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Judge Wants More Information on Duke Settlement

The parties in the Duke University 403(b) suit have a homework assignment from the judge in the case.

It was only about a week ago that the terms of the settlement in the case of Clark v. Duke University were announced – a $10,650,000 cash settlement and a series of changes in plan administration. The suit was one of the first in the August 2016 flurry of filings by the law firm of Schlichter, Bogard & Denton.

Judge Catherine C. Eagles of the U.S. District Court for the Middle District of North Carolina noted that, “while class counsel have adequately addressed many of the factors relevant to the Court’s decision to preliminarily approve the proposed settlement, they did not substantively address the adequacy of the proposed settlement,” going on to explain that, “Before ruling, the Court requires additional information.”

Judge Eagles said that she didn’t require “additional information about process or notice, in light of the information provided by class counsel in their motion papers.” What she was looking for was more on the adequacy of the proposed settlement, in that “class counsel offer only their own conclusory opinions.”

Adequacy Expectations

She did offer some ideas as to her expectations, noting that the Fourth Circuit suggests courts consider several factors when evaluating adequacy, including:

  • the relative strength of the plaintiffs’ case on the merit;

  • the existence of any difficulties of proof or strong defenses the plaintiffs are likely to encounter if the case goes to trial;

  • the anticipated duration and expense of additional litigation; and

  • the solvency of the defendants and the likelihood of recovery on a litigated judgment.


“The parties have not provided any of this information, even in summary or preliminary form,” Judge Eagles wrote. “Class members deciding whether to object need to have some meaningful context within which to evaluate the settlement amount and the non-monetary relief, beyond advice of counsel,” she continued. “Without enough information, the degree of opposition to the settlement — a factor the Court considers as to adequacy at the final approval stage — will be difficult to weigh fairly, as both opposition and support may not have an informed basis.”


Object Shuns?

To flesh that out, she suggested that class counsel might provide:

  • some basic information about the plaintiff’s damages evidence, including the range of potential damages which the class as a whole and class members individually might ultimately recover should they prevail on one or more claims and how this compares to the negotiated settlement amounts;

  • a comparison of the non-monetary relief negotiated compared to the injunctive relief sought; and

  • an overview of the nature and extent of any obstacles to recovery.


Judge Eagles said she was also “inclined to order the parties to make available all motion papers and supplemental briefing related to the settlement approval on the settlement website mentioned in the proposed class notice, so class members may readily have access to this information,” and said that the parties should indicate if they had any objection to this, and if so, why.


Judge Eagles is expecting a supplemental briefing from the parties no later than Feb. 15, 2019, “though earlier would be appreciated.” In fact, she noted that if those supplemental materials were filed by Feb. 4, “the Court will endeavor to rule on the motion for preliminary approval by February 8; otherwise it will likely late February or early March before a ruling will issue.”

The case is Clark v. Duke Univ., M.D.N.C., No. 1:16-cv-01044-CCE-LPA, 1/29/19.