           In the United States Court of Federal Claims
                                           No. 09-367L
                                      (Filed: June 16, 2017)

*************************************
JOHN P. FURLONG and LAUREN B.            *
PEARCE, husband and wife, et al.,        *
                                         *
For Themselves and As Representatives of *
a Class of Similarly Situated Persons,   *
                                         *
                                                      Rails-to-Trails; Class Action; RCFC 23(e);
               Plaintiffs,               *
                                                      Final Approval of Settlement Agreement
                                         *
v.                                       *
                                         *
THE UNITED STATES,                       *
                                         *
               Defendant.                *
*************************************

Steven M. Wald, St. Louis, MO, for plaintiffs.

Jessica M. Held, United States Department of Justice, Washington, DC, for defendant.

                                    OPINION AND ORDER

SWEENEY, Judge

        Before the court is the parties’ request, pursuant to Rule 23(e) of the Rules of the United
States Court of Federal Claims (“RCFC”), for final approval of the proposed settlement
agreement in this Rails-to-Trails class action. Upon review of the proposed settlement
agreement, and for the reasons stated below, the court grants the parties’ request.

                                       I. BACKGROUND

        In this case, plaintiffs contend that they own real property adjacent to a 9.14-mile rail
corridor in Albany County, New York. They assert that until July 8, 2003, the Delaware and
Hudson Railway Company, Inc., d/b/a Canadian Pacific Railway Company, and its predecessors
held easements for railroad purposes that crossed their land. According to plaintiffs, defendant
United States authorized the conversion of the railroad rights-of-way into a recreational trail
pursuant to the National Trails System Act, 16 U.S.C. § 1247(d) (2000), conduct that resulted in
a taking in violation of the Just Compensation Clause of the Fifth Amendment to the United
States Constitution.
        On March 4, 2013, upon agreement of the parties, another judge of this court certified the
matter as an opt-in class action, and adopted the parties’ proposed schedule for providing notice
to putative class members and preparing a claims book. Following participation in alternative
dispute resolution proceedings, the parties reached a provisional settlement agreement on
December 16, 2015. The proposed settlement agreement provides for payment of damages for
the alleged taking of the 271 class members’ property rights, interest from the date of the alleged
taking, and attorneys’ fees and costs under section 304(c) of the Uniform Relocation Assistance
and Real Property Acquisition Policies Act (“URA”), 42 U.S.C. § 4654(c) (2012). The proposed
settlement agreement was subsequently approved by the Surface Transportation Board and the
United States Department of Justice.

        On February 24, 2017, class counsel moved this court for (1) preliminary approval of the
proposed settlement agreement, (2) approval of the notice to class members regarding the
proposed settlement agreement, and (3) the setting of a public fairness hearing. Class counsel
filed the settlement agreement with the court on March 6, 2017. See generally Settlement
Agreement, ECF No. 160-1. Following a status conference and the submission of an updated
proposed notice, the court, on April 18, 2017, granted preliminary approval, approved the notice
to class members, and set a public fairness hearing. See generally Furlong v. United States, No.
09-367L, 2017 WL 1382974 (Fed. Cl. Apr. 18, 2017). On June 1, 2017, class counsel notified
the court that it had received “explicit approvals” for 225 out of 271 claims, 1 and no objections
or comments “pertaining to the proposed settlement amounts.” Notice, June 1, 2017, ECF No.
157. Nine additional class members submitted responses, all indicating approval, after the
deadline but before the fairness hearing. Notice, June 14, 2017, ECF No. 159. The fairness
hearing was conducted on June 13, 2017, and no class members participated. 2

              II. PROPOSED CLASS ACTION SETTLEMENT AGREEMENT

        Plaintiffs described the proposed settlement in their motion for preliminary approval. See
Pls.’ Mot. 6-7, ECF No. 144-1. To determine property values, each party hired experts to
appraise representative properties according to the Uniform Standards of Professional Appraisal
Practice and the Uniform Appraisal Standards for Federal Land Acquisitions. Id. at 3. These
experts determined the value of the remaining easements allegedly taken by the government by
making adjustments to the representative properties. Id. at 4. The parties then exchanged expert
reports and participated in successful alternative dispute resolution proceedings. Id. Under the
terms of the proposed settlement, defendant will pay $13,988,929.28 plus additional interest as
follows:

                •   $6,489,084.21 in just compensation, with awards for individual
                    class members ranging from $1,300.00 to $440,662.00;

       1
         Class counsel incorrectly described the explicit approval rate as “220 out of 272
claims.” Notice, June 1, 2017. However, there were 225 approvals received prior to the
response deadline, see id. at Ex. A, ECF No. 157-1, and there are 271 members of the class
(some of which assert multiple claims), see Settlement Agreement Ex. A.
       2
           One class member appeared at the hearing by telephone, but did not participate.



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               •   $5,795,743.34 in interest through April 7, 2017;

               •   additional interest at 3.74 percent, compounded annually, after
                   April 7, 2017, through the date of payment;

               •   $1,299,060.20 for attorneys’ fees under the URA; and

               •   $405,041.53 for reimbursement of costs and expenses under
                   the URA.

Id. at 6-7; Settlement Agreement ¶¶ 3-4 & Ex. A.

                    III. APPROVAL OF SETTLEMENT AGREEMENT

        Court approval is necessary for settlement of a class action. RCFC 23(e). Such approval
can only be granted “after a hearing and on finding that [the proposed settlement] is fair,
reasonable, and adequate.” RCFC 23(e)(2); accord Haggart v. Woodley, 809 F.3d 1336, 1348-
49 (Fed. Cir. 2016), cert. denied, 136 S. Ct. 2509. “In implementing RCFC 23(e), courts
typically review the proposed settlement for a preliminary fairness evaluation and direct notice
of the [proposed] settlement to be provided to the class, and then grant final approval of the
proposed settlement following notice to the class and a fairness hearing.” Lambert v. United
States, 124 Fed. Cl. 675, 677 (2015) (citing Barnes v. United States, 89 Fed. Cl. 668, 670
(2009)). The court may not alter the terms of the proposed settlement agreement, nor decide the
merits of the case, nor resolve unsettled issues; it may only accept or reject the proposed
settlement agreement in its entirety. Greenwood v. United States, 131 Fed. Cl. 231, 238 (2017).

        While there is “no definitive list of factors that the court must apply in considering a class
action settlement,” the following factors are “instructive” in evaluating whether a settlement
agreement is “fair, reasonable, and adequate”:

               1. The relative strengths of plaintiffs’ case compared to the
                  proposed settlement;

               2. The recommendation of the counsel for the class regarding the
                  proposed settlement, taking into account the adequacy of class
                  counsel’s representation of the class;

               3. The reaction of the class members to the proposed settlement,
                  taking into account the adequacy of notice to the class
                  members of the settlement terms;

               4. The fairness of the settlement to the entire class;

               5. The fairness of the provision for attorneys’ fees; and




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               6. The ability of the defendants to withstand a greater judgment,
                  taking into account whether the defendant is a governmental
                  actor or private entity.

Id. (relying in part on Sabo v. United States, 102 Fed. Cl. 619, 627 (2011)). The court has
“considerable discretion” with respect to the weight it assigns to each factor based on the factual
context of the case, and “settlement is always favored.” Raulerson v. United States, 108 Fed. Cl.
675, 677 (2013).

       Consistent with its determination at the preliminary approval stage, the court does not
find any collusive activity, preferential treatment, or other deficiencies in the proposed settlement
agreement. The court further finds that counsel for both parties are aptly experienced and have
engaged in voluminous discovery, a thorough appraisal process to determine the fair market
value of the class members’ property interests allegedly taken, and extensive settlement
negotiations indicating no preferential treatment or other deficiencies. See, e.g., Dauphin Island
Prop. Owners Ass’n v. United States, 90 Fed. Cl. 95, 107 (2009) (approving a settlement that
was “achieved through good-faith, non-collusive negotiation” (internal quotation marks
omitted)). Thus, factors one and two weigh in favor of approving the proposed settlement
agreement.

        Following a notice that was sufficient to “‘provide all necessary information for any class
member to become fully apprised and make any relevant decisions,’” Furlong, 2017 WL
1382974, at *2 (quoting Haggart, 809 F.3d at 1349), class counsel received the explicit approval
of approximately eighty-six percent of the class, and did not receive any objections. 3 A small
number of objectors relative to the size of the class weighs strongly in favor of approval,
Dauphin, 90 Fed. Cl. at 104, and here there are none. Also, the silence of the remaining class
members can reasonably be construed as consent, 4 see id. at 105, and settlement agreements with
lower explicit approval rates have been approved by other judges of this court in Rails-to-Trails
cases, see, e.g., Greenwood, 131 Fed. Cl. at 238 (seventy-five percent); Bailey v. United States,
128 Fed. Cl. 550, 553 (2016) (seventy-two percent). Thus, the third factor weighs in favor of
approving the proposed settlement agreement.




       3
           Altogether, 235 class members submitted response forms prior to the fairness hearing.
See generally Notice Ex. A, June 1, 2017; Notice Ex. B, June 14, 2017, ECF No. 159-1. Of
these class members, 234 indicated approval of the proposed settlement, and one failed to
indicate either approval or opposition. Two class members (both of whom indicated approval)
included comments beyond mere payment instructions alluding to the length of the litigation;
neither commenting class member addressed the amount of the settlement or otherwise suggested
that the settlement is unfair, unreasonable, or inadequate.
       4
         As in Dauphin, 90 Fed. Cl. at 105, class members were, prior to opting in to the class,
made aware of the binding effect of an eventual class judgment, and were given ample
opportunity to raise objections to the proposed settlement agreement prior to the fairness hearing.



                                                 -4-
       Moreover, the settlement is fair to the entire class because, as explained above, there was
no preferential treatment, and further, the grouping of properties allows for “[t]he relief to each
category of class members [to be] tailored to the specific circumstances of those members.”
Sabo, 102 Fed. Cl. at 629. Thus, the fourth factor weighs in favor of approving the proposed
settlement agreement.

        In addition, consistent with binding precedent, the proposed settlement agreement
provides for payment of attorneys’ fees pursuant to the URA rather than from settlement
proceeds under the “common fund” doctrine. 5 See Haggart, 809 F.3d at 1359 (“The URA
provides a reasonable fee and thus forecloses application of the common fund doctrine.”). Thus,
the attorneys’ fees provision of the settlement agreement is fair, and therefore the fifth factor
weighs in favor of approving the proposed settlement agreement.

        Finally, defendant’s solvency has “little relevance” when, as here, the defendant is the
federal government. Dauphin, 90 Fed. Cl. at 106. The federal government “can theoretically
always withstand greater judgment,” but such burden would “ultimately fall to the taxpayers.”
Hunneshagen Family Tr. of June 25, 1999 v. United States, 121 Fed. Cl. 51, 57 (2015) (internal
quotation marks omitted). Therefore, these competing interests essentially cancel each other out,
and the court gives this factor no weight.

      In sum, factors one through five weigh in favor of approving the proposed settlement
agreement, and the remaining factor is disregarded.




       5
          A private fee agreement between class counsel and a member of the plaintiff class, e.g.,
providing for attorneys’ fees on a contingency basis, is beyond the jurisdiction of this court. See
Hufford v. United States, 85 Fed. Cl. 607, 608 (2009) (explaining that the United States Court of
Federal Claims “does not have subject matter jurisdiction to entertain controversies between
private parties”). The parties agree that this court “does not possess jurisdiction to enforce
private fee agreements, and that such issue is a private matter between Class Counsel and his
clients.” Pls.’ Mot. 5. Accordingly, class counsel “will separately and privately enforce the
contingency fee agreements he has with his clients and then reimburse those class members their
pro rata share of the URA attorneys’ fees settlement.” Id. This procedure was explained to class
members in the notice of proposed settlement. See Approved Notice 5, ECF No. 155-1.



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                                      IV. CONCLUSION

        The parties’ proposed settlement agreement is fair, reasonable, and adequate.
Accordingly, the court APPROVES the proposed settlement agreement. The clerk is directed to
enter judgment in favor of plaintiffs in the amount of $6,489,084.21 in principal and
$5,795,743.34 in interest through April 7, 2017, apportioned as shown in the table accompanying
the attached approved settlement agreement. Further interest shall be payable at a rate of 3.74
percent, compounded annually, beginning on April 8, 2017, through the date the judgment is
paid. In addition, the clerk is directed to enter judgment in favor of plaintiffs in the amount of
$1,704,101.73 for attorneys’ fees and costs pursuant to the URA.

       IT IS SO ORDERED.


                                                     s/ Margaret M. Sweeney
                                                     MARGARET M. SWEENEY
                                                     Judge




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