Since its inception in 1946, a tobacco cooperative administered a federal price-support program designed to stabilize tobacco prices for member growers. That program ended in 2004, when Congress enacted the Fair and Equitable Tobacco Reform Act. By this point, the cooperative had accumulated a capital reserve fund of hundreds of millions of dollars generated from the members’ tobacco and/or participation fees. After a class of members sued for distribution of the reserve funds, the district court approved a $24 million settlement as fair, reasonable, and adequate for the class members. However, a parallel class action was already pending against the cooperative in state court, and its plaintiffs arguably had much stronger claims. The earlier class members claim, at bottom, that they got a raw deal.
This court cannot agree that the earlier class members’ interests were adequately protected or that a $24 million settlement is fair, reasonable, and adequate for the class.
Affirmed in part; reversed in part and remanded. Judge Quattlebaum wrote a concurring opinion.