Petrovic v. Amoco Oil Co.

Majority - Morris Sheppard Arnold

1. No, the district court did not abuse its discretion by refusing to divide the class into subclasses. The court found that the remedial interests of the class members were not sufficiently in conflict to necessitate subdivision, distinguishing this case from mass tort actions like Amchem and Ortiz where stark conflicts existed (e.g., present versus future injuries, or fundamentally different types of harm). Here, despite varying compensation levels, all class members shared common objectives: compensation for damage, restoration of property values, and preventive cleanup. The presence of 33 class representatives, including owners from all three compensation zones, ensured adequate representation. The court noted that differentiated awards in a settlement alone do not create a conflict requiring subclasses, as virtually every settlement involves varied compensation. 2. No, the district court did not abuse its discretion in approving the settlement as fair, adequate, and reasonable. The court applied a deferential standard of review, recognizing the strong public policy favoring voluntary settlements, particularly after extensive litigation and trial preparation. It considered the strength of the plaintiffs' case against the settlement amount, finding the prospects for greater injunctive relief at trial (e.g., under RCRA) to be very limited. The court narrowly interpreted the 'gag order' clause, holding it only released claims against Amoco and did not preclude class members from complaining to or suing third-party governmental agencies. The compensation differences among zones were supported by evidence of varying contamination levels, and Zone C property owners received significant non-monetary benefits. The court also noted low opposition to the settlement (less than 4% of class members). 3. No, the notice of settlement was adequate and met due process requirements. The notice was 'reasonably calculated' to apprise interested parties of the action and settlement. It sufficiently detailed the stakes, including significant injunctive relief and a total payout exceeding seven million dollars, and provided a telephone number for further information. Due process does not require a mailed settlement notice to contain a specific formula for calculating individual awards, as it is not intended to be a complete source of information. 4. No, the district court properly granted summary judgment for Amoco on the CERCLA claims. CERCLA explicitly excludes 'petroleum' from its definition of 'hazardous substance'. This 'petroleum exclusion' applies broadly to unrefined and refined gasoline, including its indigenous components. The evidence showed the contaminants in this case were refined and unrefined petroleum hydrocarbon products, falling squarely within this statutory exclusion. 5. No, the district court did not abuse its discretion in disqualifying the class counsel firm or denying it attorney fees and costs. A close familial relationship between a class counsel and class representatives creates a 'clear danger' that the representative's interests may conflict with the class's best interests, particularly regarding decisions impacting attorney fees. This constitutes an impermissible conflict of interest under Rule 1.7 of the Rules of Professional Conduct, regardless of the 'appearance of impropriety' standard. The court also found that the firm's post-disqualification involvement did not meaningfully contribute to the proceedings, thus justifying the denial of fees, consistent with Missouri law allowing forfeiture of fees for serious duty violations.