Devlin, Robert v. Scardelletti, Robert, et al. (06/10/2002)

By: E.J. Schultz, Medill News Service

Questions presented

Does an unnamed member of a class action, whose motion to intervene was denied as untimely, have standing to appeal an order approving the settlement of a class action?

Brief

In late 1991, the Transportation Communications International Union selected newees to oversee their pension plan.

Six years later, theees were in federal court, seeking in a class action filed in Maryland, to rescind a cost of living adjustment (COLA) the previous plan administrators had enacted just before they were replaced. The newees had determined that the 1991 adjustment, which called for benefit increases of 10 percent every three years, would soon bankrupt the plan.

The pension plan covered all eligible officers and employees of the 85,000-member railroad and service industry workers union.

Theees named Robert Devlin as a class representative of the unions retirees. Devlin, who retired as the unions international vice president in 1983, had actively campaigned against theees move to rescind the COLA. But he refused the offer.

The New Jersey native was instead pursuing a separate age discrimination claim against the union in a federal court in New York. As part of that claim, Devlin and four others argued against the removal of the COLA.

In April of 1999, the 2nd Circuit Court of Appeals dismissed Devlins claim. The court affirmed the New York District Courts finding that the federal court in Maryland was addressing the same issue.

In Maryland, theees were nearing a settlement with retiree representatives calling for the COLA to be replaced by other benefits.

Unhappy with the settlement and deterred in his New York pursuit, Devlin sought to intervene in the Maryland case on Sept. 10, 1999.

Two months later at a fairness hearing, the federal court in Maryland denied Devlins motion to intervene, calling it ""absolutely untimely."" They then approved the settlement, effectively deeming the COLA null and void.

Devlin appealed, claiming his intervention was erroneously denied, and citing federal procedure rules that say, ""upon timely application, anyone may be permitted to intervene in an action.""

On July 27, 2001, the 4th Circuit Court of Appeals affirmed, agreeing that Devlins application for intervention was ""absolutely untimely.""

""Devlin was aware of his interest in the litigation from the outset of the case, as demonstrated by his early and continuous opposition to the removal of the COLA benefits. Nevertheless, instead of participating in the Maryland litigation, he pursued a separate suit in New York and even declined the role of named class representative in the Maryland suit,"" wrote Judge Karen J. Williams for the court.

The appeals court went on to address the right of a non-named member of a class action to appeal a decision even after they are denied intervention. The court said the issue involves balancing fair representation and efficiency.

The appeals court recognized that individual members of a class might not have the resources or incentive to closely monitor the attorneys representing his or her interest. But they also said class action suits would become unmanageable if each member could individually decide to appeal.

The court then applied this balance to Devlin: ""We therefore hold that a non-named class member who unsuccessfully moves for intervention may still have standing to appeal the substance of the class settlement if he was wrongfully denied intervention. But, where, as here, intervention was properly denied, the non-named class member does not have standing to contest the merits of the class settlement on appeal.""

A separate issue the court addressed was Devlins right to attack the settlement using another district court. After Devlin was denied intervention, he had returned to New York asking that court to amend its earlier dismissal of his case. He claimed the court in Maryland had ""erred in its settlement refusing to allow him to intervene.""

Theees had responded by asking the court in Maryland to enjoin Devlin from taking action in any other court. That court granted the injunction, agreeing with theees that Devlins purpose was to ""interfere with the settlement.""

The 4th Circuit remanded the injunction back to the district court for further consideration. In a recent ruling, the appeals court has accepted the district courts explanation, according toee lawyers.

On Dec. 10, 2001, the U.S. Supreme Court granted certiorari in the case.

Federal courts have split on the issue of appeal rights of an unnamed member of a class action, according to Bill Hanrahan, who represents Robert Scardelletti and three otherees of the union pension plan. Hanrahan said the 4th Circuit became the sixth circuit to rule that unnamed members have limited appeal rights. But three other circuits have ruled that unnamed members do have appeal rights, according to Hanrahan.

The class action rules require that the class representative act on behalf of the entire class, Hanrahan said.

""We dont want to have everybody and his brother filing appeals if they dont like the outcome,"" Hanrahan said, adding that Devlin had long been aware of the case but ""decided as a tactical matter not to intervene.""

""We couldnt intervene until we knew what the proposed settlement would be,"" Devlin said. He added that well before his formal motion, he had sent several letters to the federal court in Maryland notifying them of his intention to intervene.

""But the court just sat on them,"" he said.