May 25, 2018


                                                                     Supreme Court




               Joseph Clifford et al.            :                   No. 2015-379-Appeal.
                                                                     (KC 14-345)
                         v.                      :

       Gina Raimondo, in her capacity as         :
   Governor of the State of Rhode Island, et al.


                                                                     No. 2016-24-Appeal.
     Rhode Island Public Employees’ Retiree      :
                                                                     No. 2016-25-Appeal.
                 Coalition et al.
                                                                     No. 2016-26-Appeal.
                                                                     No. 2016-28-Appeal.
                         v.                      :                   No. 2016-49-Appeal.
                                                                     (PC 15-1468)
   Gina Raimondo, in her capacity as Governor :
        of the State of Rhode Island, et al.



                  NOTICE: This opinion is subject to formal revision before
                  publication in the Rhode Island Reporter. Readers are requested to
                  notify the Opinion Analyst, Supreme Court of Rhode Island,
                  250 Benefit Street, Providence, Rhode Island 02903, at Telephone
                  222-3258 of any typographical or other formal errors in order that
                  corrections may be made before the opinion is published.
                                                                     Supreme Court




            Joseph Clifford et al.              :                    No. 2015-379-Appeal.
                                                                     (KC 14-345)
                      v.                        :

    Gina Raimondo, in her capacity as         :
Governor of the State of Rhode Island, et al.


                                                                     No. 2016-24-Appeal.
    Rhode Island Public Employees’ Retiree      :
                Coalition et al.                                     No. 2016-25-Appeal.
                                                                     No. 2016-26-Appeal.
                                                                     No. 2016-28-Appeal.
                      v.                        :                    No. 2016-49-Appeal.
                                                                     (PC 15-1468)
Gina Raimondo, in her capacity as Governor :
     of the State of Rhode Island, et al.


                    Present: Suttell, C.J., Goldberg, Flaherty, and Indeglia, JJ.

                                           OPINION

        Justice Indeglia, for the Court.

“Economy is the method by which we prepare today to afford the improvements of tomorrow.”1

        Rhode Island, unfortunately, failed to prepare for tomorrow. Its problems all came to a

breaking point in 2009, at the depth of the recession, at which time government officials realized

they needed to address the depletion of funding in the state and municipal employee retirement

systems.2 As a result, in 2009 and 2010, the General Assembly amended the statutes governing



1
  Silent Cal’s Almanack: The Homespun Wit and Wisdom of Vermont’s Calvin Coolidge 58
(David Pietrusza ed., 2008) (quoting Calvin Coolidge, 30th President of the United States, Third
Annual Message to Congress, December 8, 1925, Messages and Papers of the Presidents, p.
9517).
2
  See Christopher D. Hu, Reforming Public Pensions in Rhode Island, 23 Stan. L. & Pol’y Rev.
523, 524 (2012) (At the national level, “[p]ension systems for retired state and local employees,
                                                    1
the pension system, changing the retirement age and reducing the cost-of-living adjustment

(COLA). See P.L. 2009, ch. 68, art. 7; P.L. 2010, ch. 23, art. 16; see also G.L. 1956 chapters 8,

9, 10, and 10.1 of title 36; G.L. 1956 chapter 21 of title 45. In 2011, the General Assembly took

more drastic action and passed the Rhode Island Retirement Security Act of 2011 (RIRSA),

which abridged the retirement benefits of state and municipal employees even further. See P.L.

2011, chs. 408 and 409. In response, a number of lawsuits were filed by various state and

municipal unions on behalf of their affected members.

       In these appeals, we are asked to review a class-action settlement that was approved by a

Superior Court trial justice in 2015. That class action was filed in April 2015 for settlement

purposes only by the following parties: the Rhode Island Public Employees’ Retiree Coalition

(RIPERC); the Rhode Island American Federation of Teachers/Retirees, Local 8037 (AFT/R);

Roger Boudreau; Michael Connolly; Kevin Schnell; the Rhode Island Council 94, AFSCME,

AFL-CIO; the National Education Association–Rhode Island (NEARI); John Lavery; Michael

McDonald; Jason Kane; Amy Mullen; Susan Verdon; the Rhode Island State Association of

Firefighters; Raymond Furtado; and James Richards (collectively, the Union plaintiffs). The

class action was filed against both state and municipal defendants. The state defendants are the

following: Gina M. Raimondo, in her capacity as Governor of the State of Rhode Island; Seth

Magaziner, in his capacity as General Treasurer of the State of Rhode Island; and the

Employees’ Retirement System of the State of Rhode Island, by and through the Rhode Island


many of which were already seriously underfunded,[] ha[d] taken a turn for the worse in the post-
2008 recession. The stock market’s slump * * * forced pension plans to adjust their investment
projections downward, resulting in over $1 trillion in state and local unfunded pension
liability.”); see also William C. Burnham, Public Pension Reform and the Contract Clause: A
Constitutional Protection for Rhode Island’s Sacrificial Economic Lamb, 20 Roger Williams U.
L. Rev. 523, 526 (2015) (at the time that government officials commenced the changes to the
pension system, “Rhode Island was amid a period of economic decline so bleak that it prompted
one commentator to hyperbolically characterize the state as ‘an American Greece’”).
                                               2
Retirement Board, by and through Magaziner, in his capacity as Chairman of the Retirement

Board; and Frank J. Karpinski, in his capacity as Secretary of the Retirement Board (collectively,

the state defendants). The municipal defendants are the towns of Barrington, Middletown, and

South Kingstown (collectively, the municipal defendants). While the Union plaintiffs approved

of the settlement, filing briefs in this appeal in support of the state defendants, two groups of

class-member plaintiffs appealed the trial justice’s approval of the settlement in two separate

actions, now consolidated on appeal. Those opponents are “the Clifford plaintiffs” 3 and “the

Retiree plaintiffs.”4 For the reasons set forth in this opinion, we affirm the judgment of the

Superior Court.

                                                I

                                       Facts and Travel

                                                A

                          The State Employees’ Retirement System

       In Rhode Island, the state retirement board administers the state employees’ retirement

system—the Employees’ Retirement System of Rhode Island (ERSRI)—and the municipal

employees’ retirement system—the Municipal Employees Retirement System (MERS).5 See

G.L. 1956 §§ 36-8-2 and 36-8-4(a). MERS, “which includes locally funded plans[,]” was

established in 1951. Andre S. Digou, A View of the Rhode Island Pension Landscape: The

3
  The “Clifford plaintiffs” are a group of individual retired state and municipal employees who
are not associated with the other retiree associations involved in these appeals.
4
  The “Retiree plaintiffs” include retirees of the Woonsocket, East Greenwich, North Kingstown,
and Hopkinton police departments; the North Kingstown Fire Department; and the Rhode Island
Department of Administration.
5
  The following two retirement plans are also part of the Rhode Island state system: the Rhode
Island State Police Retirement Benefits Trust and the Rhode Island Judicial Retirement Benefits
Trust. See Andre S. Digou, A View of the Rhode Island Pension Landscape: The Potential
Reform of Local Pension Plans Under the Preemption Doctrine, 19 Roger Williams U. L. Rev.
740, 741 (2014).
                                                3
Potential Reform of Local Pension Plans Under the Preemption Doctrine, 19 Roger Williams U.

L. Rev. 740, 741 (2014). Rhode Island “pools plan funds for investment purposes,” and the

Rhode Island general treasurer chairs the retirement board; he or she “is responsible for the

[system’s] investment decisions and setting asset allocation strategies * * *.” Id. at 741-42.

       In 2009, the General Assembly enacted legislation that effectively redefined the service

and/or age requirements for present employees. See P.L. 2009, ch. 68, art. 7. The following

year, the General Assembly made further amendments, curtailing the COLA to “the first * * *

$35,000 * * * of retirement allowance,” and requiring that it not “commence [until] the third

(3rd) anniversary of the date of retirement or when the retiree reaches age sixty-five (65),

whichever is later.” P.L. 2010, ch. 23, art. 16.

       In 2011, as part of its legislative findings in passing RIRSA, the General Assembly

explained its reasons for adopting the act as follows:

               “(1) The State of Rhode Island has one of the lowest funded and
               most vulnerable statewide pension systems in the country.

               “* * *

               “* * *

               “(4) The state retirement system’s unfunded liability exceeds $7
               billion as measured by well-established and accepted public
               accounting standards.

               “* * *

               “(6) Annual government contributions to ERSRI more than
               doubled between fiscal years 2005 and 2011 and those
               contributions are estimated to double again in fiscal year 2013 to
               exceed over $600 million. Without immediate and comprehensive
               legislative action future contributions will continue to grow
               dramatically and exceed $1 billion * * * in necessary annual
               contributions.




                                                   4
               “(7) If pension contributions continue to grow at the current and
               projected levels, they will be unaffordable and the pension security
               of our valued public employees will be placed in jeopardy.” P.L.
               2011, ch. 408, § 1.

In response to all of these fiscal issues facing the state, RIRSA included a minimum retirement

age for certain employees and also made changes to the COLAs. P.L. 2011, ch. 408, § 7.

Specifically, and at issue in this appeal, RIRSA stopped paying annual COLAs “until the state’s

pension plans [were] 80% funded overall[,]” which, as expressed by both sets of plaintiffs at oral

argument in this appeal, is indefinite. Christopher D. Hu, Reforming Public Pensions in Rhode

Island, 23 Stan. L. & Pol’y Rev. 523, 527 (2012).

                                                B

                      Lawsuits Filed by Unions and Retiree Associations

       After the passage of RIRSA, state and municipal employees suffered a severe diminution

of their anticipated retirement benefits. This led to the filing of a number of lawsuits

commencing in 2010 that challenged the enactment of the 2009 and 2010 amendments and

RIRSA, which came to be known as “the pension cases.”

       The first lawsuit was filed in 2010 by a number of unions representing state employees

and teachers, alleging that the 2009 and 2010 amendments violated the Contract, Takings, and

Due Process Clauses of the Rhode Island Constitution. Then, in 2012, five lawsuits were

brought on behalf of various unions and retirement associations challenging RIRSA, alleging the

same constitutional claims as alleged in the 2010 lawsuit.

       In 2013, all parties involved in both the 2010 and 2012 cases were ordered to attend

mediation. After months of mediation, the parties reached a proposed settlement in February

2014, subject to approval by all members of the unions. The parties, however, failed to secure

the necessary vote from the members, and so the litigation continued. In 2014, three more cases

                                                5
alleging similar claims were filed, one of which was the so-called “Clifford” case, by a group of

individual retirees. The lawsuits were eventually consolidated.

          The parties engaged in extensive discovery—defendants produced more than 700

gigabytes of electronic documents and over four million pages of documents. The parties began

preparation for a trial scheduled on April 20, 2015. In March 2015, the trial justice assigned a

special master to oversee any remaining discovery issues; after the special master had worked

with the parties, he announced that all parties except one group of plaintiffs6 had reached a

settlement approved by a majority of the group members.

          Subsequently, on April 13, 2015, the parties filed a class-action lawsuit to implement the

settlement, move for class certification, and appoint class representatives and class counsel. The

parties also sought initial approval of the settlement terms and approval of notice procedures of

the settlement to all members of the class action.

          On April 16, 2015, after hearing argument on the motions, the trial justice issued a

written decision granting the Union plaintiffs’ motion for class certification in accordance with

Rule 23(b)(2) of the Superior Court Rules of Civil Procedure, designating the class

representatives and appointing class counsel for plaintiffs and defendants.

          The plaintiff class was defined as follows:

                 “All persons (and/or their beneficiaries) who, on or before July 1,
                 2015, are receiving benefits or are participating in the State
                 Employees, Teachers, or Municipal Employees’ retirement
                 systems administered by ERSRI and all future employees,
                 excepting only those individuals who on July 1, 2015, are
                 participating in a municipal retirement system administered by
                 ERSRI for municipal police officers in any municipality and/or for
                 fire personnel of the City of Cranston[.]”




6
    Those plaintiffs included active Cranston police and firefighters.
                                                   6
       Additionally, the trial justice certified a number of plaintiff subclasses, described as

follows:

              “State Employees and Teachers: Participants in the Teachers and
              State Employees Retirement System (ERS) who are employed on
              or before July 1, 2015, but who have not retired as of June 30,
              2015 and all future employees;

              “Participants in the Municipal Employees Retirement System
              (MERS), other than police or fire units: Participants in MERS,
              other than police or fire units, employed on or before July 1, 2015,
              but who have not retired as of June 30, 2015 and all future
              employees;

              “Participants in all fire MERS units, except for fire personnel of
              Cranston: Participants in all fire MERS units, except for fire
              personnel of Cranston, employed on or before July 1, 2015, but
              who have not retired as of June 30, 2015 and all future employees;

              “Retirees: All retired members and beneficiaries of retired
              members who retired on or before June 30, 2015, who are
              receiving a retirement benefit under ERS or any MERS unit.”

The trial justice also certified the following defendant class: “All municipal entities that

participate in MERS and all municipal entities that employ teachers who participate in the state

employees and teachers’ ERS.”

       As part of her decision, the trial justice summarized the terms of the proposed settlement

as follows:

              “A one-time COLA payment of 2% applied to the first $25,000 of
              the pension benefit and that amount added to the base benefit will
              be paid to retirees (or their beneficiaries) who participate in a
              COLA program and who retired on or before June 30, 2012 as
              soon as administratively reasonable following the passage of the
              legislation based on the amount of benefit payable on the effective
              date of the legislation.

              “For funds that are not already funded, the settlement shortens the
              time intervals between suspended COLA payments from once
              every five years to once every four years. The settlement also
              improves the COLA limitation for current retirees whose COLA is

                                               7
             suspended. The settlement also requires a more favorable indexing
             of COLA Cap for all current and future retirees. The settlement
             also changes the COLA calculation to one more likely to produce a
             positive number and dictates that the COLA formula will be
             calculated annually, regardless of funding level, and when paid, the
             COLA will be compounded for all receiving a COLA.

             “Current retirees (or their beneficiaries) who have or will have
             retired on or before June 30, 2015 will receive two payments: (1) a
             one-time $500.00 stipend (not added to the COLA base) within
             sixty days of the enactment of the legislation approving the terms
             of the settlement and (2) a one-time $500 stipend payable one year
             later.

             “For State Workers, Teachers, and General MERS, the settlement
             (1) adds another calculation to reduce the minimum retirement age;
             (2) improves the available accrual rate for employees with twenty
             years or more of service as of June 30, 2012; (3) requires increased
             contributions by the employer to the Defined Contribution Plan for
             employees with ten or more years of service (but less than twenty)
             as of June 30, 2012; (4) waives the administration fee for any
             employees participating in the Defined Contribution Plan who
             make $35,000 or less; and (5) adds another calculation designed to
             limit the impact of the ‘anti-spiking’ rule imposed by the RIRSA
             on part-time employees.

             “For MERS Firefighters (excluding Cranston Firefighters), the
             settlement (1) lowers the age and service requirements for
             retirement; (2) increases the accrual rate for Firefighters who retire
             at age fifty-seven with thirty years of service.

             “For State Correctional Officers, the settlement increases the
             accrual rate for correctional officers with fewer than twenty-five
             years of service as of June 30, 2012.

             “The settlement reduces the impact of an early retirement.

             “The settlement allows Municipalities to ‘re-amortize’; that is,
             partially refinance, to be able to pay for the increased cost of the
             settlement.

             “Otherwise, the terms of the RIRSA remain the same.”

      The trial justice found that the class settlement agreement warranted “an initial

presumption of fairness,” and concluded that it was “within the range of reasonableness.”

                                               8
Accordingly, she granted the parties’ joint motion for preliminary approval of the class

settlement. She also approved the parties’ proposed method of notifying class members by mail,

newspaper publication, and posting the settlement information on the ERSRI website.

Additionally, the trial justice scheduled a fairness hearing for May 20, 2015, for the purpose of

final approval of the settlement.

                                                 C

                             Objections to the Proposed Settlement

       In response to the notices that were mailed and published for the benefit of class

members, the Superior Court received approximately 400 objections to the settlement agreement,

which raised a number of procedural and substantive concerns. Sixty-nine class members

requested an opportunity to be heard at the fairness hearing.

       There were a number of general objections, including that (1) the settlement was unfair

because members have contractual rights to pension benefits; (2) the settlement negotiations and

voter approval process were unfairly orchestrated; (3) the state’s financial crisis was not so dire

as to necessitate the drastic changes to the pension system; (4) the settlement affected certain

groups disproportionately; and (5) certain class members were not part of the underlying cases or

settlement discussions and wished to “opt out” of the settlement to pursue their individual

claims. Some other specific objections were offered by certain groups of objectors. Specifically,

a number of retirees contended that the settlement’s reduction of their COLA would drastically

affect their financial situations. In addition, Woonsocket police retirees in particular argued that

the settlement was unfair because active police members were continuing to pursue their claims,

and, if they were successful, the retirement fund would be diminished, making it less likely that

the retirees would receive their promised COLA. The Clifford plaintiffs also objected, arguing



                                                 9
that the state failed to explicitly define the amount of compensation retirees would lose under the

settlement.

                                                  D

                                    May 2015 Fairness Hearing

          At the fairness hearing, which spanned five days, the trial justice heard from the parties’

counsel and from six witnesses. The Union plaintiffs also filed affidavits of class representatives

who attested that they thought the settlement was fair, reasonable, and adequate to resolve their

claims.

          Joseph Newton, a principal actuary with Gabriel, Roeder, Smith & Company, testified for

defendants. Newton testified that he provided actuarial services for ERSRI throughout the

litigation of the pension cases. He testified that his analysis had demonstrated that the cost of the

settlement would be about $30.8 million, not including re-amortization.               During cross-

examination, Newton explained that the settlement would cost the state more than RIRSA would

have cost.

          Robert A. Walsh, Jr., the executive director of NEARI, testified that the settlement was

“a fair and adequate and reasonable solution[.]” Walsh testified that the Union plaintiffs had

already invested approximately $1 million in legal costs in the litigation. Walsh also said that his

members were cognizant of the risks involved in a jury trial with a high burden of proof for the

Union plaintiffs on their claims. On cross-examination, Walsh acknowledged that, under the

terms of the settlement agreement, retiree members would not receive “the future earnings of

COLA[]s.”

          Roger P. Boudreau also testified as a class representative of the retiree subclass and the

then-president of RIPERC and AFT/R. Boudreau explained that RIPERC filed its own lawsuit



                                                  10
and had sustained more than $400,000 in legal fees at the time of the hearing. He also described

the efforts the organization made to notify its more than 5,000 members that the lawsuit was

being filed, including publishing newspaper advertisements. With respect to the 2015 settlement

discussions, Boudreau testified that his organization had concerns about succeeding at a jury trial

with such a high burden of proof, which affected RIPERC’s choice to join in the settlement

agreement of March 2015.

       Boudreau highlighted what he perceived as the benefits of the 2015 settlement, which he

said were greater than the first proposed settlement. He also testified that the vote, which

recommended presenting the settlement to their members by the leadership groups of the

RIPERC organizations, was “virtually unanimous.” According to Boudreau, RIPERC held a

meeting to conduct an in-person vote on the settlement, which passed with about a seventy-five

percent approval by the approximately 2,500 members who attended. On cross-examination,

Boudreau testified that the 2,500 members who voted were out of a group of 27,000 retirees who

would be affected by the settlement.

       Mark A. Dingley also testified in his capacity as special counsel for the Governor.7 He

testified regarding the history of the legislative amendments to the pension system, describing

the “underfunded” pension plans in 2011, when the state’s “contribution levels were practically

doubling.” Dingley also explained that, while prior to RIRSA’s enactment the state’s “unfunded

liability was $7.3 billion[,]” after its enactment, the liability was reduced to $4.286 billion. He

also agreed that the 2015 settlement was fair, reasonable, and adequate. Dingley was also

extensively cross-examined by counsel and by class members over three hearing days.



7
  Prior to his role as special counsel for Governor Gina Raimondo, Dingley served as the chief of
staff and general counsel for Treasurer Frank Caprio, and then he was the general counsel and
deputy treasurer for Raimondo when she was treasurer.
                                                11
       Next, Stephen Alfred, the town manager for South Kingstown and a class representative

for the municipal defendants, testified. He stated that he was in favor of the settlement because,

if the Union plaintiffs were to succeed at trial, “cities and towns would not be able to deal with

the type of pension payments that would be required * * *.” He also testified that, as of the date

of the hearing, no municipality had objected to the settlement.

       Patrick Marr, the deputy treasurer and chief operating officer from the Office of the

General Treasurer, also testified. He explained that he assisted in coordinating the notification of

the settlement to class members through mail, newspaper advertisements, and postings to the

retirement website. He pointed out that the notices outlined the method by which class members

could object to the settlement.

       After the witnesses testified, the trial justice heard from class members who had timely

requested to address the court. While sixty-nine class members submitted requests to address the

court, only thirty-five members actually expressed their views during the fairness hearing. The

trial justice reserved decision at the hearing and issued a written decision on June 9, 2015.

                                                  E

                                   The Trial Justice’s Decision

       In her written decision, the trial justice reaffirmed her certification of the settlement

classes in accordance with Rule 23(b)(2), consistent with her April 16, 2015 decision. She also

determined that the class members had received adequate notice. Finally, in reviewing the terms

of the settlement, the trial justice found that it was both procedurally and substantively fair.

       After the trial justice’s decision, the legislature enacted the 2015 amendments to RIRSA,

implementing the terms of the settlement. See P.L. 2015, ch. 141, art. 21. Both the Clifford




                                                  12
plaintiffs and the Retiree plaintiffs appealed the trial justice’s decision in the class action. On

appeal, the Union plaintiffs joined the state defendants as appellees.

                                                  II

                                       Standard of Review

       When we review a trial justice’s decision to certify a class in accordance with Rule 23 of

the Superior Court Rules of Civil Procedure, we defer to a trial justice’s “decision to certify a

class[,]” and we will not disturb such a ruling “unless the trial court misconceived material

evidence, substantially abused its discretion or was otherwise clearly wrong.” DeCesare v.

Lincoln Benefit Life Co., 852 A.2d 474, 487-88 (R.I. 2004). “The trial court, well-positioned to

decide which facts and legal arguments are most important to each Rule 23 requirement,

possesses broad discretion to control proceedings and frame issues for consideration under Rule

23.” In re Hydrogen Peroxide Antitrust Litigation, 552 F.3d 305, 310 (3d Cir. 2008).8

       Similarly, this Court will review a trial justice’s decision to approve a class-action

settlement for abuse of discretion. See Bezdek v. Vibram USA, Inc., 809 F.3d 78, 82 (1st Cir.

2015). In considering such decisions, we will review issues of law de novo, while “factual

findings are reviewed for clear error.” Id.

                                                 III

                                              Discussion

       We begin by commending the trial justice for her exhaustive analysis, care, and attention

in presiding over and adjudicating the pension cases, especially the settlement now before us.

Although both the Clifford plaintiffs and the Retiree plaintiffs astutely attempt to diversify their



8
  We have “stated that, ‘where the [f]ederal rule and our state rule are substantially similar, we
will look to the [f]ederal courts for guidance or interpretation of our own rule.’” Long v. Dell,
Inc., 93 A.3d 988, 1005 (R.I. 2014) (quoting Heal v. Heal, 762 A.2d 463, 466-67 (R.I. 2000)).
                                                 13
arguments before us, there are only two arguments squarely remaining in plaintiffs’ portfolio:

whether the trial justice’s certification of the class was appropriate, and whether the settlement

was fair, reasonable, and adequate. We will first address the class certification issue, and then

we will proceed to analyze whether the settlement approval was proper.

                                                 A

                                        Class Certification

       We first note that, to the extent that either the Clifford plaintiffs or the Retiree plaintiffs

argued the merits of their claims in the context of their challenges to the trial justice’s

certification of the Union plaintiffs, those contentions are not relevant because courts are not to

“conduct a preliminary inquiry into the merits of a suit in order to determine whether it may be

maintained as a class action.” Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177 (1974). The

Clifford plaintiffs contend that they should not have been forced into a plaintiff subclass because,

as retirees, they are differently situated than many of the other Union plaintiffs. In response, the

state defendants counter that the Clifford plaintiffs’ classification as retirees was accounted for

by the subclass of retirees.9 Further, the state defendants emphasize that the fact that class

members do not agree with the settlement is insufficient to exclude them from the class, and does

not automatically mean they will not be adequately represented.

       In a slightly more nuanced argument, the Retiree plaintiffs aver that the trial justice

should not have included them in a class for settlement purposes because they were not involved

in the underlying litigation. The Retiree plaintiffs also mention the potential impact of the

International Brotherhood of Police Officers case (No. PC 12-3169) on their future receipt of

COLAs, as well as the differences among the abilities of various municipalities to pay for

9
 To the extent that the Union plaintiffs’ arguments mirror those of the state defendants, we will
only refer to the state defendants’ arguments.
                                                 14
pension benefits.10 Additionally, they maintain that they should not have been certified pursuant

to Rule 23(b)(2) because class members received only money damages from the proposed

settlement.

                                                  1

                                          Rule 23 Caselaw

       When litigants seek class certification, Rule 23(a) of the Superior Court Rules of Civil

Procedure requires the following: (1) “[t]he class is so numerous that joinder of all members is

impracticable”; (2) “[t]here are questions of law or fact common to the class”; (3) “[t]he claims

or defenses of the representative parties are typical of the claims or defenses of the class”; and

(4) “[t]he representative parties will fairly and adequately protect the interests of the class.” Trial

justices must “conduct a ‘rigorous analysis’ of the[se] prerequisites to a class action before a

class may be certified under Rule 23 * * *.” DeCesare, 852 A.2d at 487 (quoting General

Telephone Co. of the Southwest v. Falcon, 457 U.S. 147, 161 (1982)).               Only when these

prerequisites are met should Rule 23(b) be addressed. Id. at 486.

       Rule 23(b) provides that a potential class must fit into one of three categories. DeCesare,

852 A.2d at 486. In this case, the Union plaintiffs sought to have the class certified pursuant to

either Rule 23(b)(1) or (b)(2), but the Retiree plaintiffs argue that certification pursuant to Rule




10
   The plaintiffs in No. PC 12-3169 included active Woonsocket employees who were not
included in the 2015 proposed settlement. The Retiree plaintiffs argue that if those plaintiffs
were successful, such an outcome would impact the funding available for the Woonsocket
municipal plan and delay their own annual COLAs. In response, the state defendants counter
that the case has no effect on this settlement because it was rendered moot by the 2015 RIRSA
amendments. We note that the trial justice found the case moot on August 21, 2015, and that
decision was never appealed. Additionally, the case was dismissed by the United States Court of
Appeals for the First Circuit. See Cranston Firefighters, IAFF Local 1363, AFL-CIO v.
Raimondo, 880 F.3d 44, 45, 53 (1st Cir. 2018).
                                                  15
23(b)(3) is appropriate so that they have the choice to “opt out” of the settlement. Rule 23(b)(1)

requires as follows:

                 “(1) The prosecution of separate actions by or against individual
                 members of the class would create a risk of:

                 “(A) Inconsistent or varying adjudications with respect to
                 individual members of the class which would establish
                 incompatible standards of conduct for the party opposing the class;
                 or

                 “(B) Adjudications with respect to individual members of the class
                 which would as a practical matter be dispositive of the interests of
                 the other members not parties to the adjudications or substantially
                 impair or impede their ability to protect their interests[.]”

Rule 23(b)(2), on the other hand, provides that “[t]he party opposing the class has acted or

refused to act on grounds generally applicable to the class, thereby making appropriate final

injunctive relief or corresponding declaratory relief with respect to the class as a whole[.]”

Additionally, Rule 23(b)(3) provides that “the questions of law or fact common to the members

of the class predominate over any questions affecting only individual members, and * * * a class

action is superior to other available methods for the fair and efficient adjudication of the

controversy.”

          “[C]ourts generally prefer to certify classes under Rule 23(b)(1) or (2) before certifying

under Rule 23(b)(3).” DeCesare, 852 A.2d at 490 (quoting Borcherding-Dittloff v. Transworld

Systems, Inc., 185 F.R.D. 558, 562 (W.D. Wis. 1999)). The rationale for this preference is “that

members of a class certified under Rule 23(b)(1) or (2) cannot opt out of the action, while

members of a class certified under Rule 23(b)(3) are entitled to opt out and pursue individual

suits.”    Id. (quoting Borcherding-Dittloff, 185 F.R.D. at 562).        Due to the potential for

“[i]ndividual claims brought by members opting out of the class * * * prejudic[ing] other class

members or caus[ing] inconsistencies and compromises in future litigation[,]” id. (quoting

                                                  16
Borcherding-Dittloff, 185 F.R.D. at 562), courts prefer that “classes proceed under Rule 23(b)(2)

because of its broader res judicata effect.” Id. Certification pursuant to Rule 23(b)(3) should be

pursued only “when the class is heterogeneous in composition, thereby necessitating the

additional procedural protections afforded by opt-out and notice.” Id.

                                                   2

                                               Analysis

       In her April 16, 2015 decision, the trial justice analyzed the four prerequisites of Rule

23(a) for class certification, concluding that the class met the prerequisites. First, the trial justice

found that the numerosity factor was satisfied because the proposed class contained more than

60,000 people and defendants included “113 municipal entities which participate in MERS[.]”

       Next, the trial justice considered whether there were questions of law or fact common to

the class. She determined that all Union plaintiffs made constitutional challenges to the 2009

and 2010 Acts and to RIRSA, including allegations that the legislation violated the Contract,

Takings, and Due Process Clauses of the Rhode Island Constitution. The trial justice found that

all Union plaintiffs were either active or retired employees of municipalities or the state, and that

all their claims were based upon the contention that RIRSA impaired their contractual rights to

retirement benefits. Additionally, the trial justice concluded that all the state and municipal

defendants also shared common questions of law and fact, and that they shared the same

defenses to plaintiffs’ claims.

       With respect to the third requirement of Rule 23(a)—typicality—the trial justice found

that the claims of the class representatives were typical of the claims of the whole class because

the proposed representatives were “either current or former state employees, public school




                                                  17
teachers, or municipal employees” who were either members of the state or municipal retirement

systems or already receiving pension benefits from those systems.

       Moreover, the trial justice found that the legal theories and evidence used by the

representatives would be the same for the other class members. She also found that the defenses

of the defendants’ representatives were typical of those of the whole. Finally, the trial justice

determined that there was adequate representation, based on her findings that the attorneys were

qualified and experienced and that no conflicts existed between the class representatives and the

other class members.

       Having found that the prerequisites of Rule 23(a) were met, the trial justice next analyzed

whether the class could be certified under any of the three methods provided for in Rule 23(b).

The trial justice concluded that both the plaintiff class and the defendant class qualified to be

certified pursuant to Rule 23(b)(2). With respect to the Union plaintiffs’ claims, the trial justice

found that they all challenged the state defendants’ enactment of RIRSA, which affected all

Union plaintiffs’ entitlement to retirement benefits. Moreover, the trial justice highlighted that

the claims of the Union plaintiffs were equitable in nature—they sought “the restoration of their

retirement benefits prior to the passage of the 2009 and 2010 Acts and the RIRSA.” She also

found that all defendants would be affected because all of the municipalities involved

participated in MERS, indicating that the outcome of the settlement would affect the funding

requirements for all defendant class members.

       In her June 9, 2015 decision, the trial justice revisited the certification issue, and she

reaffirmed the certification of the settlement classes. In doing so, the trial justice scrutinized a

number of factors in determining whether there was “adequate protection for absent class

members[.]” She recognized the need to generally apply a higher scrutiny to class-action



                                                18
settlements. Still, she highlighted that this case did not present any danger of collusion between

opposing counsel, there had been extensive discovery in the case, and the settlement had been

overseen by a special master chosen by the court. The trial justice also analyzed whether the

Union plaintiffs’ attorneys were qualified and whether there were any conflicts of interest

between the class representatives and the class members, concluding that the attorneys were well

qualified and that no conflicts existed.

       Finally, the trial justice found that the class members received adequate notice in

accordance with Rule 23(e). She determined that the notice informed the class members of the

action, summarized the essential terms of the settlement agreement, and described how members

could object to the settlement terms by appearing at the fairness hearing. Moreover, she noted

that the bulk of the objections to the settlement agreement had to do with its fairness, rather than

lack of notice.

       At the outset, we recognize that the review of class actions for settlement purposes

requires heightened review. See Amchem Products, Inc. v. Windsor, 521 U.S. 591, 620 (1997)

(“[U]ndiluted, even heightened, attention in the settlement context * * * is of vital importance,

for a court asked to certify a settlement class will lack the opportunity, present when a case is

litigated, to adjust the class, informed by the proceedings as they unfold.”). We keep this in

mind as we review the trial justice’s decision regarding the class certification.

                                                  a

                                             Rule 23(a)

       With respect to the Rule 23(a) analysis, neither group of plaintiffs before us appears to

quarrel with the numerosity requirement. As such, we proceed to determine whether the trial

justice abused her discretion in finding that the remaining prerequisites were met. The Clifford



                                                 19
plaintiffs’ claims were the same as the Union plaintiffs: that RIRSA’s elimination of the COLAs

amounted to a breach of contract, was in violation of the Contract, Takings, and Due Process

Clauses, and constituted conversion and unjust enrichment. The second prerequisite of Rule

23(a) has been described to require that the commonality “be of such a nature that it is capable of

classwide resolution—which means that determination of its truth or falsity will resolve an issue

that is central to the validity of each one of the claims in one stroke.” Wal-Mart Stores, Inc. v.

Dukes, 564 U.S. 338, 350 (2011). Nevertheless, in order to comply with Rule 23(a)(2), “even a

single common question will do.” Id. at 359 (internal quotations and alterations omitted).

       Here, all Union plaintiffs certainly have a single question in common—whether the

enactment of RIRSA amounted to a violation of the rights afforded by the Rhode Island

Constitution. In consideration of the Clifford plaintiffs’ claims for different damages, “[t]he

need for individual damages calculations * * * does not diminish the appropriateness of class

action certification where common questions as to liability predominate.” DeCesare, 852 A.2d

at 488 (quoting Seidman v. American Mobile Systems, Inc., 157 F.R.D. 354, 366 (E.D. Pa.

1994)). Similarly, the Retiree plaintiffs’ contention that outside litigation might affect the ability

of their respective municipalities to afford their pension benefits in the future is not the proper

inquiry for purposes of class certification. Indeed, whether the damages to individual plaintiffs

differed among categories of active employees and retirees does not affect a determination under

Rule 23(a)(2). See id. Consequently, we are satisfied that the trial justice did not abuse her

discretion in ruling that there were factual and legal questions common to the entire class.

       Turning to the third requirement, we are also satisfied that the claims of the class

representatives are typical of the claims of the entire class. “When it is alleged that the same

unlawful conduct was directed at or affected both the named plaintiff and the class sought to be



                                                 20
represented, the typicality requirement is usually met irrespective of minor variations in the fact

patterns underlying individual claims.” Robidoux v. Celani, 987 F.2d 931, 936-37 (2d Cir.

1993). The trial justice appointed class representatives specifically for each of the subclasses,

including the retiree subclass, assuring that all Union plaintiffs were represented by individuals

who had alleged the same constitutional challenges to RIRSA as they had alleged. See id.

       In addition, we conclude that the trial justice did not err in finding that the fourth

requirement was met. “Adequate representation depends on two factors: (1) the plaintiff[s’]

attorney[s] must be qualified, experienced, and generally able to conduct the proposed litigation;

and (2) the plaintiff[s] must not have interests antagonistic to those of the class.” Pennsylvania

Dental Association v. Medical Service Association of Pennsylvania, 745 F.2d 248, 262-63 (3d

Cir. 1984). Here, the trial justice engaged in a lengthy inquiry into the attorneys’ qualifications,

experience with labor law, and ability to represent the retiree subclasses. The state defendants

note that the testimony at the fairness hearing demonstrated that the Clifford plaintiffs and the

Retiree plaintiffs were adequately represented because the settlement addressed the concerns of

retirees who were older than seventy years of age.11 The Clifford plaintiffs’ dissatisfaction with

the settlement and the way the attorneys for their subclass handled the claims is not a sufficient

basis to establish that the trial justice erred when she found the Union plaintiffs were adequately

represented before her. See DeBoer v. Mellon Mortgage Co., 64 F.3d 1171, 1175 (8th Cir. 1995)

(acknowledging that the fact that the plaintiffs did not approve of the settlement did “not of

itself, demonstrate that * * * class counsel provided inadequate representation” because “[t]o



11
  The state defendants cite to the fairness hearing testimony by Boudreau that the settlement
would be beneficial to retirees because it provided a one-time two percent COLA on the first
$25,000 of a retiree’s pension benefits, which was favorable given the number of retirees who
were at the “upper end of the age spectrum[.]” The brief also cited the testimony of Walsh and
Dingley to a similar effect.
                                                21
hold as much would require decertification any time an objection is raised to a class,” which is

“certainly not the standard envisioned by Rule 23”).

       Furthermore, the trial justice found that there were no conflicts of interest between the

class representatives and class members, and we agree with the state defendants that she did not

err in this determination. All class members shared a similar goal with the various class

representatives: to preserve their pension benefits that existed prior to the 2009 and 2010

amendments and the enactment of RIRSA. See Professional Firefighters Association of Omaha,

Local 385 v. Zalewski, 678 F.3d 640, 645, 647, 648 (8th Cir. 2012) (upholding the district court’s

certification of a class action challenging the enactment of a city ordinance that changed the

plaintiff-employees’ health-care plans and finding that the plaintiffs had adequate representation

even where both active employees and retirees were appointed the same class counsel because

their “driving interest [was] to enjoin the city’s enforcement of the ordinance”). Accordingly, we

hold that the trial justice did not err in her findings regarding this requirement of Rule 23(a).

       Additionally, the Retiree plaintiffs contend that their lack of participation in the

underlying litigation should have kept them from being made part of the class for settlement

purposes only; but that argument misconstrues the entire purpose of a class action. Class actions,

by definition, inherently contemplate missing plaintiffs. See Zarrella v. Minnesota Mutual Life

Insurance Co., 824 A.2d 1249, 1262 (R.I. 2003) (“The class action provides an exception to the

traditional confrontation between a plaintiff and a defendant by allowing the named-class

plaintiff or named-class defendant to represent interests of others with similar claims who are

absent from the court.” (quoting Cabana v. Littler, 612 A.2d 678, 684 (R.I. 1992))). Rule 23

does not require that each class member has participated in the underlying litigation, but requires

only that the trial justice certify the class in accordance with its provisions. See id. In addition,



                                                  22
the safeguards for such are in the form of heightened review when a class action is filed for

settlement purposes only. See Amchem Products, Inc., 521 U.S. at 620. Therefore, the trial

justice’s inclusion of the Retiree plaintiffs in the retiree subclass was proper, pursuant to the

prerequisites of Rule 23(a).

                                                 b

                                           Rule 23(b)(2)

       Having concluded that the trial justice did not err in finding that the prerequisites of Rule

23(a) were met, we now turn to whether her decision to certify the class pursuant to Rule

23(b)(2) was appropriate. Rule 23(b)(2) is properly applied “only when a single injunction or

declaratory judgment would provide relief to each member of the class.” Wal-Mart Stores, Inc.,

564 U.S. at 360. It will not apply to cases where “each class member would be entitled to an

individualized award of monetary damages.” Id. at 360-61. Moreover, there is no requirement

with Rule 23(b)(2) that “class members be given notice and opt-out rights[.]” Id. at 363.

       The trial justice found that all of the Union plaintiffs’ claims sought equitable relief—

“the restoration of their retirement benefits prior to the passage of the 2009 and 2010 Acts and

the RIRSA.” “If the Rule 23(a) prerequisites have been met and injunctive or declaratory relief

has been requested, the action usually should be allowed to proceed under subdivision (b)(2).”

DeBoer, 64 F.3d at 1175 (quoting 7A Charles A. Wright et al., Federal Practice and Procedure §

1775, at 470 (1986)). Significantly, “[t]he fact that [damages were] sought incidentally to the

prayer for injunctive relief does not affect this result.” Id. (quoting Paxton v. Union National

Bank, 688 F.2d 552, 563 (8th Cir. 1982)). In the case at bar, the award paid to all plaintiffs in the

settlement is not relevant to a Rule 23(b)(2) analysis. Rather, we look to the relief sought in the




                                                 23
class-action complaint, which is mainly declaratory and equitable relief.12 As such, we conclude

that the relief sought fits squarely within those claims contemplated by Rule 23(b)(2), and, thus,

because any money damages would be incidental to the declaratory and equitable relief sought,

the trial justice did not abuse her discretion in certifying the class pursuant to that subsection.

See Wal-Mart Stores, Inc., 564 U.S. at 360; see also DeBoer, 64 F.3d at 1175.

                                                    c

                                           Rule 23(c)(4)(B)

          The Clifford plaintiffs’ arguments on appeal focus mainly on their discontent at being

made part of the class action—they argue that their identity as retirees distinguishes them from



12
     Specifically, the class-action complaint prayed that the Superior Court:

                 “a. Issue declaratory judgment declaring that the 2009 and 2010
                 Acts and/or RIRSA contravenes the Due Process, Contract and
                 Takings Clauses of the Rhode Island Constitution, Article I,
                 Sections 2, 12 and 16;

                 “b. Issue equitable relief including, but not limited to, a permanent
                 injunction prohibiting the [d]efendants, including the ERSRI and
                 the Retirement Board, from relying upon or applying the
                 provisions of the RIRSA to vested employees and retirees,
                 including those employees with at least ten years of contributory
                 service on or before June 30, 2012, and/or already-retired
                 employees, and to restore and make whole all retirement benefits
                 diminished by application thereof;

                 “c. Issue equitable relief including, but not limited to, a permanent
                 injunction prohibiting the [d]efendants, including the ERSRI and
                 the Retirement Board, from relying upon or applying the
                 provisions of the RIRSA to employees within [p]laintiffs’
                 bargaining units that had, prior to November 18, 2011, collectively
                 bargained for a COLA;

                 “d. Award [p]laintiffs the costs of the suit;

                 “e. Award such other and further relief as the [c]ourt deems
                 necessary and proper.”
                                                   24
other plaintiffs.    While this is true, this very situation has been contemplated by Rule

23(c)(4)(B), which provides that “[w]hen appropriate * * * a class may be divided into

subclasses and each subclass treated as a class * * *.” Here, that is exactly what the trial justice

did, recognizing the concerns that the Clifford plaintiffs now raise—that the subclass of retirees

had differing interests from active employees. Federal courts have recognized the legitimacy of

this approach. See, e.g., Monarch Asphalt Sales Co., Inc. v. Wilshire Oil Company of Texas, 511

F.2d 1073, 1077 (10th Cir. 1975) (“[r]epresentatives of one group may not adequately represent

members of another group[,]” and “[t]hese factors justify the discretionary creation of * * *

appropriate subclasses”). Notwithstanding the validity of certifying subclasses, there is nothing

that requires the trial justice to create sub-subclasses based on class members’ varying unique

circumstances.      See International Union, United Automobile, Aerospace, and Agricultural

Implement Workers of America v. General Motors Corporation, 497 F.3d 615, 629 (6th Cir.

2007) (“[I]f every distinction drawn (or not drawn) by a settlement required a new subclass, class

counsel would need to confine settlement terms to the simplest imaginable or risk fragmenting

the class beyond repair.”).

                                                 B

                              Fairness of the Settlement Agreement

                                                 1

                                    The Parties’ Arguments

       Turning to the terms of the settlement agreement, we first address the Clifford plaintiffs’

main contention that the trial justice failed to rule that RIRSA violates both the Contract Clause

and the Takings Clause. However, the state defendants maintain that such a ruling was not

necessary in deciding whether the settlement was fair and reasonable. We briefly note that our



                                                25
inquiry is confined to whether the trial justice abused her discretion in approving the settlement,

which included addressing the merits of the claim as just one of the many factors affecting

whether the settlement was fair. With respect to the Retiree plaintiffs’ argument that they were

not parties to the underlying cases and therefore did not have a voice in the settlement

negotiations, the Union plaintiffs counter that the Retiree plaintiffs had ample time to file or join

an action, but never did so.

                                                 2

                                             Analysis

       A class-action settlement has to be “fair, reasonable, and adequate.” Bezdek, 809 F.3d at

82 (quoting Fed. R. Civ. P. 23(e)(2)). While there are a number of factors a trial justice may use

to decide whether a settlement is reasonable, “the ultimate decision by the judge involves

balancing the advantages and disadvantages of the proposed settlement as against the

consequences of going to trial or other possible but perhaps unattainable variations on the

proffered settlement.” Id. (quoting National Association of Chain Drug Stores v. New England

Carpenters Health Benefits Fund, 582 F.3d 30, 44 (1st Cir. 2009)).

       There are nine factors, outlined in City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir.

1974), that federal court judges consider in making such determinations regarding class-action

settlements. See In re Tyco International, Ltd. Multidistrict Litigation, 535 F.Supp.2d 249, 259

(D.N.H. 2007) (quoting Grinnell Corp., 495 F.2d at 463); see also In re Compact Disc Minimum

Advertised Price Antitrust Litigation, 216 F.R.D. 197, 206-07 (D. Me. 2003).13 Those factors are

as follows:




13
  “Although federal district court decisions are not binding on this Court, they may guide us in
the interpretation of our own rules.” Plante v. Stack, 109 A.3d 846, 855 n.6 (R.I. 2015).
                                                 26
               “(1) the complexity, expense and likely duration of the litigation;
               (2) the reaction of the class to the settlement; (3) the stage of the
               proceedings and the amount of discovery completed; (4) the risks
               of establishing liability; (5) the risks of establishing damages; (6)
               the risks of maintaining the class action through the trial; (7) the
               ability of the defendants to withstand a greater judgment; (8) the
               range of reasonableness of the settlement fund in light of the best
               possible recovery; (9) the range of reasonableness of the settlement
               fund to a possible recovery in light of all the attendant risks of
               litigation.” In re Tyco, 535 F.Supp.2d at 259 (quoting Grinnell
               Corp., 495 F.2d at 463).

Furthermore, “a settlement following sufficient discovery and genuine arm’s-length negotiation

is presumed fair.” In re Compact Disc, 216 F.R.D. at 207.

       First, we review the trial justice’s initial determination that the settlement was

procedurally fair. In her June 9, 2015 written decision, the trial justice first addressed the

procedural fairness of the settlement. She found that the presumption of fairness applied to the

settlement, as there was no indication of collusion. She also concluded that the settlement was

“the result of well-informed and arm’s-length negotiations by competent and dedicated counsel

who provided loyal and effective representation to all parties.” Additionally, the trial justice

highlighted that the settlement was the result of earlier settlement attempts by the parties and, as

such, was not entered into immediately prior to trial; in other words, the settlement had been

under consideration for quite some time, and it was no “eve of trial” settlement.

       Moreover, after her initial decision on April 16, 2015, finding that the settlement

appeared fair and reasonable, the trial justice required the parties to notify class members by

mail, newspaper publication, and through the ERSRI website. The trial justice also held five

days of testimony at a fairness hearing, wherein the parties and objectors could be heard on the

fairness of the settlement terms; those who testified included thirty-five of the sixty-nine class

members who had originally requested to be heard. All class members received notification of



                                                27
the fairness hearing, and all were given ample opportunity to object in writing or to testify at the

hearing. Thus, we are satisfied that the trial justice did not abuse her discretion in finding that

the settlement was procedurally fair.

       We now address the substantive fairness of the settlement terms. In her decision, the trial

justice thoroughly analyzed the Grinnell factors, ultimately concluding that the settlement was

“fair, adequate, and reasonable.” With respect to the first factor, the trial justice stated that “the

complexity of the underlying pension cases” could not be “overstate[d.]” We agree that the

complexity of the pension cases and the duration of the controversy certainly weigh in favor of

settlement. See In re Tyco, 535 F.Supp.2d at 259. The settlement involved nine consolidated

cases, and the majority of the lawsuits had been pending for three years at the time of settlement.

The Union plaintiffs were expending substantial costs, and there was testimony at the fairness

hearing that they had already invested approximately $1 million in legal costs and could be

expected to spend up to $100,000 per week leading up to the trial. We agree with the trial justice

that these factors and the complex nature of the constitutional claims alleged weighed in favor of

the proposed settlement.

       The trial justice next scrutinized the reaction of the class, noting that more than 60,000

notices were sent to class members regarding the settlement, but she received only 400 written

objections. But see TBK Partners, Ltd. v. Western Union Corp., 675 F.2d 456, 462 (2d Cir.

1982) (“[M]ajority opposition to a settlement cannot serve as an automatic bar to a settlement

that a district judge, after weighing all the strengths and weaknesses of a case and the risks of

litigation, determines to be manifestly reasonable.”). Nevertheless, the trial justice considered

many of the objectors’ concerns. For example, she contemplated the argument that the objectors

had a constitutional right to a three percent COLA, and determined that the caselaw was unclear



                                                 28
regarding whether the objectors would succeed on that argument, citing Arena v. City of

Providence, 919 A.2d 379, 393 (R.I. 2007), but that these specific concerns were voiced by two

class representatives of the retiree subclass during negotiations.       The trial justice finally

concluded that, although the objectors’ concerns had some merit, they still were in a very small

minority of the group and, in fact, the settlement could be—as Walsh testified at the fairness

hearing—“heartbreaking” but fair at the same time. We cannot say that the trial justice abused

her discretion in considering this factor and determining that it weighed in favor of a fair

settlement.

        The third factor involves the stage of the litigation and the discovery conducted by the

parties. See In re Tyco, 535 F.Supp.2d at 259. In concluding that this factor weighed in favor of

a finding of a fair, reasonable, and adequate settlement, the trial justice commented on the

extensive discovery in the cases and the multiple dispositive motions that had been filed. We

agree that the discovery in these consolidated cases was more than adequate—it included

production of more than 700 gigabytes of electronic documents and over four million pages of

documents. As such, we hold that the trial justice did not abuse her discretion in ruling as she

did with respect to this factor.

        Regarding the fourth and fifth Grinnell factors, the trial justice found that the risk of

failure to establish liability and prove damages was high, relying on the testimony to that effect

by both parties at the fairness hearing. She referenced nine pending dispositive motions, which

the Union plaintiffs would first need to overcome to reach trial, ultimately determining that these

factors weighed in favor of the settlement being fair, reasonable, and adequate. In addition, she

noted that the Union plaintiffs recognized the risks of a jury trial, which would have required

them to surmount a high burden of proof. See Sullivan v. DB Investments, Inc., 667 F.3d 273,



                                                29
322 (3d Cir. 2011) (“[T]his inquiry attempts to measure the expected value of litigating the

action rather than settling it at the current time.” (quoting In re Cendant Corp. Litigation, 264

F.3d 201, 238 (3d Cir. 2001))). Consequently, we cannot say that the trial justice abused her

discretion when she weighed these factors in favor of approving the settlement.

       The trial justice gave little weight to the sixth and seventh factors—the risks of

maintaining the class action through trial and the ability of the defendants to withstand a greater

judgment. The trial justice found the latter factor to be neutral because the relief sought was

equitable, not monetary. That scrutiny involves “whether the defendants could withstand a

judgment for an amount significantly greater than the settlement.” Sullivan, 667 F.3d at 323

(quoting In re Warfarin Sodium Antitrust Litigation, 391 F.3d 516, 537-38 (3d Cir. 2004)).

There was testimony at the fairness hearing that the state and municipal defendants might not be

able to bear the cost of the restoration of the pension benefits. We are satisfied that the trial

justice did not abuse her discretion in affording less weight to these factors because, we agree, in

the event that the Union plaintiffs succeeded on their claims at trial, the judgment against

defendants would remain principally equitable in nature—namely, a requirement that RIRSA be

repealed and pension benefits restored. While we recognize that such an outcome would require

the state to pay more money to the Union plaintiffs, such an order would not amount to relief in

the form of compensatory damages, such as damages for injuries sought in asbestos litigation.

See Amchem Products, Inc., 521 U.S. at 614.

       Finally, the trial justice turned to the last Grinnell factors, contemplating the “range of

reasonableness” of the settlement. She addressed the merits of the constitutional claims in light

of pension cases in other jurisdictions, ultimately determining that the combination of the low

likelihood of success and the length of time the cases had been pending weighed in favor of a



                                                30
finding that the settlement is reasonable. These two factors inquire as to “whether the settlement

is reasonable in light of the best possible recovery and the risks the parties would face if the case

went to trial.” In re Prudential Insurance Co. of America Sales Practices Ligation, 148 F.3d

283, 322 (3d Cir. 1998). Both factors “evaluate whether the settlement represents a good value

for a weak case or a poor value for a strong case.” In re Warfarin, 391 F.3d at 538. In making

such a determination, “we must be careful to judge the fairness factors ‘against the realistic,

rather than theoretical, potential for recovery after trial.’” Sullivan, 667 F.3d at 323 (quoting In

re Global Crossing Securities and ERISA Litigation, 225 F.R.D. 436, 461 (S.D.N.Y. 2004)).

       At trial, the Union plaintiffs would have had to meet a higher burden—they needed to

“prove beyond a reasonable doubt that the act[s] violate a specific provision of the [Rhode

Island] [C]onstitution * * *.” Oden v. Schwartz, 71 A.3d 438, 456 (R.I. 2013) (quoting Mackie

v. State, 936 A.2d 588, 595 (R.I. 2007)). Moreover, the challenged legislative enactments would

be determined to be constitutional if defendants demonstrated they were “reasonable and

necessary to carry out a legitimate public purpose.” Brennan v. Kirby, 529 A.2d 633, 638 (R.I.

1987). There was testimony at the fairness hearing indicating that the financial crisis in Rhode

Island certainly necessitated the challenged pension reform.        The trial justice also outlined

decisions in other jurisdictions relating to the constitutionality of various pension reforms,

finding that the majority of jurisdictions had found that no constitutional right existed to a

specific COLA formula. See, e.g., Maine Association of Retirees v. Board of Trustees of Maine

Public Employees Retirement System, 954 F.Supp.2d 38, 54 (D. Me. 2013); see also Justus v.

State, 336 P.3d 202, 212-13 (Colo. 2014). Those cases in which there was determined to be a

constitutional right are distinguishable on other grounds. See Moro v. State, 351 P.3d 1, 39, 41-

42 (Or. 2015) (finding that retirees had a constitutional right to their COLA formula where the



                                                 31
legislative assembly failed to demonstrate that the state’s financial problems “could not be

remedied through funding from other sources”).          While such cases are instructive, these

decisions are certainly not binding in Rhode Island.14 Consequently, it is clear that the likely

outcome of the Union plaintiffs’ claims at trial is uncertain, and there are also immediate and

substantial looming costs of continuing forward with this action. Indeed, we agree with the trial

justice that the Union plaintiffs received “concrete and immediate benefits” from the settlement,

including a more favorable COLA formula, two $500 stipends paid to retirees, and a calculation

that would reduce the minimum retirement age for employees. While we need not rule on the

ultimate merits of the case in considering these two factors, on balance, we acknowledge that

these factors would weigh in favor of a determination that the settlement is fair, reasonable, and

adequate.

       We are satisfied that the trial justice did not overlook any of the concerns raised by the

various objectors to the settlement; conducted an exhaustive review of the factors necessary to

determine whether the settlement was fair, reasonable, and adequate; and properly balanced the

benefits and drawbacks of the settlement. See Bezdek, 809 F.3d at 82. We conclude that she did

not abuse her discretion in concluding that the settlement was fair, reasonable, and adequate. See

National Association of Chain Drug Stores, 582 F.3d at 45 (“[T]he [trial] court enjoys

considerable range in approving or disapproving a class action settlement, given the generality of

the standard and the need to balance benefits and costs.”).



14
   The Clifford plaintiffs argue that the trial justice erred by not addressing the merits of the
Takings Clause claim. However, because she concluded that the Contract Clause claim was
unlikely to succeed at trial, it necessarily follows that she did not need to address the Takings
Clause claim. See Cranston Firefighters, 880 F.3d at 51 (“The lack of any allegation that the
current benefits provided by the [s]tate fall below the present value of the contributions made by
the Union pensioners, coupled with the absence of the alleged contract, also eliminates the basis
for a claim under the Takings Clause.”).
                                                32
                                               IV

                                          Conclusion

       For the foregoing reasons, the Clifford plaintiffs’ and the Retiree plaintiffs’ appeals are

denied and dismissed, and the judgments appealed from are affirmed. The papers in the case are

remanded to the Superior Court.



Justice Robinson did not participate.




                                               33
STATE OF RHODE ISLAND AND                                  PROVIDENCE PLANTATIONS



                         SUPREME COURT – CLERK’S OFFICE

                                 OPINION COVER SHEET

                                     Joseph Clifford et al. v. Gina Raimondo, in her
                                     capacity as Governor of the State of Rhode Island, et
                                     al.
Title of Case
                                     Rhode Island Public Employees’ Retiree Coalition et
                                     al. v. Gina Raimondo, in her capacity as Governor of
                                     the State of Rhode Island, et al.
                                     No. 2015-379-Appeal.
                                     (KC 14-345)

                                     No. 2016-24-Appeal.
Case Number                          No. 2016-25-Appeal.
                                     No. 2016-26-Appeal.
                                     No. 2016-28-Appeal.
                                     No. 2016-49-Appeal.
                                     (PC 15-1468)
Date Opinion Filed                   May 25, 2018

Justices                             Suttell, C.J. Goldberg, Flaherty, and Indeglia, JJ.

Written By                           Associate Justice Gilbert V. Indeglia
                                     Kent County Superior Court
Source of Appeal
                                     Providence County Superior Court
Judicial Officer From Lower Court    Associate Justice Sarah Taft-Carter
                                     For Plaintiffs:

                                     Thomas M. Dickinson, Esq.
                                     Edward C. Roy, Jr., Esq.
                                     Lynette J. Labinger, Esq.
Attorney(s) on Appeal
                                     Michael B. Forte, Jr., Esq.
                                     Carly Beauvais Iafrate, Esq.
                                     Joseph F. Penza, Jr., Esq.
                                     Thomas R. Landry, Esq.
                                     Douglas L. Steele, Pro Hac Vice


SU-CMS-02A (revised June 2016)
                                 For Defendants:

                                 John A. Tarantino, Esq.
                                 Nicole J. Benjamin, Esq.
                                 Joseph Avanzato, Esq.
                                 Patricia K. Rocha, Esq.
                                 Rebecca T. Partington, Esq.
                                 Michael W. Field, Esq.




SU-CMS-02A (revised June 2016)
