at B-5, available at http://tinyurl.com/7jbyph. Cumulatively, these efforts became a catalyst in 2005 for an appropriation by the Mexican Congress of the equivalent of $27 million to fund compensation to braceros. (Hereinafter, that initial appropriation will be referred to as the “2005 Gobernación Claims Program”).[FN1] Subsequently, supplemental appropriations expanded the 2005 Gobernación Claims Program, also as a proximate result of this litigation.
FN1. “Gobernación“ refers to the Mexican Ministry of the Interior. Ironically, class counsel's success in spurring creation of the Gobernación Claims Program increased the risks of litigation, because creation of the program buttressed the Defendants' act-of-state defense.
The 2005 Gobernación Claims Program did not, however, benefit the current settlement class because it was oriented to braceros in Mexico, not the United States. This Mexican domestic program was not widely publicized, was not accompanied by any notice campaign, was unknown to many braceros and their survivors residing in the United States, and claims under it could not be filed in the United States. As a result, very few braceros in the U.S. registered for or received compensation under the 2005 Gobernación Claims Program.
This Settlement, by contrast, was designed specifically to benefit U.S. residents and is a very substantial accomplishment. As with any settlement, some of its terms are less than optimal. In particular, the documentation requirements for proof of claims are onerous and have suppressed class member participation.[FN2] But these documentation requirements were imposed by provisions in enabling legislation enacted by the Mexican national Congress and by the administrative body charged by the Mexican Congress with implementing the settlement and, in light of those constraints, they are the best that could be negotiated.[FN3] FN2. As discussed below, the documentation requirements differ dramatically from what class counsel proposed and tried to obtain. Class counsel are confident, however, that they are the best terms that could be achieved under the circumstances.
FN3. These enabling provisions promulgated in Mexico, to the extent they qualify as “acts of state,” would not have been not subject to effective challenge in U.S. courts. See generally Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964).
What has been accomplished is impressive. It is a rare case in which U.S. lawyers manage to obtain the agreement of a foreign sovereign to submit to the jurisdiction of U.S. courts in order to pay reparations to residents of the United States and to give them priority in payment over residents of the sovereign's own country. It is likewise rare for the government of Mexico to accord recognition to citizen protests in general or the braceros in particular. This settlement has achieved all of that and against overwhelming odds, given the age of the claims and the procedural and substantive obstacles to proving them on a classwide basis in United States courts.
II. PROCEDURAL BACKGROUND AND SUMMARY OF SETTLEMENT TERMS A. Procedural History of the Case The original Complaint in this matter was filed on March 2, 2001. The operative Third Amended Complaint was filed on August 15, 2003. On September 5, 2005, after rulings on successive motions to dismiss, the Court certified for appeal its conclusions regarding Plaintiffs' remaining claims against the only remaining defendants, Estados Unidos Mexicanos, Banco de Mexico, Banco Nacional de Credito Rural, S.N.C., and Banco de Ahorro Nacional, S.A. (“Defendants”). The Defendants then filed their appeal with the Ninth Circuit. On October 8, 2008, the Ninth Circuit dismissed the pending appeal pursuant to a stipulation of the parties, returning jurisdiction to this Court.
A more detailed account of the procedural history of the case is provided in Plaintiffs' Memorandum in Support of Joint Motion for Preliminary Approval. DOC. # 252-2.
B. The Settlement Agreement and its Terms On October 10, 2008, the Court granted the parties' joint motion for an order, inter alia, conditionally certifying the settlement class, directing distribution of notice to the class and preliminarily approving the class action settlement. The Court's order certified a class of:
All current U.S. residents who (a) worked as braceros during the period January 1, 1942 through December 31, 1946, (b) have not previously registered in the braceros registry compiled by the Secretaria de Gobernación, and (c) are Mexican citizens as evidenced by a Mexican passport, Mexican voting card or Mexican Military Service Card, or are the surviving spouses or heirs of such braceros now deceased who are or become Mexican national and/or dual nationals.
Under the terms of the Settlement Agreement, as preliminarily approved by the Court, class members obtain priority access to reparation payments from the Mexican government. Agreement § 9.2.
The Agreement provides for reparations payments for eligible U.S. resident braceros or their surviving spouses and children in the amount of either: (a) 38,000 Mexican pesos or (b) the greater of $3,455 or the then-current interbank exchange-rate equivalent of 38,000 pesos. If the award is made in Mexican pesos, the Defendants will assist eligible class members in converting the award to United States dollars in a cost effective manner, if class members wish to do so. Agreement § 9.
No independent list of class member names or addresses exists. Neither Defendants nor anyone else has preserved a roster of all workers who entered the braceros program between 1942 and 1946. To establish eligibility for a settlement payment, class members have been required to submit specified documentary proof, in original form (not copies), to establish three primary predicates: (a) their Mexican nationality or dual nationality; (b) theirs, or a parent or spouse's, participation in the bracero program between 1942 and 1946; and (c) in the case of a surviving spouse or child, proof of the deceased bracero's death and the spouse's or child's authority, as an authorized heir, to claim on behalf of the deceased bracero. These documentary requirements are required by regulations implementing the braceros' reparation legislation, issued in Mexico.
If the Court grants final approval to the parties' settlement, Settlement Class members who have not timely opted out will release all claims that have or could have been asserted by them arising from or related to their (or, in the case of a surviving spouse or child, their spouse's or parent's) employment as a bracero.
On or about October 23, 2008, in addition to accepting claims at Mexican consulates in the U.S. from class-member 1942-1946 era braceros under the Settlement Agreement, the Defendants also began accepting claims in the U.S. from 1947-64 era braceros. That decision was precipitated by this Settlement and significantly increased the number of persons in the United States eligible to make claims, a further direct benefit of this Settlement.
1. The Documentation Requirements Imposed by the Settlement Are Stringent But Were Hotly Contested and are the Best that Could be Negotiated Given the Intransigence of the Mexican Defendants on this Point and the Precedent Set by the Prior Gobernación Claim Program in 2005, Which Had Virtually the Same Documentation Requirements. The Settlement's stringent documentation requirements were the subject of contentious negotiations, and class counsel proposed and negotiated for three provisions that, if adopted, would have resulted in materially different and more generous proof requirements. First, class counsel opposed the notion that proof must be limited to original documents, precluding copies. Second, class counsel opposed any requirement that would limit the acceptable forms of proof to specified documents. In this regard, the early drafts of a settlement agreement prepared by class counsel and circulated to the defendants were explicit that any specification of acceptable forms of proof should admit of the possibility that class members might have “other corroboration” in the form of competent and equivalent documentary proofs that might be acceptable. In the event of disputes about the sufficiency of particular forms of corroboration, the question would have been submitted to a third-party neutral.[FN4]Third, class counsel attempted to obtain express rights of appeal of denied claims. Piers Suppl. Decl. ¶ 9.
FN4. The settlement of Holocaust reparation claims, for example, contemplated that victims might establish eligibility for payment notwithstanding their inability to document their claims by prescribed means. See Conference on Jewish Material Claims Against Germany, Inc., Program for Former Slave and Forced Laborers, at http://www.claimscon.org /index.asp? url=slave labor/documentation3 (“[W]here no documentation could be found, applicants were invited to describe their persecution experiences and these statements could constitute part of the proof that the claimant was eligible for a payment”). In re Holocaust Victim Assets Litig., 105 F. Supp. 2d 139 (E.D.N.Y. 2000).
Irremediable constraints, however, limited class counsel's options in the negotiations. First, the intractable reality was that class counsel had limited leverage given how tenuous the legal claims were. Second, Defendants were bound by the precedent of the 2005 Gobernación Claims Program. This settlement, that is, could not have documentation requirements materially more liberal than those used in 2005. Third, all documentation requirements for class members' proofs were ultimately subject to approval by a “Technical Committee” that under Mexican law administers the Trust Fund from which settlement proceeds would be disbursed. That committee is not a party defendant in this case and, while established by the Mexican government, is an independent entity over which the actual defendants in this case do not exercise control.
Within these considerable constraints, class counsel are confident that the settlement arrived at is the best that could be achieved and is more than adequate and reasonable in light of the alternative of continued litigation, a likely result of which would have been recovering nothing for any class member.
As Judge Korman stated in In re Holocaust Victim Assets Litigation, “strong moral claims” are not “easily converted into successful legal causes of action.” 105 F. Supp. 2d 139, 148-49 (E.D.N.Y. 2000). The law can be a tool of sometimes limited efficacy, particularly in cases attempting to redress disputes about events decades ago.
III. A SUBSTANTIAL NUMBER OF CLAIMS HAVE BEEN SUBMITTED. Defendants have reported that 6,193 fully documented claims were submitted by braceros, their surviving spouses and children at U.S. Consulates during the class claims period, which ran from October 23, 2008 through January 5, 2009. Of those 6,193 claims, some 6,024 were filed by 1947-64 era braceros (or their surviving spouse and children), while 169 were filed by 1942-1946 era braceros (or their surviving spouses and children). But for the lawsuit, none of these 6,193 claims could have been made in the United States. The settlement in this case must be credited with making possible not only the 169 claims submitted by 1942-1946 era braceros, their spouses and children, who are members of the Settlement Class, but also with the additional 6,024 claims submitted in the United States by 1947-1964 era braceros and their surviving spouses and children.