Corrugated Container Antitrust Litigation, In re

• Decision Date: 29 October 1981
• Docket Number: 80-1103,Nos. 80-1018,s. 80-1018
• Citation: 659 F.2d 1322
• Parties: 1981-2 Trade Cases 64,339 In re CORRUGATED CONTAINER ANTITRUST LITIGATION. ADAMS EXTRACT CO., et al., Plaintiff-Appellees, CFS Continental, Inc., et al., Townhouse Furniture, et al., Rossville Packing Co., et al., Denver Meat Co., et al., Carron Manufacturing Co., Andre-Boudin Bakeries, Inc., Ilikon Corp., Great Northern Packaging Corp., et al., Plaintiffs-Appellants-Appellees, Pleasure Hours, Inc., et al., London Dry Ltd., et al., Plaintiffs- Objectors-Appellants-Appellees, v. The CHESAPEAKE CORPORATION OF VIRGINIA, et al., Stone Container Corp., Defendants-Appellants-Appellees. In re CORRUGATED CONTAINER ANTITRUST LITIGATION. ADAMS EXTRACT CO., et al., Plaintiff-Appellees, Great Northern Packaging Corp., et al., CFS Continental, Inc., et al., Rossville Packing Co., et al., Andre-Boudin Bakeries, Inc., et al., Townhouse Furniture, et al., Denver Meat Co., et al., Carron Manufacturing Co., Ilikon Corp., Wittek Golf Supply Co., Inc., Plaintiffs-Appellants-Appellees, v. PLEASURE HOURS, INC., et al., St. Joe Paper Co., The Continental Group, Okinfraft, Inc., Container Corporation of America, The Chesapeake Corporation of Virginia, Owens-Illinois, Inc., MacMillan Bloedel, Inc., Inland Container Corp., Menasha Corp., U. S. Corrugated Fibre-Box Co., Stone Container Corp., Defendants- Appellants-Appellees. Summary Calendar. . Unit A *
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1322

659 F.2d 1322

1981-2 Trade Cases 64,339

In re CORRUGATED CONTAINER ANTITRUST LITIGATION.

ADAMS EXTRACT CO., et al., Plaintiff-Appellees,

CFS Continental, Inc., et al., Townhouse Furniture, et al.,

Rossville Packing Co., et al., Denver Meat Co., et al.,

Carron Manufacturing Co., Andre-Boudin Bakeries, Inc.,

Ilikon Corp., Great Northern Packaging Corp., et al., Plaintiffs-Appellants-Appellees, Pleasure Hours, Inc., et al., London Dry Ltd., et al., Plaintiffs- Objectors-Appellants-Appellees, v. The CHESAPEAKE CORPORATION OF VIRGINIA, et al., Stone

Container Corp., Defendants-Appellants-Appellees.

In re CORRUGATED CONTAINER ANTITRUST LITIGATION.

ADAMS EXTRACT CO., et al., Plaintiff-Appellees,

Great Northern Packaging Corp., et al., CFS Continental,

Inc., et al., Rossville Packing Co., et al., Andre-Boudin

Bakeries, Inc., et al., Townhouse Furniture, et al., Denver

Meat Co., et al., Carron Manufacturing Co., Ilikon Corp., Wittek Golf Supply Co., Inc., Plaintiffs-Appellants-Appellees, v. PLEASURE HOURS, INC., et al., St. Joe Paper Co., The

Continental Group, Okinfraft, Inc., Container Corporation of

America, The Chesapeake Corporation of Virginia,

Owens-Illinois, Inc., MacMillan Bloedel, Inc., Inland

Container Corp., Menasha Corp., U. S. Corrugated Fibre-Box

Co., Stone Container Corp., Defendants- Appellants-Appellees.

Nos. 80-1018, 80-1103

Summary Calendar.

United States Court of Appeals, Fifth Circuit.

Unit A ^*

Oct. 29, 1981.

Aram A. Hartunian, Marshall Patner, Pressman & Hartunian, Chtd., Chicago, Ill., Michael W. Perrin, Fisher, Roch & Gallagher, Houston, Tex., for plaintiffs-appellants Great Northern Packaging Corp., et. al., co-representative of Sheet Plant Sub-Class.

Stephen D. Susman, Terrell W. Oxford, William H. White, Susman & McGowan, Houston, Tex., Vance K. Opperman, McGovern, Opperman & Paquin, Minneapolis, Minn., for class plaintiffs-appellees.

Charles Kadish, Breed, Abbott & Morgan, New York City, for settling defendant Union Camp Corp.

Allen D. Black, Fine, Kaplan & Black, Philadelphia, Pa., Jack Chestnut, Chestnut & Brooks, Minneapolis, Minn., Jerry S. Cohen, Kohn, Milstein & Cohen, Washington, D. C., Jack Corinblit, Marc M. Seltzer, Corinblit, Shapero & Seltzer, Los Angeles, Cal., Kenton C. Granger, Anderson, Granger, Nagels, Lastelic & Gordon, Overland Park, Kan., Charles Kipple, Saccomanno, Clegg, Martin & Kipple, Houston, Tex., H. Kenneth Kudon, Pantaleo & Kudon, Chartered, Washington, D. C., Seymour Kurland, Wolf, Block, Schorr & Solis-Cohen, Philadelphia, Pa., Lowell E. Sachnoff, Sachnoff, Schrager, Jones, Weaver & Rubenstein, Ltd., Chicago, Ill., for plaintiffs' Steering Committee.

H. Laddie Montague, Jr., Howard Langer, Berger & Montague, P. C., Philadelphia, Pa., Lawrence J. Hayes, Maun, Green, Hayes, Simon, Johanneson & Brehl, St. Paul, Minn., for Sheet Plant Subclass plaintiffs-appellees; Richard A. Lockridge, John Murray & Associates, St. Paul, Minn., of counsel.

Henry L. King, Davis, Polk & Wardwell, New York City, for undersigned settling defendants.

David E. Bennett, Mark M. Heatwole, Chadwell, Kayser, Ruggles, McGee & Hastings, Ltd., Chicago, Ill., for Container Corp. of America.

Fletcher H. Etheridge, Butler, Binion, Rice, Cook & Knapp, Houston, Tex., Harold F. Baker, Alan M. Wiseman, Gaspare J. Bono, Howrey & Simon, Washington, D. C., for amicus curise The Mead Corp.

Michael H. King, Alexander R. Domanskis, Eric S. Palles, Ross, Hardies, O'Keefe, Babcock & Parsons, Kael B. Kennedy, Lee Ann Watson, Katten, Muchin, Zavis, Pearl & Galler, Chicago, Ill., for plaintiffs-appellants-appellees.

James B. Sloan, Sloan & Connelly, P.C., Chicago, Ill., Guido Saveri, Saveri & Saveri, San Francisco, Cal., Phillip C. Goldstick, Goldstick & Smith, Joseph A. Ginsburg, Levin, Ginsburg & Novoselsky, Chicago, Ill., Leonard Barrack, Barrack, Rodos & McMahon, Philadelphia, Pa., Granvil I. Specks, Perry Goldberg, Gary L. Specks, Specks & Goldberg, Ltd., Ellis Sostrin, Sostrin & Walner, Chicago, Ill., Robert H. Weir, Law Offices of Robert H. Weir, San Jose, Cal., Michael J. Freed, Lawrence H. Eiger, Much, Shelist, Freed, Denenberg, Ament & Eiger, Chicago, Ill., for plaintiff-appellant Container Purchasers.

Appeals from the United States District Court for the Southern District of Texas.

Before CHARLES CLARK, TATE and WILLIAMS, Circuit Judges.

CHARLES CLARK, Circuit Judge:

We remanded this multidistrict price-fixing class action for more detailed findings of fact and conclusions of law concerning various aspects of settlements approved by the district court. 643 F.2d 195, 225-26 (5th Cir. 1981). At the same time, we noted that "(n)one of the (objectors') arguments persuades us that the settlements must be set aside or modified." Id. at 202. The district court made additional findings and conclusions and once again approved the proposed settlements. ¹ This reapproval is now before us for further evaluation in light of our mandates in the prior remand and the district court's findings and conclusions. Because our mandates have been followed and proper findings support the settlement agreements and the formula for allocating certain of the settlement proceeds among class members as fair, reasonable, and adequate, we find the reapproval to be well within the discretion of the district court and affirm. Since Texas Industries, Inc. v. Radcliff Materials, Inc., --- U.S. ----, 101 S.Ct. 2061, 68 L.Ed.2d 500 (1981), has established that there is no right of contribution under the antitrust laws, the distribution of settlement funds may proceed.

I. The Remand Instructions

In remanding this action to the district court, we sought an enlarged factual and legal base upon which to evaluate the settlement agreements and allocation formula. The particular requests we made of the district court for information on these distinct issues are summarized below.

A. The Settlement Agreements

We enunciated a three-step process for passing on the fairness, reasonableness, and adequacy of the settlement agreements. That process required the district court to evaluate the plaintiffs' likelihood of prevailing at trial and the range of possible recovery at such a trial, to consider other relevant factors, and to determine the point on or below the range of possible recovery at which the settlement was fair, reasonable, and adequate. In re Corrugated Container Antitrust Litigation, 643 F.2d 195, 212. In calling for additional information on the range of recovery and likelihood of prevailing at trial, we eschewed any requirement of a high degree of specificity. Id. Nonetheless, we found the district court's initial findings inadequate in the following respects.

In crediting Dr. Richard C. Hoyt's expert testimony and establishing $200 to $800 million as the range of possible recovery, the district court failed to compile adequate findings to rebut two of the objectors' criticisms. The objectors argued that Dr. Hoyt's computation wrongly failed to take into account the period preceding the four-year statute of limitations and was the product of defective methodology. The district court was asked to explain why it only considered damages within the statute of limitations period in computing the range of possible recovery. Id. at 214. In explaining the district court was requested to evaluate objectors' argument that defendants' fraudulent concealment tolled the statute of limitations and enlarged the temporal, and thus, the monetary range of possible recovery. Id. In addition, the district court was instructed to consider the difficulties of proving a price-fixing conspiracy and assessing damages for the longer period. Id. We also called upon the district court to justify its reliance on Dr. Hoyt's estimates, rebut the objectors' criticisms of Dr. Hoyt's conclusions, and explain why Dr. Hoyt's conclusions are more accurate than those of the objectors' experts. Id. at 215. We then turned to the district court's discussion of the likelihood that the class would prevail on the merits and suggested that the district court more completely explain its conclusions. Id. at 217.

Based on the established range of possible recovery and the plaintiffs' likelihood of success, the court was to exercise its discretion and determine the fairness, reasonableness, and adequacy of the settlements. We also instructed the district court to explain and evaluate why it attached importance to factors such as the length, complexity, and expense of an actual trial and the number and importance of parties opting out of the class or objecting to the settlements. Id. at 217-18. Furthermore, the district court was directed to make particularized findings as to why each individual settlement was reasonable, or at least to explain why it was unnecessary to do so. Id. at 218.

B. The Allocation Formula

In order to allocate the proceeds of settlements reached prior to January 5, 1979, the agreements provide that class members file claims based on their purchases between 1960 and 1978 and that the proceeds be distributed to class members in proportion to those claims. The objectors point out that this formula treats pre-1973 purchases on a par with post-1972 purchases, even though the district court expressed the opinion that claims on pre-1973 purchases might have been barred by the statute of limitations. We called upon the district court to articulate persuasive justifications for the allocation formula. Id. at 220.

II. The District Court's Additional Findings

A. Standard of Review

Our discussion of the district court's additional findings on the adequacy of the settlements and the reasonableness of the allocation formula is best prefaced by the caveat that the essence of a settlement is compromise. A just result is often no more than an arbitrary point between competing notions of reasonableness. As we stated in our earlier remand, "our appellate function ... is a limited one, especially in light of the strong judicial policy...