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Morris v. Tate
Citation: 24 F. App'x 520Docket: No. 00-3454, 00-3455, 00-3090
Court: Court of Appeals for the Sixth Circuit; December 25, 2001; Federal Appellate Court
David A. Nelson, Circuit Judge, addresses appeals related to orders stemming from a $4.1 million settlement of a prisoner class action following a 1993 riot at the Southern Ohio Correctional Facility. In Case No. 00-3090, the district court awarded $7,500 as "incentive awards" to the two named plaintiffs, Darren Morris and Eugene Adams. In Case No. 00-3455, the challenged protective orders prevented public access to documents including claim forms submitted by class members, state responses, claim determinations, and appeals. In Case No. 00-3454, the court denied intervention requests from local agencies in Cuyahoga County aimed at collecting debts from certain class members. The ruling concludes that the settlement agreement did not authorize incentive awards, indicating the district court overstepped its authority in approving them. Additionally, the protective orders' scope lacks justification based on the record. The attempt by Cuyahoga County entities to intervene was found insufficient under Fed. R.Civ. P. 24(a), and the denial of their request is affirmed. The background details the 1993 riot as the longest and third deadliest prison uprising in U.S. history, leading to the class action seeking damages and injunctive relief for inmates whose rights were allegedly violated. The case was certified as a class action in December 1994, followed by over two years of negotiations culminating in a settlement agreement signed on January 22, 1997. This agreement established a settlement fund and outlined procedures for claims and distribution, finalized by a separate document, the "General Protocol for Claims." The district court preliminarily approved the settlement on January 30, 1997, instructing notification to class members. On March 3, 1997, class counsel requested $25,000 in incentive awards for each of the two named plaintiffs, a request opposed by the state and two class members. The district court postponed a decision on the incentive awards until after a scheduled fairness hearing on April 15, 1997. Following the hearing, the court approved a settlement on April 22, 1997, awarding $1.4 million in attorney fees and $258,613.41 in expenses, but left the incentive awards unresolved as an administrative detail. In July 1997, the court indicated that the named plaintiffs should receive incentive awards, pending a recommendation from the claims administrator regarding the amounts. The court expressed concerns about the prior request process and the lack of notice to class members before the fairness hearing. Consequently, the awards would be funded from the attorney fees and expenses rather than reducing the settlement amount for class members. Defendants appealed the incentive awards, but the appeal was dismissed as premature since no amounts had been determined. On December 29, 1999, the district court approved a recommendation to award each plaintiff $7,500, citing their crucial role in communication between class members and counsel. The court later stayed this decision pending appeal. During the consideration of the incentive awards, the individual claims process against the settlement fund began. The claims administrator was tasked with distributing claim forms that required detailed documentation from class members. The state received copies of each submission and was allowed to respond, with claimants and class counsel also receiving copies of these responses and the opportunity to reply. The claims administrator adjudicated claims using the materials in the claim files, allowing both claimants and the state to appeal decisions first to a magistrate judge and then to the district court. Concerns arose regarding the potential for extortion of successful claimants by other inmates, leading to a confidentiality measure where claimants would be identified solely by a claim number in public court filings. A key to these claim numbers was filed in camera with the court, with confidentiality being the only specific provision addressed in the General Protocol regarding such matters. In summer 1998, 1,069 claim forms were distributed, and 1,055 claims were submitted. The state responded to several claims with documents from criminal trials and prison disciplinary proceedings. The claims administrator issued determinations on December 16, 1999, filing three sets of documents with the district court: a key to claimant identities, sample forms, and a recommendation for incentive fee awards for class representatives. Individual determinations were sent to inmates and the Attorney General’s Office but not yet presented to the court. The state moved to vacate protective orders related to the claims key and incentive awards. Plaintiffs’ counsel agreed on the incentive awards but defended the protective order for the claims key, arguing for the confidentiality of claim determinations and related materials. This was discussed in a December 23, 1999 status conference. Subsequently, on January 10, 2000, the district court lifted the protective order on the incentive awards but maintained the seal on individual claim determinations for inmate safety, allowing any interested parties to seek permission from the parties or apply to the court for access to sealed records. Parties failed to reach an agreement on handling media requests, leading the state to seek reconsideration of a January 10 order. Plaintiffs opposed this motion, submitting briefs and affidavits from five inmates, each expressing fear for their safety if their claim determinations were publicly released. The affidavits highlighted concerns that other inmates could identify them through the information contained in the determinations and posed a threat if aware of their awards. In response, the district court expanded the protective order, emphasizing that the safety of inmates, witnesses, and prison personnel outweighed public interest in disclosure. Consequently, the court maintained the protective order on claim determinations and sealed all related individual claim materials. Organizations seeking access could obtain redacted copies at their own expense, subject to approval from both plaintiffs' counsel and the state. On January 24, 2000, Cuyahoga County officials filed a motion for intervention to apply class members' settlement awards to outstanding judgments for court costs and child support, which the district court denied. Cuyahoga County later appealed this denial and requested a stay on the distribution of settlement funds, which was also denied. The state raises two points for review: the district court's decision to grant incentive awards to the named plaintiffs and the sealing of claim documents. Cuyahoga County challenges the denial of intervention as of right under Fed. R. Civ. P. 24(a). The issues will be addressed in the order presented. Incentive awards for named plaintiffs in class action lawsuits have gained acceptance in various jurisdictions as a form of compensation for their contributions and associated risks. Courts, including several district courts and the Seventh and Ninth Circuits, have upheld such awards in specific cases. However, this court has not previously ruled on the legitimacy of these awards and does not express a general opinion on their appropriateness. The current issue is whether incentive awards can be granted under the specific settlement agreement between the state and plaintiffs in this case, which the court determined is not permissible. The Memorandum of Understanding outlines four key provisions regarding disbursements from the settlement fund: 1. Class members may receive compensation only if they were murdered, physically injured, or lost property during the riot, with the Magistrate able to award compensation for serious riot-related injuries outside these categories under specific conditions. 2. Paragraph 57 restricts cost payments, stating no party is liable for costs incurred by others unless explicitly stated in the Memorandum. 3. Paragraph 47 stipulates that attorneys' fees and expenses will only be paid to Class Counsel upon court approval after submission of applications. 4. Paragraph 46 specifies that any remaining funds after claim awards, fees, and expenses must be allocated to inmate programming agreed upon by both parties. In a prior appeal, the court reversed a district court's decision allowing class members to assign their awards to third parties, noting that while the Memorandum of Understanding and General Protocol did not explicitly prohibit such assignments, they also did not authorize them. The court determined that the district court exceeded its authority by altering the settlement terms, which must reflect the agreement of the parties without modification. It emphasized that under Rule 23(e), court approval is required for class action settlements, but this authority does not extend to imposing terms not agreed upon by the parties. The court highlighted that settlements should be enforced as agreed and cannot be changed by the court. The district court's attempt to classify incentive awards for class representatives as "litigation expenses" was also rejected. The original settlement agreement specified that expenses were to be reimbursed to class counsel, not as rewards for class representatives. The definition of "expenses" does not align with incentive payments, which are intended to reward representatives for their participation, rather than reimbursing costs incurred. Incentive awards given to class representatives post-service do not qualify as the "necessary price" for their services or as reimbursement for expenses. The district court based the awards on the non-pecuniary risks and leadership roles of the plaintiffs rather than any monetary expenditures. Plaintiffs' counsel highlighted the public service rendered by the representatives in mitigating the risk of riots at the Southern Ohio Correctional Facility. The court expressed skepticism about equating cash awards with traditional expense reimbursement. Plaintiffs claimed that incentive awards had been treated as expenses in past cases within the Southern District of Ohio, citing unpublished orders from two cases, but the court found no compelling reason to broaden the current settlement’s interpretation based on those cases. Additionally, the court referenced a Seventh Circuit case affirming that named plaintiffs can recover fees to incentivize their participation, but underscored that the current incentive awards must be explicitly authorized by the settlement agreement, which it concluded they were not. Regarding disputed protective orders, the state argued that they improperly broadened the confidentiality terms of the settlement agreement, invoking the First Amendment and the principle of public access to judicial records. The state also contended that the orders lacked proper evidentiary support and factual findings. In contrast, plaintiffs maintained that the court's issuance of the orders was within its discretion due to the ongoing nature of the settlement process, which typically does not adhere to public accessibility norms. The state is favored in its argument regarding public access to settlement negotiations. There is a lack of tradition for public access to such negotiations, as illustrated by *In re Cincinnati Enquirer*, where a writ to allow public access to a pre-settlement jury trial was denied. However, a distinction exists between negotiating a settlement and utilizing court resources to implement an already agreed-upon settlement. Cases like *Newman v. Graddick* and *Bank of America Nat’l Trust v. Rittenhouse* support the presumption of access to judicial records in similar contexts. The settlement in question was funded by taxpayer dollars, creating a public interest in transparency regarding its expenditure. The adjudication of claims against the settlement fund is judicial in nature, warranting accessibility of relevant records. The identities of inmates receiving funds should remain confidential, as stipulated in U 9 of the General Protocol, which prohibits identifying inmates in public filings. The district court has the discretion to redact identifying information from claims documents before their release. The court emphasized that access to court records could be restricted to prevent misuse, yet the current orders deny public access to all claim documents without an evidentiary hearing or detailed findings justifying the closure. Remand is necessary for the district court to reassess the protective orders, allowing plaintiffs to provide evidence on the potential risks of unsealing documents. Should the district court determine that certain data merits protection, it must specify what information is to be withheld and justify the nondisclosure through detailed findings. Cuyahoga County's motion to intervene as of right was denied based on Rule 24(a) of the Federal Rules of Civil Procedure. This rule allows intervention if a statute grants an unconditional right or if the applicant has a substantial interest that may be impaired without intervention, provided that existing parties do not adequately represent that interest. The court evaluated four elements for intervention, focusing on timeliness and impairment. The district court determined that Cuyahoga County's application was untimely, as it was filed after a settlement had been reached. Factors considered included the progress of the case, the purpose of the intervention, the delay in filing, potential prejudice to original parties, and any unusual circumstances. The court noted that the county's interests could be addressed through existing state procedures under O.R.C. 5120.133 and that intervention could burden the settlement process by adding complications for the administrator. Furthermore, the court found no impairment of the county's ability to protect its interests, as alternative methods were available for addressing outstanding debts. The court concluded that Cuyahoga County was aware of its interests for years but only sought to intervene at the last moment, which was insufficient justification for intervention given the advanced stage of the case. Thus, the denial of the motion was deemed not an abuse of discretion. The district court's finding that Cuyahoga County's application was untimely was upheld, making it unnecessary to evaluate the other requirements of Rule 24(a). The order denying intervention in Case No. 00-3454 is affirmed, while the order granting incentive awards in Case No. 00-3090 is reversed. Case No. 00-3455 is remanded for further proceedings consistent with this opinion. The ruling also denied intervention motions from other counties, with only Cuyahoga County appealing. An analysis of class actions from July 1, 1992, to June 30, 1994, across four districts showed varying rates of granted incentive awards, with median awards ranging from $7,500 to $17,000. Incentive awards have faced criticism for potentially fostering collusion, as named plaintiffs might favor settlements detrimental to the class. Some courts have denied such awards out of concern they might become commonplace rather than exceptional. Class counsel argue for the validity of incentive awards based on precedent from Thornton v. East Texas Motor Freight, where the court recognized the value of rewarding plaintiffs who advocate for the rights of discriminated employees. However, the context of Thornton does not necessarily support financial rewards for named plaintiffs, as all class members are similarly situated before litigation. The distinction in treatment of different groups in Thornton was based on their actions prior to litigation, not on their status as named plaintiffs, highlighting the court's recognition of the differing circumstances that warranted varying relief. The opinion in Thornton primarily supports the fair resolution made by the district court and is unaffected by the stipulation regarding the deduction of incentive awards from the $1.659 million allocated for attorney fees and expenses. The payment of these awards does not impact the remaining funds available for claims from the settlement or for class member programming. The state is entitled to enforce the agreement as originally established, without additional conditions not agreed upon by the parties. During a status conference on December 23, 1999, the district court indicated that it did not consider the materials submitted to the claims administrator to be confidential, a stance deemed correct. Additionally, Ohio Revised Code Section 5120.133 outlines a process for collecting judgments against inmates, allowing direct deductions from their accounts without further judicial action. However, the county argues that this method may be ineffective due to the confidentiality of claimant identities and the possibility that some claimants may have been released before receiving their judgments.