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A federal judge has refused to sign off on a settlement of nearly $100,000 in a products liability suit brought by a 9-year-old boy who was injured while attempting to open a can of cat food. In his eight-page opinion in Sligh v. Friskies Petcare Co., U.S. District Judge Herbert J. Hutton of the Eastern District of Pennsylvania said he was not convinced that the settlement was in the best interest of the child. He said the lawyers had failed to assure him that their fees were fair. The recurring theme in Hutton’s opinion is that judges play a special role when approving the settlement of a child’s lawsuit and that lawyers who file a so-called “minor’s compromise” petition must provide the judge with every fact he needs to make an independent judgment about whether the settlement is a good one. “To assure that the child’s interests are protected, the petition should include all relevant facts and the reasons why the guardian of the minor believes that a settlement is desirable and in the minor’s best interest to discontinue, compromise, or settle the action,” Hutton wrote. The “relevant facts,” Hutton said, “include evidence of the need for future medical care and future expenses, description of the minor’s current physical and mental condition, and evidence of the extent and duration of the injuries.” Hutton found that the petition filed by attorney Dean R. Phillips of Neil E. Jokelson & Associates was lacking in several respects. Phillips declined to comment on the judge’s ruling except to say that he intends to “address each of the judge’s concerns.” But court papers already on file seem to show that the settlement is actually worth much more to the child than the judge’s opinion suggests. While the petition was missing some details about the current status of the child’s injuries, the judge’s own math may be faulty. Hutton complained that the settlement pays just $52,739 to plaintiff Eric William Porteous, who is now 11 years old, and that he won’t receive his first payment until 2007, with the final payment delayed until 2014. By contrast, Hutton noted that the lawyers will immediately be paid their fees of more than $29,000. But court papers show that the $52,739 figure is the “present value” of the portion of the settlement to be paid to Porteous. When the structured payments are completed, however, Porteous will have received more than $83,000. The settlement papers show that the structured settlement for Porteous was designed to provide an estimated two-thirds of the cost of his college education at a Pennsylvania state college, with $10,000 payments made every August over four years. And on his 25th birthday, Porteous will receive a final payment of $41,000 — a sum that will come at a time when he may be ready to make a down payment on a home. In his original petition, Phillips argued that one reason for accepting the settlement was that Porteous and his legal guardian did not have a very strong case and risked losing at trial or even before trial due to the potential strength of the defense arguments. According to the suit, Porteous suffered a serious cut to his hand when he was trying to open a can of cat food. Two surgeries were required to repair a severed ligament. The theory of the claim against Friskies Petcare and the Silgan Container Corp. was that the can was unreasonably dangerous and should have carried a warning that children may not have the skill and dexterity to avoid injury when opening it. Hutton found that court approval of a minor’s compromise is governed by Pennsylvania Rule of Civil Procedure 2039. Under Pennsylvania law, Hutton said, “the court must hold that the best interests of the child are paramount and of controlling importance.” The court’s task is not one of rubber-stamping, Hutton found, but instead, “the court must be prepared to substitute its judgment in the best interest of the minor for that of the plaintiff’s counsel, the guardian, or even the minor himself.” In doing so, Hutton said, the judge must consider “the strength of the plaintiff’s case” and “whether the settlement amount represents a fair value for the lawsuit.” The court’s goal, Hutton said, “is to determine whether the plaintiff is getting a fair deal from the defendants or settling for some lesser amount.” And in a separate analysis, Hutton said, the court must review the distribution and focus on the fairness of the attorney fees being paid. Phillips asked for 30 percent of the settlement fund. But that figure was calculated on the basis of the $97,500 “present value” of the settlement. Under the settlement, $52,739 will be used to purchase two annuities. The first annuity costs $33,859 in today’s dollars and will result in four annual payments of $10,000 beginning in August 2007. The second annuity will be purchased for $18,800 and will pay $41,000 in 2014. Porteous’ guardian, Angel Sligh, will receive an immediate payment of $12,500 for her own claim in which she says she lost wages and suffered emotional distress because she witnessed the accident. Sligh will also be paid $2,500 immediately to use for Porteous, paying the cost of sending him to sports camps, according to the settlement papers. As a result, the total paid to Sligh and Porteous in today’s dollars is more than $67,000 and the attorney fees are $29,031. Hutton was unimpressed. “It does not appear that the best interests of the minor are being served by the current settlement agreement. For example, the court notes that of the $97,500 total settlement amount, only $52,739.06 has been earmarked for the minor, who is the real party in interest,” Hutton wrote. Hutton also found that the annuity payments will not begin until 2007 and “does not even include a provision for inflation.” Hutton said he was also concerned by a provision in the settlement that says the defendants and their insurer will be the sole owners of the annuity policy and have all rights of ownership. “It is apparent, therefore, that these terms create nothing more than a right for the minor to sue in the future,” Hutton wrote. Hutton complained that the $12,500 payment to Sligh is for “a non-existent claim at law” and that the additional $2,500 she will be paid “contains a mere promise that it will be used for the benefit of the minor.” The petition was also lacking, Hutton said, in providing details about the nature of the child’s injury. “Although the guardian’s statement makes a short and conclusory statement that the minor has resumed most normal activities with minor limitations, there is no discussion of the need for future medical care and future expenses, a detailed description of the minor’s mental and physical condition, or sufficient discussion of the extent or duration of the injuries,” Hutton wrote. “This evidence is necessary, as the court will then have a fuller understanding of the sufficiency and adequacy of the instant petition.” Hutton said he decided to deny the petition without prejudice and will consider approving it if the lawyers address his concerns. When they do so, Hutton said, the lawyers must “set forth which county’s local rules govern the appropriate contingent fee in the minor’s case and whether the requested fee is reasonable in light of that rule.” Friskies Petcare is represented by attorney Louis E. Bricklin of Bennett Bricklin & Saltzburg in Philadelphia. Silgan Container Corp. is represented by attorney Joel D. Gusky of Philadelphia’s Harvey Pennington Herting & Renneisen.

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