Full opinion text
ORDER & REASONS APPROVING CLASS ACTION SETTLEMENT AND AWARD OF COMMON-BENEFIT FEES AND EXPENSES FALLON, District Judge. The Plaintiffs’ Steering Committee (“PSC”) and Murphy Oil USA, Inc. (“Murphy”) have settled this class action litigation involving an oil spill in the days following Hurricane Katrina. Before the Court is the parties’ Joint Motion for Final Approval of the Class Action Settlement (Rec.Doc. 1034) and the PSC’s Motion for Common Benefit Fees and Expenses (Rec. Doe. 865). The Court has carefully considered the oral arguments made at the fairness hearing held on January 4, 2007, including statements presented by both proponents and objectors to the class settlement. It has also reviewed the written memoranda and supporting documentation submitted by all parties, including numerous affidavits and declarations from PSC members, class representatives, and experts. Lastly, the Court has examined the procedural record and applied its own knowledge of the case accumulated through its active involvement in this litigation since inception. Accordingly, the Court is fully advised of the matter and is now ready to rule. For the following reasons, the parties’ Joint Motion for Final Approval of the Class Action Settlement is GRANTED because the Court finds that the proposed settlement of this class action is fair, reasonable, and adequate. In addition, the PSC’s Motion for Common Benefit Fees and Expenses is GRANTED IN PART as provided in this Order & Reasons. I. BACKGROUND A. Factual Background On August 29, 2005, Hurricane Katrina made landfall on the Louisiana/Mississippi border, resulting in one of the most devastating natural disasters ever to occur in the United States. As the storm passed over southeastern Louisiana, twenty-foot storm surges rolled into the Mississippi River-Gulf Outlet (“MR-GO”) and swept over and breached some fourteen miles of a levee system intended to protect St. Bernard Parish, inundating nearly all of the homes and businesses with massive flood waters. Among those properties impacted by the flood waters was the Murphy Oil refinery in Meraux, Louisiana. The refinery, owned and operated by Murphy, produced approximately 125,000 barrels of refined petroleum per day. Located on Murphy’s property are multiple above-ground tanks used to hold crude oil. These tanks are surrounded by earthen berms, or dikes, built to contain any oil that might escape from the tanks in the event of a leak or spill. Murphy’s Tank 250-2, designed to hold 250,000 barrels of oil, was surrounded by an eight-foot-high earthen dike. Sometime shortly following the overtopping and breaches along the MR-GO levee system, flood waters reportedly up to twelve feet in height swept over, eroded, or traveled through openings in the earthen dike, entering the containment area where Tank 250-2 was located. Though the parties debate the specific facts, time frame, and causes of this incident, there is no dispute that the flood waters quickly surrounded Tank 250-2. The Tank dislodged from its moorings, causing it to float and subsequently rupture. Water entered the Tank due to hydrostatic pressure, and it ultimately began to sink. As flood waters receded and hydrostatic pressure dropped, the crude oil mixture leaked from the Tank and escaped beyond the dike. A significant amount of crude oil escaped from the Tank, spilled into the refinery property, and traveled to the surrounding neighborhood in the days following the hurricane’s arrival, contaminating homes and businesses already saturated with flood waters. On September 3, 2005, Murphy notified the federal government that the oil spill had been detected. Federal and state environmental regulators quickly traveled to the scene to assess the scope of damage and begin recovery of spilled oil. Murphy undertook a voluntary settlement program with residents of the area neighboring its refinery. It also began cleanup and remediation efforts in public spaces and for homeowners who gave Murphy permission to test and clean their property. B. Procedural Background On September 9, 2005, the first lawsuit regarding this accident was filed against Murphy. Many suits followed. In all of these suits, the Plaintiffs are St. Bernard Parish homeowners and business owners who claim to have suffered damages due to the oil spill. In separate orders dated October 4 and 5, 2005, the Court consolidated the cases that had been filed and provided that all future cases would be automatically consolidated. This litigation now includes twenty-seven consolidated class actions. The Court appointed a Plaintiffs’ Committee on October 4, 2005 and has expanded its membership on several occasions. On October 18, 2005, the Court established the Plaintiffs’ Executive Committee to manage the litigation and designated both Plaintiffs’ and Defendant’s Liaison Counsel. The Court subsequently outlined the procedure for case management stating, among other things, that monthly status conferences would be held in open court which all interested parties could attend and meetings with liaison counsel would take place prior to the monthly conferences. The Court also established a dedicated website for this litigation and posted orders, pleadings, transcripts, and notices for public viewing. At the request of the Court, the parties jointly compiled a Class Action Administrative Master Complaint, consolidating all claims raised by the Plaintiffs in the various pending lawsuits, and filed it on November 28, 2005 (Rec.Doc. 49). Murphy subsequently filed seven motions to dismiss portions of the Master Complaint pursuant to Rules 12(b)(6) and 12(c) of the Federal Rules of Civil Procedure. On December 29, 2005, the Court resolved these motions, dismissing several aspects of the Master Complaint (Rec.Doc. 104). With respect to the remaining claims, the parties engaged in extensive discovery, conducted testing, and took depositions for class certification purposes. On January 12 and 13, 2006, the Court held a two-day class certification hearing at which counsel presented evidence for and against class certification of the remaining claims. After review of the evidence and expert opinions offered by the parties, the Court certified this matter as a class action pursuant to Rule 23(b)(3). See Turner v. Murphy Oil USA, Inc., 234 F.R.D. 597 (E.D.La.2006). Based upon where it found the oil flowed, the Court certified a class composed of residents and property owners within the following defined geographic area: All persons and/or entities who/which have sustained injuries, loss, and/or damages as a result of the September 2005 spill of crude oil and any other related substances from a storage tank located on Defendant Murphy Oil USA, Inc.’s property in Meraux, Louisiana, and who/which on August 29, 2005, were residents of, or owned properties or businesses in, the following area: Beginning north, from the 40 Arpent Canal with its intersection in the west at Paris Road in Chalmette, Louisiana, and traveling along Paris Road in a southerly direction to its intersection with St. Bernard Highway, then heading east from this intersection along St. Bernard Highway to Jacob Drive, then heading north along Jacob Drive to the intersection with East Judge Perez Drive, then heading east along East Judge Perez Drive to its intersection with Mary Ann Drive, then heading north along Mary Ann Drive to the 40 Arpent Canal. Specifically, the Court certified Counts I, II, IV, V, and VII of the Administrative Master Complaint for class-wide treatment, which included the following claims: negligence pursuant to Louisiana Civil Code article 2315, absolute liability pursuant to Louisiana Civil Code articles 667 and 2315, strict liability pursuant to Louisiana Civil Code articles 2317 and 2322, nuisance and trespass pursuant to Louisiana Civil Code articles 3421 and 3425, and groundwater contamination pursuant to Louisiana Revised Statutes § 30:2015.1. Given the need to protect class members’ rights and to avoid any possibility of confusion, on February 6, 2006, the Court directed that the “best notice practicable” of class certification be distributed to class members pursuant to Rule 23(c)(2). See Turner v. Murphy Oil USA, Inc., No. 05-4206, 2006 WL 286009 (E.D.La. Feb.6, 2006); see also Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 173, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974). The Court found it appropriate to permit class members to opt out of the class action litigation at this stage and ordered that the notice must contain a provision informing class members that they would be afforded the opportunity to opt out of the lawsuit. On March 3, 2006, the Court adopted a trial plan for this class action, bifurcating the trial into two different phases (Rec. Doc. 257). Phase One would address common issues of liability and general causation; Phase Two would consist of successive trials on specific causation and compensatory damages. However, Phase Two would only take place if a jury found Murphy liable in whole or in part in Phase One. Phase One of the trial was scheduled to commence on October 2, 2006. However, on September 26, 2006, the trial was can-celled because the parties reported to the Court that they had come to an amicable resolution of the case and had signed a Memorandum of Understanding to this effect (Rec.Doc. 588). On October 9, 2006, the parties presented a Final Settlement Agreement and Notice Program to the Court (Rec.Doc. 742), which was preliminarily approved on October 10, 2006 (Rec. Doc. 731), pending a fairness hearing noticed to all class members. As part of the Settlement Agreement, all of those who had previously opted out of the class following certification, but did not settle with Murphy, were permitted to rejoin or opt back into the Plaintiff class. (Settlement Agreement 18.) Additionally, those who resided, leased, or owned property or businesses in a designated Buyout Zone, regardless of any prior settlement with Murphy, were also allowed to opt back in to obtain certain benefits under the Settlement Agreement. Id. The Court permitted these opt-outs to rejoin the Plaintiff class until December 8, 2006. The Court also permitted class members to file objections to the settlement program by December 15, 2006. The Court ordered that all objections were to be filed into the record and that the objectors would be given an opportunity to be heard at the fairness hearing. The Court appointed Judge Robert Klees (Ret.) of the Louisiana 4th Circuit Court of Appeal as Special Master to assist in resolving any objections or allocation disputes, and it appointed disbursing and administrative agents to assist with the administration of claims. C. The Settlement Agreement According to the terms of the Settlement Agreement, the total value of the settlement is currently estimated at $330,126,000 and can be broken down into four main categories of compensation for damages related to the crude oil spill. The first category is a buyout program. Murphy is required to spend $55 million toward purchasing and remediating properties in a “Buyout Zone,” which is comprised of class member properties adjacent to the oil refinery that suffered the most extensive contamination. In the event that Murphy does not exhaust the $55 million in the Buyout Zone by June 30, 2007, it will acquire other properties in the class area until this fund is exhausted. The second category is a compensation program. Murphy is required to distribute $120 million to all residents and owners of properties within the class area, including those within the Buyout Zone, pursuant to an allocation plan approved by the Court (Rec.Doc. 802). Buyout Zone class members are not required to sell their property to Murphy under the buyout program in order to participate in the compensation program. The allocation plan divides the class area into four zones and provides that the level of compensation paid to class members depends upon the zone in which they live or own property, the total square footage of property, the number of persons who live at the property, and the estimated commercial loss. These zones were designed according to the level of oil contamination on properties and after extensive review of property records and input from environmental, technical, and scientific experts. The third category acknowledges past compensation, recognizing that $83,264,000 has been paid, exclusive of remediation, through Murphy’s voluntary settlement program. The fourth and final category is a remediation program. As of the date of the Settlement Agreement, $51,862,000 has been expended in remediation costs and it is estimated that an additional $20 million will be spent on future remediation in the class-wide area beyond the Buyout Zone. The class area will be remediated pursuant to a plan approved and overseen by federal and state regulatory authorities and subject to this Court’s review. Under the plan, Murphy and its contractors will test and remediate building interiors, exterior structures, and yards until government regulators or the Court determines that the clean-up is sufficient. Thus, Murphy could conceivably be required to spend more than the estimated $20 million in future remediation costs. To receive the designated settlement award, class members are required to submit a proof-of-claim form and agree to release all claims against Murphy. Murphy is not required to accept liability or otherwise make any admissions of wrongdoing for the oil spill. Lastly, the Settlement Agreement provides that all administrative costs of the class settlement, all common-benefit fees, and all common-benefit expenses incurred in connection with prosecuting this litigation will be paid by Murphy. D. Notice The Court’s October 10, 2006 Order preliminarily approving the class settlement required dissemination of a legal notice of the settlement to individual class members, including notice of the opportunity to rejoin the class for those parties who previously opted out. According to Rule 23(e), the notice must be given “in a reasonable manner.” Fed.R.Civ.P. 23(e)(1)(B). “There are no rigid rules to determine whether a settlement notice to class members satisfies constitutional and Rule 23(e) requirements.... ” Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 114 (2d Cir.2005), cert. denied, 544 U.S. 1044, 125 S.Ct. 2277, 161 L.Ed.2d 1080. In some circumstances, reasonable notice may require individual notice in the manner required by Rule 23(c)(2)(B). See Fed.R.Civ.P. 23 advisory committee’s note. Rule 23(c)(2)(B) provides in part: For any class certified under Rule 23(b)(3), the court must direct to class members the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. Fed.R.Civ.P. 23(c)(2)(B) (emphasis added); see also Eisen, 417 U.S. at 173-77, 94 S.Ct. 2140 (elaborating on the constitutional dimension of notice under the Due Process Clause). However, actual notice to each party that would be bound by the adjudication of the class action is not required. See Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 313-14, 70 S.Ct. 652, 94 L.Ed. 865 (1950). “A construction of the Due Process Clause which would place impossible or impractical obstacles in the way could not be justified.” Id. Therefore, when courts have evaluated whether settlement notice is adequate, the focus is not on actual notice rates, but rather whether the best notice practicable to individuals under the circumstances was achieved through reasonable effort. See DeJulius v. New England Health Care Employees Pension Fund, 429 F.3d 935, 944 (10th Cir.2005) (citing In re Integra Realty Res., Inc., 262 F.3d 1089, 1110-11 (10th Cir.2001), and Eisen, 417 U.S. at 174, 94 S.Ct. 2140). To state it another way, “the question is ... not whether some individual ... got adequate notice, but whether the class as a whole had notice adequate to flush out whatever objections might reasonably be raised to the settlement.” Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1375 (9th Cir.1993); see also DeJulius, 429 F.3d at 945-47. At the outset, it is important to note the unique challenges that counsel in this case faced in providing reasonable notice to class members that complied with due process requirements. Most of the putative class members were displaced following Hurricane Katrina. The class-wide area received little or no mail service for some time following the storm. Many class members have yet to return to their homes and are scattered in different areas, though most have established residences in southeastern Louisiana and Mississippi. With this challenge in mind, the parties prepared a notice plan designed to reach the class members wherever they might reside. The parties retained Todd Hilsee of Hilsoft Notifications to ensure that adequate notice was given to class members in light of the unique challenges presented in this case. The Court reviewed and made changes to the content and form of the notice and monitored the procedure used to disseminate the notice. Three primary methods were used to circulate the notice to class members: direct mail, newspaper publication, and the Internet. The first mailing following execution of the Settlement Agreement included a Decision to Rejoin Package (“DRP”) targeted to those who previously opted out of the class to inform them of an opportunity to rejoin. Over 1,300 packages were mailed to 307 class area addresses and 280 class area properties, and 777 packages were mailed to 41 law firms representing clients for approximately 300 properties that had opted out of the class. Remailings were also sent to updated current addresses. Only two class area addresses representing two class area properties did not receive a DRP after completion of all DRP mailings and remailings. Although the actual rate of notice is not the deciding factor in determining whether notice was adequate, it is worth mentioning that only 0.6% of the class area addresses or 0.07% of class area properties unrepresented by attorneys did not receive the package, signifying a successful mailing rate. Second, a Settlement Notice Package (“SNP”), which included a summary of the settlement, the notice and a summary of the notice, the class area map, the proof-of-claim form, and an envelope, was sent to all class members and others who had not settled claims with Murphy through its voluntary settlement program after the Court issued the Order of Preliminary Approval. Over 6,600 of these packages were sent to 3,658 class area addresses and 3,321 class area properties. After subsequent remailings to updated current addresses, approximately 80% of the total number of individual addresses within the class area received the SNP. Third, 5,147 Supplemental Mailing Packages (“SMP”) with information concerning the allocation plan, fee requests, and remediation plan were sent to 2,635 class area addresses and 2,447 class area properties to reach class members who had not filed proof-of-claim forms. Only 187 class area addresses representing 170 class area properties that had not yet filed proof-of-claim forms did not receive the SMP. To reach remaining class members whose current addresses were unknown, notice of the settlement was also published in 10 newspapers circulated on a local basis or within areas of proximity to St. Bernard Parish where class members were believed to have relocated. Notice was published in each of these newspapers on two occasions within a short time frame (the earliest notice occurred on October 29, 2006, and the latest on November 15, 2006). To reach the remaining 10% to 15% of St. Bernard residents dispersed throughout several states, notice of the settlement was published in USA- Today, which has a nationwide circulation. Mr. Hilsee states that these newspaper publication efforts provided notice to an estimated 60% to 80% of the class members (Affidavit of Todd B. Hilsee, ¶ 67). Class members were also provided notice of the settlement and access to settlement documents through the Court’s website for the litigation, vnvw.laed.uscourts. gov, and Murphy’s website, www. murphyoileorp.com. Furthermore, St. Bernard Parish’s website, www.sbpg.net, also posted information about the spill, the class action lawsuit, and the settlement process. Lastly, this litigation and resulting settlement plan has received significant coverage in both the local and national press since the parties executed the Memorandum of Understanding on September 25, 2006. Mr. Hilsee states that, based on research data received from media consulting firms, adults were exposed to information about the class action settlement more than 9.9 million times due to newspaper articles alone (Affidavit of Todd B. Hilsee, ¶ 56). Local television and radio coverage of the proposed settlement has also been consistent. Through these numerous methods, notice was targeted to individual class members to inform them of the pendency of the action, the proposed settlement, the settlement terms and conditions, their interest in the settlement, the manner of distribution of proceeds, the date and time of the fairness hearing, and their right to object. As such, the Court finds that the parties used more than reasonable efforts to achieve the best notice practicable under the circumstances, thereby complying in all respects with Rule 23 and due process requirements. All of the above actions lead the Court to conclude that the class members received due and adequate notice in compliance with the Court’s order preliminarily approving the settlement and that these actions constituted the most reasonable manner of notice under Rule 23(e)(1)(B). E. Settlement Administration In order to assist class members, the parties established a claims center in Chal-mette, Louisiana. Claims office attorneys have assisted class members in opting back into the class, filing claim forms, obtaining legal documentation in support of claims, and filing objections. The Court designated Global Risk Solutions to serve as the Disbursing Agent to disburse payments to class members in accordance with the Settlement Agreement. The Court appointed Bourgeois Bennett, L.L.C. to perform accounting functions on behalf of the PSC regarding the Disbursing Agent’s services. Lastly, as previously mentioned, the Court also appointed Retired Judge Robert Klees as Special Master to assist in resolving allocation disputes and objections. Pursuant to the Settlement Agreement, these parties will be compensated by Murphy for their services. 11. FAIRNESS OF THE SETTLEMENT AGREEMENT Before approving a class settlement that binds members of the class, the Court must conduct a fairness hearing at which the parties proposing the settlement must present evidence that the settlement is “fair, reasonable, and adequate.” Fed. R.Civ.P. 23(e)(1)(C); see also Newby v. Enron Corp., 394 F.3d 296, 300-01 (5th Cir.2004); Parker v. Anderson, 667 F.2d 1204, 1209 (5th Cir.1982). Accordingly, on January 4, 2007, the Court held a fairness hearing to determine whether it should grant final approval of the settlement program in this case. At the hearing, the Court heard arguments from proponent counsel, Special Master Judge Klees, two objectors, and the Governor of Louisiana, Kathleen Babi-neaux Blanco, who appeared before the Court to express support for the class settlement and confirm that any class settlement awards would not be deducted from amounts class members might receive from the Louisiana Recovery Authority’s Road Home Program. The Court also ordered that the affidavits and declarations of class counsel, class representatives, and experts as to the fairness, reasonableness, and adequacy of settlement be offered into evidence and made part of the record. A. Legal Standard for Review of Class Action Settlements The Court must be exacting and thorough in analyzing whether the settlement is in the best interests of class members, Manual for Complex Litigation (Fourth) § 21.61 (2004), and should provide the basis for its conclusions in a reasoned opinion. See In re Combustion, Inc., 968 F.Supp. 1116, 1125 (W.D.La.1997) (stating that a court may not give boilerplate approval to settlement, but must instead analyze the facts and law supporting its conclusion in a memorandum); see also In re Wireless Tel. Fed. Cost Recovery Fees Litig., 396 F.3d 922, 933 (8th Cir.2005), cert. denied, — U.S. -, 126 S.Ct. 356, 163 L.Ed.2d 64. It has been remarked that the district court takes on the role of fiduciary for absent class members, or that of a skeptical client, who critically examines the settlement’s terms and implementation. See Reynolds v. Beneficial Nat’l Bank, 288 F.3d 277, 279-80 (7th Cir.2002); Georgevich v. Strauss, 96 F.R.D. 192, 196 (M.D.Pa.1982) (“[T]he Court must vigorously act as guardian of the rights of absentee class members.”); 1 Alba Conte & Herbert B. Newberg, Newberg on Class Actions § 1:3 (4th ed.2002); Manual for Complex Litigation § 21.61. Indeed, the district court must “exercise the highest degree of vigilance in scrutinizing the proposed settlement.” Reynolds, 288 F.3d at 279-80. When evaluating a proposed settlement, the Court must compare its terms with the rewards the class would likely receive following a trial and judgment in its favor. Cotton v. Hinton, 669 F.2d 1326, 1330 (6th Cir.1977). However, the merits of the case are not at issue during the settlement review process. Reed v. Gen. Motors Corp., 703 F.2d 170, 172 (5th Cir.1983). Otherwise, a primary goal of settlement — to avoid the expense and delay of trial — would be thwarted. See id. (citing Young v. Katz, 447 F.2d 431, 433 (5th Cir.1971)). The Court is also limited in that it may not make unilateral modifications or alterations to the proposed settle ment, but rather may only accept or reject the agreement as a whole. See Evans v. Jeff D., 475 U.S. 717, 726-27, 106 S.Ct. 1531, 89 L.Ed.2d 747; see also 7B Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1797.5 & n. 9 (3d ed.2005); Manual for Complex Litigation § 21.61. The Court may not resolve contested issues of fact or law, but instead is concerned with the overall fairness, reasonableness, and adequacy of the proposed settlement as compared to the alternative of litigation. Though Rule 23 does not elaborate specific factors necessary for settlement approval, the United States Court of Appeals for the Fifth Circuit has cited six factors that a district court should take into consideration when evaluating a proposed class action settlement. These factors, or “focal facets,” include: (1) the existence of fraud or collusion behind the settlement; (2) the complexity, expense, and likely duration of the litigation; (3) the stage of the proceedings and the amount of discovery completed; (4) the probability of plaintiffs’ success on the merits; (5) the range of possible recovery; and (6) the opinions of the class counsel, class representatives, and the absent class members. Reed, 703 F.2d at 172 (adopting six-factor test cited in prior Fifth Circuit decisions including Parker, 667 F.2d at 1209, and Pettway v. American Cast Iron Pipe Co., 576 F.2d 1157 (5th Cir.1978)); see also In re Corrugated Container Antitrust Litig., 643 F.2d 195, 217 (5th Cir. Apr.1981). The Court will consider these six factors, taking into account the statements by counsel, class representatives, and objectors; the Court’s own knowledge of the litigation obtained from its management and involvement in the case over the past year; and any recommendations provided by the Special Master. Before beginning an analysis, it is relevant to note that there is a “strong judicial policy favoring the resolution of disputes through settlement” and that a presumption is made in favor of the settlement’s fairness, absent contrary evidence. Smith v. Crystian, 91 Fed.Appx. 952, 955 (5th Cir.2004) (quoting Parker, 667 F.2d at 1209); Cotton, 559 F.2d at 1331. The public interest favoring settlement is especially apparent in the class action context where claims are complex and may involve a large number of parties, which otherwise could lead to years of protracted litigation and sky-rocketing expenses. See Cotton, 559 F.2d at 1331; In re: Train Derailment Near Amite La., MDL 1531, 2006 WL 1561470, at *11 (E.D.La. May 24, 2006) (“But for amicable resolution of this class action by compromise ... its disposition would almost certainly have been a complicated, lengthy, and exceedingly expensive enterprise.”). Ultimately, however, the proponents of the settlement bear the burden of demonstrating that the settlement is fair, reasonable, and adequate. See Wright, et al., supra, § 1797.1; see also Holmes v. Cont’l Can Co., 706 F.2d 1144, 1147 (11th Cir.1983); Foster v. Boise-Cascade, Inc., 420 F.Supp. 674, 680 (S.D.Tex.), aff'd, 577 F.2d 335 (5th Cir.1978). With this in mind, the Court will now turn to the six Reed factors. B. Analysis of the Reed Factors 1. Fraud or Collusion A strong presumption exists in favor of settlement if the district court determines that the settlement resulted from arms-length negotiations between experienced counsel and was not tainted by fraud or collusion. See Wal-Mart Stores, 396 F.3d at 116-17; 4 Alba Conte & Herbert B. Newberg, Newberg on Class Actions § 11:41 (4th ed.2002). The suspicion of fraud and collusion is sometimes suggested by agreements of counsel regarding attorneys’ fees. In private disputes such as the present case, class counsel have historically been compensated with a fee award taken directly out of the settlement fund. See, e.g., William J. Lynk, The Courts and the Plaintiffs Bar: Awarding the Attorney’s Fee in Class-Action Litigation, 23 J. Legal Stud. 185, 186 (1994). While the recovery of such “common benefit” fees from class members is based in equity, such a procedure can create a perceived or actual conflict of interest and may lead to claims of collusion. Courts and counsel have thus implemented alternative arrangements in an effort to combat the possibility of such appearances. It is common practice today for class counsel to negotiate a specific fee award after they have successfully negotiated the class’s recovery. See, e.g., In re GMC Pickr-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 803 (3d Cir.1995); In re Ford Motor Co. Bronco II Prods. Liab. Litig., MDL 991, 1995 WL 222177, at *4 (E.D.La. Mar.15, 1995) (“Separate negotiation of the class settlement before an agreement on fees is generally preferable to avoid conflicts of interest between the attorneys and the class.”). In addition to specifically negotiated fees, courts have been presented with class action settlements that include “clear-sailing clauses,” in which the defendant agrees not to contest a court-awarded fee up to a certain amount. In both instances, it is increasingly common for class action settlements to provide that such fees are to be paid separately by the defendant, that is, over and above the class’s recovery, rather than subtracted from the common benefit fund. But even these alternative arrangements have their skeptics. For example, the United States Court of Appeals for the Third Circuit noted that the first edition of the Manual for Complex Litigation “condemned fees that are paid separate and apart from the settlement funds paid to the class because amounts paid by the defendant(s) are properly part of the settlement funds.” In re GMC, 55 F.3d at 802-03; see also Staton v. Boeing Co., 327 F.3d 938, 964 (9th Cir.2003) (“That the defendant in form agrees to pay the fees independently of any monetary award or injunctive relief provided to the class in the agreement does not detract from the need carefully to scrutinize the fee award.”). A task force commissioned by the Third Circuit explained the rationale driving this skepticism: “Since the defendant is interested only in the total size of its liability, so long as the settlement is accepted, it often will be indifferent as to the division of the fund between the plaintiffs’ recovery and the attorneys’ fees.” Court Awarded Attorney Fees, Report of the Third Circuit Task Force, 108 F.R.D. 237, 266 (1985). The United States Court of Appeals for the First Circuit has also spoken on the issue: While the conflict between a class and its attorneys may be most stark where a common fund is created and the fee award comes out of, and thus directly reduces, the class recovery, there is also a conflict inherent in cases like this one, where fees are paid by a quondam adversary from its own funds — the danger being that the lawyers might urge a class settlement at a low figure or on a less-than-optimal basis in exchange for red-carpet treatment on fees. Weinberger v. Great N. Nekoosa Corp., 925 F.2d 518, 524 (1st Cir.1991). In class actions where the attorneys’ fee is negotiated by counsel, courts “must be particularly vigilant in evaluating [class counsel’s] recommendations because there may be a bias toward settlements in which the class attorney agrees to trade off a smaller total award by the defendant for a larger fee.” Wright, et al., supra, § 1797.1; see also Kent A. Lambert, Class Action Settlements in Louisiana, 61 La. L.Rev. 89, 102-04 (2000) (noting that “mixing negotiation of the overall settlement with discussions of attorneys’ fees” can, at a minimum, create “an appearance of impropriety”). Pecuniary self-interest of class counsel has long been cited by courts and scholars as a threat to performance of counsel’s' professional and fiduciary obligations to class members. See, e.g., Reynolds, 288 F.3d at 279-80; John C. Coffee, Jr., Class Action Accountability: Reconciling Exit, Voice, and Loyalty in Representative Litigation, 100 Colum. L.Rev. 370, 385-93 (2002); David L. Shapiro, Class Actions: The Class as Party and Client, 73 Notre Dame L.Rev. 913, 958-60 & n. 132 (1998). The proposed settlement before this Court is unique, however, in that not only are attorneys’ fees and expenses to be paid by Murphy over and above the class recovery, but the amount of the fee is left entirely to the Court’s discretion. As previously noted, this is significant because it exponentially decreases the possibility of collusion among counsel. Because the parties have not agreed to an amount or even a range of attorneys’ fees, and have placed the matter entirely into the Court’s hands for determination, there is no threat of the issue explicitly tainting the fairness of settlement bargaining. See, e.g., Bruce L. Hay, The Theory of Fee Regulation in Class Action Settlements, 46 Am. U.L.Rev. 1429, 1432 (1997) (“[P]roper regulation of the counsel’s fee is both necessary, and within limits, sufficient to mediate the tension between the goals of facilitating settlement and protecting the class against collusion.”). Finally, a presumption exists that settlement negotiations were conducted properly in the absence of collusion if the terms of the proposed settlement are demonstrably fair. See In re Corrugated Container Antitrust Litig., 643 F.2d at 212. As discussed below, the Court believes that the quality and comprehensiveness of the benefits provided to class members under the Settlement Agreement adequately compensate the class members. Class counsel are skilled attorneys who have extensive experience with this type of case and have used this knowledge at the bargaining table to conduct arms-length negotiations. Moreover, counsel for both sides engaged in vigorous advocacy, as evidenced by the extensive discovery, expert consultations, and motion practice in this case. Thus, settlement was achieved in the full context of the adversarial process. The Court monitored and often participated in the negotiation process and was fully informed of the developments leading up to settlement achievement. The Court, therefore, concludes that the proposed settlement was negotiated by the parties absent any fraud or collusion. 2. Complexity, Expense, and Likely Duration of the Litigation The complexity, expense, and likely duration of the litigation make the option of settlement a far better alternative in this case than proceeding to trial. As the Court stated at the fairness hearing, this class action litigation would ordinarily have taken five or more years to complete. Moreover, the Plaintiffs’ claims and Murphy’s defenses are complex and require a high degree of scientific and technical skill and knowledge, making discovery particularly expensive in light of the tests and experts required to successfully litigate the case. Approximately 3,800 properties are represented by the class representatives in this class action litigation. If a jury had determined that Murphy was indeed fully or even partially liable for the spill, the litigation regarding individual damages could have taken years to resolve and would have greatly increased the costs and fees associated with both prosecuting and defending the litigation. Moreover, an appeals process, if utilized, would add additional time and considerable expense and delay to the receipt of any relief afforded. From the inception of litigation, the Court has recognized that speedy resolution of this case was imperative because of the critical situation that many of the Plaintiff class members have faced since Hurricane Katrina. The storm completely devastated St. Bernard Parish, which has always been a tight-knit community. Many residents continue to remain displaced and are unable to return to their homes. Compensation now rather than later is an important step in affording class members the means to rebuild their neighborhood. Moreover, remediation efforts are critical in creating a safe environment for residents. Recognizing the desire of the St. Bernard community to return to their homes and businesses, the Court believes that the impact of settlement will significantly aid their road to recovery and return to normality. 3. Stage of the Proceedings and Amount of Discovery Completed The stage of the proceedings and the nature and extent of discovery can be significant factors in evaluating the fairness of a settlement. Although it is not essential that all or nearly all discovery be complete in order for a court to conclude that this factor supports a finding of fairness, see In re Corrugated Container Antitrust Litig., 643 F.2d at 211, it certainly strengthens the argument for approval of settlement. In this case, the parties executed the Memorandum of Understanding on September 25, 2006, approximately one week before the Phase One trial on liability was scheduled to begin. The Settlement Agreement was executed on October 9, 2006, and preliminarily approved by the Court on October 10, 2006. Since settlement was achieved so close to the trial date, discovery was basically complete and the parties were able to evaluate the class members’ claims and conduct informed bargaining. See In re Educ. Testing Serv. Praxis Principles of Learning & Teaching: Grades 7-12 Litig., 447 F.Supp.2d 612, 620 (E.D.La.2006) (“[T]he question is ... whether the parties have obtained sufficient information about the strength and weaknesses of their respective cases to make a reasoned judgment about the desirability of settling the case-”). The record reflects the following discovery efforts by the parties: • Approximately 52 motions were extensively briefed and filed by both sides and many of these motions were heard with oral argument. • An estimated 87 depositions were conducted. • The PSC engaged approximately 18 experts in various scientific and technical fields. • Murphy retained 10 experts regarding the liability phase of the trial. • The PSC interviewed numerous fact witnesses who were in St. Bernard Parish before and/or during Hurricane Katrina and met with the United States Coast Guard on several occasions to obtain video and photographic evidence of the spill’s effects. • The PSC, in conjunction with experts, caused 830 soil, sediment, water and/or air samples to be taken from the class area to obtain information on the nature and extent of the spill. Murphy has collected and analyzed approximately 16,375 samples from 5,413 addresses with agency oversight, and the EPA has collected and analyzed approximately 911 split samples. • The PSC drilled 15 monitoring wells and took numerous samples from these wells to attempt to confirm the extent of groundwater contamination from the spill, and it conducted sub-slab testing in several class area homes to confirm whether any toxins were being emitted. • The PSC created extensive and sophisticated computer graphics on issues such as tank gravitation, weather advisories, mechanisms of tank floating, rupturing and spilling crude oil, and test results in class boundaries. • The PSC took samples from Tank 250-2 for a full metallurgical analysis and attended the dismantling and demolition of Tank 250-2 in order to preserve evidence of location and condition of the tank, and its floating roof and bottom for trial. • The PSC and Murphy engaged in formal mediation conducted by an experienced mediator on March 24 and 25, 2006. Thus, from a review of the extensive discovery record and considering that the pending Phase One trial was to occur little more than one week before resolution was achieved, the Court finds that the parties were fully informed of the factual and legal obstacles presented and possessed more than sufficient information to determine that settlement was preferable to looming litigation. 4. Probability of Plaintiffs’ Success on the Merits A court’s determination, or even evaluation, of whether any factual or legal issues exist that could prevent or otherwise hinder success on the merits at trial produces somewhat of a tension against the prohibition of trying the case in the settlement hearings. See Reed, 703 F.2d at 172; see also Carson v. Am. Brands, Inc., 450 U.S. 79, 88 n. 14, 101 S.Ct. 993, 67 L.Ed.2d 59 (1981) (stating that courts must not resolve the merits of the case or unsettled legal questions when weighing the likelihood of success on the merits against settlement form and amount). Nevertheless, absent fraud or collusion, the probability of the plaintiffs’ success on the merits has been held by the Fifth Circuit as the most important Reed factor. See Parker, 667 F.2d at 1209. Thus, the Court now turns to this issue. The certified claims asserted in the Administrative Master Complaint — negligence, liability of a landowner for activity that deprives his neighbor of enjoyment or causes damages, strict liability, nuisance and trespass, and groundwater contamination — all relate to property damage that the Plaintiff class members allegedly suffered when oil spilled onto their properties. As revealed by numerous tests conducted at class members’ properties and uncontroverted visual evidence, there is no doubt that oh belonging to Murphy’s Tank 250-2 spilled onto many of these properties. Thus, proving that the crude oil damaged the Plaintiff class members’ properties would not be difficult; therefore, the Plaintiffs possessed strong claims for nuisance, trespass, groundwater contamination, and liability of a landowner for activity depriving a neighbor of enjoyment or causing damages. There was also strong evidence that Murphy did not follow its own hurricane protection procedures, which allowed the tank to float and subsequently rupture, suggesting that a jury could have found in the Plaintiff class members’ favor on the issue of negligence as well. Nevertheless, balanced against these factors weighing in the Plaintiffs’ favor are significant factual and legal obstacles that could have substantially reduced their probability of success on the merits, or minimized their recovery even if successful on the merits. The principal issue to be decided at the Phase One trial was Murphy’s fault and whether that fault was a legal cause of the oil spill. Through numerous pre-trial motions, the PSC indicated that it planned to take the position at trial that Murphy’s actions constituted the sole cause of the spill because Murphy allegedly failed to comply with its own hurricane protection plan and/or accepted industry and safety standards regarding protection of oil refinery storage tanks located in flood zones (Rec. Docs. 322, 528, & 529). Murphy’s stance throughout the proceedings has been to deny any fault on its part and argue that all fault for the oil spill belonged solely to natural causes and actions or inactions of the United States Army Corps of Engineers (“Corps”), who designed, constructed, and maintained the levee system along the MR-GO (Rec. Docs. 347, 543, & 567). It remains Murphy’s position that Tank 250-2 would not have floated and the containment dike that surrounded the oil tank would not have been damaged, but for the dike’s breach by flood waters, which caused the release of oil beyond the containment area and into the surrounding neighborhood. Murphy alleges that the catastrophic flooding was caused by the levee failures, which directly resulted from either natural causes or the Corps’ negligent construction, design, and maintenance. In short, Murphy’s position was that the cause of the Plaintiffs’ damage was not the release of oil from Tank 250-2, but the release of oil from the containment dike surrounding the Tank, and that this latter release was due entirely to the destruction of the dike by flood waters, which, in turn, was due to the storm or the Corps’ negligence. The Corps was not brought into this litigation by either party, due to its potential immunity from direct liability under the doctrine of sovereign immunity. See Loeffler v. Frank, 486 U.S. 549, 108 S.Ct. 1965, 100 L.Ed.2d 549 (1988) (recognizing that the United States is immune from suit, and that the courts lack jurisdiction to entertain any action against it unless it expressly waives its sovereign immunity); Block v. North Dakota ex rel. Bd. of Univ. & Sch. Lands, 461 U.S. 273, 287, 103 S.Ct. 1811, 75 L.Ed.2d 840 (1983); Humphries v. Various Fed. USINS Employees, 164 F.3d 936, 941 (5th Cir.1999); Williamson v. U.S. Dep’t of Agric., 815 F.2d 368, 380 (5th Cir.1987) (stating that if a plaintiff brings suit against a federal agency or a federal official acting in his or her official capacity, the claim is designated as a claim against the United States and will be barred absent an express waiver of sovereign immunity). However, Murphy contended that it was entitled to assert the fault of the Corps as an affirmative defense under Louisiana law, regardless of the Corps’ non-party status and potential immunity from suit. Indeed, article 2323 of the Louisiana Civil Code provides that the percentage of fault must be determined for all parties that caused or contributed to the loss, regardless of whether or not they are parties to the suit and regardless of immunity by statute. Although the Memorandum of Understanding was executed by the parties before the Court decided whether the Corps’ fault should be excluded from the Phase One trial, the Court notes that even if the jury had found both Murphy and the Corps negligent, Murphy would likely have been entitled to have its percentage of fault reduced by the amount for which the Corps was found liable, reducing the damages recoverable by class members. Furthermore, if the litigation had proceeded to Phase Two and Murphy was found liable in whole or in part, the Court would have had to determine which damage was due to the storm surge and which was due to the oil spill, since homes were already saturated with flood waters at the time of the oil spill. Murphy would not have been required to compensate class members for flood damage, as it did not cause the flooding of class members’ properties. Thus, establishing liability and the amount of damages at trial could have been problematic for the Plaintiffs. These legal and factual obstacles presented a considerable threat to the Plaintiffs’ success on the merits and support a finding that settlement was preferable to litigation. 5. Range of Possible Recovery “[I]n any case there is a range of reasonableness with respect to a settlement — a range which recognizes the uncertainties of law and fact in any particular case and the concomitant risks and costs necessarily inherent in taking any litigation to completion.... ” Newman v. Stein, 464 F.2d 689, 693 (2d Cir.1972). Thus, after determining if any legal or factual obstacles exist, a district court must make an inquiry into whether the settlement’s terms fall within a reasonable range of recovery, given the likelihood of the plaintiffs’ success on the merits. When considering this factor, the Court must remain aware that [compromise is the essence of settlement and the court should not make the proponents of a proposed settlement justify each term of settlement against a hypothetical or speculative measure of which concessions might have been gained; inherent in compromise is a yielding of absolutes and an abandoning of highest hopes. Nelson v. Waring, 602 F.Supp. 410, 413 (N.D.Miss.1983) (quoting Cotton, 559 F.2d at 1330). As noted, the Settlement Agreement calls for the settlement award to be allocated to class members based on an allocation plan. The allocation plan requires the entire class area to be divided into four geographic “Zones.” These Zones were created after extensive environmental sampling by experts hired by the PSC, Murphy, and governmental regulators; a comprehensive review of property records; and multiple quantitative analyses performed by a local public accounting firm, real estate and economic experts with specialized knowledge of the St. Bernard real estate market, and the Court-appointed Disbursing Agent. After several arms-length discussions between counsel regarding the creation of the four Zones, the Court approved the allocation plan (Rec. Doc. 802). Thus, these Zones were not arbitrarily established, but are the result of thoughtful and comprehensive evaluation of the class area. The Settlement Agreement provides that Murphy must spend $55 million on the purchase of properties within the Buyout Zone, the area containing the majority of highly impacted properties closest to Tank 250-2’s location (Affidavits of Marco Kaltofen, P.E., Paul H. Templet, Glenn C. Millner, Ph.D.). The intent of the buyout program is thus to create a buffer zone between the Murphy Oil refinery and the community and remove the most heavily contaminated properties from residential use. Owners of commercial properties will also be offered the option of buyout. Under the program, Murphy will offer to purchase all residential properties in the Buyout Zone at a rate of $40.00 per square foot. Real estate studies indicate that the price per square foot in the Chal-mette area for storm-surge damaged homes declined on average $50.57, or 64.9%, from $77.95 in 2005 to $27.38 in 2006 (Affidavit of Wade R. Ragas, Ph. D., MAI, ¶ 30). This decline in price reflects the typical cost to repair the significant damage caused by Hurricane Katrina and does not include the impact of oil. Id. Current housing prices for homes within the Buyout Zone, where storm surge and oil spill damage combined, range from $25 to $40 per square foot of living area. Id. at ¶ 34. Thus, the $40 per square foot offered to Buyout Zone property owners represents the very upper end of current market value (Affidavit of John A. Kilpatrick, Ph. D., MRICS, ¶ 7). Furthermore, class members within the Buyout Zone are not required to participate in the buyout program in order to receive the other settlement benefits of monetary compensation and remediation, and if Murphy does not use all of the $55 million for acquisition of properties within the Buyout Zone, it is required to use the remaining amount to purchase other properties in the class area. Based on these features, the Court finds that the buyout program offers considerable value to class members. Second, each and every class member stands to gain from Murphy’s agreement to financially compensate the class. The total amount of compensation to be distributed to class members is $120 million. The amount of compensation each individual class member will receive depends upon the Zone in which they reside or in which they own property, the total square footage of property, the number of persons who reside at the property, and the estimated commercial loss. Persons owning residential property in the Buyout Zone (otherwise known as Zone 1) will be compensated at a rate of $19.25 per square foot of living area, plus $3,375 per occupant for each occupant residing at the property as of August 29, 2005. Non-owner occupants living in the Buyout Zone as of August 29, 2005 will receive $3,375 per person, and commercial property owners are also entitled to monetary compensation. In Zone 2, owners of residential property will be compensated at a rate of $14.39 per square foot of living area, plus $3,375 per occupant. Non-owner occupants will receive $3,375 per person. In Zone 3, residential property owners will receive $10 per square foot of living area plus $2,500 per occupant. Non-owner occupants are awarded $2,500 per person. Commercial property owners in both Zones 2 and 3 are also entitled to compensation. Finally, residential and commercial property owners in Zone 4 will receive flat payments of $15,000 per property, and any tenants within this Zone who paid rent as of August 29, 2005 will receive $2,500 per person. Multiple owners with interests in a commercial property will share the $15,000 payment. Taking into consideration the legal and factual obstacles recited in the previous section, the Court finds that the monetary compensation afforded to class members falls within the reasonable range of recovery. The class members’ awards could have been significantly reduced if the case had proceeded to trial and the fault of the Corps was introduced. The compensation is also reasonable based on the fact that the Plaintiff class members’ properties were heavily damaged by flood waters before oil contaminated the properties. The program uses the appropriate factors to determine the amount of harm that individual members suffered — the amount of oil contamination found in the area; the square-footage of the residence or commercial building; and the number of people residing at the property. All are relevant measures when considering just relief for property damage due to an oil spill. Furthermore, class members benefit from Murphy’s agreement to remediate the class-wide area. All properties in all Zones will be remediated to the satisfaction of governmental regulators and this Court, and homeowners will be able to return to the properties once testing confirms that property is safe for occupancy. The Settlement Agreement thus does not provide a limit on the amount of money to be spent on remediation efforts, though the current estimate for future remediation costs stands at $20 million and past remediation cost totals almost $52 million. This feature of the Settlement. Agreement’s remediation provision is important because it ensures the health and safety of the community and places it at the highest level of priority. Remediation will limit future damage to the community by preventing the travel of oil to other areas and ensuring that residents are not subjected to the harmful effects of further oil exposure. Furthermore, remediation will help to revitalize the community and increase property values. All class members, and the St. Bernard community in general, will benefit from the settlement of this class action. The Settlement Agreement squarely falls within the reasonable range of relief for property damage and fully addresses the Plaintiff class members’ claims. The quality and comprehensiveness of the benefits provided attests to the fairness, reasonableness and adequacy of the Settlement Agreement. In approving a factually similar class action settlement arising out of underground oil seepage that caused damage to property, the United States Court of Appeals for the Eighth Circuit further explained why the use of compensation zones was appropriate: It seems to us that almost every settlement will involve different awards for various class members. Indeed, even if every class member were to receive an identical monetary award in settlement, the true compensation would still vary from member to member since risk tolerance various from person to person (i.e., a more risk-averse class member would place a greater premium on the certainty of a settlement award than a less risk-averse class member would). ... Each property owner stands to gain from Amoco’s agreement to compensate landowners for damage already sustained to property, and from Amoco’s undertaking steps to revitalize the community and to increase property values. Petrovic v. Amoco Oil Co., 200 F.3d 1140, 1146-48 (8th Cir.1999). These observations apply with equal, if not greater, force in this case. 6. Opinions of Class Counsel, Class Representatives, and Absent Class Members Counsel are the Court’s “main source of information about the settlement,” Manual for Complex Litigation § 21.641, and therefore the Court will give weight to class counsel’s opinion regarding the fairness of settlement. See Cotton, 559 F.2d at 1330 (“[T]he trial court is entitled to rely upon the judgment of experienced counsel for the parties.”). Class counsel’s opinion should be presumed reasonable because they are in the best position to evaluate fairness due to an intimate familiarity with the lawsuit. Boyd v. Bechtel Corp., 485 F.Supp. 610, 622 (N.D.Cal.1979). However, the Court’s deference must not be so great that it blindly follows class counsel’s recommendations. Id. Rather, the Court must give class counsel’s recommendations appropriate weight in light of all the factors surrounding the settlement. Id. (citing Pettway, 576 F.2d at 1215-16, and Saylor v. Lindsley, 456 F.2d 896, 900-01 (2d Cir.1972)). More than twenty members of the PSC, all able and experienced attorneys, have submitted affidavits stating that they believe the settlement constitutes a good bargain achieved on an arms-length basis. As stated above, the PSC obtained a thorough understanding of this litigation’s strengths and weaknesses through extensive motion practice, discovery, and past experience with similar cases. The Court therefore affords deference to their views. Additionally, all of the class representatives in this matter — Phyllis N. Michon, Cherie Scott Perez, James Shoemaker, Fernand Marsolan, and Robin Diaz Clark — submitted affidavits in which they state that it is their opinion that the proposed settlement is fair, reasonable, and adequate and that they have no objections. The attitude of absent class members, expressed either directly or indirectly by their failure to object after notice or high level of participation in the proposed settlement program, is an additional factor on which district courts generally place heavy emphasis. See In re Microstrategy, Inc. Sec. Litig., 150 F.Supp.2d 896 (E.D.Va.2001) (stating that class reaction is perhaps the most significant factor in determining whether a settlement is adequate). In the present case, of 3,800 potential claimant properties, there are only two objectors, and as of December 19, 2006, only 251 potential claimants have opted out of the class settlement program. (Perullo Aff. Ex. F. ¶ 11.) Thus, approximately 93% of potential class members have accepted the settlement. Additionally, as of December 19, 2006, 4,065 proof-of-claim forms have been received, with 3,997 of these being approved as accurate and 88 being corrected (Perullo Aff. Ex. F. ¶ 8.) These numbers indicate a pronounced response in support of the proposed settlement. In summary, a thorough analysis of the Reed factors supports a finding