03-25-09 John Ivan Sutter, M.D., P.A., et al. v. Horizon Blue
Cross Blue Shield of New Jersey, et al.
A-3708-06T3
1. In determining whether a proposed settlement of a
class action is fair and reasonable, the trial court must
conduct a fairness hearing pursuant to Rule 4:32-2(e). Where the
facts underlying the proposed settlement are in dispute by
objectors to the settlement, the trial court must conduct a
testimonial hearing during which the parties and objectors have
the opportunity to present and cross-examine witnesses before
the court determines whether the proposal is fair and
reasonable.
2. In determining whether a class attorney's fee award is
reasonable, the trial court must consider the lodestar method
(based upon a reasonable hourly rate) or the percentage recovery
(or common fund) method (based upon a reasonable percentage of
the proposed settlement). In applying the percentage recovery
method, however, the trial court must review the reasonableness
of the fees awarded in light of the hourly rate, the complexity
of the legal issues involved and whether the case is tried or
settled.
3. The court cannot base a percentage recovery fee award
on a disputed valuation of the settlement.
