Pallister v. Blue Cross & Blue Shield of Montana, Inc.

May 24 2016

DA 15-0458
Case Number: DA 15-0458

IN THE SUPREME COURT OF THE STATE OF MONTANA
2016 MT 121

In re BLUE CROSS AND BLUE SHIELD OF
MONTANA, INC., n/k/a CARING FOR
MONTANANS, INC., and MONTANA
COMPREHENSIVE HEALTH ASSOCIATION
INSURANCE LITIGATION.

__________________________________

TYSON PALLISTER, KEVIN BUDD,
KENNETH WALSH, MARTIN T. MANGAN,
SHIRLEY MANGAN, RAY LEE,
and LAURA FORTUNE,

Objectors and Appellants,

v.

BLUE CROSS AND BLUE SHIELD OF
MONTANA, INC., n/k/a CARING FOR
MONTANANS, INC., and MONTANA
COMPREHENSIVE HEALTH ASSOCIATION,

Defendants and Appellees.

APPEAL FROM: District Court of the Second Judicial District,
In and For the County of Butte-Silver Bow, Cause No. DV 08-553
Honorable Brad Newman, Presiding Judge

COUNSEL OF RECORD:

For Appellants:

James G. Hunt, Hunt Law Firm, Helena, Montana

Jory C. Ruggiero, Domenic A. Cossi, Western Justices Associates,
Bozeman, Montana
 For Appellant Laura Fortune:

Lawrence A. Anderson, Attorney at Law, P.C., Great Falls, Montana

For Appellee Montana Comprehensive Health Association:

Jacqueline T. Lenmark, Keller, Reynolds, Drake, Johnson
& Gillespie, P.C., Helena, Montana

For Appellee Caring for Montanans, Inc.:

Michael F. McMahon, Stefan T. Wall, McMahon, Wall & Hubley, PLLC,
Helena, Montana

For Class Representatives:

Robert G. McCarthy, McCarthy Law, P.C., Butte, Montana

Submitted on Briefs: April 6, 2016

Decided: May 24, 2016

Filed:

__________________________________________
Clerk

2
Justice Patricia Cotter delivered the Opinion of the Court.

¶1 This case arises out of claims asserted by multiple persons against Blue Cross and

Blue Shield of Montana, now known as Caring for Montanans, Inc. (CFM) and Montana

Comprehensive Health Association (MCHA) (collectively “Insurers”). The District

Court certified a class of claimants for settlement purposes only. The District Court then

held a fairness hearing on a proposed settlement agreement and approved the settlement.

Several class members objected to the settlement (Objectors) and appealed to this Court,

arguing they should be allowed to conduct further discovery to ascertain the fairness of

the settlement agreement. We agreed with Objectors and remanded the case to the

District Court for further discovery and a second fairness hearing. The District Court

allowed further discovery, held a second fairness hearing, and determined that the same

settlement agreement was fair, reasonable, and adequate. The Objectors again appeal.

We affirm.

ISSUES

¶2 We restate the issues on appeal as follows:

¶3 Has Objector Laura Fortune waived her right on appeal to object to the settlement
agreement?

¶4 Does Objector Kevin Budd have standing to object to the settlement agreement?

¶5 Did the District Court abuse its discretion by certifying this matter as a class
action?

¶6 Did the District Court abuse its discretion by approving the settlement agreement?

¶7 Did the District Court err by allowing individual settlements?

3
 FACTUAL AND PROCEDURAL BACKGROUND

¶8 This case arises out of claims asserted by multiple persons against CFM and

MCHA. The claimants assert that while they were insured by CFM or MCHA, they

submitted claims that the insurers denied based upon exclusions contained in their health

insurance policies. These exclusions generally provided that the insurer would not pay

for health care costs of the injured insureds if the insureds received, or were entitled to

receive, benefits from any automobile liability policy. These exclusions were

subsequently disapproved by the Montana Commissioner of Insurance, see Blue Cross &

Blue Shield of Mont. v. Mont. State Auditor (State Auditor), 2009 MT 318, 352 Mont.

423, 218 P.3d 475, and the insureds sought the previously-denied benefits. We affirmed

the disapproval on appeal. State Auditor, ¶ 20.

¶9 Following our ruling in State Auditor, the Second Judicial District Court certified

a class of claimants for settlement purposes only and appointed class counsel. A

settlement was negotiated, which the District Court approved after conducting a

settlement fairness hearing. Several members of the class objected to the settlement and

appealed to this Court, claiming the District Court erred in denying their motion to

conduct discovery into the fairness of the settlement. We held in Pallister v. Blue Cross

& Blue Shield of Mont., Inc. (Pallister I), 2012 MT 198, 366 Mont. 175, 285 P.3d 562

that the District Court should have allowed the Objectors to conduct discovery into how

the class members were identified and how the class counsel’s fee was negotiated. We

concluded that this information was necessary for the District Court to evaluate whether

the proposed settlement agreement was “fair, reasonable and adequate.” Pallister I, ¶ 34.

4
We therefore vacated the District Court’s approval of the settlement agreement, and

reversed and remanded for discovery, a second fairness hearing, and an evaluation of the

totality of the evidence to determine if the proposed settlement agreement was fair,

reasonable and adequate. Pallister I, ¶ 36. We instructed the District Court to evaluate

the fairness of the proposed settlement by analyzing the factors identified in Jones v. GN

Netcom, Inc. (In re Bluetooth Headset Prods. Liab. Litig.), 654 F.3d 935, 946 (9th Cir.

2011) as well as any other factors the District Court deemed critical to the case. Pallister

I, ¶¶ 38-39.

¶10 After allowing for further discovery, the District Court held a second fairness

hearing on March 3, 2015, during which the parties presented arguments and submitted

additional documents. On July 7, 2015, the District Court issued Findings of Fact,

Conclusions of Law, and a Final Order and Judgment. The District Court analyzed the

same proposed settlement agreement according to the Jones factors, found the agreement

to be fair, reasonable, and adequate, and approved the settlement. The Objectors appeal

from that order, and again are challenging the settlement agreement, as well as the

certification of the class and the allowance of individual settlements.

STANDARD OF REVIEW

¶11 A district court “is in the best position to consider the most fair and efficient

procedure for conducting any given litigation,” so we review for abuse of discretion a

district court’s decision whether to certify a class. Sieglock v. Burlington Northern &

Santa Fe Ry. Co., 2003 MT 355, ¶ 8, 319 Mont. 8, 81 P.3d 495 (citing McDonald v.

Washington, 261 Mont. 392, 399, 862 P.2d 1150, 1154 (1993)). “However, [t]o the

5
extent that the ruling on a Rule 23 requirement is supported by a finding of fact, that

finding, like any other finding of fact, is reviewed under the clearly erroneous standard.

And to the extent that the ruling involves an issue of law, review is de novo.” Jacobsen

v. Allstate Ins. Co., 2013 MT 244, ¶ 25, 371 Mont. 393, 310 P.3d 452 (citing Mattson v.

Mont. Power Co., 2012 MT 318, ¶ 17, 368 Mont. 1, 291 P.3d 1209) (internal quotations

omitted).

¶12 Rule 23 of the Montana Rules of Civil Procedure is identical to the federal Rule

23, so “federal authority is instructive.” Jacobsen, ¶ 28. We review for abuse of

discretion a district court’s decision to approve a class action settlement. Dunleavy v.

Nadler (In re Mego Fin. Corp. Sec. Litig.), 213 F.3d 454, 458 (9th Cir. 2000). We will

affirm if the district court “applies the proper legal standard and [its] findings of fact are

not clearly erroneous.” Dunleavy, 213 F.3d at 458.

DISCUSSION

¶13 Has Objector Laura Fortune waived her right on appeal to object to the settlement
agreement?

¶14 Objectors Tyson Pallister, Kevin Budd, Kenneth Walsh, Martin Mangan, Shirley

Mangan, and Ray Lee filed a joint brief on appeal, and Objector Laura Fortune (Fortune)

filed her own brief. In their response briefs, the Insurers responded to the issues raised by

all the Objectors and separately raised the issue of Fortune’s standing to object to the

settlement agreement.

¶15 The issue of Fortune’s standing as a putative class member to object to the

settlement agreement was raised in Pallister I. We said then that

6
 The District Court determined that she lacked standing to object to the
fairness of the Settlement Agreement because her excluded claims had been
paid in full by BCBSMT. Fortune disputes this assertion. Because we are
remanding for further discovery, Fortune shall be given the opportunity to
present evidence to the District Court that will establish whether or not she
has been paid for her excluded claims and whether she therefore has
standing.

Pallister I, ¶ 42. The Insurers now argue that Fortune does not have standing to

challenge the settlement agreement because she did not participate in the second fairness

hearing and she did not avail herself of the opportunity provided by this Court to present

to the District Court on remand evidence to establish her standing. Although the

Insurers’ argument is couched as a standing argument, it is in effect a waiver argument

and we will address it as such.

¶16 The Insurers urge this Court not to consider Fortune’s objections to the settlement

agreement because Fortune “did not participate in the district court proceedings after

remand.” The Insurers maintain that although Fortune joined the Objectors’ combined

brief filed prior to the second fairness hearing, the fact that Fortune and her attorneys did

not appear at or object during the fairness hearing means she has now waived her right to

object to the settlement agreement. Federal courts that have addressed similar situations

have reached different conclusions regarding an unnamed non-intervening class

member’s right to object to a settlement agreement. The Tenth Circuit held that a class

member who filed written objections to a settlement agreement was not entitled to appeal

approval of the settlement because he did not object during the fairness hearing, which

was a requirement imposed by the district court in the notice to class members of the

proposed settlement. Weinman v. Fid. Capital Appreciation Fund (In re Integra Realty

7
Res., Inc.), 354 F.3d 1246, 1257-58 (10th Cir. 2004). The Sixth Circuit came to the

opposite conclusion and held that a class member who filed written objections to a

settlement but did not appear at the fairness hearing was nonetheless entitled to appeal the

district court’s approval of the settlement. Fidel v. Farley, 534 F.3d 508, 511-13 (6th Cir.

2008). The Insurers urge us to adopt the reasoning of the Tenth Circuit; Fortune urges us

to adopt the reasoning of the Sixth Circuit. However, we need not decide this issue now

because the Insurers’ other waiver argument is dispositive.

¶17 The Insurers secondarily argue that Fortune cannot object to the settlement

agreement now because the question of her standing to do so was previously raised and

decided, she was given an opportunity to supplement the record and seek a different

ruling from the District Court, and she declined to do so. The Insurers are correct. The

District Court already determined that Fortune lacked standing to object to the settlement

agreement. Pallister I, ¶ 42. This Court then gave Fortune the opportunity to conduct

further discovery and present additional evidence to establish her standing. Pallister I,

¶ 42. On remand, Fortune failed to conduct further discovery and she presented no new

evidence of standing to the District Court. In her reply brief on appeal, Fortune points to

evidence of excluded claims sufficient to confer standing that was in the record when this

Court decided Pallister I. That evidence was in the record before the District Court, and

the District Court found it insufficient. Since Fortune did not avail herself of the

opportunity to supplement that evidence, the District Court’s ruling regarding her

standing remains uncontested. As a result, Fortune has waived her right on appeal to

reassert her objections to the settlement agreement. Siebken v. Voderberg, 2015 MT 296,

8
¶ 19, 381 Mont. 256, 359 P.3d 1073 (“We will not reverse a district court when it was not

given an opportunity to correct the error alleged.”). We therefore decline to address

arguments raised only in her brief.

¶18 Does Objector Kevin Budd have standing to object to the settlement agreement?

¶19 The Insurers argue on appeal that Objector Budd does not have standing to object

to the settlement agreement because he is not a class member and is not eligible to

recover under the settlement agreement. Objectors do not respond to this argument. The

District Court already determined that Budd has no standing to object to the settlement

agreement because he is not a class member. We did not overrule that finding on

remand, Pallister I, ¶ 82 (Morris, J., dissenting), and we will not disturb that finding now.

¶20 Did the District Court abuse its discretion by certifying this matter as a class
action?

¶21 The four prerequisites to a class action are numerosity, commonality, typicality,

and adequacy of representation. M. R. Civ. P. 23(a). Objectors contend that the District

Court certified the class in violation of two of the requirements of Rule 23(a), typicality

and adequacy of representation. We address these two requirements in turn.

¶22 We have explained before that

To satisfy the typicality element, a plaintiff must demonstrate that
the claims or defenses of the representative parties are typical of the claims
or defenses of the class. The typicality requirement is designed to ensure
that the interests of the named plaintiffs align with the interests of the class
members, the rationale being that a named plaintiff who vigorously pursues
his or her own interests will necessarily advance the interests of the class. A
named plaintiff’s claim is typical if it stems from the same event, practice,
or course of conduct that forms the basis of the class claims and is based
upon the same legal or remedial theory.

9
Chipman v. Northwest Healthcare Corp., 2012 MT 242, ¶ 53, 366 Mont. 450, 288 P.3d

193 (internal quotations and citations omitted). Objectors allege that typicality is not

satisfied in this case because the class representatives have non-ERISA claims that have

different legal and remedial bases than the ERISA claims held by most class members.

¶23 The District Court reviewed the requirements for typicality and the facts in this

case and determined that typicality was satisfied. We agree. In Montana, “the typicality

requirement is not demanding.” Diaz v. Blue Cross & Blue Shield, 2011 MT 322, ¶ 35,

363 Mont. 151, 267 P.3d 756. The requirement serves to “prevent[] plaintiffs from

bringing a class action against defendants with whom they have not had any dealings.”

Diaz, ¶ 35. In a settlement class, typicality “requires proof that the interests of the class

representative and the class are commonly held for purposes of receiving similar or

overlapping benefits from a settlement.” 2 Newberg & Conte, Newberg on Class Actions

§ 11.28, 11-58 (3d ed. 1992). “This is a much simpler proposition than showing

typicality in an ongoing litigation context, wherein all elements of liability and damages

must be analyzed to determine common questions affecting both the class representative

and the class.” Newberg & Conte, § 11.28, at 11-58.

¶24 In this case, the class members (including the class representatives and Objectors)

alleged that the Insurers applied an unlawful policy exclusion to their medical bill claims

when other liability coverage was available to pay those claims, and that benefits would

have been paid to the class members but for the application of the exclusion. All class

members, including the class representatives, clearly have had dealings with the

defendants, Diaz, ¶ 35, and the class representatives’ claims “stem[] from the same event,

10
practice, or course of conduct that forms the basis of the class claims,” Chipman, ¶ 53.

Although some class members were part of a plan governed by ERISA and some class

members were not, the remedy for the ERISA plan members is the same as the remedy

for non-ERISA plan members: recovery of the benefit denied. This remedy is in fact the

relief offered to all class members by the settlement agreement, so the class

representatives and the class members have common interests for purposes of receiving

similar benefits from a settlement. Newberg & Conte, § 11.28, at 11-58. The class

members have satisfied the typicality requirement by establishing that the claims of the

class representatives are typical of the claims of the class as a whole, and the interests of

the class representatives and the non-named class members are sufficiently aligned.

Chipman, ¶ 53. The District Court did not err in concluding that this requirement of Rule

23(a) was satisfied.

¶25 The fourth requirement of Rule 23(a), adequacy of representation, “allows

certification only where the representative parties will fairly and adequately protect the

interests of the class. This element requires that the named representative’s attorney be

qualified and competent and able to conduct the litigation and that the named

representative’s interests not be antagonistic to the interests of the class.” Diaz, ¶ 38

(citing M. R. Civ. P. 23(a)(4)) (internal quotations omitted). No party has challenged the

qualifications, competency, or abilities of the class representatives’ attorney, so the

requirement is satisfied if the class representatives’ interests are not antagonistic to the

interests of the rest of the class.

11
¶26 Objectors contend the adequacy of representation requirement is not met because

the denied benefits to which the class representatives claim entitlement may be subsumed

by the deductibles, co-pays, and co-insurance specified in their particular plans.

According to Objectors, “[p]ayment of funds to claimants like the class representatives

reduces class funds available to claimants who have legitimate damages far in excess of

their deductibles,” which “puts the interests of the class representatives at odds with other

class members.”1 But offsets due to deductibles, co-pays, or co-insurance are litigation

defenses, which the Insurers waived in settlement, so in light of the settlement agreement,

the District Court and this Court need not determine how these defenses would have fared

with respect to the class representatives in litigation. Rather, we concern ourselves with

whether the interests of the class representatives with regard to the settlement agreement

are “antagonistic to the interests of the class.” Diaz, ¶ 38 (internal quotations omitted).

We are satisfied they are not.

¶27 All class members, including the class representatives, have claims for wrongful

denial of benefits, and all class members are entitled under the settlement agreement to a

predetermined percentage of those benefits as a remedy. The percentages range from

1
Objectors purport to challenge the standing of the class representatives to be involved in
the litigation, based upon the same allegations that the deductible, co-pay, and co-insurance
applicable under their policies subsume the denied benefits to which they claim entitlement. In
other words, the Insurers’ waiver of these defenses conferred standing on the class
representatives. The class representatives dispute this allegation and point to evidence in the
record that establishes that the value of their denied benefits exceeds the setoffs. The District
Court made no findings on this subject because the issue was not squarely presented to it.
Regardless, this is not truly a standing dispute because Objectors raise the point as another
challenge to the “adequacy of representation” requirement. As a result, we address the argument
about deductibles, co-pays, and co-insurance in the context of the Rule 23(a) requirements, and
not as a separate standing argument.
12
45%–75% of the benefits denied, depending upon the insurer, the date of the claim, and

whether the claim was submitted or unsubmitted. In addition to the remedy to which all

class members are entitled, the class representatives will each receive a relatively small

fee ($2,500) for their service as representatives. This small additional fee does not cause

the interests of the class representatives and the non-named class members to diverge

because it is a set fee that does not reduce the non-named class members’ potential

recovery. Furthermore, contrary to Objectors’ assertions, this is not a limited fund class

settlement, so recovery by a class representative does not reduce the amount of settlement

funds available to other class members. Rather, any benefits the class representatives

were able to negotiate in the settlement agreement apply to all class members equally, so

by pursuing their own interests, the class representatives simultaneously pursued the

interests of the other class members. The class members have satisfied the adequacy of

representation requirement by establishing that the class representatives will “fairly and

adequately protect the interests of the class.” M. R. Civ. P. 23(a)(4); Diaz, ¶ 38. The

District Court did not err in concluding that this requirement of Rule 23(a) was satisfied.

Because both typicality and adequacy of representation are present in this class, the

District Court did not abuse its discretion in certifying the class for settlement purposes.

¶28 Did the District Court abuse its discretion by approving the settlement agreement?

¶29 Objectors contend the District Court’s approval of the settlement agreement was

an abuse of discretion for three reasons. First, Objectors contend the District Court

approved the settlement without sufficient information to determine the fairness of the

settlement. Second, they object to CFM’s method of identifying class members. Third,

13
they allege collusion between the Insurers and class counsel, resulting in an unfair

settlement for the Objectors. We address each objection in turn.

¶30 When we remanded this case to the District Court, we instructed the District Court

to allow Objectors to conduct discovery into the fairness of the settlement agreement.

Pallister I, ¶ 43. We also instructed the District Court to evaluate the fairness of the

proposed settlement by analyzing the factors identified in Jones. Pallister I, ¶¶ 38-39.

The District Court did so, and found the settlement agreement to be fair, reasonable, and

adequate. Objectors now contend that class counsel did not conduct sufficient discovery

between the time of the remand in Pallister I and the time of the second fairness hearing.

But it was the Objectors and their counsel and not the class members and class counsel

who sought the right to conduct further discovery. Nothing in Pallister I indicated that

the District Court should require class counsel to conduct further discovery sufficient to

satisfy the Objectors.

¶31 In fact, this Court was very clear about what discovery the District Court should

allow before reconsidering the fairness of the settlement agreement:

On remand, the court shall allow the [O]bjectors the opportunity to
conduct limited discovery. They should be allowed to explore how the
class was chosen, how the medical coding was conducted, and how and
why the particular compromises of claims were determined. They should
also be allowed to explore how the Settlement Agreement and class
counsel’s fee were negotiated, and any other area of inquiry the [O]bjectors
and the court conclude is relevant. The District Court may set parameters
on how and under what time frame this will be accomplished. Upon
completion of this discovery and assuming the negotiation of the same or a
different settlement, the District Court shall then conduct another fairness
hearing and make a determination of whether the proposed settlement is
“fair, reasonable and adequate.”

14
Pallister I, ¶ 36. We said that in a settlement only class action, there needs to be

“sufficient information provided to the class representatives, any objectors, and the

district court to enable the parties and the court to reach a well-informed decision of

whether the proposed settlement is fair, adequate and reasonable.” Pallister I, ¶ 35. The

District Court found the information provided by all the parties was sufficient to make

that fairness determination. We see no reason to disturb that finding, especially when the

Objectors did not discover the information they sought leave to discover but rather

complain that class counsel did not discover it for them.

¶32 The Objectors are also dissatisfied with the way in which the class was defined by

CFM. CFM maintains that the best way to identify class members is to search for three

codes used in two of its databases to indicate the application of a disapproved exclusion.

Objectors contend that allowing CFM to self-report in this way creates a conflict of

interest that is “obvious,” and that CFM’s explanation of why this is the best method for

identifying class members is a “smoke and mirrors explanation.” Objectors also point out

that many other searches of CFM’s adjuster notes and claims correspondence are possible

but were not performed. However, Objectors have offered no evidence that CFM’s

method is not the best method for identifying class members, nor have they argued or

proven that a different search would identify class members not identified by CFM’s

searches. The District Court found the database searches to be adequate, especially

considering that the settlement agreement allows both known and unknown class

members to submit claims. Since the Objectors imply wrongdoing and ill intent on the

part of CFM and class counsel but offer no supporting evidence or superior alternatives,

15
we hold that the District Court did not abuse its discretion in finding the CFM method of

searching for class members to be adequate. See, e.g., In re Marriage of Tummarello,

2012 MT 18, ¶ 38, 363 Mont. 387, 270 P.3d 28 (“The court did not abuse its discretion in

declining to award Phil a deduction for which he provided no evidence.); State v. Dunfee,

2005 MT 147, ¶¶ 17-18, 327 Mont. 335, 114 P.3d 217 (“Other than his speculation,

Dunfee has presented no evidence that the juror held any ill will toward him. Under

these circumstances, the District Court did not abuse its discretion when it denied

Dunfee’s motion for a new trial on the ground of juror misconduct.”).

¶33 Finally, the Objectors contend that CFM and class counsel abandoned the

adversarial process and colluded in reaching a settlement agreement that benefits class

counsel at the expense of the class members and Objectors. The settlement agreement

provides that class counsel will receive a flat fee of $600,000 for submitted claims and a

30% contingency fee on unsubmitted claims. Objectors point to the flat fee on

submitted claims as evidence of collusion because that fee structure does not incentivize

class counsel to maximize recovery for the class. Objectors also contend that class

counsel is incentivized “to put more class members into the ‘unsubmitted’ group of

claims where class members receive less money and [class counsel] receives more.”

Objectors again provide speculation but no evidence to support their accusations.

¶34 The District Court evaluated the allegation of collusion under the factors

articulated in Jones and concluded “there is no evidence to show that class counsel and

the [I]nsurers’ counsel colluded in reaching the Settlement Agreement.” The District

Court noted that it “takes seriously the allegations leveled by Objectors that the

16
Settlement Agreement was the product of collusion,” but “Objectors ask the Court to

rely on supposition” and “[t]he Court instead looks at a record that strongly supports the

fairness of the voluntary resolution reached by the Parties.” We agree. Objectors have

offered no evidence of collusion between counsel for the Insurers and class counsel, and

the flat fee for submitted claims and the contingency fee for unsubmitted claims are not

objectively disproportionate or indicative of an improper motive. The District Court did

not abuse its discretion in finding the settlement agreement was not the product of

collusion.

¶35 As noted in ¶ 29, Objectors allege the District Court abused its discretion in

approving the settlement agreement in three particulars, all of which we addressed above.

Notably, Objectors do not contend that the District Court wrongly limited their ability to

conduct discovery or wrongly refused to consider their tendered evidence. It can thus be

presumed that the Objectors were given the opportunity to undertake the discovery that

we determined they should be allowed to conduct, Pallister I, ¶ 36, which was the sole

justification for our remand in Pallister I. Absent any new or additional evidence

adduced by Objectors to support their position, there is simply no basis upon which to

disturb the District Court’s re-approval of the settlement agreement.

¶36 Did the District Court err by allowing individual settlements?

¶37 The District Court granted class members leave to settle their claims against CFM

individually, according to the terms of the settlement agreement. Following the order

allowing individual settlements, 745 individual claims were settled as of July 6, 2015.

Objectors argue that the allowance of individual settlements constitutes a circumvention

17
of this Court’s remand in Pallister I—which was designed to elicit more information with

which to determine the fairness of the settlement agreement—and is contrary to the

policy underlying Rule 23. We agree with the District Court that Rule 23(e) has no

bearing on individual settlements.

¶38 By its own terms, Rule 23(e) applies only to settlement of class claims: “[t]he

claims, issues, or defenses of a certified class may be settled . . . with the court’s

approval.” In contrast, Rule 23(e) “does not bar non-approved settlements with

individual members which have no effect upon the rights of others. . . . [I]t is only the

settlement of the class action itself without court approval that [Rule] 23(e) prohibits.”

Weight Watchers of Philadelphia, Inc. v. Weight Watchers International, Inc., 455 F.2d

770, 773, 775 (2d Cir. 1972). Thus, the District Court did not err in allowing individual

settlements.

CONCLUSION

¶39 For the foregoing reasons, we affirm the District Court’s November 26, 2014

Order permitting individual settlements and the District Court’s July 7, 2015 Findings of

Fact, Conclusions of Law, and Final Order and Judgment.

/S/ PATRICIA COTTER

We Concur:

/S/ MIKE McGRATH
/S/ LAURIE McKINNON
/S/ BETH BAKER
/S/ JIM RICE

18