In re MGM Grand Hotel Fire Litigation, MDL No. 453.

Decision Date17 March 1987
Docket NumberMDL No. 453.
PartiesIn re MGM GRAND HOTEL FIRE LITIGATION.
CourtU.S. District Court — District of Nevada

John J. Cummings, III, New Orleans, La., Stanley M. Chesley, Cincinnati, Ohio, Wendell H. Gauthier, Kenner, La., Melvin M. Belli, San Francisco, Cal., Toxey H. Smith, Los Angeles, Cal., Will S. Kemp, Las Vegas, Nev., Joseph W. Cotchett, San Mateo, Cal., Leonard M. Ring, Chicago, Ill., J. Bruce Alverson, Las Vegas, Nev., Joseph Weiner, Philadelphia, Pa., for plaintiffs: Plaintiffs' Legal Committee.

Allan B. Goldman, Los Angeles, Cal., Stephen L. Morris, James Olson, Las Vegas, Nev., for MGM.

Leland Eugene Backus, A. William Maupin, Las Vegas, Nev., for Taylor Const. Co.

Rex Jemison, Corby Arnold, Las Vegas, Nev., for Martin Stern, Jr., AIA Architect d/b/a Martin J. Stern Architect and Associates.

G. Edward Fitzgerald, Richard McKnight, Los Angeles, Cal., for California Electric Const. Co.

Samuel A. Harding, Las Vegas, Nev., for Continental Mechanical Corp.

Nicholas W. Hornberger, Los Angeles, Cal., for Otis Elevator Co.

James F. Pico, Las Vegas, Nev., for Clark County Departments and Political Subdivisions.

John F. O'Reilly, Las Vegas, Nev., for W.J. Thompson, Inc.

Duane Tewell, Seattle, Wash., for Simpson Timber Co.

Samuel T. Rees, Beverly Hills, Cal., for Cadillac Plastic and Chemical Co.

Tom H. Foulds, Seattle, Wash., for American Protection Ins. Co., Lumbermens Mut. Cas. Co., Kemper Corp., American Motorist Ins. Co., American Manufacturers Mut. Ins. Co., and American Protection Ins. Co.

MEMORANDUM AND ORDER

BECHTLE, District Judge.

Presently before the court is Plaintiffs' Legal Committee's petition for an award of attorney fees and costs. For the reasons stated herein, the petition will be granted.

Plaintiffs' Legal Committee ("the PLC"), appointed by this court in court Order No. 8, filed August 13, 1981, seeks an award of attorney fees of 7% of the gross recovery of "global settlement" funds and for costs for services rendered and costs incurred on behalf of all plaintiffs in the above-captioned litigation from the commencement of their services to date. The gross recovery, the total amount of the now final global settlement, with interest, is in excess of $205,000,000.00.1

A description of the course of this litigation and the factual elements and relative rank of each of the parties and interests, whether they be plaintiffs' or defense interests, as well as a summary of the progress of the litigation, appears in the court's Order No. 376, 570 F.Supp. 913 (D.Nev.1983), which the court incorporates herein by reference. The court also incorporates by reference court Order No. 420, filed March 15, 1984, which contains an important discussion of the concerns and difficulty faced in determining the PLC fee in this case.2

The PLC previously filed motions for an award of attorneys' fees and costs on December 24, 1985, and again on May 15, 1986, in respect to which argument and evidence was heard at a hearing and a pretrial conference held on January 7, 1986 ("Pretrial Conference No. 17") and May 13, 1986 ("Hearing On Motions") respectively. At Pretrial Conference No. 17 the interested parties were granted leave to file supplemental briefs and the court took the motion under advisement and awaited that additional paperwork. The second motion was filed on May 15, 1986. The court considered the motions as well as the opposition arguments and documents and ruled that notice and a more detailed petition articulating in greater precision the exact claim the PLC was making was required so that all plaintiffs' attorneys who could be affected by the fee petition would have a full understanding of the claim. See Order No. 746, filed August 20, 1986.

The PLC then filed the instant petition and new evidence and arguments were introduced and heard at Pretrial Conference No. 19 in Las Vegas on October 15 and 16, 1986.

The only opposition to the PLC petition comes from private plaintiffs' attorneys, Sybil A. Davis, Esquire, Michael McGill, Esquire, F. Lee Bailey, Esquire, Aaron J. Broder, Esquire, Ray LaPica, Esquire, and William Sampson, Esquire. Ms. Davis represents Wendell B. Will, guardian of the estates of Allison Ann Thompson and Kristie Lynn Thompson and administrator of the estates of Tommy G. Thompson and Dianne Kay Thompson. Mr. McGill represents Erik D. Nilsson, individually and as executor of the estates of Donald C. Nilsson and Janet T. Nilsson, and Thomas C. Nilsson and Carol J. Nilsson. Mr. F. Lee Bailey and Mr. Aaron Broder represent Wayne Bailey, Estate of Dorothy Burdzinski, Estate of Willie Lee Duncan, Alice Kiel, Duane Sinatra, Ida Vellone, Joseph Vellone, Donna Wilson, Jean Wilson, Jorge Zairik Simon and Mirna Zairik Salomon. Mr. Ray LaPica represents the Herring Family. Mr. William Sampson represents Ester, Salvador, Elias, Jack, Celia and Mario Galico.

Two other attorneys, James L. Fetterly and Neil G. Galatz, both representing Grand Hotel Valet Services, Inc.; Clocks, The Time and Place, Ltd.; The Teepee, Inc.; La Grande Jewels Corporation, Inc.; MGM Grand Florists, Inc.; James H. Smith; The Travelers Insurance Companies; Florist Mutual Insurance Company; Fireman's Fund Insurance Companies; State Farm Fire and Casualty Company; and Those Underwriters at Lloyds' London, indicated in a petition filed on October 15, 1986, that their eleven plaintiff clients support the PLC's petition provided that their clients who suffered property losses be fully compensated for their actual calculated losses. As stated in Order No. 762, filed on November 21, 1986, which vacated Order No. 758, the court will consider the October 15, 1986 petition of counsel for those eleven plaintiffs as a form of "objection," albeit a qualified one, to the PLC's instant petition for an award of attorney fees and costs.

The sole objection of the attorneys who object to the PLC fee petition is to the PLC receiving a fee of 7% of the recovery as opposed to 5% of the recovery.

In Order No. 764, filed on December 22, 1986, the court created a fund of approximately $7,060,000.00 from which the PLC fees may be paid should the court grant the instant fee petition.3

DISCUSSION

If the court denied the PLC fee petition, the PLC would receive attorney fees in the amount of 5% of the gross recovery and the individual private attorneys (non-PLC attorneys and PLC attorneys when not considered in their capacity as PLC members) would receive a maximum of 28 1/3 % of their clients' gross recovery, with the PLC attorney fees and non-PLC attorney fees totalling a maximum of 33 1/3 % by reason of this court's Order No. 399 that limited the total fee to be paid by any plaintiff to be 33 1/3 % of a recovery due that plaintiff. If the court grants the PLC petition, the PLC will receive 7% of the gross recovery as attorney fees and the non-PLC attorneys will receive a maximum of 26 1/3 % of their client's gross recovery as attorney fees, with the PLC attorney fees and non-PLC attorney fees again totalling a maximum of 33 1/3 % of each plaintiff's gross recovery. The court has the right and the duty to establish equitable fees for all of the attorneys and has done so previously in this case.

The PLC points out various facts which put their petition into context vis-a-vis other court awards of attorneys' fees. This is a fund creation case, a pure fund-in-court case, not a statutory fee case. The disposition of the instant PLC fee petition could not impose additional liability on the defendants; nor does it affect any defendant in any other way. Regardless of which way the court disposes of the PLC fee petition, the fund which will be available for distribution to plaintiffs in the personal injury and death claim cases will be greater as to each plaintiff than the amount that each such plaintiff originally agreed to accept in settlement of that plaintiff's claim. Granting the PLC's petition will not work to take money away from the plaintiff beneficiaries of the recovery fund. The total amount of attorneys' fees to be allowed under the court's Order remains unchanged at 33 1/3 % of each plaintiff's ultimate gross recovery. The eleven plaintiffs who claimed property damage and are represented by Mr. Fetterly and Mr. Galatz will receive 100% of what they agreed to accept in settlement which is 25% of their original claims. In the personal injury and death claim cases, the vast majority of the cases, plaintiffs will receive over 128% of what they originally agreed to receive. See Order No. 375, filed July 12, 1983.

The effect of granting all or any part of this fee petition would thus be best characterized as fee shifting from the plaintiffs' individual attorneys to the PLC.4

The court's original award of fees to the PLC in this matter was an amount equal to 5% of the total gross recovery. See Pretrial Memorandum Order No. 420, filed March 19, 1984. As this court acknowledged and emphasized in Order No. 420, the 5% figure was in the court's view below what would normally be expected by the application of standard principles for attorneys' work in class action-type litigation. Id. at pages 4, 7 and 8. At the time the court entered Order No. 420 neither the court nor anyone involved with this case contemplated the ultimate reality that the PLC would produce such vast additional funds well above the agreed global settlement figure of $134,887,992.00.

In court Order No. 8, filed August 13, 1981, which was during the time the PLC was being formed and beginning its work, the court stated in paragraph O:

In addition to the reimbursement to the committee of such sums, the court, at times that the court deems appropriate in the future, and upon notice to all parties, will consider the payment of interim and final fee for services performed by committee members for and on behalf of the committee pursuant to this Order. Any such fee approved and to be awarded to the members of the committee shall be based upon the
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