ACCESS NOW, INC, et. al, )
It is the role of the Attorney General to enforce the ADA “in the public interest” and to ensure that alleged violations are remedied. Moreover, private enforcement actions are authorized by Title III of the ADA. The Department of Justice has only once before (in Access Now, Inc. v. The May Dep’t Stores, Co., C.A. 00-148-CIV-MORENO) objected to a voluntary settlement of ADA claims between private litigants. However, this settlement so favors Carnival, and so limits future ADA enforcement actions on behalf of persons with disabilities, that the United States must object to its approval.
II. BACKGROUND AND PROCEDURAL HISTORY
The original Carnival complaint, filed in August 2000, alleged that then-defendant Cunard Limited violated Title III of the ADA due to the “existence of barriers to accessibility” on both the QE2 and the Caronia – two ships operated by Cunard, who is, in turn, owned by Carnival. See Complaint ¶ 10 (filed Aug. 28, 2000) (Docket #1). The complaint sought injunctive relief only on behalf of two named plaintiffs -- Access Now and Edward Resnick. Since then, the case has had several procedural twists, including multiple amendments to the complaint, so that the operative amended complaint now covers 11 ships owned or operated by Carnival (rather than Cunard) and a class definition that includes disabled persons nationwide. See, e.g., Amended Complaint (filed Nov. 1, 2000) (Docket #14); Second Agreed Motion to Amend Complaint to Add Class Allegations (filed May 18, 2001) (Docket #40).
At the behest of the Court, the Carnival parties also entered into settlement negotiations in early 2001. These negotiations bore fruit and, in mid-April 2001, the parties filed a proposed class action settlement agreement, as well as an accompanying motion for conditional class certification. See Joint Motion to Conditionally Certify Class Action, for Fairness Hearing, a Stay, and Settlement Hearing (filed April 18, 2001) (Docket # 31); Joint Notice of Agreement in Principle/Stipulation (filed Feb. 6, 2001) (Docket #25). However, at a status conference a few weeks later, the Court dismissed the motion for conditional class certification (and accompanying settlement agreement) without prejudice based on the conditional class aspect of the parties’ agreement. See Order Denying Motion to Amend Complaint and Order Denying Motion for Class Certification (filed May 2, 2001) (Docket #35). Thereafter, on May 18, the parties filed their renewed motion for class certification and a revised class action settlement agreement. See Joint Motion for Class Certification, a Fairness Hearing, a Stay, and Settlement Approval (filed May 18, 2001) (Docket # 41). The revised class action settlement agreement was attached to the Joint Motion and designated a as “Exhibit 1.” See Joint Motion, Ex. 1 [hereinafter “Carnival Agreement”]. Other than deleting the “conditional” aspect of the previous agreement, the substance of the revised Carnival agreement does not materially deviate from the terms of the original agreement. In this Joint Motion, the parties sought certification of a class consisting of:
all persons who have been or will qualify as having a “disability,” as that term is defined by 42 U.S.C. § 12102(2), and who have been or will be a guest on or otherwise have been or will be adversely affected by the design or construction of or the policies, practices, or procedures relating to ticket sales, physical accessibility, or the provision of auxiliary aides and services for the following [15 Carnival cruise ships].
Carnival Agreement ¶ 1.1. (This class definition remained unchanged from the class proposed by the parties in the original Carnival settlement agreement.)
Accompanying this renewed motion for class certification was a proposed class notice. See [Proposed] Notice of Class Certification, Proposed Settlement, and Fairness Hearing (lodged May 18, 2001). The Carnival parties proposed that the class notice be distributed by: (i) mailing a copy of the settlement agreement and notice to each member of Access Now; (ii) publishing a copy of the notice in the Paralyzed Veterans of America’s magazine (published under the name PN magazine), New Mobility magazine, and the newsletter of the National Federation for the Blind (published under the name Braille Monitor); and (iii) posting a copy of the notice on the Access-Able.com web site. See Carnival Joint Motion, [Proposed] Order Granting Conditional Class Certification, Setting Hearing to Consider Approval of Settlement, and Staying Further Proceedings at 2-3.
Shortly thereafter, the district court granted the parties’ pending motions for class certification and for a fairness hearing. See Order Granting Joint Motion for Class Certification and Setting Hearing to Consider Approval of Settlement (filed May 29, 2001) (Docket #47) [hereinafter “Class Order”]. In this brief Order, the Court held that the proposed class satisfied the requirements of Fed. R. Civ. P. 23(a) and 23(b). Id. at 3.1 The Court also scheduled a settlement hearing for September 18, 2001. Id.2 Finally, the Court approved the parties’ proposed class notice and distribution scheme. Id. at 4; see also Notice of Class Certification, Proposed Settlement, and Fairness Hearing (filed May 29, 2001) (Docket # 48) [hereinafter “Class Notice”]. Objections to the Carnival agreement must be filed no later than 30 days prior to the settlement hearing. (i.e. - August 24, 2001). See Class Notice at 4-5.
A. The Terms of the Carnival Agreement Are Neither Fair, Adequate, Nor Reasonable
to All Class Members and the Agreement Should Not Receive Judicial Approval
Access Now and Carnival, as proponents of the class settlement, bear the burden of demonstrating that the Carnival Agreement represents a fair and reasonable resolution of class members’ discrimination claims. See, e.g., In re General Motors Corp. Pick-Up Fuel Tank Products Liability Litigation, 55 F.3d 768, 785 (3rd Cir. 1995), cert. denied, 516 U.S. 824 (1995); Holmes v. Continental Can Co., 706 F.2d 1144, 1147 (11th Cir. 1983). As discussed below, the Carnival Agreement is so procedurally flawed that neither party can satisfy this burden. With problems ranging from an overbroad class definition that exceeds the scope of the Amended Complaint, to an overly expansive release provision that purports to release all future state and federal disability claims in perpetuity, the Agreement is simply too flawed to be deemed fair to all class members. The Court must, therefore, reject the settlement agreement.
1. Standard of Review: The Court Has A Heavy Duty to Ensure the Fairness of a Negotiated Class Action Settlement Agreement
While Rule 23(e) mandates judicial approval of negotiated class action settlement agreements, the rules do not provide any standards for such approval. As a consequence, determining the propriety of a settlement is committed to the sound discretion of the district court. See, e.g., Sterling v. Stewart, 158 F.3d 1199, 1201 (11th Cir. 1998); Bennett v. Behring Corp., 737 F.2d 982, 986 (11th Cir. 1984).
Although judicial discretion to approve a settlement is broad, it is not, however, without limits. In particular, the Eleventh Circuit has cautioned that “the [class action] settlement process is more susceptible than adversarial adjudications to certain types of abuse.” Pettway v. American Cast Iron Pipe Co., 576 F.2d 1157, 1214 (5th Cir. 1978), cert. denied, 439 U.S. 1115 (1979).3 As a result, the Court has a “heavy duty to ensure that any agreement is ‘fair, adequate, and reasonable.’” Piambino v. Bailey, 757 F.2d 1112, 1139 (11th Cir. 1985) (internal citation omitted), cert. denied, 476 U.S. 1169 (1986); see also Holmes, 706 F.2d at 1147; United States v. City of Hialeah, 899 F. Supp. 603, 606 (S.D. Fla. 1994), aff’d, 140 F.3d 968 (11th Cir. 1998); accord Grunin v. Int’l House of Pancakes, 513 F.2d 114, 123 (8th Cir.) (“Under Rule 23(e) the district court acts as a fiduciary who must serve as a guardian of the rights of absent class members . . . [T]he court cannot accept a settlement that has not been shown to be fair, reasonable, and adequate.”), cert. denied, 423 U.S. 864 (1975).4
When assessing the propriety of a class action settlement agreement, the court’s discretion is also limited in two other respects. First, the court cannot sanction a proposed settlement that is either collusive or contrary to public policy. See, e.g., United States v. City of Alexandria, 614 F.2d 1358, 1362 (5th Cir. 1980); City of Hialeah, 899 F. Supp. at 609; Shurford v. Alabama State Bd. of Educ., 897 F. Supp. 1535, 1547 (M.D. Ala. 1995). Second, the Court does not have the authority to modify the terms of a class action settlement agreement; the agreement must be approved or rejected as a whole. See, e.g., Brooks v. Georgia State Bd. of Elections, 59 F.3d 1114, 1119-20 (11th Cir. 1995); Holmes, 706 F.2d at 1160 (“Courts are not permitted to modify settlement terms or in any manner to rewrite the agreement reached by the parties.”).
2. The Carnival Agreement Is So Procedurally Flawed That Endorsement
of the Agreement Would Undermine the Legal Interests of Disabled
The Carnival Agreement suffers from several procedural deficiencies. These procedural problems include an excessively broad class definition that includes that includes claims outside the Amended Complaint which the named plaintiff has no standing to represent, as well as an overly expansive release provision that precludes class members from litigating future disability-related complaints arising under state or federal law against Carnival. Each of these areas are discussed more fully below.
The class definition is too broad and goes beyond the scope of claims raised in the amended complaint
In this case, what began as an individual ADA-based action on behalf of Access Now and one mobility-impaired plaintiff (Resnick) against Carnival regarding the physical accessibility of eleven Carnival cruise ships docked in Florida, has now blossomed in the Carnival Agreement into a global class action settlement purporting to settle every present or future disability-based discrimination claim by a nationwide class of disabled individuals against all existing Carnival-owned cruise ships (15) and an unlimited number of ships of certain classes to be built in the future. As a result, the Agreement reaches too far – both in terms of its class definition and the scope of covered claims – and should not, therefore, receive judicial approval.
The class definition set forth in the Carnival Agreement, and certified by the Court in May 2001, potentially covers every disabled individual in the country. As noted above, the Carnival class includes not only all persons with disabilities within the meaning of the ADA who have been (or will be) passengers on one of the Carnival cruise ships enumerated in the Agreement, but also all disabled individuals who “otherwise have been or will be adversely affected by the design or construction of or the policies, practices, or procedures relating to ticket sales, physical accessibility, or the provision of auxiliary aides or services[.]” See discussion supra p. 4; Carnival Agreement ¶ 1.1. This expansive class definition is procedurally problematic for two reasons.
First, the Carnival class definition purports to cover claims that are outside the scope of the Amended Complaint. This Complaint contains a single cause of action alleging that eleven Carnival cruise ships docked in Florida are in violation of the ADA due to the existence of certain enumerated physical barriers to accessibility, including: improperly installed ramps, doors, and doorways; inaccessible guest rooms and bathrooms; and inaccessible elevators and telecommunication devices that lacked the requisite accessible features and/or markings. See Amended Complaint ¶¶ 17-24. The Carnival Agreement, however, goes much further. The Agreement’s expansive class definition includes not only claims regarding physical inaccessibility of the covered cruise ships, but also claims with respect to “policies, practices, or procedures concerning ticket sales . . . or the provision of auxiliary aides and services.” In addition, the Carnival Agreement expands the scope of covered cruise ships from the eleven ships docked in Florida that were named in the Amended Complaint, to all fifteen existing Carnival cruise ships (wherever docked) and an unlimited number of as-yet unbuilt “future ships” in the Spirit and Conquest classes. See Carnival Agreement ¶¶ 1.1, 1.2. Since the Agreement goes beyond the scope of claims raised in the Amended Complaint, and these “new” claims do not share the same factual or legal predicate as the claims alleged in this Complaint, they cannot properly be made part of the settlement agreement. See National Super Spuds, Inc. v. New York Mercantile Exchange, 660 F.2d 9, 18 (2nd Cir. 1981) (“If a judgment after trial cannot extinguish claims not asserted in the class action complaint, a judgment approving a settlement in such an action should not be able to do so either.”); cf. TBK Partners, Ltd. v. Western Union Corp., 675 F.2d 456, 460-61 (2nd Cir. 1982) (holding that class action settlement agreement enjoining class members from prosecuting claims that were not part of class complaint was properly approved by district court since the released claims arose out of the identical factual predicate as the claims in the complaint).5
Second, the Agreement’s class definition not only goes beyond the claims raised in the Amended Complaint, but also includes persons (and claims) whom the named plaintiff – Resnick – has no standing to represent. It is axiomatic that Resnick, as the sole individual class representative, must have Article III standing to raise each class claim or subclaim on behalf of the class. See
., Prado-Steiman ex rel. Prado v. Bush
, 221 F.3d 1266, 1280 (11th Cir. 2000) (“[E]ach [class] claim must be analyzed separately, and a claim cannot be asserted on behalf of a class unless at least one named plaintiff has suffered the injury that gives rise to that claim.”); see also Griffin v. Dugger
, 823 F.2d 1476, 1482 (11th
Cir. 1987) (“[A]ny analysis of class certification must begin with the issue of standing.”); 1 Newberg on Class Actions
§§ 2.05 -.06 (3d ed. 1992) (representative plaintiffs must be members of the class they seek to represent and cannot acquire standing to sue by bringing action on behalf of others who suffered injury) (collecting cases). Yet the only injury-in-fact personally alleged by Resnick in the Amended Complaint concerns the physical inaccessibility of Carnival cruise ships for mobility-impaired customers such as himself. See
Amended Complaint ¶¶ 9-11. Nowhere, for example, does Resnick allege that Carnival charged him a higher price for a cruise ticket than non-disabled passengers, prevented him from boarding unless accompanied by a fully-mobile adult companion, or refused to provide him with adequate or appropriate “auxiliary aides or services.” Resnick thus properly cannot represent a class (or subclass) of individuals raising claims regarding Carnival’s “ticketing policies” or provision of “auxiliary aides or services.” As Chief Justice Burger cautioned in the context of a class action by a farmworkers’ union:
A named plaintiff cannot acquire standing to sue by bringing an action on behalf of others who suffered injury which would have afforded them standing had they been named plaintiffs; it bears repeating that a person cannot predicate standing on an injury which he does not share. Standing cannot be acquired through the back door of a class action.
Allee v. Medrano
, 416 U.S. 802, 828-29 (1974) (Burger, C.J., concurring in part and dissenting in part). Thus, because Resnick has no standing to represent the expansive class set forth in the Carnival
Agreement, the Agreement must be rejected. See Amchem Products, Inc. v. Windsor
, 521 U.S. 591, 62 22 (1997) (holding that Rule 23's class action requirements apply to negotiated class action settlement agreements, and stating that “[t]he safeguards provided by Rule 23(a) and (b) class-qualifying criteria . . . are not practical impediments - checks shorn of utility - in the settlement context.)
(b) The Agreement’s release provision is overly expansive, precluding all
disability-related discrimination actions by class members – whether
based on state or federal law – in perpetuity
In addition to these class definition problems, the Carnival
Agreement is also procedurally flawed due to its overly broad release provisions. These releases provisions are so expansive that they not only exceed the claims stated in the Carnival
complaint, but also purport to preclude any future disability-related complaints by class members against Carnival regardless of the cause of action, type of relief sought, or conduct/barrier at issue. Simply put
, the terms of this release are so one-sided in favor of Carnival that the Court could, on this basis alone, reject the Carnival
Spanning more than two pages, the Carnival Agreement's broad release provisions collectively provide that, in exchange for Carnival making modifications to its cruise ships’ accessibility as specified in the Agreement, see Carnival Agreement ¶¶ 2.1 - 2.2, class members forever release, with prejudice, any and all claims against Carnival under state or federal accessibility laws. See id. at ¶¶ 4.2 - 4.9. Of particular relevance here are two specific paragraphs addressing the scope of claims released by class members under the Agreement. First, in a paragraph entitled “Release and Covenant Not to Sue,” the Agreement provides that class members, upon entry of final judgment
shall forever release, remise, acquit, satisfy, and discharge Carnival and all other Released Persons from any and all claims that any one or more of them had, now has or in the future will or may have for injunctive relief under Title III of the ADA involving ships that are subject of this Settlement Agreement (hereinafter, collectively, the “Released Claims”).
Agreement ¶ 4.2. Shortly thereafter, in the “Related Claims” paragraph, the Agreement further defines the “Released Claims” listed above as including, but not limited to:
any and all actions, claims and causes of action arising out of or predicated upon allegations: a) that Carnival and/or any other Released Person did not comply with the ADA in violation of any federal law, Florida law, or any state law; b) that any modifications made pursuant to this Agreement comply with any and all ADA requirements; and c) of a failure to provide the proper disclosure in connection with marketing cruises of disabled persons.
Carnival Agreement ¶ 4.4.
Taken together, the claims released by these two provisions are exceedingly broad. For while paragraph 4.2 purports to release “only” present or future Title III-based ADA claims (which is itself overly broad), paragraph 4.4 casts an even wider net by purporting to preclude future claims under both the ADA and state accessibility laws. Because of their broad scope, these release provisions are procedurally improper and threaten to negatively impact the legal interests of the greater disability community.
First, public policy considerations dictate that prospective waivers of individuals’ civil rights – whether arising out of the ADA or other anti-discrimination statutes – are highly disfavored. See, e.g., Alexander v. Gardner-Denver Co., 415 U.S. 36, 51-52 (1974) (“[There can be no prospective waiver of an [individual’s] rights under Title VII.”); Adams v. Philip Morris, Inc., 67 F.3d 580, 584 (6th Cir. 1995) ("A [party] cannot purchase a license to discriminate"); Uherek v. Houston Light and Power Co., 997 F. Supp. 789, 792 (S.D. Tex. 1998) (“A party may validly waive [Title VII] claims that exist on the day she signs a release, but not future claims.”); see also Rivera-Flores v. Bristol-Myers Squibb Caribbean, 112 F.3d 9, 10-12 (1st Cir. 1997) (holding past ADA claims subject to waiver so long as release was knowing, voluntary, and “given in exchange for additional benefit”). Thus, because the Carnival Agreement’s release provisions purported waiver of all future state or federal accessibility claims by class members violates public policy, the Agreement must be rejected. See, e.g., City of Alexandria, 614 F.2d at 1362 (noting judicial duty to ensure class action settlement agreements are neither illegal nor contrary to public policy); Shurford, 897 F. Supp. at 1547 (same).
Moreover, by extinguishing all future federal and state disability-related actions by class members, the Agreement’s release provisions preclude recovery of compensatory or punitive damages by persons living in states permitting such relief. Indeed, because many states provide substantial monetary remedies for violations of state accessibility laws or regulations, some class members may find litigating their discrimination claims more advantageous under state law than under Title III of the ADA where only equitable relief is available for private actions.6
Third, the release would bar future litigation by class members against Carnival concerning accessibility issues or architectural barriers left unaddressed by the Agreement. Operation of the release provision would, for example, thus preclude such future hypothetical actions as: (1) an ADA-based injunction action by a disabled passenger who uses a wheelchair claiming that he could not board the M/V Carnival Destiny at the Port of Miami because ramps and gangways for embarking and disembarking the ship were not accessible; (2) a class action for injunctive and monetary relief under both the ADA and state law by disabled individuals alleging that Carnival discriminated against blind and mobility-impaired passengers by requiring them to travel with ticketed “able-bodied” companions; (3) a complaint for monetary relief under California’s Unruh Civil Rights Act by an HIV positive passenger alleging that Carnival discriminated against him by refusing to treat him in the M/V Elation’s on-board medical facility and by ordering him to disembark at the next port of call after Los Angeles. In short, this release provision guarantees Carnival absolute immunity from any and all future disability-related litigation by class members — whether arising under federal or state law, whether for damages or injunctive relief, and whether or not the future claims concern accessibility issues addressed by the Agreement. As with other aspects of the Agreement, this open-ended release provision thus provides a windfall to Carnival at the expense of future legal claims of the larger disability community.
Finally, the overly expansive scope of the release provision could also compromise the Department of Justice’s independent authority to enforce the ADA. The Department of Justice is the federal agency with primary responsibility for enforcing Title III of the ADA and its implementing regulations against public accommodations, including cruise ships. See 42 U.S.C. §§ 12181 - 12189; 28 C.F.R. pt. 36 (1994); see also Stevens v. Premier Cruise Lines, Inc., 215 F.3d 1237, 1241-43 (11th Cir. 2000) (holding that Title III of the ADA applies to foreign-flag cruise ships operating in United States waters). In keeping with this responsibility, the Department has the statutory authority to conduct compliance reviews of entities covered by Title III, investigate alleged violations, and, when necessary and appropriate, commence a civil action in district court for equitable relief, civil penalties, and/or monetary damages for the aggrieved party or parties. 42 U.S.C. § 12188(b). Because the Agreement precludes class members from raising “any claims” in the future against any of the existing or future ships covered by the Agreement -- including, potentially, the filing of ADA-based complaints with the Department -- the Department’s ability to fully and effectively enforce the ADA against Carnival would be undermined.
Taken together, the procedural deficiencies underlying the Carnival Agreement’s broad release provision – particularly the release of all future state or federal disability discrimination actions - thus counsel against judicial endorsement of this Agreement. See, e.g., National Super Spuds, 660 F.2d at 18-19 (reversing district court’s approval of class settlement agreement with over broad release provision that provided for uncompensated release of unliquidated potato futures contracts that were not encompassed within the class complaint concerning liquidated contracts); Petruzzi’s, Inc. v. Darling-Delaware Co., Inc., 880 F. Supp. 292, 299-301 (M.D. Pa. 1995) (rejecting class settlement requiring release of all class members’ claims when only one-half of class received any direct economic benefit from agreement).
B. The Class Notice Is Constitutionally Defective and Will Reach Only A Minuscule
Portion of Class Members
Agreement must also be rejected because the class notice is defective in terms of both its content and method of distribution. With a distribution scheme primarily relying on notice published in three limited-circulation magazines
, only a tiny faction of the potentially millions of class members will be adequately informed of the Carnival
Agreement prior to the settlement hearing. Such a limited distribution scheme satisfies neither due process nor Rule 23's statutory notice requirements. In addition, the content of the class notice is constitutionally suspect because nowhere does the notice describe either the substantive terms of the Agreement or the breadth of released claims. Given the critical role of class notice in the approval of class action settlements under Rule 23(e), these deficiencies – whether considered individually or collectively – preclude judicial endorsement of the Carnival