                                                         United States Court of Appeals
                                                                  Fifth Circuit
                                                                 F I L E D
                          In the                                December 15, 2004
         United States Court of Appeals                    Charles R. Fulbruge III
                  for the Fifth Circuit                            Clerk
                      _______________

                        m 04-20001
                      _______________




                   MARK NEWBY, ET AL.,

                                        Plaintiffs,

 MARK NEWBY; THE REGENTS OF THE UNIVERSITY OF CALIFORNIA,

                                        Plaintiffs-Appellees,

                         VERSUS

                ENRON CORPORATION, ET AL.,

                                        Defendants,

       ANDERSEN-UNITED KINGDOM; ANDERSEN-BRAZIL;
ARTHUR ANDERSEN & COMPANY INDIA; ANDERSEN WORLDWIDE SC,

                                        Defendants-Appellees,

                         VERSUS

RINIS TRAVEL SERVICE INC. PROFIT SHARING TRUST UA 6-1-1989;
                  MICHAEL J. RINIS, IRRA,

                                        Intervenor Plaintiffs-Appellants,
SETTLEMENT CLASS MEMBERS; JAMES H. ALLEN, JR.; BURTON W. CARLSON, JR.;
    MICHAEL T. DEFREECE; MARCIA A. DEFREECE; ANDREW E. KRINOCK;
          PHYLLIS A. KRINOCK; PARTCOM LIMITED PARTNERSHIP;
                          REED PARTNERS LP,
            FORMERLY KNOWN AS REED FAMILY LIMITED PARTNERSHIP;
            F. WALKER TUCEI; JUNE P. TUCEI; ROMAN H. UHING;
            ALVERA A. UHING; VIETS FAMILY ASSOCIATES LLP,

                                                Appellants.


                         ***************




                     PAMELA M. TITTLE, ETC., ET AL.,

                                                Plaintiffs,

                            PAMELA M. TITTLE,
       ON BEHALF OF HERSELF AND A CLASS OF PERSONS SIMILARLY SITUATED,
           AND ON BEHALF OF THE ENRON CORPORATION SAVINGS PLAN,
          THE ENRON CORPORATION EMPLOYEES STOCK OWNERSHIP PLAN,
               AND THE ENRON CORPORATION CASH BALANCE PLAN,

                                                Plaintiffs-Appellees

                                  VERSUS

                       ENRON CORPORATION, ET AL.,

                                                Defendants.



                         ***************




                                     2
 WASHINGTON STATE INVESTMENT BOARD, ET AL.

                                       Plaintiffs,

                       VERSUS

              KENNETH L. LAY, ET AL.,

                                       Defendants.



             ***************




   ABBEY NATIONAL TREASURY SERVICES PLC,

                                       Plaintiff,

                       VERSUS

CREDIT SUISSE FIRST BOSTON CORPORATION; ET AL.,

                                       Defendants.



             _________________________

      Appeals from the United States District Court
           for the Southern District of Texas

             _________________________




                           3
Before SMITH, STEWART, AND PRADO,                        of promising financial reports. The meteoric
  Circuit Judges.                                        rise of Enron stock allowed industry insiders
                                                         to reap windfall gains. The bubble burst on
JERRY E. SMITH, Circuit Judge:                           October 16, 2001, when Enron announced a
                                                         shocking $618 million loss for the quarter, a
   This appeal concerns a variety of securities          figure attributable to the company’s decision
class actions stemming from the downfall of              to reduce falsely inflated income and report
Enron Corporation. These actions have simi-              concealed losses from earlier accounting peri-
lar substantive claims, but they differ with             ods. On November 8, 2001, Enron revealed
respect to the definition of the putative class.         that its accounting practices violated a number
Appellants, a subset of members of the puta-             of laws and industry norms and that audit re-
tive class in Newby v. Enron Corp., No.                  ports for 1997-2000 were inaccurate. Enron’s
H-01-CV-3624 (S.D. Tex.), timely objected to             share price fell precipitously, it is now bank-
the proposed partial settlement with defendant           rupt, and many of its senior officers have been
Andersen Worldwide Societe Cooperative                   indicted.
(“AWSC”)1 and most of its member firms.
The district court held a “fairness hearing”                This consolidated appeal concerns a set of
before approving the settlement. The objec-              cases arising out of the Enron debacle, among
tors from the putative Newby class (the “Ob-             them Newby, a securities fraud class action,
jectors”) appeal the decision to approve the             and Tittle v. Enron Corp., No. H-01-CV-3913
$40 million partial settlement (the “Partial Set-        (S.D. Tex.), a related ERISA2 claim alleging
tlement”). Finding no error, we affirm.                  racketeering and negligence. The appeal also
                                                         concerns Wash. State Inv. Bd. & Employ-
                         I.                              er-Teamsters Local Nos. 175 and 505 Pension
    In the interest of clarity, we divide our fac-       Trust Fund v. Lay, No. H-02-3401 (S.D. Tex).
tual summary into three sections. They are
(1) a brief synopsis of the financial events sur-                               B.
rounding the collapse of Enron Corporation                  The Newby defendants include a number of
(“Enron”) and those leading to the associated            AWSC Member Firms, including Arthur An-
litigation; (2) a discussion of the relationship         dersen LLP (“Andersen U.S.”), an entity not
between AWSC and its affiliated Andersen                 party to the Partial Settlement. The plaintiffs
firms (the “Member Firms”); and (3) the terms            lodged detailed and extensive allegations
of the Partial Settlement.                               against a variety of Andersen business entities.
                                                         These claims stemmed primarily from allegedly
                        A.                               defective accounting procedures and audits.
   Throughout the 1990’s Enron sold natural              The Partial Settlement before us today
gas, electricity, and communications products            involves (1) the plaintiffs in the Newby, Tittle,
to a variety of customers. Its share price               and Washington State Investment Board ac-
soared through mid-2001, partially as a result           tions (the “Actions”) and (2) the “Settling De-
                                                         fendants” (AWSC and the “Foreign Member

   1
     Because AWSC is now in liquidation, the full
                                                            2
name of the defendants is AWSC Societe Coop-                 Employee Retirement Income Security Act of
erative, en liquidation.                                 1974, 29 U.S.C. § 1001 et seq.

                                                     4
Firms,” with the term “Foreign Member                      ber, several groups intervened to object to the
Firms” denoting all AWSC Anderson affiliates               Partial Settlement. After an October fairness
excluding Andersen U.S.).                                  hearing, the district court entered the judgment
                                                           approving the settlement. Two groups of ob-
    AWSC is a limited liability Swiss societe              jectors (the “Rinis” and “Allen” objectors)
cooperative, a business entity with no Am-                 timely appealed. The relevant terms of the
erican corporate analogue, formed under the                Partial Settlement to which the district court
Swiss Code of Obligations and domiciled in                 gave preliminary approval are as follows:5
Geneva, Switzerland. AWSC coordinated the
Andersen accounting network. Each Member                      (1) the dismissal with prejudice of all of
Firm was formed under the laws of its domi-                plaintiffs’ past, present, and future claims, aris-
ciliary. A separate contract governed every                ing out of the Enron facts, against Settling
individual relationship between AWSC and                   Defendants, including Anderson-United King-
each member firm, including the Foreign                    dom, Andersen-Brazil, and Arthur Andersen &
Member Firms.3 AWSC did not provide pro-                   Co. (India), the Foreign Member Firms already
fessional services to clients and its primary              embroiled in litigation;6
(but not exclusive) responsibilities involved
establishing the professional standards by                     (2) the release of plaintiffs’ past, present,
which the Member Firms were to abide.4                     and future claims against successors in interest
                                                           to the Settling Defendants;
                       C.
    In August 2002 the representative plaintiffs              (3) payment by AWSC of $40 million in
in the Actions (together, the “Representative              order to establish the “Partial Settlement
Plaintiffs”) agreed to a $40 million partial set-          Fund,” with the funds placed in escrow so that
tlement with AWSC and the Member Firms,                    they may earn interest during the pendency of
excluding Andersen U.S. The parties submit-                these proceedings;7
ted their Stipulation of Partial Settlement for
$40 million in July 2003 and, in late Septem-                 (4) the establishment of a $15 million fund
                                                           for future court-approved class litigation ex-
                                                           penses (the “Litigation Expense Fund”);8
   3
      The Foreign Member Firms, along with
AWSC, are the defendants that are party to the
Partial Settlement. This group includes those                 5
                                                                These are not all the provisions of the Partial
Member Firms against whom actions were pend-               Settlement. The full agreement is set forth in the
ing: Anderson-United Kingdom, Andersen-Brazil,             Stipulation of Partial Settlement filed on August
and Arthur Andersen & Co. (India).                         29, 2002.
   4
     AWSC’s duties involved the coordination of               6
                                                               This release does not apply to Andersen U.S.
activities among the various Member Firms.                 (Andersen U.S. is not a Settling Defendant).
AWSC would, for example, facilitate transnational
assistance and accounting among member firms.                 7
                                                                The funds earned about $335,000 in the first
AWSC was also responsible for dividing common              year.
costs, such as the costs of running Anderson’s
                                                              8
training center, among the other firms. It could not              Milberg Weiss and other Plaintiffs’ Settlement
earn a profit and performed no audits.                                                            (continued...)

                                                       5
   (5) the allocation, through confidential,               members. See Reed v. Gen. Motors Corp.,
binding, and non-appealable arbitration, of the            703 F.2d 170, 172 (5th Cir. 1983); Parker v.
remaining $25 million (the “Remainder”) be-                Anderson, 667 F.2d 1204, 1209 (5th Cir.
tween, on the one hand, the consolidated New-              1982). The various facts pertaining to each of
by and Washington State Investment Board                   these elements are set forth in the respective
actions and, on the other, the Tittle action; and          subsections below.

   (6) the payment from the Remainder to                       The Objectors phrase their arguments in a
Plaintiffs’ Settlement Counsel for as-yet un-              variety of ways. Essentially, however, they
specified but (ultimately) court-approved at-              take issue with certain aspects of the Partial
torneys’ fees.                                             Settlement pertaining to its fairness, reason-
                                                           ableness, and adequacy: (1) the size of settle-
                        II.                                ment; (2) the fraction of the settlement devot-
                        A.                                 ed to expenses; (3) the propriety of the ex-
    A district court’s approval of a class action          pense bills; (4) that payment to class members
settlement may be set aside only for abuse of              is deferred; and (5) the broad release of suc-
discretion. See Cotton v. Hinton, 559 F.2d                 cessors in interest to the Settling Defendants.
1326, 1331 (5th Cir. 1997). The district court
was extrao rdinarily meticulous in its analysis                                    B.
of the Partial Settlement Fund. The Objectors,                The Objectors protest the size of the settle-
on the other hand, continue to engage in what              ment fund, contending $40 million to be a pal-
we can only describe as a maddening pattern                try sum in light of the Settling Defendants’ po-
of over-generalization and selective narration.            tential liability. Draping this contention in
                                                           vague accusations of collusion, they apparently
   The gravamen of an approvable proposed                  believe the class representatives and counsel
settlement is that it be “fair, adequate, and              short-changed the class by failing to secure a
reasonable and is not the product of collusion             larger settlement. The district court expended
between the parties.” See id. at 1330 (citing              considerable effort delineating the specific
Young v. Katz, 447 F.2d 431 (5th Cir. 1971)).              reasons why a substantial recovery against the
The district court faithfully applied a six-factor         Settling Defendants was unlikely. We repeat
test in determining the appropriateness of the             them only briefly here.
proposed settlement: (1) evidence that the
settlement was obtained by fraud or collusion;                First, the record reveals that AWSC and the
(2) the complexity, expense, and likely dura-              Foreign Member firms were formed and oper-
tion of the litigation; (3) the stage of the litiga-       ated principally under the laws of a foreign
tion and available discovery; (4) the probability          jurisdiction, rendering the prospect of satisfy-
of plaintiffs’ prevailing on the merits; (5) the           ing personal jurisdiction requirements a daunt-
range of possible recovery and certainty of                ing one. Second, the record reveals that the
damages; and (6) the opinions of class counsel,            Plaintiffs were unlikely to establish even mini-
class representatives, and absent class                    mal liability on the part of the Settling Defen-
                                                           dants. The Objectors’ argument that AWSC
                                                           engaged in legally cognizable wrongs rests al-
   8
   (...continued)                                          most entirely on conclusional testimony con-
Counsel do not currently seek attorney fees.

                                                       6
tained in two supplementary affidavits.9 The                  Finally, the district court determined that
remainder of the Objectors’ arguments are                 there would be almost insurmountable prob-
premised on pithy statements of worldwide                 lems collecting any judgment against the Set-
corporate unity found in marketing materials.             tling Defendants. This is because of, inter
We decline, as did the district court, to afford          alia, (1) the financial insolvency of AWSC and
those corporate clichés considerable weight.              many of its member firms and (2) the un-
                                                          willingness of foreign sovereigns to enforce
   AWSC identified a number of other courts               U.S. judgments against them.
rejecting claims against AWSC or Andersen as
a single, worldwide organization. The Ob-                     Counsel for the Tittle and the Newby plain-
jectors fail to rebut this submission with any            tiffs submitted that the settlement was fair, ad-
caselaw. The Objectors reason that we should              equate and reasonable, and in the best interests
consider AWSC and the Member Firms to be                  of the class. Although at the fairness hearing
a single, worldwide organization because, if              lead counsel for the Newby class was hesitant
such were not the case, the Objectors argue,              to state explicitly his belief in the weakness of
why would the Foreign Member Firms have                   the claims against the Settling Defendants,
contributed to the AWSC settlement?                       counsel for the Tittle plaintiffs was more can-
                                                          did: “Without the settlement agreement,
    The answer, provided in much detail during            which was reached prior to the Court’s ruling
the fairness hearing, is that they did so not be-         on the motions to dismiss, and after very seri-
cause of their potential for liability, but be-           ous and often contentious arm’s length negoti-
cause any potential association with Enron                ations, the Tittle plaintiffs could very well have
“poisoned’ opportunities for them to merge                had no recovery at all against AWSC.” We
with other companies and to “get on with their            consider the class’s small estimated recovery
lives.”10 We consider this issue in further de-           sufficient to justify the sum upon which the
tail in the factual insufficiency discussion of           plaintiffs and Settling Defendants agreed.
part IV, infra.
                                                                                 C.
                                                             As we have discussed, the Objectors ques-
   9
    These were the affidavits of Burton Carlson           tion the magnitude of the settlement. In addi-
and Gilbert Viets, who stated that                        tion, as we will now examine, they challenge
                                                          the fraction ($15 million, or 37.5%) devoted to
   [AWSC] was the entity in charge of establish-          the Litigation Expense Fund.
   ing and enforcing accounting and professional
   standards as well as quality control techniques                              1.
   and procedures of, education and training per-            The reasonableness of the expenses in-
   sonnel of, and coordinating client services on a       curred during the course of the litigation is not
   worldwide basis for, all of its member firms,
                                                          before the court; only the structure of the set-
   including Arthur Andersen LLP and any other
                                                          tlement fund is. As the district court noted,
   affiliated entities that may have provided pro-
   fessional services to Enron.                           each round of notice for expenses costs rough-

   10
      In fact, the Foreign Member Firms had al-
ready settled with the Enron estate in bankruptcy
court.

                                                      7
ly $750,000.11 If the plaintiff class were to             for the proposition that a settlement must al-
incur that sum each time class counsel with-              ways result in a class award at the time the
draws money for expenses, the administrative              settlement is made. Absent some inkling of
costs would cannibalize much of the Partial               why the Litigation Expense Fund is irrational
Settlement.                                               (particularly in light of the enormous adminis-
                                                          trative expense associated with the Enron class
   Professor Eric Green, a respected, court-              actions), we uphold the district court’s ap-
appointed mediator, suggested the creation of             proval of the litigation defense fund as a sound
a litigation expense fund to reduce such re-              exercise of discretion.
dundant and costly notification. Each time
class counsel must withdraw funds for expens-                                     3.
es associated with future litigation, the court               The Rinis Objectors submit ten full pages of
must approve them. In other words, the $15                faulty accounting. First, they compute the
million litigation expense fund is neither (1) a          fraction of the partial settlement attributed to
vehicle to finance expenses exclusively asso-             expenses to be 37.5% by dividing $15 million
ciated with this $40 million settlement nor               by $40 million. They then argue that this frac-
(2) a blank check to class counsel.                       tion is unreasonable in light of much smaller
                                                          ratios in other settlements.
                      2.
    The Allen Objectors further argue that re-               The Rinis Objectors inaccurately state the
covery is highly speculative, but this argument           numerator, because the $15 million Litigation
is both vague and unpersuasive.12 The objec-              Expense Fund is not money assigned to class
tion does not even specifically mention the ex-           counsel, but merely a guaranteed pool from
pense fund, nor does it invoke any authority              which class counsel may withdraw fundsSSbut
                                                          only with the imprimatur of the district court.
                                                          If expenses on future litigation do not total
   11
      The Rinis objectors mistakenly calculate the        more than $15 million, that money is to be
notification costs as the number of class members         dispensed to the class.
times postage ($407,000), ignoring the costs of
printing notices, publicizing notice in newspapers,           More importantly, they incorrectly state the
paying claims administrators to oversee the pro-          denominator, because the instant agreement is
cess, and printing the notices themselves.                a partial, rather than final, settlement. We can-
                                                          not now state with any confidence what the
   12
      This argument consists of two sentences in          denominator will ultimately be, but the final
their opening brief:                                      figure will substantially exceed $40 million.
                                                          These two mathematical adjustments bring the
   In approving this settlement, the District Court
                                                          likely ratio of expenses-to-settlement in line
   abused its discretion because it did notSSand
   could notSSdetermine what compensation the
                                                          with the cases the Rinis brief cites.
   class members would actually receive. There
   was no basis in the record to conclude that the                            D.
   settlement proceeds will be used to pay any-              The Objectors contest the propriety of the
   thing but attorney’s fees and expenses. There          expenditures. As the district court noted on
   was no basis to conclude that the class mem-           numerous occasions, the propriety of class
   bers will receive anything.

                                                      8
counsel’s litigation expenditures was not be-               although it is true that those fees will be de-
fore it and is not before us now. The Rinis                 ducted from the $25 million Remainder. The
Objectors’ references to emptying personal                  disbursement of the Remainder, however, is
cookie jars and their backhanded remarks                    not being deferred because of any delay in
about crawfish festivals notwithstanding,13 the             Class Counsel’s submission of attorney fee ap-
application for expenses is only now pending                plications; rather, it is deferred because the
before the district court. That court will not              administrative costs of the disbursement mili-
summarily award future expenses; notice to                  tate in favor of deferral until the classes settle
the parties, including an opportunity to chal-              with other defendants.14
lenge, will accompany each application. Any
emphasis on the propriety of the expenditures                   Second, the speculative accusations that
is, at this time, misplaced.                                Class Counsel’s desire to minimize future tax
                                                            liability drives the deferral provisions are poor-
                         E.                                 ly theorized. The deferral provisions allow
     The Objectors argue, on two grounds, that              settlement with peripheral defendants, against
deferred payment is unreasonable. First, they               whom the substantive claims are quite weak,
contend that the $25 million Remainder leaves               to proceed with all possible speed. If the
little for the class. Second, they speculate that           district court were to reject the deferral mech-
the Partial Settlement’s deferral provisions ex-            anism, then the plaintiffs could not settle with
ist entirely to defer class counsel’s income tax            the peripheral defendants unless such set-
liability and to remove nominal risks of litiga-            tlement coincided with settlement against a
tion involving future costs.                                principal defendant (so that the proceeds could
                                                            be disbursed simultaneously). Vitiating the de-
   It is untrue that there will be nothing left in          ferral provisions would harm plaintiffs, who
the Remainder for the class members. Class
Counsel has not yet applied for attorney fees,
                                                               14
                                                                  The Allen Objectors cite to the Class Notice
                                                            for the proposition that none of the proceeds from
   13
       In their opening brief, the Rinis Objectors          the settlement will be distributed. That notice says:
state that
                                                               Because of the aggregate amount of damages
   [f]lying back and forth across the country 500              that Plaintiff’s Settlement Counsel assert were
   times, attending crawfish festivals and attempt-            suffered by Settlement Class Members, it is not
   ing to charge injured class members nearly                  economically feasible to distribute the Gross
   $60,000 for the purchase of computer equip-                 Settlement Fund to Settlement Class members
   ment, all contribute to the perception that class           at this time. Plaintiff’s Settlement Counsel
   counsel is succumbing to the temptation to use              anticipate that such distributions will occur
   the sheer catastrophic size of the instant action           with additional recoveries against the
   as their own personal cookie jar.                           remaining Defendants in the Actions.

The travel expenses are in fact well documented,            (Emphasis added.) The Allen Objectors are self-
and the reference to the crawfish festival during the       evidently incorrect. The notice explicitly says that
fairness hearing was used as a means of ref-                the proceeds will be distributed in association with
erencing the date of the mediation session and was          future settlements, not that they will not be
not advanced as a reimbursable expense.                     distributed at all.

                                                        9
would forfeit potential sources of recovery and          liability, they were unable to “get on with their
would harm defendants, who would have to                 lives” because of their “toxic” association with
defend themselves needlessly in court when               the Enron debacle. The release allowed them
there exist viable settlement opportunities.             to merge with other firms because those firms
                                                         no longer feared Enron liability. The releases
                      F.                                 were therefore the sine qua non of the
   The Objectors contest the scope of the legal          settlement.
release. The settlement releases AWSC and
the Foreign Member Firms, and any past, pres-               The Allen Objectors contest the release in
ent, or future successors in interest, from any          light of the district court’s failure to order dis-
subsequent Enron liability. The release pro-             covery to determine whether valid claims exist
visions are worded extremely carefully be-               against successor firms. They criticize the
cause, as the record reveals, they were the              court for accepting the claims about limited
most important element of the partial settle-            prospects for recovery against successors on
ment. It bears repeating that no provision of            face, but offer no evidence that refutes this
the Partial Settlement releases Andersen U.S.            position. They offer as precedent Nat’l Super
from any past or future liability.                       Spuds, Inc. v. New York Mercantile Exch., 660
                                                         F.2d 9, 18-20 (2d Cir. 1981), for the proposi-
   Most of the confusion on the release issue            tion that a release that forecloses claims other
centers on the meaning behind the following              than those asserted in litigation is overbroad.
passage, offered by Milberg Weiss attorney
Keith F. Park at the fairness hearing:
                                                            First, Super Spuds is from another circuit
   [I]n the bargaining process to get to the 40          and hence does not bind us. Second, and more
   million, [potential Member Firm or succes-            importantly, although the Partial Settlement
   sor liability] was a chip that was on the             does release unidentified successors from a
   table. We don’t know what it wasSSwe                  variety of claims, including those that remain
   couldn’t quantify what it was worth. We               undisclosed, the Andersen release is not
   frankly didn’t think it was worth that much           analogous to that at issue in Super Spuds.
   in terms of the effort to go after the succes-
   sor firms; but we weren’t going to get the               In that case, the release was problematic
   40 million because this money was not                 because the releasing party did not have the
   being put up, as I understand, by AWSC.               authority to make the release. The named
                                                         plaintiffs represented members of the class
The rationale for the release is straightforward.        with respect to certain contracts, but released
The prospect of recovering against the Foreign           potential defendants from potential liability as
Member Firms was slim because of the                     to others. See id. at 18.
above-cited legal obstacles: personal juris-
diction, liability, and judgment collectability.            The Representative Plaintiffs, on the other
Ordinarily, under such circumstances, those              hand, do not make a broader release than that
firms would just refuse to settle. They funded           to which they are authorized by the terms of
the AWSC settlement in this instance because,            their class representation. Moreover, the Allen
in spite of the negligible likelihood of legal           Objectors ignore footnote 7 of Super Spuds,


                                                    10
which identifies the specific circumstances of                ther discovery.16 This request was not very
the instant settlement as warranting more                     precise but, because the Allen Objectors lose
permissive treatment.15                                       on the merits, the issue is moot.

   The releases do not immunize the successor                                        B.
firms from liability for their own conduct,                      The Allen Objectors advance two related
either related or unrelated to the Enron litiga-              discovery arguments. They request discovery
tion. They immunize these firms from liability                to explore (1) the potential for securing a
insofar as that liability would have attached by              judgment against AWSC and the Foreign
virtue of their acquisition of interest in one of             Member Firms and (2) the possibility of col-
the Foreign Member Firms. The release pro-                    lusion. The district court did not abuse its dis-
visions are carefully crafted to have the same                cretion in refusing to order discovery on both
effect they would have had they been given to                 fronts.
a Foreign Member Firm before merger or
acquisition by a successor.                                      “[F]ormal discovery [is not] a necessary
                                                              ticket to the bargaining table.” In re Corru-
                       III.                                   gated Container Antitrust Litig., 643 F.2d
                        A.                                    195, 211 (5th Cir. Apr. 1981). This court, on
    The scope of discovery to be conducted in                 several occasions, has rejected precisely the
each case rests within the sound discretion of                proposition the Allen Objectors propound: that
the district court. See Cotton v. Hinton, 559                 “the settlement process is necessarily in-
F.2d 1326, 1333 (5th Cir. 1977) (citing Burns                 adequate unless informed by the process of
v. Thiokol Chem. Corp., 483 F.2d 300 (5th                     discovery.” Id. In considering whether a re-
Cir. 1973)). AWSC argues that the Allen Ob-                   jection of discovery was an abuse of discre-
jectors did not preserve the discovery error,                 tion, we consider whether Objectors’ counsel
thereby waiving it on appeal. If, however, a                  was “groping in the darkness.” See Cotton,
litigant raises an argument sufficient for the                559 F.2d at 1332.
district court to rule on it, we consider the er-
ror preserved. See New York Life Ins. Co. v.                     Generally speaking, a settlement should
Brown, 84 F.3d 137, 141 n.4 (5th Cir. 1996).                  stand or fall on the adequacy of its terms. See
In their September 24 objections, the Allen                   Corrugated Container, 643 F.2d at 211. The
Objectors requested, albeit in a footnote, fur-               overriding theme of our caselaw is that formal
                                                              discovery is not necessary as long as (1) the
   15
                                                              interests of the class are not prejudiced by the
      Footnote 7 excepts the situation in which a             settlement negotiations and (2) there are sub-
settlement releases defendants from class members             stantial factual bases on which to premise
subsequently asserting claims relying on a legal
theory different from that relied on in the class
action complaint but relying on the same set of
                                                                 16
facts. It goes on to distinguish the facts before that              That footnote stated, “The Objecting Class
court from such a situation. See Super Spuds, 660             Members request that the Court permit them to
F.2d at 18 n.7. The Andersen settlement grants                conduct discovery relating to the conduct of the
releases only for claims within the set of those              negotiations and the settlement terms to determine
arising out of the facts asserted in the Consolidated         whether their interests and those of other class
Complaint.                                                    members have been adequately represented.”

                                                         11
settlement.                                               explored the possibility that the settlement was
                                                          the product of collusion.18 That accusation has
    The Objectors’ first discovery-related argu-          never, at any point in the record, been
ment relates to the district court’s failure to           advanced with the slightest factual substantia-
order full discovery into the true financial              tion. Moreover, Green oversaw the court-or-
condition of AWSC and the Foreign Member                  dered mediation, holding four separate meet-
Firms. First, the record shows that Plaintiffs’           ings at which the parties hammered out vari-
Counsel undertook a massive analysis of the               ous settlement terms. There is no reason to
circumstances surrounding Defendants’ poten-              believe that the Regents of the University of
tial liability.17 Second, and more importantly,           California, the court-selected lead plaintiff in
the financial condition of the firms was beside           Newby and the public body disclosing the set-
the point.                                                tlement, has engaged in anything other than
                                                          what the district court described as “highly
    As the district court discussed at length, the        professional administration of the litigation, as
settlement is desirable not necessarily because           have counsel for the Tittle action.”
the Foreign Member Firms were immediately
insolvent (although there are considerable in-               Finally, in arguing that the court abused its
dications that they were), but because (1) the            discretion in denying further discovery, the
court’s personal jurisdiction over them was in            Allen Objectors rely on non-binding precedent
doubt, (2) their ultimate expected liability was          from other circuits; even that precedent does
minimal or non-existent, and (3) even if the              not support the proposition the Objectors
court entered judgment against them, collect-             urge. For instance, they cite Ficalora v. Lock-
ing the judgments appeared to be an exercise              heed Cal. Co., 751 F.2d 995, 997 (9th Cir.
in legal futility. Assessing the impact of these          1985), but that case has to do with a district
variables requires legal analysis, not factual            court’s failure to analyze an intervenor’s ob-
discovery into the financial condition of the             jection entirely, not a court’s refusal to order
Settling Defendants.                                      discovery.19 See id.

   Plaintiffs’ counsel, defendants, and media-                The Objectors also rely on Girsh v. Jepson,
tor Green concurred with this analysis. The               521 F.2d 153, 157, 159-60 (3d Cir. 1975). In
district court did not abuse its discretion in            that case, however, the objector submitted
determining that discovery into the assets of             four carefully delineated interrogatories, see
the Foreign Member Firms was unnecessary in               id. at 157, rather than a generalized, open-end-
light of those figures’ status as a secondary             ed plea for more evidence along the lines of
settlement consideration.                                 that which we confront here. Moreover, the
                                                          reviewing court’s analysis in that case was
   The Objectors’ second contention is that,
by failing to order discovery, the court left un-
                                                             18
                                                                The Objectors apparently smell a fix because
                                                          of the timing of the preliminary settlement approval
   17
      For example, Milberg Weiss attorney Helen           application and the liquidation of AWSC.
Hodges, counsel to the Regents, submitted a sworn
                                                             19
statement that AWSC and many of the Foreign                    In fact, neither the word “discover” nor “dis-
Member Firms were on the brink of bankruptcy.             covery” appears in the case.

                                                     12
animated primarily by the district court’s fail-        law in November. The record contains, in ad-
ure to allow the intervenor to participate ef-          dition to the entire consolidated complaint, all
fectively in the settlement hearing. See id.            of these sworn statements, opinions of coun-
                                                        sel, objections, responses, and hearing tran-
    Finally, the Objectors rely on In re Gen.           scripts. The proposition that the district court
Motors Corp. Engine Interchange Litig., 594             made its findings based on a malnourished
F.2d 1106, 1123-25 (7th Cir. 1979). There               record borders on being frivolous or even
the court was concerned about “attor-                   absurd.
ney-shopping,” where a person unofficially
representing a plaintiff in negotiations “shops”                               A.
a settlement to appease defense counsel. See               Approval of a class action settlement may
id. at 1125.                                            be set aside on appeal only for abuse of discre-
                                                        tion. See Cotton v. Hinton, 559 F.2d 1326,
   There are no such concerns in this case.             1331 (5th Cir. 1997).20 In other words, the
Not only was there complete clarity regarding           same standard applies without regard to
who was representing the plaintiffs at the bar-         whether we are reviewing the facial reason-
gaining table, but there was a court-appointed          ableness of the settlement terms or the factual
neutral mediator who oversaw the negotia-               sufficiency of the record underlying them.
tions.
                                                                                B.
                       IV.                                  As explained in part II.A, the district court
   The Objectors contend that the record was            faithfully applied a six-factor test in determin-
factually insufficient to support the approval.         ing the appropriateness of the proposed settle-
There is significant overlap between the argu-          ment: (1) evidence that the settlement was ob-
ments they make here and those covered under            tained by fraud or collusion; (2) the complex-
our discussion in part II of whether the Partial        ity, expanse, and likely duration of the litiga-
Settlement terms are facially fair and reason-          tion; (3) the stage of the litigation and avail-
able.                                                   able discovery; (4) the probability of plaintiffs’
                                                        prevailing on the merits; (5) the range of
   We again emphasize that the record was ex-           possible recovery and certainty of damages;
ceptionally well-developed. Multiple parties            and (6) the opinions of class counsel, class
submitted sworn statements regarding the                representatives, and absent class members.
financial state and legal status of various de-         See Reed, 703 F.2d at 172; Parker, 667 F.2d
fendants. Green oversaw a protracted, in-               at 1209.
volved court-appointed mediation. The vari-
ous counsel first submitted their Stipulation of           The court considered arguments and found
Partial Settlement in August 2002.                      (1) no concrete evidence of collusion; (2) that

   The district court admitted several sets of
objections and responses, conducted a settle-              20
                                                               The litigants also quibble over whether the
ment hearing in July, and had a separate fair-          Allen Objectors preserved the error. The Allen
ness hearing in October. Only then did the              Objectors style this argument as an appeal of the
court issue findings of fact and conclusions of         district court’s credibility determination. Given
                                                        our disposition, this issue is moot.

                                                   13
the complexity, duration, and expense of the              2003), at *9-*10.22 Moreover, the district
impending litigation was, for all parties, enor-          court weighed the Andersen Affidavits against
mous; (3) that future discovery would be ex-              voluminous material submitted to the court
pensive but (4) that the plaintiffs chances for           and delivered at the fairness hearing to the
prevailing on the merits remained slim; (5) that          contrary. These materials contain the consid-
even if plaintiffs were to prevail on the merits,         ered opinion of counsel and recitation of
there are significant jurisdictional obstacles to         substantial caselaw, both of which strongly
recovery; and (6) that Class and Defense                  suggest that the Objectors’ prospects for pre-
Counsel concurred in the court’s judgment.                vailing on the merits are dubious.
There is extensive support in the record for
each proposition, particularly in the transcript              The Allen Objectors, of course, argue that
of the fairness hearing. In the remainder of              the district court should have accepted the
this discussion we address only the Objectors’            sworn Andersen Affidavits as accurate or
more specific arguments.                                  should have allowed further discovery. It cites
                                                          two cases for this proposition, and neither one
                    C.                                    is even close to being on point.23 Even assum-
  The statement of Allen Objectors Burton                 ing arguendo that the court should have cred-
Carlson and Gilbert Viets, former Andersen                ited the Andersen Affidavits, the Allen Objec-
employees, was submitted in an affidavit:                 tors still advance no response to the obstacles
                                                          involving personal jurisdiction and collectabili-
   AWSC was the entity in charge of estab-                ty, not to mention a detailed analysis of the
   lishing and enforcing accounting and pro-              other five factors used in analyzing the pro-
   fessional standards, as well as quality con-           priety of settlement.
   trol techniques and procedures of, educat-
   ing and training personnel of, and coordi-
   nating client services on a worldwide basis               22
                                                                Admittedly, WorldCom involved a pleading
   for, all of its member firms, including Ar-            deficiency: The litigant did not plead a sufficient
   thur Andersen LLP and any other affiliated             relationship between AWSC and Andersen U.S.
   entities.21                                            WorldCom does, however, strongly suggest that to
                                                          create derivative liability, Andersen U.S. must be
   First, these facts, even if true, were insuffi-        found to be some sort of “agent” of AWSC’s. See
cient to create liability for AWSC when the               WorldCom, 2003 WL 21488087, at *10.
same relationship between Andersen U.S. and
                                                             23
AWSC was adjudicated in In re WorldCom,                         In Molina v. Sewell, 983 F.2d 676,681 (5th
Inc., 2003 WL 21488087 (S.D.N.Y. June 25,                 Cir. 1993), the court objected to the use by the
                                                          Board of Immigration Appeals of off-record facts
                                                          to reach a conclusion on an immigration “entry”
                                                          claim. The court ruled that the Board abused its
                                                          discretion by relying on this off-record evidence
                                                          without even admitting sworn testimony in conflict
   21
      Certification, Proof of Membership In Set-          with it. See id. In Foreman v. Dallas County,
tlement Class and Objections of Gilbert Viets;            Tex., 193 F.3d 314, 327 (5th Cir. 1999), the cited
Certification, Proof of Membership In Settlement          text constitutes the panel’s rebuke of the district
Class and Objections of Burton W. Carlson (col-           court’s failure to credit an affidavit where there
lectively the “Andersen Affidavit”).                      was no conflicting evidence.

                                                     14
                      D.                                                            V.
   The Allen Objectors argue that the district                                      A.
court gave too much weight to the unsworn                       The Objectors assert a crudely articulated
opinions of class counsel. First, there is con-              due process objection. Failure to raise a due
siderably more material in the record than un-               process objection before a district court
sworn opinions. Newby Plaintiff Counsel Hel-                 waives that objection on appeal. See Keenan
en Hodges and the co-lead counsel for the                    v. Tejeda, 290 F.3d 252, 262 (5th Cir. 2002).
Tittle class both submitted sworn declarations               Litigants must allege constitutional violations
expressing concern over the prospect that the                with “factual detail and particularity.” Jackson
district court would grant the motions to dis-               v. Widnall, 99 F.3d 710, 716 (5th Cir. 1996)
miss.                                                        (quoting Schultea v. Wood, 47 F.3d 1427,
                                                             1430 (5th Cir. 1995) (en banc)).
    Second, the weight the district court at-
tached to the opinions of class counsel, relative                The Rinis Objectors assert that they could
to those of the Allen Objectors, was justified in            not have waived due process because it is the
light of their superior sophistication. For the              “bedrock” underlying FED. R. CIV. P. 23.
proposition that the court cannot rely so                    Parsing the Rinis Objectors’ due process ob-
heavily on the opinions of class counsel, the                jections is difficult generally, but this argument
Allen Objectors point to Holmes v. Cont’l Can                is particularly puzzling. It does not follow
Co., 706 F.2d 1144 (11th Cir. 1983).                         that, merely because considerations underlying
                                                             procedural due process protection may be
    Holmes is non-binding precedent from                     similar to those driving rule 23, a litigant
another circuit24 and is premised on a set of                cannot waive that protection (what would be
facts that differ from those presented here.                 a statutory, not a constitutional protection, no
Holmes is a class action for back-pay where                  less) by failing to make the argument in front
the amount of back pay for each class member                 of a district court.
was determined entirely by the testimony of
class counsel. See id. at 1149. That reversal                    The Rinis Objectors then argue that they
was premised on the fact that the back pay                   actually preserved the error because, although
award was “disproportionate and facially un-                 they did not explicitly invoke due process,
fair.” Id. at 1150. No such circumstances                    their objections included things such as “a lack
exist in the instant settlement.25                           of fairness, adequacy, or reasonableness to the
                                                             class. . . .” This phraseology is not particular
                                                             enough to justify a conclusion that the Rinis
   24
      The Allen Objectors also cite a variety of             Objectors preserved the error, particularly
other district court cases, only some of which were          because that phrase is also the operative lang-
reviewed by this court.                                      uage in lodging a non-constitutional objection
   25
      Of course, in one sense the settlement affects
                                                             to a settlement.
class members disproportionatelySSclass members
with more stock receive a greater windfall than do
those with less. The amount of equity belonging to
                                                                25
a particular stockholder, however, is an objective                (...continued)
index of entitlement to settlement proceeds and              does not invite the sort of subjectivity with which
                                       (continued...)        the Holmes court was concerned.

                                                        15
                       B.                                    detail. Those provisions are desirable because
   Even if we were to decide that the Rinis                  they allow the settlement proceeds to be dis-
Objectors preserved the due process error,                   bursed only after the administrative costs of
they would lose on the merits. They advance                  disbursing them become a relatively small frac-
two vague due process arguments. First, they                 tion of the payment. Deferment also promotes
argue that the Partial Set tlement violates due              speedy settlement with peripheral defendants
process because the district court cannot at                 that, given the economics of disbursement,
this time evaluate the expenses it ultimately                would otherwise be unobtainable.            The
will award the plaintiff classes. Second, they               settlement proceeds will be held only until the
urge that the deferral provisions violate due                plaintiff classes can secure a more substantial
process. Neither argument is persuasive.                     recovery through resolution of outstanding
                                                             claims, and it will then be distributed to class
                       1.                                    members.
    The Partial Settlement does not purport to
award any costs or fees, so it cannot, as the                    The rest of the Rinis Objectors’ arguments
Objectors posit, violate due process just by                 merely repeat the contentions regarding ex-
awarding costs that are impossible for the dis-              pense propriety that, for reasons discussed
trict court to evaluate. The Objectors’ argu-                above, are not properly before us today. Giv-
ment is again premised on a misunderstanding                 en these considerat ions, we decline to find a
of what was before the district court.                       due process violation merely because payment
                                                             is not immediate.
   The court approved the structure of the
Partial Settlement and did not approve any ac-                  AFFIRMED.
tual expenses or fees. Portions of the Litiga-
tion Expense Fund are to be disbursed to class
counsel only (1) after the costs have been in-
curred in the litigation; (2) the court reviews
and approves the expenses, using the essential
“Johnson” factors to evaluate reasonableness,
see Johnson v. Ga. Highway Express, Inc.,
488 F.2d 714 (5th Cir. 1974); (3) notice is
given to the parties; (4) notice is given to the
objectors; and (5) all have an opportunity to
challenge the funds sought. Such substantial
procedural protection does not violate princi-
ples of due process.26

                        2.
   In part II.E, we set the forth the justifica-
tion for the deferral provisions in considerable


   26
        Plaintiffs’ counsel have not even applied for
fees.

                                                        16
