[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
AUGUST 13, 2009
No. 08-16334
THOMAS K. KAHN
________________________
CLERK
D. C. Docket No. 05-01656-MD-T-27-TBM
In Re: CP SHIPS LTD. SECURITIES LITIGATION,
______________________________________________
GEOFFREY GOTTFRIED, individually
and on behalf of all others
similarly situated,
BILLY R. HOOD,
JAMES W. NELSON, individually
and on behalf of all others
similarly situated,
RAYMOND TYLER, on behalf of
himself and all others
similarly situated,
KIRVIN HENDRIX, et al.,
Plaintiffs-Appellees,
versus
ALLEN GERMAIN,
Interested Party-Appellant,
CP SHIPS LTD.,
RAY MILES,
IAN WEBBER,
FRANK HALLIWELL,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(August 13, 2009)
Before WILSON, KRAVITCH and ANDERSON, Circuit Judges.
ANDERSON, Circuit Judge:
Objector-Appellant Allen Germain appeals from the district court’s final
order approving the settlement of a securities class action lawsuit. Germain, a class
member in the instant action, is also a member of a class pursuing related litigation
in Canada (“Canadian Actions”). Germain is a Canadian citizen who purchased his
securities on the New York Stock Exchange (“NYSE”). Germain argues that the
district court lacked subject matter jurisdiction over the claims of foreign stock
purchasers or, in the alternative, should have declined jurisdiction as a matter of
comity. In addition, Germain argues that notice was inadequate and that the
settlement is not fair, reasonable or adequate. For the reasons set forth below, we
affirm the decision of the district court.
2
FACTS
Defendant-Appellee CP Ships Ltd. (“CP Ships” or “the Company”) is a
prominent container shipping company. It operates in several countries. The
Company is organized under the laws of Canada and headquartered in London or
Gatwick, England. Although officially headquartered in England during the class
period (January 29, 2003 to August 9, 2004) (“Class Period”), crucial headquarters
activities – including the relevant operations and personnel that were central to the
fraud (i.e. the accounting department and executive offices) – were located in
Tampa, Florida. These accounting operations were micromanaged by Defendant
Halliwell, first in his capacity as Chief Operating Officer and later in his capacity
as Chief Executive Officer. Halliwell was based in, and worked out of, the Tampa
office during the Class Period. Roughly eighty percent of CP Ships’ shares are
traded on the Toronto Stock Exchange (“TSX”) and roughly twenty percent are
traded on the NYSE.
From 1993 to 2003, CP Ships acquired nine different businesses. Each
business retained its own financial accounting system. In 2004, CP Ships instituted
a single accounting platform (“SAP”) over most of its businesses. After the SAP
implementation, the Company announced that the transition had caused it to
understate its operational costs. The Company’s stock price dropped
3
approximately 22.4 percent on the NYSE and 21.5 percent on the TSX. The
allegations in the instant case and the Canadian Actions are both based on this
occurrence.
The instant class action asserts claims for securities fraud in violation of
Section 10(b) and 20(a) of the Exchange Act. On April 5, 2007, the district court
dismissed the Complaint for failure to meet the heightened requirements for
pleading scienter under the Private Securities Litigation Reform Act of 1995
(“PSLRA”). The plaintiffs appealed to this Court. While the appeal was pending,
the parties agreed to settle for $1.3 million. This is a small fraction of the original
losses of $130 to $180 million alleged in the Complaint. The settlement class
includes the claims of some foreigners but specifically excludes the claims of
Canadian citizens who purchased CP Ships stock on the TSX.
After notices of settlement were published, an objector, Earl Downey, argued
that the settlement would prevent some members of the Canadian class from
pursuing their action in Canada. The district court ultimately issued an order
concluding that Downey lacked standing to challenge the settlement. Nonetheless,
the plaintiffs issued a supplemental notice (“Supplemental Notice”) addressing
some of his concerns. It included additional information about the Canadian
Actions, including the contact information of the counsel in the Canadian Actions.
4
There was an opportunity to opt out of the class after the Supplemental Notice.
On September 4, 2008, Appellant-Objector Allen Germain filed the instant
objections to the settlement (“Objections”). The district court overruled the
Objections and approved the settlement. Germain appealed. We first address
subject matter jurisdiction, and then address Germain’s merits challenges (i.e. to
the notice and to the fairness of the settlement).
STANDARD OF REVIEW
The existence of subject matter jurisdiction is a question of law we review de
novo. Pintando v. Miami-Dade Hous. Agency, 501 F.3d 1241, 1242 (11th Cir.
2008) (per curiam). This Court reviews a district court’s approval of a settlement
agreement for an abuse of discretion, Christo v. Padgett, 223 F.3d 1324, 1335 (11th
Cir. 2000), bearing in mind that “[p]roponents of class action settlements bear the
burden of developing a record demonstrating that the settlement distribution is fair,
reasonable and adequate,” Holmes v. Continental Can Co., 706 F.2d 1144, 1147
(11th Cir. 1983).
DISCUSSION
A. Subject Matter Jurisdiction
First, we must determine whether Germain raised a facial or factual attack on
the existence of subject matter jurisdiction. Then, we will address the question of
5
jurisdiction itself.
1. A Facial Challenge
“A litigant generally may raise a court’s lack of subject-matter jurisdiction at
any time in the same civil action, even initially at the highest appellate instance.”
Kontrick v. Ryan, 540 U.S. 443, 455, 124 S. Ct. 906, 915 (2004). However, “the
parties may admit the existence of facts which show jurisdiction, and the courts
may act judicially upon such an admission.” Ry. Co. v. Ramsey, 89 U.S. 322, 327
(1875); see also United States v. Harty, 930 F.2d 1257, 1261 (7th Cir. 1991)
(“Although challenges to subject matter jurisdiction may be raised at any time, the
appellants’ argument . . . is a factual challenge not raised before the district court.
This court has repeatedly stated that arguments raised for the first time on appeal
are waived.”) (internal citations and quotations omitted).1
Thus, there are two types of challenges to the existence of subject matter
1
Accord Meyer v. Berkshire Life Ins. Co., 372 F.3d 261, 265 (4th Cir. 2004)
(concluding that defendant-appellant could admit facts establishing that it was an ERISA
fiduciary, although that conclusion was inextricably intertwined with the district court’s subject
matter jurisdiction); Ferguson v. Neighborhood Hous. Servs. of Cleveland, Inc., 780 F.2d 549,
551 (6th Cir. 1986) (“The rule that jurisdictional facts which are admitted by the parties may
establish subject matter jurisdiction over a case is a salutory one that promotes speedy and
inexpensive litigation.”); Verzosa v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 589 F.2d 974,
977 (9th Cir. 1978) (per curiam) (“It is well settled that one may stipulate to facts from which
jurisdiction may be inferred.”) (quotation omitted).
6
jurisdiction. “A ‘facial attack’ on the complaint requires the court merely to look
and see if the plaintiff has sufficiently alleged a basis of subject matter jurisdiction,
and the allegations in his complaint are taken as true for the purposes of the
motion.” McElmurray v. Consol. Gov’t of Augusta-Richmond County, 501 F.3d
1244, 1251 (11th Cir. 2007) (internal quotations and alterations omitted). “‘Factual
attacks,’ on the other hand, challenge the existence of subject matter jurisdiction in
fact, irrespective of the pleadings, and matters outside the pleadings, such as
testimony and affidavits are considered.” Id. (internal quotations omitted). In a
factual challenge, “the district court must give the plaintiff an opportunity for
discovery and for a hearing that is appropriate to the nature of the motion to
dismiss.” Williamson v. Tucker, 645 F.2d 404, 414 (5th Cir. 1981).2
We conclude that Germain raised only a facial challenge before the district
court. Germain did not advise the district court that he intended to raise a factual
challenge. Nor did Germain request discovery or an evidentiary hearing. It is also
clear from the transcript of the Final Approval Hearing that Germain was raising
only a facial challenge to the Complaint.3 Furthermore, the district court’s opinion
2
Fifth Circuit decisions issued before October 1, 1981 are binding precedent in this
Court. Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc).
3
The following excerpt from the Final Approval Hearing is representative of the
dialogue:
7
expressly treats Germain’s attack as facial, and he did not file a motion for
reconsideration stating that he intended to mount a factual attack on the
Complaint.4
Furthermore, Germain has not at any time expressly challenged any facts
determinative of subject matter jurisdiction. As discussed below, the allegations in
the Complaint establish that substantial fraudulent activity occurred at CP Ships’
Tampa, Florida, accounting office. On appeal, Germain challenges only facts
tangential to that conclusion. There is no evidence in the record to suggest that the
district court in fact lacked subject matter jurisdiction.5 Cf. Rubin v. Buckman, 727
F.2d 71, 72-73 (3d Cir. 1984); Eisler v. Stritzler, 535 F.2d 148, 150-52 (1st Cir.
THE COURT : And, obviously, the question is why are these allegations not
sufficient to satisfy the conduct part of that conduct effects analysis that the
Berger court discusses.
[COUNSEL FOR GERMAIN ]: Yes, Your Honor. The problem with all of those
allegations that were just recited, Your Honor, is that they are not instances of
fraudulent conduct here in the U.S.
(emphasis added).
4
Even on appeal, Germain did not advise this Court of his intent to raise a factual
challenge to subject matter jurisdiction until he filed his Reply brief.
5
At oral argument, Germain made much of the fact that the headquarters of the
Company was in England and that the false or misleading statements were disseminated from
England. Those facts, however, are not inconsistent at all with the alleged facts that the
Company’s accounting department, and the relevant operations and personnel central to the
fraud, were located in Tampa. Especially in light of the fact that Germain never advised the
district court that he was making a factual challenge, the mere assertion of such facts cannot be
deemed to have put the district court on notice that Germain was making a factual challenge.
8
1976).6 We will not remand simply to allow Germain to embark on a “fishing
expedition.”
Accordingly, we turn to Germain’s facial attack on the existence of subject
matter jurisdiction. Although Germain himself, a Canadian citizen, bought his
securities on the NYSE, he not only challenges the district court’s jurisdiction over
similar plaintiffs, but also challenges the district court’s jurisdiction over other
foreign investors who purchased on the TSX.
2. The Allegations in the Complaint
“It is well recognized that the Securities Exchange Act is silent as to its
extraterritorial application.” Itoba Ltd. v. LEP Group PLC, 54 F.3d 118, 121 (2d
Cir. 1995). Thus,
[w]hen, as here, a court is confronted with transactions that on any
view are predominantly foreign, it must seek to determine whether
Congress would have wished the precious resources of United States
courts and law enforcement agencies to be devoted to them rather than
leave the problem to foreign countries.
6
In Rubin, the plaintiff revised his original allegation that he was a citizen of Hong
Kong after the district court entered summary judgment in favor of the defendant. 727 F.2d at
72-73. The record in fact indicated that the plaintiff had a United States passport. Id. at 73.
Thus, the Third Circuit remanded for the district court to conduct further discovery on the
existence of diversity jurisdiction.
In Eisler, the defendant revised his original admission that he was a citizen of Puerto Rico
after the district court entered a default judgment against him. 535 F.2d at 150-52. The
defendant filed an affidavit stating that he was a citizen of California at the time the action was
brought. Id. at 151. Thus, the First Circuit remanded for a hearing on the existence of diversity
jurisdiction.
9
Bersch v. Drexel Firestone, Inc., 519 F.2d 974, 985 (2d Cir. 1975). The provisions
and purposes of the Securities Exchange Act serve as a guide.
The courts have reached two broad conclusions with respect to transnational
securities frauds. First, “it is consistent with the statutory scheme to infer that
Congress would have wanted to redress harms perpetrated abroad which have a
substantial impact on investors or markets within the United States.” Morrison v.
Nat’l Austl. Bank Ltd., 547 F.3d 167, 171 (2d Cir. 2008) (internal quotations
omitted). Second, “Congress did not mean the United States to be used as a base
for fraudulent securities schemes even when the victims are foreigners . . . .”
Bersch, 519 F.2d at 987.
These principles have been distilled into two jurisdictional tests: the
“conduct test” and the “effects test.” S.E.C. v. Berger, 322 F.3d 187, 193 (2d Cir.
2003). The court asks: “(1) whether the wrongful conduct occurred in the United
States, and (2) whether the wrongful conduct had a substantial effect in the United
States or upon United States citizens.” Id. at 192. “Where appropriate, the two
parts of the test are applied together because an admixture or combination of the
two often gives a better picture of whether there is sufficient United States
involvement to justify the exercise of jurisdiction by an American court.”
Morrison, 547 F.3d at 171 (internal quotations omitted). We conclude that the
10
Complaint alleges ample facts sufficient to establish subject matter jurisdiction
under the “conduct test” over unnamed foreign class members who purchased on
the TSX.7 Accordingly, we need not address the “effects test.”
Jurisdiction exists under the “conduct test” when “substantial acts in
furtherance of the fraud were committed within the United States.”8 Berger, 322
F.3d at 193 (internal quotations omitted). “[T]he test is met whenever (1) the
defendant’s activities in the United States were more than merely preparatory to a
securities fraud conducted elsewhere and (2) the activities or culpable failures to
act within the United States directly caused the claimed losses.” Id. (internal
quotations omitted).
The Second Circuit’s decision in Berger is instructive. Defendant Michael
Berger formed an offshore investment company (“the Fund”) organized under the
laws of the British Virgin Islands. Id. at 188. The Fund maintained a brokerage
7
It follows, a fortiori, that the Complaint alleges sufficient facts to establish subject
matter jurisdiction over unnamed foreign class members who purchased on the NYSE.
8
The parties agreed that the Second Circuit’s articulation of the conduct test is
appropriate, and we conclude that it has been met. Therefore, we need not (and do not) decide if
a less stringent formulation would also suffice to establish subject matter jurisdiction. See, e.g.,
Kauthar SDN BHD v. Sternberg, 149 F.3d 659, 666 (7th Cir. 1998) (“[T]he Third, Eighth and
Ninth Circuits . . . to use the Fifth Circuit’s words, ‘generally require some lesser quantum of
conduct.’” (quoting Robinson v. TCI/US West Commc’n Inc., 117 F.3d 900, 906 (5th Cir.
1997))).
11
account at a broker-dealer located in Ohio and the majority of its assets and
securities were held in the United States. Id. Berger, working in New York,
created fraudulent account statements and forwarded them to the Fund
administrator in Bermuda. Id. at 189. The Fund administrator, operating in
Bermuda, relied on these fraudulent calculations to prepare and mail monthly
account statements to investors.9 Applying only the “conduct test,” the Second
Circuit held “that subject matter jurisdiction clearly exists over Berger’s actions.”
Id. at 194. “Clearly, the fraudulent scheme was masterminded and implemented by
Berger in the United States.” Id.
The circumstances of the instant case are analogous. CP Ships is a foreign
corporation. However, the Complaint alleges that the SAP conversion project
occurred in the Company’s Tampa, Florida, accounting offices, where personnel –
including key executives – knowingly caused costs to be understated. The Tampa
offices then transmitted this false data to the Company’s foreign offices, where it
was incorporated into allegedly false and misleading financial statements that were
disseminated from abroad. Accordingly, we conclude that subject matter
jurisdiction exists over CP Ships’ actions. The allegedly fraudulent scheme was
9
The Fund had approximately 280 investors, only a small percentage of whom had
addresses in the United States. Id. at 188.
12
masterminded by Halliwell and other executives operating out of Tampa, and
implemented in substantial part by those executives in Tampa.
Germain seeks to dissuade us. Under the “conduct test,” Germain asserts:
(1) the accounting activity in Tampa was merely preparatory to the creation and
dissemination of allegedly false and misleading statements outside the United
States; and (2) the creation and dissemination of allegedly false and misleading
statements outside the United States (rather than the manipulation of accounting
information in Tampa) directly caused the claimed losses. For support, Germain
relies on the Second Circuit’s decision in Morrison v. Nat’l Aust. Bank Ltd., 547
F.3d 167 (2d Cir. 2008).
In Morrison, the plaintiffs brought a class action against, inter alia, National
Australia Bank (“NAB”) and its wholly owned American subsidiary HomeSide
Lending Inc. (“HomeSide”). The plaintiffs alleged that HomeSide, a mortgage
service provider, manipulated its internal books and records and sent false numbers
from HomeSide’s Florida headquarters to NAB’s Australia headquarters – where
the allegedly false numbers were incorporated into public statements and
disseminated from Australia. Id. at 168-79, 171. The Second Circuit held:
The actions taken and the actions not taken by NAB in Australia were,
in our view, significantly more central to the fraud and more directly
responsible for the harm to investors than the manipulation of the
13
numbers in Florida.
Id. at 176. After noting that HomeSide was merely a wholly owned, operational
subsidiary, the court elaborated:
The responsibilities of NAB’s Australian corporate headquarters, on
the other hand, included overseeing operations, including those of the
subsidiaries, and reporting to shareholders and the financial
community. NAB, not HomeSide, is the publicly traded company, and
its executives – assisted by lawyers, accountants, and bankers – take
primary responsibility for the corporation’s public filings, for its
relations with investors, and for its statements to the outside world.
...
NAB’s executives possess the responsibility to present accurate
information to the investing public and to the holders of its ordinary
shares in accordance with a host of accounting, legal and regulatory
standards. When a statement or public filing fails to meet these
standards, the responsibility, as a practical matter, lies in Australia, not
Florida.
...
In other words, while HomeSide may have been the original source of
the problematic numbers, those numbers had to pass through a number
of checkpoints manned by NAB’s Australian personnel before
reaching investors. While HomeSide’s rigging of the numbers may
have contributed to the misinformation, a number of significant events
needed to occur before this misinformation caused losses to investors.
This lengthy chain of causation between what HomeSide did and the
harm to investors weighs against our exercising subject matter
jurisdiction.
Id. at 176-77. In holding that it lacked subject matter jurisdiction over foreign
14
plaintiffs who purchased on foreign exchanges, the Second Circuit placed primary
reliance on the fact that all the executives with responsibility for ensuring the
accuracy of information provided to the investing public operated out of Australia,
and all of the actions of those executives in verifying such information occurred in
Australia. In addition, the Second Circuit relied upon the “lengthy chain of
causation between the American contribution to the misstatements and the harm to
investors.” Id. at 176. In other words, “those numbers had to pass through a
number of check points manned by NAB’s Australian personnel before reaching
investors.” Id. at 176-77.
We conclude that the instant case is distinguishable. The Complaint in this
case alleges:
Defendant Halliwell was Chief Operating Officer and a Director and
member of the Executive Committee of CP Ships during the Class
Period. From May 2004 through the end of the Class Period . . .
Halliwell served as the Company’s Chief Executive Officer. . . . He
was based in, and worked out of the Company’s Tampa offices
throughout the Class Period. . . . [D]efendant Halliwell made
materially false and misleading statements contained in the
Company’s releases and/or signed the Company’s materially false and
misleading SEC filings.
Complaint at ¶ 23. The Complaint continues:
Although CP Ships is officially headquartered in England, most
headquarters operations – including the relevant operations and
personnel which were central to the misconduct in this case
15
throughout the Class Period – were located in the Company’s offices
in Tampa, Florida. The Tampa offices contained, inter alia, the
Company’s accounting department . . . and the executive offices on the
thirty-third floor which housed key CP Ships executives, including
CEO Halliwell.
Complaint at ¶ 38. In paragraph 39, the Complaint alleges that the SAP conversion
project occurred in Tampa. This Standard Accounting Platform was implemented
in January 2004, and was used in the May 11, 2004, press release to excuse or
explain the initial revelation that the financial results for 2003 had to be revised.
This press release is challenged in the Complaint as being false and misleading: it
allegedly buried and downplayed the needed revision, both understating the
significance thereof, and misleadingly stating that it did not affect the Company’s
2004 outlook. This May 11, 2004, press release, and the related statements and
SEC filings, were issued after Halliwell had been promoted from his Chief
Operating Officer position to Chief Executive Officer of the Company, and thus at
a time when Halliwell, operating out of Tampa, bore the primary responsibility not
only for the alleged manipulation of the numbers, but also for ensuring the
accuracy of financial information provided to investors. Indeed, paragraph 41 of
the Complaint alleges that “he controlled everything from Tampa.”
Thus, we conclude that the instant case is very different from Morrison.
Although the problematic numbers in Morrison may have originated in the United
16
States, all of the executives bearing responsibility to present accurate information
to the investing public, and all of their actions in supervising and verifying such
information, occurred in Australia. By contrast, in the instant case, not only did the
manipulation and falsification of the numbers occur in Florida, the executives with
responsibility for ensuring the accuracy of the accounting data operated from
Florida. The accounting department for the Company was located in Tampa, and
operated under the micromanagement of Halliwell (first in his position as Chief
Operating Officer and later as Chief Executive Officer). Although other divisions
of the Company’s headquarters were located in its official headquarters in England,
the headquarters operations “which were central to the misconduct in this case . . .
were located in the Company’s offices in Tampa.” A number of the statements
challenged in this Complaint were actually made or signed by Halliwell, who was
based in and operated out of Tampa. Although it is true that other challenged
statements were made by Defendant Miles or Defendant Webber (who operated out
of England) there is no indication in the Complaint that they performed any
verification activities with respect to ensuring the accuracy of the information
generated in Tampa. In any event, the most that could be said is that they also bore
some responsibility in that regard, in addition to the primary responsibility borne
by Halliwell in Tampa. Furthermore, in the instant case, and unlike Morrison, the
17
Complaint indicates no lengthy chain of causation between the American
contribution to the misstatements and the harm to investors. Rather, the causation
here was direct and immediate.10
Accordingly, we conclude that Morrison is distinguishable, and that the
alleged activity in Tampa represents substantial acts in furtherance of the fraud
which directly caused the claimed losses.11 We conclude that the district court
properly exercised subject matter jurisdiction over the claims of foreign
10
We note that, in cases decided before Morrison, the Second Circuit had expressly
rejected the argument that, although the actual manipulation and falsification of the numbers
occurred in the United States, “the inaccurate monthly account statements [were] prepared and
mailed to investors by the Fund administrator in Bermuda, [and they] constitute[d] the heart of
the fraud.” Berger, 322 F.3d at 193; see also id. at 193-95. Accord Itoba Ltd. v. LEP Group
PLC, 54 F.3d 118, 124 (2d Cir. 1995) (“[W]e hold that the situs of preparations for SEC filings
should not be determinative of jurisdictional questions. Otherwise, the protection afforded by the
Securities Exchange Act could be circumvented simply by preparing SEC filings outside the
United States.”).
11
As noted above, see supra note 8, this case has been litigated by agreement of the
parties pursuant to the Second Circuit’s articulation of the conduct test. Because we conclude
that the Second Circuit’s articulation of the test has been met in this case, we need not decide if
the less stringent formulation of the test (as utilized in the Third, Eighth and Ninth Circuits)
would also suffice to establish subject matter jurisdiction. Moreover, the recent Morrison case in
the Second Circuit may represent a somewhat more stringent application of the conduct test than
was indicated in previous Second Circuit cases. Again, because we conclude that the facts in the
instant case also satisfy the Morrison application of the Second Circuit test, we need not (and do
not) decide whether we should adopt the Morrison application of the test. In other words, we
need not decide whether to adopt the Morrison decision’s emphasis on the location of the
activities performed in ensuring the accuracy of financial information to be provided to the
public, and that decision’s consequent discounting of the significance of the location of the actual
falsification of the relevant numbers. Because the facts alleged in the instant case satisfy even
the very stringent application of the conduct test articulated in Morrison, we need not decide
whether the Morrison opinion itself correctly denied subject matter jurisdiction notwithstanding
the fact that the false numbers at issue there were actually created in Florida.
18
purchasers.12
B. The Merits: Germain’s Objections
Having established that the district court properly exercised subject matter
jurisdiction, we turn to the merits.13 First, we will address the adequacy of notice to
the class. Then, we will turn to the adequacy of the settlement itself.
1. Notice
Federal Rule of Civil Procedure 23(e)(1)(B) requires the court to provide
“direct notice in a reasonable manner to all class members who would be bound by
the [proposed settlement].” Notice must be “reasonably calculated, under all the
circumstances, to apprise interested parties of the pendency of the action and afford
12
With respect to Germain himself, the district court’s exercise of subject matter
jurisdiction is bolstered by the fact that he purchased his securities on the NYSE. Although
Germain may not have standing to object on behalf of foreigners who purchased on the TSX, we
nevertheless address that issue because of our obligation to examine our jurisdiction sua sponte.
We note however that the record suggests that there are not many of such foreigners.
13
Germain also argues that we should abstain from exercising jurisdiction as a
matter of comity. We review a district court’s decision to deny abstention based on international
comity for abuse of discretion. Belize Telecom, Ltd. v. Gov’t of Belize, 528 F.3d 1298, 1303
(11th Cir. 2008). This Court weighs three factors in determining whether to abstain: “(1)
international comity; (2) fairness to litigants; and (3) efficient use of scarce judicial resources.”
Belize, 528 F.3d at 1305.
First, with respect to principles of comity, we note that “courts regularly permit parallel
proceedings in an American court and a foreign court.” Turner Entm’t v. Degeto Film, 25 F.3d
1512, 1521 (11th Cir. 1994). Second, as discussed below, the settlement is fair, reasonable and
adequate. Finally, the American courts have invested substantial judicial resources in this
lawsuit, and the resources invested by the Canadian courts will be unaffected with respect to opt-
outs and Canadian citizens who purchased on the TSX. Accordingly, we conclude that the
district court did not abuse its discretion.
19
them an opportunity to present their objections.” Mullane v. Cent. Hanover Bank
& Trust Co., 339 U.S. 306, 314, 70 S. Ct. 652, 657 (1950). Germain argues, in
essence, that notice did not reasonably apprise class members of their rights with
respect to the Canadian Actions. This argument is without merit. The
Supplemental Notice expressly informs class members of the Canadian Actions,
provides contact information for further inquiries, and states that failure to opt out
of the present settlement might preclude participation in the Canadian Actions.
2. The Settlement
The district court reviews a class action settlement to determine whether it is
fair, reasonable and adequate. See Bennett v. Behring Corp., 737 F.2d 982, 986
(11th Cir. 1984). The court considers these relevant factors:
(1) the likelihood of success at trial; (2) the range of possible recovery;
(3) the point on or below the range of possible recovery at which a
settlement is fair, adequate and reasonable; (4) the complexity,
expense and duration of litigation; (5) the substance and amount of
opposition to the settlement; and (6) the stage of proceedings at which
the settlement was achieved
Id. at 986. Germain alleges essentially that the district court erred in approving the
settlement because foreign class members have potential for a greater recovery in
the Canadian Actions. Germain makes no attempt to argue that the settlement is
unfair for reasons outside the existence of the Canadian Actions. Thus, our
20
consideration is limited to this single factor. We observe that notice adequately
informed class members of the pending Canadian Actions. They were provided
with the necessary information to pursue further inquiries. Any class member
wishing to pursue the Canadian Actions could opt out of the instant settlement.
Recovery in the Canadian action remains speculative, and, finally, there is no
allegation that the instant recovery is otherwise unfair. Accordingly, we discern no
abuse of discretion in the district court’s approval of the settlement. Cf. In re
Corrugated Container Antitrust Litig., 643 F.2d 195, 222 (11th Cir. 1981) (“We
agree with the district court that releases from state claims are generally reasonable
and the objectors have not pointed to any extraordinary factors dictating different
treatment of the state-claim releases here.”).
CONCLUSION
For the foregoing reasons, we conclude that the district court properly
exercised subject matter jurisdiction over the claims of foreign purchasers. On the
merits, Germain’s objections are easily dismissed.14 Accordingly, the decision of
the district court is
AFFIRMED.
14
All arguments not explicitly addressed are rejected without need for further
discussion.
21