## Facts

- A certified class consisted of persons (or representatives) who, between November 1, 1983 and April 30, 1984, were administered E‑Ferol Aqueous Solution and died or suffered injuries.
- Defendants manufactured, marketed, or distributed E‑Ferol, a vitamin E product used primarily for premature infants.
- Plaintiffs alleged E‑Ferol was marketed as a “supplement” to avoid regulatory testing requirements applicable to “drugs,” and that the product caused severe injuries (including kidney failure, liver failure, and brain injury) and deaths.
- After years of litigation and extensive discovery, the parties engaged in prolonged mediation and reached a class settlement.
- The proposed settlement created a $110 million common fund and allocated compensation through a plan that placed class members into five injury-severity categories with specified fund shares.
- One class member objected, challenging overall fairness and adequacy of representation and asserting the settlement undervalued her claim.

## Issues

1. Whether the proposed $110 million class settlement was fair, reasonable, and adequate, and not the product of collusion, under Federal Rule of Civil Procedure 23(e).
2. Whether to approve class counsel’s request for a 30% common-fund fee, reimbursement of expenses, $300,000 in administration/distribution costs, and $75,000 service awards to each of two class representatives.
3. Whether the objector’s challenges required denial or modification of the settlement or related awards.

## Decision

- The court granted final approval of the Rule 23(e) settlement and entered judgment implementing its terms.
- The court found the settlement resulted from arm’s-length negotiations and that the record did not show collusion.
- The court approved attorneys’ fees equal to 30% of the common fund, reimbursement of reasonable litigation expenses, $300,000 in settlement administration and distribution costs, and $75,000 service awards for each class representative.
- The court overruled the sole objection.

## Legal Principles

- A class settlement may be approved under Rule 23(e) only if it is fair, reasonable, and adequate, and the court must consider whether the process suggests collusion.
- In evaluating fairness, courts consider factors including: litigation complexity and expected duration; the procedural posture and extent of discovery; risks on liability, causation, and damages; the settlement amount relative to plausible outcomes; views of class counsel and representatives; and the degree of class opposition.
- Rule 23(e) fairness focuses on the class as a whole; dissatisfaction with an individual allocation does not, by itself, establish that the settlement is unfair.
- Common-fund attorneys’ fees may be awarded as a percentage of the fund when supported by the risk assumed, time and labor expended, litigation duration, and the result obtained.
- Service awards and administrative-cost payments may be approved when supported by evidence of representative effort and responsibility and the need to implement distributions.

## Conclusion

The court approved a $110 million products-liability class settlement for injuries allegedly caused by E‑Ferol, concluding the agreement and allocation plan were fair to the class and negotiated without collusion, and it upheld a 30% common-fund fee award, expenses, administration costs, and representative service awards while rejecting the sole objection.


Klein v. O’Neal, Inc., 705 F. Supp. 2d 632 (N.D. Tex. 2010)