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Hazel Mcmillon, et al v. State of Hawai`I

December 21, 2011


The opinion of the court was delivered by: Leslie E. Kobayashi United States District Judge


On November 14, 2011, Plaintiffs Hazel McMillon, Gene Strickland, Trudy Sabalboro, Katherine Vaiola, and Lee Sommers, individually ("the Named Plaintiffs"), and on behalf of a class of present and future residents of Kuhio Park Terrace ("KPT") and Kuhio Homes who have disabilities affected by architectural barriers and hazardous conditions (all collectively "Plaintiffs" or the "Class"), filed their Motion for Final Approval of Class Action Settlement ("Settlement Approval Motion") and Second Motion for an Award of Attorneys' Fees and Costs ("Fee Motion"). None of the other parties responded to the motions. On December 20, 2011, this matter came before the Court for a final fairness hearing for the proposed class action settlement*fn1 and a hearing on Plaintiffs' motions. Jason Kim, Esq., M. Victor Geminiani, Esq., and Deja Ostrowski, Esq., appeared on behalf of Plaintiffs; Robert Creps, Esq., appeared on behalf of Defendant/Cross Claimant/Cross Defendant Realty Laua LLC ("Realty Laua"); and Michael Tom, Esq., appeared on behalf of Third-Party Defendant/Counterclaimant Urban Management Corporation, doing business as Urban Real Estate Company ("Urban"). For the reasons set forth below, and after due consideration of the evidence and arguments presented by the parties and the record in this case, the Court concludes that good cause exists to grant final approval of the settlement agreement in this action pursuant to Federal Rules of Civil Procedure Rule 23(e) and to grant Plaintiffs' Settlement Approval Motion and Plaintiffs' Fee Motion.


Plaintiffs filed their class action complaint on December 18, 2008 seeking damages, declaratory and injunctive relief, and attorneys' fees against Realty Laua and Defendants the State of Hawai`i and Hawai`i Public Housing Authority (collectively "State Defendants") for violations of Title II and Title V of the Americans with Disabilities Act of 1990 ("ADA"), Section 504 of the Rehabilitation Act of 1973 ("Section 504"), and the Fair Housing Amendments Act of 1988 ("FHA"). The claims arise from discriminatory obstacles, hazardous conditions, and the failure to grant reasonable accommodations, for residents with disabilities in KPT and Kuhio Homes. On July 17, 2009, the State Defendants filed a Third-Party Complaint against Urban, alleging, inter alia, that Urban was the managing agent for the project that consists of KPT and Kuhio Homes.

Plaintiffs moved for class certification on June 3, 2009, [dkt. no. 72,] and United States District Judge J. Michael Seabright granted Plaintiffs' motion on October 29, 2009,*fn2 certifying a class consisting of: all present and future residents of KPT and Kuhio Homes who are eligible for public housing, who have mobility impairments or other disabling medical conditions that constitute "disabilities" or "handicaps" under federal disability nondiscrimination laws, and who are being denied access to the facilities, programs, services, and/or activities of the Defendants, and or/discriminated against, because of the architectural barriers and/or hazardous conditions described in the Complaint. [Order Granting Pltfs.' Motion for Class Certification, filed 10/29/09 (dkt. no. 120), at 30-31.]

Throughout the course of this action, this Court presided over numerous settlement discussions between the parties, and the parties also engaged in mediation before Keith Hunter. As a result of these discussions, which demonstrate good faith and arms-length negotiations, Plaintiffs reached a settlement agreement with Urban and Realty Laua (collectively "the Management Defendants"). The terms of the settlement are set forth below.

In addition, the Court notes that Plaintiffs previously reached a settlement with the State Defendants ("the State Settlement"), and this Court granted final approval of that settlement and granted Plaintiffs' motion for an award of attorneys' fees and costs attributable to the claims against the State Defendants. McMillon v. Hawai`i, Civil No. 08-00578 LEK, 2011 WL 744900 (D. Hawai`i Feb. 22, 2011).


Plaintiffs and the Management Defendants agreed to a settlement by which: Realty Laua shall pay $225,000 into a settlement fund for the benefit of the Class and their counsel ("the Settlement Fund"); Urban shall pay $150,000 into the Settlement Fund; the Named Plaintiffs, the State Defendants, and the Management Defendants shall release and dismiss all claims, third-party claims, cross-claims, and counterclaims alleged in the instant case and in the related state court action ("the State Lawsuit"); and Plaintiffs' counsel shall release any claim they may have for attorneys' fees and costs, and other expenses, arising out of this action against, inter alia, the Management Defendants.*fn3 [Mem. in Supp. of Settlement Approval Motion at 4; Motion, Decl. of Jason H. Kim ("Kim Approval Decl."), Exh. 1 (Settlement and Release Agreement ("Settlement Agreement")).]

Of the $375,000 that the Management Defendants will pay, Plaintiffs propose that the Court approve an award of $93,750 in attorneys' fees and $3,997.40 in costs. [Fee Motion at 3.] The remainder will be allocated for distribution to the Class. Combined with the $200,000 allocated to the Class from the settlement with the State Defendants, the Class will receive a total award of almost $500,000. This will result in payments of approximately $1,000 per unit at KPT and Kuhio Homes. [Mem. in Supp. of Settlement Approval Motion at 7.] Plaintiffs' Plan for Disbursement of Settlement Funds ("Disbursement Plan") is attached to the Settlement Approval Motion as Exhibit 2 to the Kim Approval Declaration. It provides for both rent rebates for tenants and the funding of services to improve the residents' quality of life.

PRELIMINARY APPROVAL OF SETTLEMENT AND NOTICE OF THE SETTLEMENT TO THE CLASS This Court granted preliminary approval of the settlement, finding that it was "fair, reasonable, and adequate" as required by Fed. R. Civ. P. Rule 23(e), and scheduled a final fairness hearing for December 20, 2011. [Prelim. Approval Order at 3-4.] The Court also directed Plaintiffs' counsel to provide notice of the settlement to the Class.

The Settlement Approval Motion states that Plaintiffs' counsel caused the Second Notice of Proposed Settlement of Class Action and the Disbursement Plan to be served by personal delivery to all current tenants of KPT and Kuhio Homes.*fn4 In addition, both documents were posted in a prominent place at KPT. The notice asked Class Members to contact Plaintiffs' counsel, Lawyers for Equal Justice ("LEJ"), if they had any questions or concerns. On August 30, 2011 and September 14, 2011, LEJ convened meetings with KPT and Kuhio Homes tenants to discuss the settlement. During those meetings, there was a discussion about the alternatives for distribution, and there was general consensus supporting the rent rebate and services plan. Plaintiffs' counsel states that no Class Member has expressed opposition to the settlement or the distribution plan. [Motion, Decl. of Victor Geminiani ("Geminiani Approval Decl.") at ¶¶ 2-6.]

At the December 20, 2011 final fairness hearing, Plaintiffs' counsel also represented that, when counsel posted notice of the proposed settlement, counsel also provided translations in five different languages. Counsel also provided translation services at the meetings they held with Class Members. Counsel noted that one of the components of the distribution plan is that Class Members can opt out of only the lump sum rent rebate. In addition to the meetings that counsel convened, counsel appeared at two tenant meetings to discuss and answer questions about this matter. Plaintiffs' counsel have not received any objections to the settlement since the filing of the motions.

The Court therefore finds that, as required by Federal Rules of Civil Procedure Rule 23(e)(1), notice of the settlement was directed in a reasonable manner to all Class Members who would be bound by the settlement.


Insofar as Plaintiffs' counsel are also parties to the Settlement Agreement, which provides that the payments from the Management Defendants include Plaintiffs' attorneys' fees and costs, this Court must examine the reasonableness of the proposed award of attorneys' fees and costs before it can grant final approval of the settlement. See Fed. R. Civ. P. 23(h) ("In a certified class action, the court may award ...

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