U.S. District Court for the NMI designated judge Frances Tydingco-Gatewood gave final approval yesterday to the global settlement agreement in Betty Johnson’s class action against the CNMI government and the NMI Retirement Fund.
Tydingco-Gatewood issued the approval after finding the settlement agreement to be “fair, reasonable and adequate” during a hearing that lasted over five hours. Tinian and Rota participated in the hearing via video teleconference.
“It is ordered. So it is over!” the beaming judge said shortly after she announced her rulings.
Under the settlement agreement, the CNMI government agrees to make annual payments that will enable the settlement fund to at least 75 percent of class members’ benefits.
With the final approval, all Fund assets will be transferred and assigned as assets of the settlement fund and will be administered by the newly appointed trustee, attorney Joyce Tang of the Civille & Tang law firm of Guam.
The Fund will transfer $44.61 million to the CNMI government so it can pay the balance of the refund of contributions of Fund members who are not yet receiving benefits and have elected to withdraw from the Fund. The Fund had paid the CNMI government $10 million upon the court’s preliminary approval last Aug. 6 so the government can pay a portion of the refunds of contributions.
The judge did not rule on Johnson’s counsels’ petition for attorneys’ fees and costs. That tab ranges in amount from a minimum of $40 million to a maximum of $60 million.
Instead, Johnson’s counsels and the counsel for the CNMI government were directed to talk about the fees issue with Hawaii bankruptcy judge Robert Faris.
Tydingco-Gatewood, however, approved paying Johnson $7,500 as a service award or incentive in recognition of her time and effort in bringing and prosecuting this matter as class representative.
Tydingco-Gatewood also discharged the Civille & Tang law firm and its representative, Joseph Razzano, as Fund trustee ad litem.
The judge said the 16 opt-outs—those who asked to be excluded from the settlement class by the Sept. 20, 2013 deadline—are no longer members of the settlement class.
Tydingco-Gatewood approved the consent judgment against the CNMI government in favor of the settlement fund in the amount of $779 million, the equivalent of the actuarial present value of benefits related to the settlement class members.
All 12 pending motions related to the case are now considered moot.
Senate President Ralph Torres and several other lawmakers were present. Sen. Ray Yumul and Reps. Roman Benavente, Ramon Tebuteb, and Christopher Leon Guerrero addressed the court to express concerns about those who opted out and other issues. Other lawmakers present were Reps. Teresita Santos, Janet Maratita, Antonio Agulto, and Lorenzo Deleon Guerrero.
One of Johnson’s lawyers, Margery Bronster, cited the extremely low number of objections and opt-outs, saying this indicates that the vast majority of class members want to participate in the settlement.
Bronster said the issue of attorneys’ fees and costs should be taken separately by the court or may be delayed as this should not have an impact on the final approval of the settlement.
Tydingco-Gatewood agreed with Bronster, adding that the Fund will not pay the fees.
Assistant attorney general Reena Patel, counsel for the CNMI government, joined in Johnson’s motion for final approval of the settlement deal.
Johnson, who spoke briefly on the phone, thanked Tydingco-Gatewood, Judge Faris, Gov. Eloy Inos, and attorneys involved in the case, for reaching the settlement.
“It’s been a long, long journey. It’s a great day for the CNMI!” Johnson said.
After the judge announced the discharge of Razzano, he said he is based in Guam but “it’s truly an honor” to work for the CNMI.
“It was a great pleasure to serve the people in the CNMI,” Razzano said.
On attorney’s fees, Tydingco-Gatewood said the billings submission of Bronster Hoshibata, one of the counsels for Johnson, is detailed and contained recitations.
She contrasted this with the billings of Johnson’s other counsel, attorney Bruce Jorgensen, saying his submission is very incomprehensible and that she could not understand it.
The judge said she agreed with the Office of the Attorney General’s objection upon a review of Jorgensen’s filing.
Tydingco-Gatewood said there is also an issue that Jorgensen is an inactive member of the defined benefit plan and is therefore a member of the class.
Jorgensen explained that he is not a class member as he never received Fund benefits. He said he worked for only six months and that it was a sole-source contract.
Fund acting administrator Pangelinan insisted that Jorgensen is considered a member of the class.
With respect to Johnson’s other counsel, Timothy Lord, the judge said there is an issue of untimely filing and that Johnson actually terminated him in 2012.
On Johnson’s local counsel, attorney Stephen Woodruff, Tydingco-Gatewood said there was no record to support the billings, and that there is also an issue about his ability to practice in the CNMI and failure to pay CNMI Bar Association fees.
Woodruff explained that he has a computer problem, and that the issue of his law practice is still pending in the CNMI Supreme Court. He said he is authorized to practice in federal court.
Tydingco-Gatewood said she is pretty sure that she is going to approve the billings of Bronster Hoshibata law firm.
The judge ordered Johnson’s counsels to get together and work out with the comments of the Office of the Attorney General or else she would set a full-blown hearing on the issue.
Johnson’s counsels and the OAG were ordered to come before Faris to settle their attorneys’ fees and costs.
Tydingco-Gatewood told Jorgensen to better re-do his billings as they gave her a headache.
She also told Jorgensen to talk to Lord.
Tydingco-Gatewood believes that, as there is not much to do anymore in the class action, there is no need to have more lawyers.