Thirteen Appeals Arising Out of San Juan Dupont Plaza Hotel Fire Litigation, In re, s. 94-1156

Citation56 F.3d 295
Decision Date07 December 1994
Docket Number94-1422,94-1440,94-1438,Nos. 94-1156,94-1439,94-1426,94-1409,94-1423,94-1427,94-1414,s. 94-1156
PartiesIn re THIRTEEN APPEALS ARISING OUT OF the SAN JUAN DUPONT PLAZA HOTEL FIRE LITIGATION. . Heard
CourtUnited States Courts of Appeals. United States Court of Appeals (1st Circuit)

Judith Resnik, with whom Dennis E. Curtis, Richard A. Bieder, and Koskoff, Koskoff & Bieder, P.C., were on brief, Bridgeport, CT, for appellants Bieder, et al.

Jose E. Fernandez-Sein on brief, Santurce, PR, for appellant Nachman.

Steven C. Lausell, with whom Jimenez, Graffam & Lausell was on brief, San Juan, PR, for appellee Jimenez, Graffam & Lausell.

Will Kemp, with whom Stanley Chesley, Wendell Gauthier, John Cummings, David Indiano and Harrison, Kemp & Jones, Chtd., were on brief, Las Vegas, NV, for remaining appellees.

Before SELYA, Circuit Judge, BOWNES, Senior Circuit Judge, and CYR, Circuit Judge.

SELYA, Circuit Judge.

These appeals require us to revisit the war zone where two groups of plaintiffs' lawyers have struggled over the proposed allocation of roughly $68,000,000 in attorneys' fees. One camp, dissatisfied with the district court's latest formula for distributing the fees, attacks the court's order on three fronts. The disgruntled lawyers contend that the district court (1) violated their due process rights, (2) used an improper method to determine the awards, and (3) divided the available monies in an arbitrary and unreasonable manner. We find appellants' first two plaints to be without merit, but we agree with them that allocating 70% of the fees to the appellees constituted an abuse of the trial court's discretion. And, because we are reluctant to prolong a matter that, like the proverbial cat, seems to have nine lives, we take matters into our own hands and reconfigure the fee awards.

I. BACKGROUND

The lay of the land is familiar. We explored much the same terrain in an earlier encounter, see In re Nineteen Appeals Arising Out of San Juan Dupont Plaza Hotel Fire Litig., 982 F.2d 603 (1st Cir.1992), and a plethora of opinions describing the details of the underlying litigation pockmark the pages of the Federal Reports, see, e.g., id. at 605 n. 1 (offering partial listing). Thus, a brief overview of the litigation will suffice.

In 1987, the Judicial Panel on Multidistrict Litigation consolidated over 270 cases arising out of the calamitous conflagration that had ravaged the San Juan Dupont Plaza Hotel on the evening of December 31, 1986. See In re Fire Disaster at Dupont Plaza Hotel, 660 F.Supp. 982 (J.P.M.L.1987) (per curiam). The designated trial judge, Hon. Raymond L. Acosta, handpicked certain attorneys, denominated collectively as the Plaintiffs' Steering Committee (PSC), to act as lead and liaison counsel for the plaintiffs. In Nineteen Appeals, we summarized the roles played by the PSC and the individually retained plaintiffs' attorneys (IRPAs), respectively:

The PSC members looked after the big picture: mapping the overarching discovery, trial, and settlement strategies and coordinating the implementation of those strategies. The IRPAs handled individual client communication and other case-specific tasks such as answering interrogatories addressed to particular plaintiffs, preparing and attending the depositions of their clients, and taking depositions which bore on damages. The IRPAs also worked with Judge Bechtle [the "settlement judge"] on a case-by-case basis in his efforts to identify and/or negotiate appropriate settlement values for individual claims. When Judge Acosta determined that the plaintiffs should try twelve representative claims as a means of facilitating settlement, a collaborative composed of three PSC members and four IRPAs bent their backs to the task.

Nineteen Appeals, 982 F.2d at 605.

The combined efforts of all concerned generated a settlement fund approximating $220,000,000. The district court computed the payments due under the various contingent fee agreements, deducted the total (roughly $68,000,000) from the overall settlement proceeds, and placed that sum in an attorneys' fee fund (the Fund). 1 In his initial attempt to disburse the Fund, Judge Acosta used an enhanced lodestar to compute the PSC's fees, and awarded some $36,000,000 (52% of the Fund) to PSC members in their capacity as such, leaving the balance to be distributed among the IRPAs. A group of lawyers (mostly, but not exclusively, "non-PSC" IRPAs) 2 succeeded in vacating this award on the ground that the proceedings were procedurally flawed. See id. at 610-16.

The victory proved to be illusory. On remand, the district court abandoned the lodestar approach, adopted the percentage of the fund (POF) method, and recalculated the fees based on what it termed "the relative significance of the labor expended by the IRPAs and PSC members in instituting, advancing, or augmenting the plaintiffs' settlement fund." Using this methodology, the court awarded 70% of the Fund to PSC members in their capacity as such, thereby increasing their share of the fees by some $11,000,000, while simultaneously reducing the IRPAs' share of the Fund by the same amount. These appeals ensued.

II. ADEQUACY OF THE PROCEEDINGS

In a virtual echo of the claims advanced in Nineteen Appeals, appellants (all of whom are IRPAs) characterize the proceedings by which the district court determined the allocation of the Fund as unfair. Specifically, appellants assert that the revamped procedural framework violated their rights to due process, and that, in all events, the court abused its discretion in erecting the framework. We consider these assertions in sequence.

A. Due Process.

In Nineteen Appeals, 982 F.2d at 610-16, we discussed the due process considerations implicated in the fee-setting aspect of this litigation. We again use the triangular construct of Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976), to determine whether the district court afforded the IRPAs "the opportunity to be heard 'at a meaningful time and in a meaningful manner.' " Id. at 333, 96 S.Ct. at 902 (quoting Armstrong v. Manzo, 380 U.S. 545, 552, 85 S.Ct. 1187, 1191, 14 L.Ed.2d 62 (1965)).

The first Mathews factor involves a specification of "the private interest that will be affected by the official action...." Id. at 335, 96 S.Ct. at 903. Rehashing this point would serve no useful purpose. We conclude, for precisely the same reasons articulated in our earlier opinion, that the IRPAs have a salient private interest in the fees due them for services rendered. See Nineteen Appeals, 982 F.2d at 612.

The second Mathews factor requires us to examine the risk of error presented by the district court's procedures. See Mathews, 424 U.S. at 335, 96 S.Ct. at 903. The last time around we determined that the hearing format invited error. See Nineteen Appeals, 982 F.2d at 612-13. Appellants urge us to find that the proceedings on remand represented no real improvement and again presented an intolerable risk of error--this time because the district court refused to hold an evidentiary hearing, to allow free-form discovery, or to permit cross-examination of PSC members. We conclude, for reasons described more fully in Part II(B), infra, that the format revisions cured the infirmities that led us to invalidate the district court's earlier effort.

The third Mathews factor necessitates an assessment of the public interest, including "the fiscal and administrative burdens" that improved procedural requirements would entail. Mathews, 424 U.S. at 335, 96 S.Ct. at 903. Here, too, past is prologue: we studied this point in the course of the first appeal and remarked the "substantial governmental interest in conserving scarce judicial resources." Nineteen Appeals, 982 F.2d at 614. We also recognized the reasonableness of keeping tight controls on the fee dispute in light of the large number of lawyers involved, the lengthy shelf life of the litigation, and the Supreme Court's admonition that "[a] request for attorney's fees should not result in a second major litigation." Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S.Ct. 1933, 1941, 76 L.Ed.2d 40 (1983). This important public interest remains intact.

To sum up, the district court reformed its ways, significantly moderating the restrictions originally imposed on the IRPAs. The court levelled the playing field by permitting the IRPAs to present their case in precisely the same manner as their litigation adversaries. Moreover, the court gave both camps adequate notice and a meaningful opportunity to be heard. From a procedural standpoint, then, the adjudicative process employed on remand met the test of fundamental fairness and gave appellants the process that was due.

B. Abuse of Discretion.

Appellants strive to convince us that Judge Acosta abused his discretion in authoring three procedural rulings, namely, (1) denying appellants' entreaty that an evidentiary hearing be held; (2) denying the bulk of their discovery requests; and (3) denying them the privilege of cross-examination. We are not persuaded.

1. Lack of an Evidentiary Hearing. We need not tarry over the supposed error in refusing to hold an evidentiary hearing. 3 A district court is not obliged to convene an evidentiary hearing as a means of resolving every attorneys' fee dispute. See Nineteen Appeals, 982 F.2d at 614; Weinberger v. Great N. Nekoosa Corp., 925 F.2d 518, 528 (1st Cir.1991). Because evidentiary hearings in fee disputes are not mandatory, the decision not to convene one is reviewed deferentially, using an abuse-of-discretion standard. See Weinberger, 925 F.2d at 527. In conducting that review, appellate tribunals cannot woodenly apply a preconceived matrix. Rather, flexibility is the watchword. Because a district court has available to it a "wide range of procedures" through which it can "bring a sense of fundamental fairness to the fee-determination hearing while at the same time husbanding ...

To continue reading

Request your trial
157 cases
  • In re Tobacco Cases I
    • United States
    • California Court of Appeals Court of Appeals
    • April 26, 2013
    ... ... party since it achieved its main litigation objective of stopping said campaign [Farm ... These consolidated appeals of the orders followed. 216 Cal.App.4th 577 ... California Dept. of Forestry and Fire Protection (2010) 190 Cal.App.4th 217, 248, 118 ... a reasonable time on the same matter."]; Dupont Plaza Hotel Fire Litigation (1st Cir.1995) 56 ... ...
  • Volkswagen Grp. of Am., Inc. v. Peter J. McNulty Law Firm
    • United States
    • U.S. Court of Appeals — First Circuit
    • July 27, 2012
    ... ... VOLKSWAGEN AND AUDI WARRANTY EXTENSION LITIGATION. Volkswagen Group of America, Inc.; Volkswagen ... 111438, 111857. United States Court of Appeals, First Circuit. Heard May 10, 2012. Decided July ... In re Thirteen Appeals Arising out of the San Juan Dupont Plaza Hotel Fire Litig., 56 F.3d 295, 304 (1st Cir.1995) ... ...
  • In re Enron Corp. Securities
    • United States
    • U.S. District Court — Southern District of Texas
    • September 8, 2008
    ... ... SECURITIES, DERIVATIVE & "ERISA" LITIGATION ... Mark Newby, et al., Plaintiffs ... Enron ... District Judge and Third Circuit Court of Appeals Judge H. Lee Sarokin (# 5819); Lucian Bebchuk, ... § 1331 over this dispute arising out of violations of the federal securities laws, ... lodestar in common fund cases."); In re Thirteen Appeals Arising Out of San Juan Dupont Plaza l Fire Litig., 56 F.3d 295, 308 (1st Cir.1995) ... ...
  • In re Cases
    • United States
    • California Court of Appeals Court of Appeals
    • May 8, 2013
    ... ... CONSOLIDATED APPEALS from orders of the Superior Court of San Diego ... party since it achieved its main litigation objective of stopping said campaign [Farm ... California Dept. of Forestry and Fire Pro tection (2010) 190 Cal.App.4th 217, 248, 118 ... reasonable time on the same matter.”]; Dupont Plaza Hotel Fire Litigation (1st Cir.1995) 56 ... ...
  • Request a trial to view additional results
2 books & journal articles
  • Money matters: judicial market interventions creating subsidies and awarding fees and costs in individual and aggregate litigation.
    • United States
    • University of Pennsylvania Law Review Vol. 148 No. 6, June 2000
    • June 1, 2000
    ...Plaza Hotel Fire Litig., 982 F.2d 603 (1st Cir. 1992); In re Thirteen Appeals Arising Out of the San Juan Dupont Plaza Hotel Fire; Litig., 56 F. 3d 295 (1st Cir. 1995); supra note 180 (discussing fee limits imposed in the A.H. Robins (187) Under current ethical rules, lawyers who represent ......
  • How Class Action Fees Work in the Eleventh Circuit
    • United States
    • Mercer University School of Law Mercer Law Reviews No. 73-3, March 2022
    • Invalid date
    ...or lodestar method or a crosscheck. See In re Thirteen Appeals Arising Out of San Juan Dupont Plaza Hotel Fire Litig., 56 F.3d 295, 308 (1st Cir. 1995) (district court has discretion to use either method or some combination); In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prod. Liab. Litig......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT