Haggart v. United States

809 F.3d 1336, 2016 U.S. App. LEXIS 218, 2016 WL 97520
CourtCourt of Appeals for the Federal Circuit
DecidedJanuary 8, 2016
Docket2014-5106
StatusPublished
Cited by55 cases

This text of 809 F.3d 1336 (Haggart v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Haggart v. United States, 809 F.3d 1336, 2016 U.S. App. LEXIS 218, 2016 WL 97520 (Fed. Cir. 2016).

Opinion

WALLACH, Circuit Judge.

Appellants Gordon and Denise Woodley (“Woodleys”) challenge the decision of the United States Court of Federal Claims (“Claims Court”) approving a settlement agreement in a class action takings suit and awarding attorney fees to class counsel under the common fund doctrine. The United States (“Government”) confesses error for failing to support the Woodleys’ claim before the Claims Court and, like the Woodleys, now asserts the Claims Court erred in approving the settlement agreement and awarding class counsel attorney fees under the common fund doctrine. For the reasons set forth below, we vacate and remand on both issues.

BACKGROUND

I. Procedural History

This is an appeal by two members of a certified class in a class action suit, challenging the Claims Court’s approval of a $110 million settlement agreement and its decision to award class counsel approximately $35 million in attorney fees. See Haggart v. United States (Haggart IV), 116 Fed.Cl. 131 (2014). In 2003, Burlington Northern Railroad sought to divest its interest in three segments of land in King County, Washington. The divestiture was accomplished pursuant to section 208 of the National Trails Systems Act Amendments of 1983, 16 U.S.C. § 1247(d) (“Trails Act”). 1 The Surface Transportation Board, a federal adjudicatory body with *1341 broad economic regulatory oversight of railroads, authorized King County to use the railroad corridor for a public trail. However, the authorization forestalled the reversion of the property to the fee title landowners of the segments of land, who had only granted easements to the railroads.

In February 2009, Daniel and Kathy Haggart filed a complaint alleging that they and other landowners held interests in the railroad corridor and the Trails Act effected an uncompensated taking, in violation of the Fifth Amendment’s Takings Clause, when King County acquired an interest in the land. 2 Before the class was certified, sixty-four class members signed contingent fee agreements with class counsel, providing for a thirty-five percent fee of the “common fund.” 3 The Haggarts sought to define the common fund to include land values, interest, and statutory fees under section 304(c) of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (“URA”). See 42 U.S.C. § 4654(c).

In September 2009, the Claims Court certified the class as an opt-in class action in accordance with Rule 23 of the Rules of the United States Court of Federal Claims (“RCFC”). See Haggart v. United States (Haggart I), 89 Fed.Cl. 523, 536 (2009). On October 16, 2009, class counsel notified the Claims Court and the Government that attorney fees “will be the greater of (a) 35% of any recovery (45% if the case is appealed); or (b) its statutory attorney[] fees.” S.A. 239. 4 Class counsel also provided a copy of the contingency fee agreement to class members who did not sign the agreement. The Claims Court subsequently divided the class into six subclasses. See Haggart v. United States (Haggart II), 104 Fed.Cl. 484, 491 (2012). After discovery, the parties filed cross-motions for partial summary judgment relating to two subclasses (subclasses two and four). In December 2012, the Claims Court granted-in-part and denied-in-part the cross-motions. See Haggart v. United States (Haggart III), 108 Fed.Cl. 70, 75 (2012) (asserting that the United States was “liable to the [s]ubclass [t]wo plaintiffs and several categories of the [sjubclass [fjour plaintiffs for the taking of their property by issuing the trail-use authorizations when the rail easements did not encompass that use”). Following this decision, the class was winnowed to 253 class members.

II. Settlement Negotiations

After the Claims Court’s decision in Haggart III, the parties commenced set *1342 tlement negotiations for the 253 class members. Both parties retained appraisers to independently examine the properties and to determine their fair market value. 5 ' After two days of mediation, the parties reached a settlement agreement in the amount of $110,000,000 for the land of the 253 class members and agreed that interest should be compounded at 4.2% from the date of the taking, totaling an additional $27,961,218.69 through May 31, 2014. 6 After a second mediation, the parties settled on a statutory attorney fees figure of $2,580,000, consisting of $1,920,000 in fees and $660,000 in costs. Class members received notice regarding the likely terms of the settlement in September 2013, and many consented to them at that time.

III. The Claims Court’s Approval of the Settlement Agreement and Award of Attorney Fees

On February 12, 2014, class counsel and the Government filed a joint motion for approval of the settlement agreement. The joint motion asserted that “the proposed settlement is fair, reasonable, and adequate with respect to the individual claims of each opt-in class member and as to the class as a whole.” S.A. 375. A day later, class counsel moved for an additional award of attorney fees under the common-fund doctrine.

On February 25, 2014, the Claims Court preliminarily approved the proposed settlement agreement and also approved a notice to be sent to the 253 class members. On February 27, 2014, a slightly revised notice advising class members of the overall settlement terms, as well as the settlement terms for the claims of individual class members (the notice included an individual disclosure page, which provided the principal and interest for each landowner’s property) and attorney fees, was sent to class members. 7

The Claims Court held a fairness hearing on March 28, 2014. Of the 253 class members, only three participated in the hearing. 8 The Woodleys expressed their dissatisfaction with their proposed award, the awarding of additional attorney fees as a percentage of the total recovery, and the lack of “access by , class members to appraisal data.” Haggart IV, 116 Fed.Cl. at 142. The Claims Court granted class counsel’s motion for approval of the attorney fees and division of the common fund. However, the court rejected class counsel’s *1343 request that the statutory fee under the URA should be included in the common fund for purposes of calculating the contingent fee.

The Woodleys appeal the settlement approval and award of attorney fees. The remaining members of the class (collectively, the “Haggarts”), oppose the Woodleys through their class counsel.

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Bluebook (online)
809 F.3d 1336, 2016 U.S. App. LEXIS 218, 2016 WL 97520, Counsel Stack Legal Research, https://law.counselstack.com/opinion/haggart-v-united-states-cafc-2016.