Ferguson v. Meadows 9/12/02 CA1/4

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State: California

Court: 1st District Court of Appeal 1st District Court of Appeal

Docket No: A094750

Case Date: 12/19/2002

Preview:Filed 9/12/02 Ferguson v. Meadows CA1/4

NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION FOUR BRENT FERGUSON et al., Plaintiffs and Appellants, v. MICHAEL D. MEADOWS et al., Defendants and Respondents. A094750, A095475 (San Francisco County Super. Ct. No. 996044)

Appellants1 were personal injury plaintiffs and objectors to a proposed class action settlement in the In re Unocal Refinery Litigation (Super. Ct. Contra Costa County, No. C94-04141) stemming from a chemical release at the Unocal refinery in Rodeo. Shortly after securing awards in an arbitration proceeding established to allocate the settlement fund, appellants sued their retained counsel, respondents Michael D. Meadows and his firm, Casper, Meadows & Schwartz (collectively, Casper Meadows) as well as class counsel, Lieff Cabraser, Heimann & Bernstein (Lieff Cabraser). We affirm the summary judgment granted in favor of Casper Meadows. I. BACKGROUND A. Appellants Retain Casper Meadows In August 1994, a processing tower at the Unocal refinery in Rodeo developed a leak, resulting in release into the atmosphere of the toxic chemical compound

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Appellants herein are Brent Ferguson and Florencia Prieto. 1

known as "Catacarb." Thousands of residents from neighboring communities were affected. Casper Meadows represented numerous clients on an individual basis. Appellants were among those who signed contingent fee contracts with the firm. Casper Meadows specially designed the contract for potential clients with claims against Unocal arising from the Catacarb disaster. The agreement contained several references to the possibility that the client's claim might be part of a class action. The contingent fee was 33-1/3 percent if claims were resolved before trial or arbitration, and before trial setting, pretrial and settlement conferences, but 40 percent if claims were resolved after one of those events. As well, the agreement treated the issue of conflicts of interest: "Attorneys may represent other persons damaged by the releases mentioned herein and Client understands that such multiple representation has advantages, but also may give rise to potential conflicts of interest of which Client is hereby advised. Each person's recovery may depend on factors such as age, severity of injury, extent of medical treatment, amount and duration of exposure, pre-existing health condition. Despite such potential conflicts of interest Client believes that the advantages of multiple representation outweigh any potential disadvantage and hereby waives any and all conflicts of interest that may arise from such multiple representation. Client acknowledges that Client has had the opportunity to discuss the question of conflict of interest with Attorneys and that this waiver is made after all questions have been fully answered." Both appellants read this provision. The agreement also noted that in the event of an aggregate lump sum settlement, there would be conflicts between clients represented by Casper Meadows as to the size of their share, and that clients could consult with or hire another attorney in such event. B. The Underlying Litigation Pursuant to an August 1995 pretrial order, the trial court consolidated nine related actions, including the action filed by Casper Meadow on behalf of appellants 2

and multiple other individual plaintiffs, and designated them "complex litigation." The court vested primary responsibility for managing the litigation with a steering committee of plaintiffs' counsel, with Lieff Cabraser appointed as co-lead class counsel and Casper Meadows appointed as co-lead direct action counsel, and both firms also appointed as co-liaison counsel. In February 1996, Lieff Cabraser submitted the first amended model complaint identifying four potential classes: personal injury, property damage, medical monitoring and punitive damages. Four months later, class counsel and Unocal entered into a stipulation and proposed order concerning class certification, subject to court approval. They agreed that plaintiffs would withdraw allegations of personal injury and property damage and the parties would stipulate to certification of a mandatory, non-opt-out punitive damages class, defined as all persons entitled to compensatory damages as a result of the "Catacarb" release. The court approved the stipulation after a hearing attended by Michael Meadows. Casper Meadows did not object to the stipulated mandatory class. The order required publication of notice of withdrawal of the personal injury and property damage class allegations but not of certification of the mandatory punitive damages class, nor were appellants informed of this development. Meanwhile, discovery was conducted, with over 100 depositions taken. The court appointed Judge Daniel H. Weinstein (ret.) as settlement master and referee who oversaw extensive settlement negotiations. Negotiations culminated in April 1997, with a tentative $80 million global settlement of the consolidated class and individual actions. The settlement called for dismissal of the punitive damage allegations. By letter of April 24, 1997, Casper Meadows apprised its clients of the aggregate amount of the proposed settlement. On May 29, Michael Meadows authorized class counsel to dismiss all his clients' claims with prejudice in exchange for the right to participate in allocation of the $80 million settlement. He did not seek client authorization to dismiss. 3

The court set the motion to dismiss the punitive damages class claims for hearing on June 27, 1997; ordered class counsel to send notice of the hearing by first class mail by June 6 to all known members of the punitive damages class and to publish notice; and directed class counsel to file the motion with supporting papers by June 12. Opposition was due June 20. By letter of June 10, Casper Meadows advised its clients of the status of the allocation plan as well as the motion to dismiss the mandatory punitive damages class action. Ferguson was dissatisfied with the settlement and the prospect of dismissal of the punitive damages class. Meadows explained it was not in Ferguson's best interest to be excluded from the settlement. He refused to object on Ferguson's behalf, indicated Ferguson could get another opinion but that it would be difficult to find a competent attorney willing to take on his individual case. Appellants tried, but could not locate, substitute counsel. Thus they prepared and filed their written objections, in pro. per.2 Ferguson attended the hearing and personally spoke against the settlement and dismissal. The court approved the settlement and dismissed the class action, remarking that it was satisfied that the concerns expressed by objectors had been fully considered by class counsel and that the settlement appeared to be fair and reasonable for all parties involved. Appellants followed Casper Meadows' advice to participate in the global settlement rather than appealing dismissal of the punitive damages claims. The final plan of allocation established procedures for claimants to apply for individual awards of compensation. The plan provided that each award would "be based on the merits,

The objections stated: "It is apparent that unfair, inadequate, and unreasonable compensatory awards will come from the $80 million settlement fund, therefor, I ask to seek only a punitive award from the $80 million fund. [

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