7-Eleven Owners for Fair Franchising v. Southland Corp

In 7-Eleven Owners for Fair Franchising v. Southland Corp. (2000) 85 Cal.App.4th 1135, the objecting parties acknowledged that the settlement was preceded by " 'vigorous, aggressive and exhaustive' discovery" over four and a half years of litigation (7-Eleven, supra, 85 Cal.App.4th at p. 1149). During the course of "three daylong evidentiary hearings" (id. at p. 1142), the court was apprised of the details and maximum dollar value of the plaintiffs' various claims, the defenses to those claims, and the manner in which counsel evaluated the strengths of each of the claims. Although criticized by objectors, the court received sworn testimony as to the amounts in controversy and following tentative approval of the settlement the defendant paid $ 30,000 to defray the cost of hiring an accountant "to test the validity of defendant's ... data by sampling the underlying records, interviewing defendant's accounting personnel, and taking related 'due diligence' measures." (Id. at p. 1154.) The trial judge reviewed the contract provisions that were in dispute, as well as counsel's evaluation of the merits of the plaintiffs' claims, and expressed " 'serious reservations about whether there have been breaches sufficient even to bring these damages issues into account' " with one "singular" exception. (Id. at p. 1151.) The appellate court was satisfied that the trial court had fulfilled its fiduciary duty "to have before it sufficient information to determine if the settlement was fair, adequate, and reasonable." (Id. at pp. 1151.)