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Court Affirms District Court's Approval of Settlement

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By Tanya Roth, Esq. on May 11, 2012 4:23 PM

Earlier this week, the Eighth Circuit Court of Appeals upheld a settlement agreement on health care coverage between the city of Omaha and a class of city workers, affirming the U.S. District Court for the District of Nebraska's approval of the agreement.

The class consisted of police officers, city firefighters, civilian employees and their unions.

In arguing for the city, attorneys claimed that the court failed to properly apply and interpret the Federal Rules of Civil Procedure and as a result, failed to properly address the conflict of interest that arose from having the same attorneys represent both active and retired employees.

The case arose as the result of a city ordinance from May 2010. The ordinance made many changes in the benefit plans available to current and retired city employees.

Immediately after the ordinance passed, the suit was brought by a collective group of plaintiffs. The plaintiffs included four labor organizations and four individual retirees. They filed a declaratory judgment action seeking to prevent enforcement of the ordinance.

The district court ruled in favor of the plaintiffs in June 2010.

Later that month, five firefighters intervened in the case.

The next month, the district court certified the proposed class under Rule 23(b)(3) and adopted three subclasses identified by the plaintiffs in their complaint. Parties eventually reached a settlement agreement and the court approved the settlement agreement.

Last April, the district court entered a final consent decree, finding that the agreement was "fair, reasonable and adequate."

The case was described as "straightforward" by Eighth Circuit Judge William Jay Riley.

The Eighth Circuit noted that the lower court provided more than one opportunity for the retirees to opt out of the case, thus eliminating any inference of unfairness.

The Eighth Circuit also noted that the lower court allowed the intervening of five retired firefighters, with separate counsel.

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