## Facts

- Quality Distribution, Inc. entered into a 2015 merger agreement under which Apax Partners, LLC would acquire Quality for $16 per share, subject to shareholder approval.
- After a preliminary proxy was issued, shareholder Richard Delman filed a class action against Quality and its directors/officers, alleging breaches of fiduciary duty based on allegedly missing or misleading merger-related disclosures.
- The litigation proceeded on an expedited basis and Quality issued supplemental proxy disclosures addressing the challenged topics (including aspects of the sale process and financial-advisor analyses).
- Quality’s shareholders later approved the transaction, and the merger closed.
- After closing, the parties presented a proposed “disclosure-only” settlement: the supplemental disclosures would serve as the class’s consideration, and the class would give a broad release of merger-related claims; class counsel would seek attorney’s fees based on the claimed benefit of the disclosures.
- Sean J. Griffith, a Quality shareholder and class member, objected to approval. Among other arguments, he asserted that a court must evaluate disclosure-only settlements with a searching review like the Delaware Court of Chancery’s approach in In re Trulia, Inc. Stockholder Litigation, including whether the added disclosures were actually material and whether the release was properly limited.
- The trial court stated that Trulia provided the right framework, but approved the settlement as fair and reasonable largely because the released claims were “commensurate” with the claims pleaded in the complaint, and it denied Griffith’s request for attorney’s fees as an objector.
- Griffith appealed the settlement approval and the denial of objector fees.

## Issues

1. Did the trial court abuse its discretion by approving a disclosure-only class settlement without making a meaningful evaluation of (a) whether the supplemental disclosures provided a plainly material benefit and (b) whether the settlement release was suitably limited in relation to that benefit?
2. After successfully challenging the settlement on appeal, was the objector’s request for attorney’s fees improperly denied, requiring reconsideration under a common-benefit/corporate-benefit theory?

## Decision

- The appellate court affirmed the trial court’s class certification without further discussion.
- The appellate court reversed the order approving the disclosure-only settlement because the trial court did not apply the announced standard in a way that meaningfully tested the value of the disclosures against the breadth of the release.
- The appellate court reversed the denial of Griffith’s fee request and remanded for the trial court to determine whether his objection produced a substantial benefit and, if so, what fee is reasonable.

## Legal Principles

- Florida courts may look to Delaware corporate law for guidance in merger-related fiduciary-duty litigation when Florida authority is limited.
- Disclosure-only settlements in merger cases require heightened judicial review because they exchange non-monetary, often hard-to-value disclosures for releases that may extinguish claims with potential monetary value.
- A court evaluating a disclosure-only settlement should consider whether the supplemental disclosures are plainly material to a reasonable shareholder’s decision-making, not merely whether they add detail.
- The settlement release must be narrowly tailored and justified in light of what was actually investigated and litigated; a broad, transaction-wide release is not justified by marginal disclosures.
- A trial court cannot satisfy its duty to protect absent class members by relying mainly on the idea that the release matches the pleadings; the court must assess the settlement’s real give-and-get.
- An objector who successfully improves the outcome for the class (including by overturning an improper settlement) may be eligible for attorney’s fees under a common-benefit/corporate-benefit rationale, even without a monetary fund.

## Conclusion

Griffith held that Florida trial courts must subject disclosure-only merger settlements to a Trulia-style, searching review focused on whether the supplemental disclosures are plainly material and whether the release is appropriately limited; because the trial court approved the settlement without that analysis, the Second District reversed approval, affirmed class certification without comment, and remanded both for further proceedings consistent with the heightened review standard and for reconsideration of the objector’s request for fees based on any benefit conferred.


Griffith v. Quality Distribution, Inc., 307 So. 3d 791 (2018)