$9.5 million settlement gets tentative OK


A federal judge today gave preliminary approval to the proposed $9.5 million settlement between Holiday Universal Inc. and blacks who were subjected to racial discrimination when they tried to join Holiday Spas and related health clubs in Baltimore and four other major cities.

Judge Joseph C. Howard, in U.S. District Court here, chided the plaintiffs' lawyers for proposed legal fees of more than $3.5 million to be paid out of the settlement.

Gregory Kernan, the lead plaintiff in the class-action suit, told Howard that the legal fees were negotiated between the lawyers and plaintiffs, and class members did not object to them.

The plaintiffs' lawyers said they felt the fees were justified, in part because most of the work done on the case over the past 2 1/2 years was accomplished by associates, not partners, at private law firms.

"We regard compensation for the time spent as really vital in attracting other law firms to take on this kind of litigation," said Joseph M. Sellers, of the Washington Lawyers' Committee for Civil Rights Under the Law, which spearheaded the Holiday case. "The [health club] industry is ripe with this kind of [discriminatory] conduct."

Kernan said, "We agree with the future enforcement of civil rights, that part of the settlement should go to the enforcement of civil rights laws."

Howard set a fairness hearing July 23, after which he would sign the proposed consent decree, making it final, if there are no substantial objections to it.

People who believe they were discriminated against at health clubs operated by Holiday and its subsidiary, U.S. Health Inc., have until May 30 to apply to the U.S. District Court clerk here for acceptance as members of the class.

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