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White v. General Motors Corporation11/3/2000
At the June 18, 1999 hearing, GMC rigorously objected to the inclusion of the cash option letter, arguing its inclusion had never been agreed to by the parties, and its inclusion was contrary to the terms of the settlement agreement. GMC argued Class counsel's attempt to include the cash option letter, contrary to the terms of the settlement, was an attempt to financially gain from the agreement with CRG whereby CRG agreed to reimburse Class counsel $1.55 million in conjunction with its role as the market maker.
The "Implementation" Order
On June 21, 1999, the trial court signed an "Order Relating to Class Counsel's Motion and Amended Motion Relating to Administration and/or Implementation of Settlement," (June 21, 1999 order) which forms the basis of GMC's current appeal. The June 21, 1999 order, among other things: (1) approved the format, text, and quality of the envelope to be used for mailing the final settlement notice and proof of claim form; (2) approved the inclusion of a business reply envelope in the mail-out as well as the format and text of the business reply envelope; (3) approved the inclusion of the cash option letter in the mail-out along with the final notice and proof of claim form; (4) directed that Experian, as the lowest bidder, would be responsible for printing and mailing the final notice and related material, for processing proofs of claims and issuing original certificates, and processing requests for and issuing third party certificates; and (5) ordered "GM/Polk" to immediately provide Experian with the necessary database, subject to certain conditions.
In the June 21, 1999 order and in "Findings of Fact" signed the same day, the trial court concluded it had the power to order the relief sought by Class Counsel because the issues addressed in Class Counsel's motion "all clearly relate to the administration and implementation of the Settlement," and because the settlement agreement specifically provided that "the form and content of [this] Notice shall be subject to Court review and approval[...]." (Emphasis in original.)
AUTHORITY OF THE TRIAL COURT TO ORDER INCLUSION OF CASH OPTION LETTER IN FINAL NOTICE MAIL-OUT
In assignment of error number one, GMC contends the trial court erred in ordering GMC to send the cash option letter with the final notice to class members because:
(1) the order improperly changed the parties' settlement agreement, which specifies what the notice is required to do and precludes the cash option letter;
(2) the cash option letter conflicts with the requirements in the settlement agreement for the issuance and exchange of settlement certificates, and the trial court's order rewrites the settlement agreement to accommodate the terms of the cash option letter;
(3) the order is an improper substantive modification of the final judgment that approved the settlement without a cash option letter;
(4) the parties had agreed in their March 22, 1999 compromise that GMC did not have to send the cash option letter; and
(5) the record shows the trial court made no attempt to analyze the propriety of the cash option letter or Class Counsel's self-dealing and conflicts of interest, and the record does not support a finding that the order was justified.
Applicable Legal Principles
The authority of the trial court to order the inclusion of the cash option letter in the final notice mail-out is governed by the terms of the settlement agreement itself and Louisiana laws regarding compromise and class action settlements.
Under Section VII.7 of the settlement agreement, the final notice to be mailed to se
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