                                   UNPUBLISHED

                      UNITED STATES COURT OF APPEALS
                          FOR THE FOURTH CIRCUIT


                                     No. 19-1148


DANIEL HERRERA; ZACHARY AIKEN; OMAR BASHI; KIMBERLEY
BEYER; STEVEN BURLESON; KABIR BUHARI; EDGAR JULIAN CABRA;
KAYLA CARMENIA; CHARLIE CARPENTER; SHERRY DUNCAN; BRENT
FINNELL; PAMELA FREEMAN; CHARLES HORNACK; JAMES A. HOWE;
TALECE HUNTER; EPHRAIM MOSELY; ANNABELLE PARDO; SUSAN
PATROSKI; DAWN PATTERSON; MICHAEL PEREZ; KARINA RAHALL;
SHANELL REID; JAMAL WILLIAMS,

                    Objectors – Appellants,

      and

ROBERT C. BARCHIESI, Individually and in a Representative capacity on behalf
of a class of all persons similarly situated; LEJLA HADZIC, Individually and in a
Representative capacity on behalf of a class of all persons similarly situated,

                    Plaintiffs,

      v.

CHARLOTTE SCHOOL OF LAW, LLC; INFILAW CORPORATION,

                    Defendants – Appellees,

RAISSA LEVY; JAMES VILLANUEVA; SHANNA RIVERA; ANDRE MCCOY;
17CV26 LEVY PLAINTIFFS; LEAH ASH; 17CV39 ASH PLAINTIFFS;
SPENCER KREBS; MORGAN SWITZER; DAVE WYATT; JACENTA MARIE
PRICE; KRYSTAL HORSLEY; MARKISHA DOBSON; 17CV190 PLAINTIFFS,

                    Consolidated Plaintiffs – Appellees,

INFILAW HOLDING, LLC; JAY CONISON; CHIDI OGENE; DONALD
LIVELY,
                  Consolidated Defendants – Appellees,

      and

STERLING PARTNERS; STERLING CAPITAL PARTNERS IV, LLC,

                  Defendants.



                                    No. 19-1161


ROBERT C. BARCHIESI, Individually and in a Representative capacity on behalf of a
class of all persons similarly situated; LEJLA HADZIC, Individually and in a
Representative capacity on behalf of a class of all persons similarly situated,

                  Plaintiffs – Appellants,

REBECCA APPELBAUM; CAROLINE APRAHAMIAN; ERIN BOWMAN; BRIDGET
CAMPBELL; ARIEL CARTER; KIA JOHNSON; VONDA JOHNSON; JESSICA
HALL; ALECIA KING; BRYANT LAVENDER; HATTY MACON; NISHI PATEL;
ALEX PETTY; LEROY RICHARDSON; KAYTLIN RUZICKA; JULIETA SMITH;
CHRISTOPHER TABAKA; STACY TOWNSEND,

                  Objector – Appellants,

      v.

CHARLOTTE SCHOOL OF LAW, LLC; INFILAW CORPORATION,

                  Defendants – Appellees,

RAISSA LEVY; JAMES VILLANUEVA; SHANNA RIVERA; ANDRE MCCOY;
17CV26 LEVY PLAINTIFFS; LEAH ASH; 17CV39 ASH PLAINTIFFS; SPENCER
KREBS; MORGAN SWITZER; DAVE WYATT; JACENTA MARIE PRICE;
KRYSTAL HORSLEY; MARKISHA DOBSON; 17CV190 PLAINTIFFS,

                  Consolidated Plaintiffs – Appellees,

INFILAW HOLDING, LLC; JAY CONISON; CHIDI OGENE; DONALD LIVELY,

                  Consolidated Defendants – Appellees,

                                             2
       and

STERLING PARTNERS; STERLING CAPITAL PARTNERS IV, LLC,

                       Defendants.



Appeal from the United States District Court for the Western District of North Carolina, at
Charlotte. Graham C. Mullen, Senior District Judge. (3:16-cv-00861-GCM)


Submitted: March 19, 2020                                         Decided: June 11, 2020


Before WILKINSON and KEENAN, Circuit Judges, and Rossie D. ALSTON, Jr., United
States District Judge for the Eastern District of Virginia, sitting by designation.


Affirmed by unpublished opinion. Judge Alston wrote the opinion, in which Judge
Wilkinson and Judge Keenan joined.


Gary K. Shipman, Kyle J. Nutt, Angelique Adams, SHIPMAN & WRIGHT, LLP,
Wilmington, North Carolina; H. Forest Horne, John Alan Jones, Steven D. Corriveau,
MARTIN & JONES, PLLC, Raleigh, North Carolina, for Barchiesi Appellants.
Christopher R. Bagley, Gary W. Jackson, LAW OFFICES OF JAMES SCOTT FARRIN,
Durham, North Carolina, for Herrera Appellants. David E. Mills, Michael D. Hays,
COOLEY LLP, Washington, D.C.; Robert T. Cahill, Reston, Virginia, for Appellees
Charlotte School of Law, LLC, InfiLaw Corporation, InfiLaw Holding LLC, Jay Conison,
Chidi Ogene, and Donald Lively. Anthony J. Majestro, POWELL & MAJESTRO, PLLC,
Charleston, West Virginia, for Appellees Spencer Krebs, et al. Philip Bohrer, BOHRER
BRADY LLC, Baton Rouge, Louisiana; Brian L. Kinsley, CRUMLEY ROBERTS, LLP,
Greensboro, North Carolina, for Appellees Raissa Levy, et al. Michael John Messinger,
LAW OFFICES OF MICHAEL MESSINGER, PLLC, Charlotte, North Carolina, for
Appellee Leah Ash.


Unpublished opinions are not binding precedent in this circuit.




                                            3
ROSSIE D. ALSTON, Jr., District Judge:

       The central question raised in this appeal is whether the district court abused its

discretion in approving a limited fund class action settlement pursuant to Federal Rule of

Civil Procedure 23(b)(1)(B) and Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999). The

dispute giving rise to the settlement centers around allegations concerning Charlotte School

of Law, LLC’s (“CSL”) compliance with the American Bar Association’s (“ABA”)

accreditation standards, related ABA directives to take remedial action, and representations

or lack thereof concerning the same.             Defendants 1 funded the settlement with

$2,650,000.00, which was derived from the following two sources: a $2,500,000.00 portion

of an insurance policy and a $150,000.00 institutional contribution. After a meticulous

review, the district court ultimately approved the limited fund settlement.

       As explained below, we conclude that the district court did not abuse its discretion

in approving the limited fund settlement. We further find that the district court did not

abuse its discretion by ultimately determining that the settlement was fair, reasonable, and

adequate pursuant to Federal Rule of Civil Procedure 23(e), and in denying a motion for




       1
          “Defendants” involved in the settlement include CSL, InfiLaw Corporation,
InfiLaw Holding, LLC (“Holding”) (collectively “entity-Defendants”), Chidi Ogene, Jay
Conison, Don Lively, and Rick Inatome. J.A. 801. CSL and two other privately-owned,
for-profit law schools were members of the Infilaw System. Each of these law schools and
InfiLaw Corporation are owned by Holding. J.A. 518. Ogene was the President of CSL,
Lively was the former President of CSL, and Conison was the Dean of CSL. Sterling
Capital Partners, L.P., and Sterling Capital Partners GmbH & Co. KG were also initially
Defendants.

                                             4
discovery, largely concerning Defendants’ ability to fund the settlement. Accordingly, we

affirm the district court’s decisions in full.

                                                      I.

                                                      A.

         The ABA is the accrediting agency for programs awarding juris doctorates. See

generally, 34 C.F.R. §§ 602. The particular entities involved in the accreditation process

include the ABA’s Council of the Section of Legal Education and Admissions to the Bar

(“Council”) and the Accreditation Committee of the Council (“Committee”). To obtain

accreditation and remain in good standing, law schools must comply with the ABA’s

Standards and Rules of Procedure for Approval of Law Schools (“ABA Standards”). J.A.

519. 2

         CSL was established as a private, for-profit law school in 2006, and was accredited

by the ABA in 2011. J.A. 518.

         An ABA “site team” visited CSL in March 2014, conducted a Three Year Interval

Evaluation, and then issued the resulting Inspection Report to CSL. J.A. 521-22. The

Committee reviewed the Inspection Report as well as CSL’s response and issued its

decision on February 24, 2015. J.A. 522. In that decision, the Committee expressed that

“it had reason to believe that” CSL was not in compliance with several ABA Standards and

one ABA Interpretation. Id. The ABA Standards and Interpretation perceived to have

been violated pertained to maintaining rigorous curriculum, ABA Standard 301(a);


         2
             Citations to “J.A.” refer to the joint appendix.

                                                  5
maintaining sound admission policies and practices, ABA Standard 501(a); not enrolling

“high-risk students,” ABA Standard 501(b); and finally, CSL’s “academic and admission

test credentials of the law school’s entering students, the academic attrition rate of the law

school’s students, the bar passage rate of its graduates, and the effectiveness of the law

school’s academic support program,” ABA Interpretation 501-1. Id. Pertinent to these

findings, the Committee requested additional information regarding CSL’s compliance,

which CSL submitted.

       On February 3, 2016, the Committee issued a second determination, finding that

CSL was “not in compliance” with the above ABA Standards and Interpretation. J.A. 523.

The Committee again required that CSL supply additional information regarding

compliance and advised that a hearing on the issuance of sanctions was forthcoming. Id.

After that hearing, on July 21, 2016, the Committee issued a third decision determining

that CSL remained noncompliant and that its noncompliance was both “substantial” and

“persistent.” J.A. 524. CSL was then required to disclose these findings to its students and

the public. J.A. 525.

       CSL appealed portions of this determination to the Council. Id. After hearing the

appeal, on November 14, 2016, the Council issued a decision, finding that CSL’s

noncompliance was “substantial and . . . persistent,” placing CSL on probation, and

ordering public disclosure of the above findings. J.A. 526.

       CSL allegedly did not make the required disclosures and made representations

seemingly to the contrary of the ABA’s findings through public statements, an email to

students on November 16, 2016, and statements on CSL’s website. J.A. 527-35.

                                              6
       Also, during the pendency of the accreditation investigation, CSL’s application for

recertification of its Program Participation Agreement was under review. This program

enabled CSL students to apply for federal student loans. J.A. 519. On December 16, 2016,

the Department of Education, the federal agency responsible for determining whether the

participating school is eligible, denied CSL’s application, citing in part the ABA

determinations outlined above. J.A. 519.

       CSL’s license to operate granted by the University of North Carolina Board of

Governors expired on August 10, 2017. J.A. 520. On August 15, 2017, the North Carolina

Attorney General’s Office ordered that CSL was no longer licensed to operate. Id. CSL

closed that month.

       Litigation commenced all over the state of North Carolina with the filing of lawsuits

containing similar allegations regarding the circumstances outlined above in federal and

state courts.

                                                 B.

                                                 1.

       Three putative federal class action lawsuits were filed against Defendants; one in

the Middle District of North Carolina and two in the Western District of North Carolina.

Specifically, on December 22, 2016, Krebs v. CSL, No. 1:16-cv-01437-CCE-JEP

(M.D.N.C.), was filed in the Middle District of North Carolina. J.A. 2593. On the same

day, Barchiesi v. CSL, No. 3:16-cv-00861-GCM (W.D.N.C.), was filed in the Western

District of North Carolina. J.A. 80. On January 19, 2017, Levy v. CSL, No. 3:17-cv-00026-

GCM (W.D.N.C.), was also filed in the Western District of North Carolina. J.A. 802.

                                             7
       On April 10, 2017, Krebs was transferred from the Middle District of North Carolina

to the Western District of North Carolina (hereinafter “district court”), No. 3:17-cv-00190-

GCM. Accordingly, on October 13, 2017, the district court consolidated Krebs, Barchiesi,

and Levy for discovery purposes. Id.

       On December 28, 2016, Plaintiff Leah Ash filed suit in North Carolina Superior

Court, Ash v. CSL, No. 16-CVS-22993, which was removed to the district court over her

objection, Ash v. CSL, 3:17-cv-00039-GCM (W.D.N.C.). J.A. 802. Then, on November

14, 2017, the district court consolidated Ash with Krebs, Barchiesi, and Levy. Id.

       Defendants moved to dismiss certain claims in these federal lawsuits prior to their

consolidation. With the exception of the motions to dismiss filed in Krebs and Ash, each

of the motions were granted in part and denied in part, and the district court ordered that a

consolidated complaint be filed. J.A. 803. In Krebs, after permitting jurisdictional

discovery, the district court granted the motion to dismiss for lack of personal jurisdiction

as to Defendants Holding and Lively. Id. 3 The district court denied the motion to dismiss

in Ash as moot given the filing of the consolidated complaint. Id.

       Ultimately, on January 26, 2018, the Barchiesi, Krebs, Levy, and Ash Plaintiffs filed

a consolidated complaint. J.A. 512-89. The following three claims were asserted: unfair

or deceptive trade practices in violation of N.C. Gen. Stat. § 75-1.1 (“UDTPA”), fraud and

fraudulent misrepresentation, and negligent misrepresentation. Id. On February 9, 2018,


       3
         Defendants Holding and Lively remain as Defendants in the settlement agreement
because “the dismissal does ‘not end the action’ as to them until judgment is entered.” J.A.
803 (citing Fed. R. Civ. P. 54(b)).

                                             8
Defendants CSL and InfiLaw Corporation answered by denying the allegations and

asserting affirmative defenses. Id. Additionally, Defendants moved to dismiss Plaintiff

Ash’s individual claims as well as Defendants Chidi Ogene and Jay Conison. J.A. 804.

                                                2.

      Additional litigation ensued in North Carolina Superior Court with five lawsuits

against certain Defendants. Specifically, Herrera v. CSL, No. 17-CVS-1965, was filed on

January 31, 2017. Herrera v. CSL, No. 17-CVS-1965, 2018 WL 1902556, at *1 (N.C.

Super. Ct. Apr. 20, 2018). Robertson v. CSL, No. 17-CVS-4265, was filed on March 10,

2017. Id. Moseley v. CSL, No. 17-CVS-5870, was filed on March 28, 2017. Id. Merritt

v. CSL, No. 17-CVS-6749, was filed on April 13, 2017. Id. And finally, Frisby v. CSL,

No. 17-CVS-7851, was filed on May 1, 2017. Id. All were deemed mandatory complex

business cases under North Carolina state law. Id. at *2.

      On June 16, 2017, Defendants moved to dismiss the five lawsuits pursuant to Rule

12(b)(6) of the North Carolina Rules of Civil Procedure. Herrera, 2018 WL 1902556, at

*2. Defendants Holding, Lively, and Inatome also moved for dismissal pursuant to Rule

12(b)(2) of the North Carolina Rules of Civil Procedure. Id. Defendants Sterling Capital

Partners, L.P., and Sterling Capital Partners GmbH & Co. KG moved for dismissal

pursuant to Rules 12(b)(2) and 12(b)(6) of the North Carolina Rules of Civil Procedure.

Id.

      On June 21, 2017, the North Carolina Superior Court consolidated these lawsuits

under Herrera.     J.A. 803.   The North Carolina Superior Court also ordered that

subsequently filed related actions be assigned to that court and then stayed those related

                                            9
actions. Id. As a result, more than 90 lawsuits involving over 160 Plaintiffs are pending

before the North Carolina Superior Court. Id.

       On February 14, 2018, the North Carolina Superior Court dismissed all claims

against Sterling Capital Partners, L.P., and Sterling Capital Partners GmbH & Co. KG for

lack of personal jurisdiction. Id. at *3.

       On April 20, 2018, the North Carolina Superior Court granted in part and denied in

part the motions to dismiss. Id. at *2-18. Thus, the remaining claims included fraud,

intentional misrepresentation, negligent misrepresentation, and unfair or deceptive trade

practices. Id. at *18. The North Carolina Superior Court permitted the Plaintiffs to file an

amended consolidated complaint pursuant to Rule 9(b) within thirty days. Id. at *18-19.

                                                  C.

       From April 19, 2018, to April 20, 2018, the Plaintiffs in the above-referenced federal

and state lawsuits and their counsel participated in a mediation conducted by professional

mediator, Hunter Hughes. J.A. 805. As a result, Defendants and the Plaintiffs in Krebs

and Levy, as well as Plaintiff Leah Ash (collectively “Settling Parties”), executed a

Memorandum of Understanding with the Barchiesi Plaintiffs. Id. In the Memorandum of

Understanding, the Settling Parties agreed to “engage[] [in] settlement discovery and due

diligence, and analyze[] the legal and factual issues relevant to settlement.” Id. The inquiry

largely concerned Defendants’ ability to pay a judgment. Id. Eventually, a settlement

agreement was reached. Id.

       As noted in the settlement agreement, this was to be a limited fund, non-opt-out

settlement pursuant to Federal Rule of Civil Procedure 23(b)(1)(B). Id. The settlement

                                             10
class was defined as those “who enrolled in, attended, or paid tuition or fees to CSL

between September 1, 2013 through and including August 15, 2017.”                J.A. 806.

Additionally, Defendants agreed to fund the settlement with $2,500,000.00 of a

$5,000,000.00 insurance policy and a $150,000.00 institutional contribution, totaling

$2,650,000.00. Id.

       On September 11, 2018, the Settling Parties jointly moved for preliminary approval

of the limited fund settlement and for preliminary certification of the settlement class

(“joint motion”). J.A. 795-801.

       The next day, the district court granted the joint motion.

       On October 9, 2018, the Barchiesi Plaintiffs requested additional discovery from

the Settling Parties on issues surrounding the limited fund. After that request was refused,

the Barchiesi Plaintiffs filed a motion with the district court requesting the same. J.A.

1379. The district court took the matter under advisement until the fairness hearing. J.A.

2365. Additionally, several of the Barchiesi and Herrera Plaintiffs filed notices of

objection to the settlement agreement. J.A. 1418-1979.

       The fairness hearing took place on January 9 and 10, 2019. J.A. 2370. After

considering argument, the district court denied the Barchiesi Plaintiffs’ discovery motion

relating to Defendants’ ability to fund the settlement. J.A. 2386. The district court then

heard unsworn statements made by certain Barchiesi and Herrera Plaintiffs regarding their

respective objections to the settlement agreement.

       Experts then testified with respect to the “limited fund.” J.A. 2402. The expert for

the Settling Parties, as well as the entity-Defendants’ Chief Financial Officer (“CFO”),

                                             11
Scott Thompson, advised that he supplemented documentation previously filed concerning

the entity-Defendants’ finances. Those included income statements and balance sheets.

J.A. 2410. Thompson explained that the Defendants adequately substantiated that the

$2,650,000.00 figure was all that Defendants could pay to fund the settlement. J.A. 2405.

Thompson advised that the two sources available to fund the settlement included

$2,500,000.00 of a $5,000,000.00 insurance policy and a $150,000.00 institutional

contribution, which was not presently on hand, but would be created through other means,

such as reductions in force. J.A. 2405-09. In assessing Defendants’ financial state,

Thompson noted that Defendants’ liabilities exceeded their assets.          J.A. 2413-14.

Thompson also stated that a tax refund was used for critical operating expenses necessary

to sustain the entity-Defendants’ survival and advised that lawsuits were filed against the

ABA for the same reason. J.A. 2415. The expert for the Barchiesi Plaintiffs and Herrera

Plaintiffs, Edward Bowers, disagreed with Defendants’ representations and supporting

documentation concerning their ability to fund the settlement. J.A. 2456-79. Both experts

were cross-examined.

      The next day, the district court approved the settlement, carefully proceeding

through the factors articulated in Federal Rule of Civil Procedure 23(b)(1)(B), Ortiz v.

Fibreboard Corp., 527 U.S. 815 (1999), and Federal Rule of Civil Procedure 23(e). J.A.

2486-2550. The district court entered an order on January 16, 2019, approving the

settlement. J.A. 2553-2558.

       The Barchiesi Plaintiffs (hereinafter “Barchiesi Objectors”) and Herrera Plaintiffs

(collectively “Objectors”), timely noticed separate appeals.      J.A. 2566-2572.      The

                                            12
Objectors appealed the district court’s final order approving the settlement as well as the

district court’s final judgment. Id. The Barchiesi Objectors also appealed the district

court’s denial of their discovery motion. Id.

                                                   II.

         This case presents three main claims of error. First, the Objectors argue that the

district court erred when it approved the limited fund class action settlement pursuant to

Federal Rule of Civil Procedure 23(b)(1)(B) and Ortiz v. Fibreboard Corp., 527 U.S. 815

(1999). Next, the Objectors contend that the district court erred in approving the settlement

as fair, reasonable, and adequate pursuant to Federal Rule of Civil Procedure 23(e). And

finally, the Barchiesi Objectors argue that the district court erred in denying its discovery

motion. We address each claim of error in turn.

                                                   A.

         “In drafting Rule 23(b), the Advisory Committee sought to catalogue in ‘functional’

terms ‘those recurrent life patterns which call for mass litigation through representative

parties.’” Ortiz, 527 U.S. at 833 (citing Kaplan, A Prefatory Note, 10 B.V. Ind. & Com.

L. Rev. 497 (1969)). Reading Federal Rule of Civil Procedure 23(b)(1)(B) with subsection

(c)(2)

         provides for certification of a class whose members have no right to
         withdraw, when “the prosecution of separate actions . . . would create a risk”
         of “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.”




                                              13
Ortiz, 527 U.S. at 833 (quoting Fed. R. Civ. P. 23(b)(1)(B)). A species of such lawsuits

includes one wherein property requires distribution or management. Id. at 834 (quoting J.

Moore & J. Friedman, 2 Federal Practice 2240 (1938)). A subset of those lawsuits includes

the “limited fund” class action, wherein “‘claims . . . made by numerous persons against a

fund insufficient to satisfy all claims’” are aggregated. Id. (quoting Advisory Committee’s

Notes on Fed. R. Civ. Pro. 23, 28 U.S.C. App., p. 697)).

       In Ortiz, the Supreme Court of the United States set forth a “set of conditions to

justify binding absent members of a class under Rule 23(b)(1)(B)” in the context of limited

fund class actions. Id. at 838. The Supreme Court opined that these conditions should be

treated as “presumptively necessary, and not merely sufficient.” Id. at 838, 842-48. Those

conditions include: 1) “the totals of the aggregated liquidated claims and the fund available

for satisfying them, set definitely at their maximums, demonstrate the inadequacy of the

fund to pay all the claims,” 2) “the whole of the inadequate fund was to be devoted to the

overwhelming claims,” and 3) “the claimants identified by a common theory of recovery

were treated equitably among themselves.” Id. at 838-39.

       With respect to the first condition, the Supreme Court noted that the notion

underlying this condition was “insufficiency, which alone justified the limit on an early

feast to avoid later famine.” Id. at 838 (citing Guffanti v. Nat’l Sur. Co., 196 N.Y. 452,

457, 90 N.E. 174, 176 (N.Y. 1909) and Nat’l Sur. Co. v. Graves, 211 Ala. 533, 534, 101

So. 190, 190 (Ala. 1924)). “[T]he settling parties must present not only their agreement,

but evidence on which the district court may ascertain the limit and the insufficiency of the

fund, with support in findings of fact following a proceeding in which the evidence is

                                             14
subject to challenge.” Id. at 849 (citing In re Bendectin Prods. Liab. Litig., 749 F.2d 300,

306 (6th Cir. 1984)). The rationale underlying the second condition concerns “ensur[ing]

that the class as a whole was given the best deal[, and that the limited fund] did not give a

defendant a better deal than seriatim litigation.” Id. at 839. With respect to the third

condition, the Supreme Court observed that the cases “assume that the class will comprise

[of] everyone who might state a claim on a single or repeated set of facts, invoking a

common theory of recovery, to be satisfied from the limited fund as the source of payment.”

Id. “In these cases[,] the hope of recovery was limited. . . . Once the represented classes

were so identified, there was no question of omitting anyone whose claim shared the

common theory of liability and would contribute to the calculated shortfall of recovery.”

Id. at 840 (citing Nashville & Decatur R.R. Co. v. Orr, 18 Wall. 471, 474 (1873)). And

“[o]nce all similar claims were brought directly or by representation before the court, these

antecedents of the mandatory class action presented straightforward models of equitable

treatment, with the simple equity of a pro rata distribution providing the required fairness.”

Id. at 840-41 (citing 1 J. Pomeroy, Equity Jurisprudence § 407, pp. 764-65 (4th ed. 1918)).

       With these benchmarks, we review the district court’s approval of the limited fund

settlement under an abuse of discretion standard. Sharp Farms v. Speaks, 917 F.3d 276,

299 (4th Cir. 2019) (quoting Berry v. Shulman, 807 F.3d 600, 614 (4th Cir. 2015)).

                                                  1.

       In reviewing the determinations made regarding the first condition, we first reject

the Objectors’ argument that a limited fund settlement is not appropriate in this case.



                                             15
       The district court distinguished the instant matter from Ortiz. The district court

observed that one concern the Supreme Court raised in Ortiz was the existence of

unliquidated tort claims. The district court further explained that in Ortiz, a subset of

claimants were exposed to asbestos but had not yet developed a related malignancy or

disease. J.A. 2542. Thus, the district court opined, that the extent of those claimants’

injuries was unknown and unascertainable. Id. The district court went on to observe that,

in the post-Ortiz era, federal courts have approved limited fund class action settlements

involving tort claims. Id. (citing Stott v. Capital Fin. Servs., 277 F.R.D. 316, 328-29 (N.D.

Tex. 2011) (noting that although the class action involved claims of fraud, the district court

was able to reach a “sufficiently reliable conclusion regarding the probable total of the

aggregated liquid damages”)).

       We recognize that in Ortiz, the Supreme Court noted that applying “Rule

23(b)(1)(B) to a fund and plan purporting to liquidate actual and potential tort claims is

subject to question.” Ortiz, 527 U.S. at 864. And, ultimately, the Supreme Court found a

Rule 23(b)(1)(B) application inappropriate in Ortiz. Id. However, in assessing the first

condition set forth in Ortiz, the Supreme Court commented that although the Ortiz district

court essentially found that the damages were unliquidated and unascertainable for the

subset of plaintiffs previously described, the Ortiz district court could have used experience

with prior similar cases as a guide to approximate the damages figure. Id. at 850 (citing

Ahearn v. Fibreboard Corp., 162 F.R.D. 505, 528 (E.D. Tex. 1995)).

       In determining whether the aggregated liquidated claims were set at their

maximums, in the instant case, the district court discerned that the damages requested

                                             16
largely amounted to reimbursements for tuition, payment, and fees. J.A. 2543. The district

court identified the class and then set forth a simple formula to calculate the damages

figure: “one must multiply the annual cost of tuition and fees, times two; the number of

students, times three; the number of years in attendance.” J.A. 2543. The district court

then “[p]erform[ed] that calculation for [one] year at average costs [which yielded] a multi-

hundred dollars of millions of dollars in damages.” J.A. 2543. The district court also

advised that the Settling Parties approximated that the damages figure was

$105,000,000.00 prior to trebling the actual damages and adding attorneys’ fees sought

under the UDTPA. J.A. 2543.

       In scrutinizing whether the limited fund was set at its maximum, which the

Objectors contend that it was not, the district court found there were only two sources to

fund the settlement. Those sources included $2,500,000.00 of an insurance policy and a

$150,000.00 direct institutional contribution. J.A. 2544. In so finding, the district court

referenced the “ample evidence” before it, including the submissions of the Settling Parties

and the testimony of their expert, Scott Thompson.           J.A. 2543.     The district court

emphasized that Defendants’ liabilities “far exceed their assets.” J.A. 2544. With respect

to the contention that these figures were a result of negotiation, the district court found that

“[n]egotiation is not precluded in these circumstances.” J.A. 2544.

       With regard to Defendants’ finances generally, it is significant to note that other

entities under Defendants’ control, including two other for-profit law schools, were not

profitable. Further, Defendants explained that the tax refund was used for critical business

expenses and explained that hundreds of thousands of dollars were expended on lawsuits

                                              17
against the ABA. Thompson testified that the lawsuits were undertaken for the survival of

Defendants’ businesses.

       Turning to Defendants’ funding of the settlement, Thompson clarified that the most

that could be paid out of the $5,000,000.00 insurance policy was $2,500,000.00.

Thompson explained that although invoices were pending, Defendants directed the

insurance company to stop paying on those invoices after reaching $2,500,000.00 in order

to preserve the remaining balance to fund the settlement.

       Additionally, Thompson testified extensively with respect to the $150,000.00

institutional contribution. At the mediation, the mediator shuttled between the parties

several times. Defendants then advised that $150,000.00 was the most that could be

contributed to the settlement beyond the portion of the insurance policy previously

discussed. Defendants indicated that this sum was not on hand but would be created by

other means, such as reductions in force. Ultimately, when asked if other sources were

available to fund the settlement, Thompson explained that there were none, and that, as

CFO, this was the most that Defendants could contribute to the settlement. Unlike the Ortiz

district court, that the Supreme Court criticized for “uncritical[ly] adopt[ing] . . . figures

agreed upon by the parties in defining the limits of the fund,” the district court in the instant

matter copiously and carefully sifted through the evidence presented and made detailed

findings on the record. Id. at 848.

       The district court also established the inadequacy of the fund when it observed that

the damages claims exceeded the limited fund, set at $2,650,000.00, by “roughly 40 times,”

which was “a rather enormous disparity.” J.A. 2543.

                                               18
       The district court did not abuse its discretion in making these findings, which were

well-supported by the record.

                                                   2.

       The Objectors then contest the district court’s findings with respect to the second

condition, which they frame as an alternative argument. See Appellants’ Op. Br. 37. When

advancing this argument, the Objectors contend that Defendants fare better under the

settlement agreement as Defendants are able to “keep their businesses, with

$10,000,000[.00] in annual revenue, free of all [c]lass claims, for the meager payment of

$150,000[.00].” Appellants’ Op. Br. 27.

       Importantly, the district court found that there was no dispute that the entirety of the

limited fund, except for attorneys’ fees and costs, would be devoted to payment of these

claims. J.A. 2544. We further note that the Objectors’ argument is unavailing considering

that the Defendants’ liabilities outweigh their assets. Moreover, the Objectors’ argument

fails to consider the payment from the insurance policy. Further, if additional litigation

were to commence, there would be no funds left for the remaining Plaintiffs. Ortiz, 527

U.S. at 839.

       The district court did not abuse its discretion in so finding.

                                                   3.

       With respect to the third condition, we disagree with the Objectors’ contentions that

the class is both underinclusive and overinclusive.

       The district court noted that the class included “all individuals who enrolled in, and

attended, or paid tuition or fees to CSL from September 1, 2013, to August 15, 2017.” J.A.

                                              19
2544. Accordingly, Plaintiffs who were party to the federal consolidated actions, as well

as the Herrera Plaintiffs, were encompassed by the class. J.A. 2544. When presented with

the suggestion that the class was overinclusive, the district court dismissed it as meritless.

J.A. 2544-45. We note that the class members advanced similar claims. Additionally, the

mechanism developed to distribute the limited fund reflects the relative value of the various

claims alleged, see infra p. 20.     This conclusion cannot be considered an abuse of

discretion.

       With respect to whether the members of the class were equitably treated, which the

Objectors argue they were not, the district court noted that a Claims Administrator would

distribute the limited fund to class members according to a mechanism involving “tiers and

point allocations” “based upon criteria reflecting the strength of the student claims and the

magnitude of their alleged damages.” J.A. 2545. The limited fund would then be

distributed by the Claims Administrator to class members “proportionately to the point

allocations,” awarding the most to those with the strongest case who suffered the greatest

loss. Id. The district court noted that the settlement mechanism was a result of “detailed

and hard-fought negotiations” and accounted for other available sources of relief as well

as complexities in individual cases. The district court found that the mechanism had a

“reasonable, rational basis” and found it was fair. J.A. 2545-46.

       We find the district court’s assessment sound. The mechanism developed for

distributing the fund is proportionate to what each member of the class suffered, awarding

those who suffered more. . . a greater share.



                                                20
       Ultimately, the district court analyzed the factors set forth in Ortiz with painstaking

care. The district court did not abuse its discretion in any regard.

                                                  B.

       We also disagree with the Objectors’ argument that the district court abused its

discretion in approving the settlement as fair, reasonable, and adequate pursuant to Federal

Rule of Civil Procedure 23(e).

       Before parties settle a class action lawsuit, the parties are required to seek the

approval of the district court. Fed. R. Civ. P. 23(e). Before the district court approves the

settlement, that court must conduct a hearing and find that the settlement is “fair,

reasonable, and adequate.”       Fed. R. Civ. P. 23(e)(2). 4   In determining whether the

settlement is fair, this Court has identified the following factors the district court may



       4
         Federal Rule of Civil Procedure 23(e)(2) has been amended and now sets forth
factors for the district court to assess in evaluating fairness, reasonableness, and adequacy.
Recognizing that, this Court continues to apply its own standards as they “almost
completely overlap with the new Rule 23(e)(2) factors,” rendering the analysis the same.
In re Lumber Liquidators Chinese-Manufactured Flooring Prods. Mktg., Sales Practices
& Prods. Liab. Litig., 952 F.3d 471, 474, n.8 (4th Cir. 2020). The factors set forth in Rule
23(e)(2) include

              (A) the class representatives and class counsel have adequately represented
              the class;
              (B) the proposal was negotiated at arm’s length;
              (C) the relief provided for the class is adequate, taking into account:
                     (i) the costs, risks, and delay of trial and appeal;
                     (ii) the effectiveness of any proposed method of distributing relief to
                     the class, including the method of processing class-member claims;
                     (iii) the terms of any proposed award of attorney’s fees, including
                     timing of payment; and
                     (iv) any agreement required to be identified under Rule 23(e)(3); and
              (D) the proposal treats class members equitably relative to each other.
                                             21
consider, which the district court followed: “(1) the posture of the case at the time

settlement was proposed; (2) the extent of discovery that had been conducted; (3) the

circumstances surrounding the negotiations; and (4) the experience of counsel in the area

of [the] class action litigation.” In re Lumber Liquidators Chinese-Manufactured Flooring

Prods. Mktg., Sales Practices & Prods. Liab. Litig., 952 F.3d 471, 484 (4th Cir. 2020)

[hereinafter In re Lumber Liquidators] (citing In re Jiffy Lube Sec. Litig., 927 F.2d 155,

159 (4th Cir. 1991)).

       In determining whether the settlement is adequate, the following factors set forth by

this Court guided the district court’s analysis:

       (1) the relative strength of the plaintiffs’ case on the merits; (2) the existence
       of any difficulties of proof or strong defenses the plaintiffs are likely to
       encounter if the case goes to trial; (3) the anticipated duration and expense
       of additional litigation; (4) the solvency of the defendant[] and the likelihood
       of recovery on a litigated judgment; and (5) the degree of opposition to the
       settlement.

J.A. 2548 (citing In re Jiffy Lube Sec. Litig., 927 F.2d at 159).

       Moreover, as we previously opined, we “afford[] the district court’s decision

‘substantial deference,’ reversing only ‘upon a clear showing that the district court abused

its discretion in approving the settlement.’” Sharp Farms v. Speaks, 917 F.3d 276, 299

(4th Cir. 2019) (quoting Berry v. Schulman, 807 F.3d 600, 614 (4th Cir. 2015)).

                                                   1.

       We are satisfied that the district court did not abuse its discretion in finding that the

settlement was fair. The district court noted that the settlement was approved after

approximately “a year and a half of litigation involving significant motions practice and


                                              22
discovery.” J.A. 2546; see In re Lumber Liquidators, 952 F.3d at 484 (citing Berry, 807

F.3d at 614 (finding that a settlement was fair after noting that “extensive discovery” took

place prior to its approval)). The district court observed that engaging in such motions

practice and discovery over that length of time enabled the parties to “develop their

negotiations positions.” J.A. 2546. Additionally, the district court found that negotiations

occurred at an arm’s length as the two-day mediation was led by “an experienced class

action mediator.” J.A. 2547; see In re Lumber Liquidators, 952 F.3d at 484-85 (discerning

that the point of the fairness analysis is to determine whether a settlement was a product of

“good-faith bargaining at arm’s length, without collusion”).

       Further, the declarations filed in the case demonstrated that class counsel was

experienced in handling class action litigation as well as such suits involving school

closures. See In re Lumber Liquidators, 952 F.3d at 485.

       For these reasons, the district court did not abuse its discretion in determining that

the settlement was fair.

                                                  2.

       We also find that the district court did not abuse its discretion in finding that the

settlement was adequate. The district court found that the factors established by this Court

weighed in favor of settlement and highlighted factors three, four, and five. J.A. 2548.

       Regarding the third factor, the district court fittingly noted that ensuing litigation

“would quickly deplete the limited settlement fund, thereby dramatically reducing any

potential recovery.” J.A. 2548; see In re Lumber Liquidators, 952 F.3d at 485 (citing In re

Wireless Tel. Fed. Cost Recovery Fees Litig., 396 F.3d 922, 933 (8th Cir. 2005) (affirming

                                             23
a district court’s approval of a settlement wherein the district court found that the suit would

likely proceed for years and cause the “expenditure of millions of dollars”)).

       With respect to the fourth factor, the district court considered the filings, including

those that were supplemented, as well as what occurred at the fairness hearing. The district

court reiterated that “Defendants’ liabilities far exceed their assets.” J.A. 2548. The district

court’s findings related to approving the limited fund settlement further support the district

court’s determination that the settlement was adequate, infra pp. 15-20.

       Finally, in consideration of the fifth factor, the district court also indicated that “the

vast majority” of the class approved of the settlement, noting that only approximately four

percent of the class filed objections. J.A. 2548; see In re Lumber Liquidators, 952 F.3d at

485-86 (explaining that a finding that 0.05% opted out of the settlement and about 0.0006%

objected to the settlement supported the determination that the settlement was adequate).

       Additionally, in the district court’s discussion on whether the settlement was fair,

reasonable, and adequate, the district court considered the “complexity of Plaintiffs’ theory

of liability” as well as “the arguments raised by Defendants in its pleadings that could

potentially preclude or reduce the recovery” and observed that the settlement terms

provided “substantial and adequate value” to the class. J.A. 2554.

       Accordingly, we cannot find that the district court abused its discretion in approving

the settlement as fair, reasonable, and adequate.

                                               C.

       We also disagree with the Barchiesi Objectors that the district court abused its

discretion when denying the discovery motion.

                                              24
       “We review the district court’s discovery and evidentiary rulings for abuse of

discretion.” Jordan v. South Carolina Dep’t of Transp., 797 Fed. App’x. 101, 102 (4th

Cir. 2020) (citing Bresler v. Wilmington Tr. Co., 855 F.3d 178, 189 (4th Cir. 2017) and

Fed. R. Civ. P. 61).

       When denying the Barchiesi Objectors’ discovery motion, the district court applied

a very stringent standard. The district court first noted that the purpose of settlement-

related discovery “is to ensure that the [district court] has sufficient information” to enable

it to approve the settlement. J.A. 2385 (quoting In re Checking Account Overdraft Litig.,

830 F. Supp. 2d 1330, 1337 (S.D. Fla. 2011)). The district court further noted that

settlement-related discovery often “delay[s] settlement, introduce[s] uncertainty, and might

be undertaken primarily to justify an award of attorneys fee[s] to objector’s counsel,”

thereby justifying a higher standard. Id. (citing The Manual for Complex Litigation, §

21.643 (4th ed.)). The district court advised that in a limited fund settlement context, these

“concerns are heightened.” Id. The district court then applied the standard set forth in Int’l

Union, United Auto., Aerospace, and Agr. Implement Workers of Am. v. Gen. Motors

Corp., 497 F.3d 615 (6th Cir. 2007). Based on that case, the district court found that to

obtain settlement-related discovery, a movant is required to demonstrate a “colorable claim

that the settlement should not be approved” and that “existing discovery is insufficient or

not truly adversarial.” Id. at 2385-84. The district court then held that the Barchiesi

Objectors failed to meet that standard.




                                              25
       Today, we do not decide whether a more stringent standard must be applied to

settlement-related discovery motions. We only decide whether the district court abused its

discretion in denying the discovery motion at issue.

       The basis of the discovery motion pertained to the limited fund. At the fairness

hearing, the Court heard argument on the discovery motion and subsequently denied it,

finding that the terms of the extent of discovery were “negotiated vigorously,” that

Defendants complied with those terms, and that as a result, “extensive document

discovery” had occurred. J.A. 2386.

       These findings were amply supported by the record and were well within the district

court’s discretion.

                                           III.

       For the reasons set forth above, we find that the district court did not abuse its

discretion in approving the limited fund settlement pursuant to Federal Rule of Civil

Procedure 23(b)(1)(B) and Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999), in finding that

the settlement was fair, reasonable, and adequate pursuant to Federal Rule of Civil

Procedure 23(e), and in denying the discovery motion. Accordingly, we affirm the

judgment of the district court.

                                                                             AFFIRMED




                                            26
