Fine Paper Antitrust Litigation, In re
| Decision Date | 13 December 1984 |
| Docket Number | 83-1233,83-1261,Nos. 83-1172,83-1300 and 83-1312,83-1241,83-1299,83-1239,83-1266,83-1242,83-1220,83-1216,s. 83-1172 |
| Citation | 751 F.2d 562 |
| Parties | 1985-1 Trade Cases 66,337, 17 Fed. R. Evid. Serv. 222 In re FINE PAPER ANTITRUST LITIGATION. Appeal of WALTER E. RIORDAN, P.A., in 83-1172. Appeal of LAWRENCE WALNER AND ASSOCIATES, LTD., in 83-1216. Appeal of PHILLIP C. GOLDSTICK & ASSOCIATES, LTD., in 83-1220. Appeal of FREEMAN, ATKINS & COLEMAN, LTD., in 83-1233. Appeal of SAVERI & SAVERI, in 83-1239 and 83-1300. Appeal of O'BRIEN AND HALLISEY, P.C., in 83-1241. Appeal of MUCH SHELIST FREED DENENBERG AMENT & EIGER, P.C., in 83-1242. Appeal of SACHNOFF WEAVER & RUBENSTEIN, LTD., in 83-1261. Appeal of SPECKS & GOLDBERG, LTD., in 83-1266. Appeal of ROGERS, RUDE, CANDLIN, FAULKNER & SJOSTROM, in 83-1299. Appeal of SLOAN AND ASSOCIATES, P.C. (formerly Sloan and Connelly, P.C.), in 83-1312. |
| Court | U.S. Court of Appeals — Third Circuit |
Walter E. Riordan, Minneapolis, Minn., for appellant, Walter E. riordan, P.A.
Edmund W. Kitch, Charlottesville, Va. (argued), Lawrence Walner, Lawrence Walner & Associates, Ltd., Chicago, Ill., for appellant, Lawrence Walner & Associates, Ltd.
Stewart M. Weltman, Phillip C. Goldstick & Associates, Ltd., Chicago, Ill., for appellant, Phillip C. Goldstick & Associates, Ltd.
Frank H. Easterbrook, Chicago, Ill., for appellants, Freeman, Atkins & Coleman, Ltd., Much Shelist Freed Denenberg Ament & Eiger, P.C., Sachnoff Weaver & Rubinstein, Ltd.
Jeremiah F. Hallisey, O'Brien & Hallisey, P.C., San Francisco, Cal., for appellant, O'Brien and Hallisey.
Guido Saveri, Richard Saveri, Saveri & Saveri, P.C., San Francisco, Cal., for appellant, Saveri & Saveri.
Lionel G. Gross (argued), Kenneth R. Gaines, Benjamin D. Schwartz, Monte Dube, Chicago, Ill., for appellant, Specks & Goldberg, Ltd.; Altheimer & Gray, Chicago, Ill., of counsel.
James W. Rude, Wildfang, Rude, McIntosh, Murray, Chartered, Minneapolis, Minn., for appellant, Rogers, Rude, Candlin, Faulkner & Sjostrom.
James B. Sloan (argued), Sloan & Associates, P.C., Chicago, Ill., for appellant, Sloan and Associates, P.C.
Weil, Gotshal & Manges, New York City, for appellees; Ira M. Millstein (argued), Dennis J. Block (argued), New York City, of counsel.
Table of Contents
Page
I. Evolution of the Fee Dispute 568
II. The Hearings 571
III. The Trial Court's Decision 572
A. Preliminary Observations 572
B. General Guidelines 574
C. Application of the Guidelines 575
(1) Pretrial Memorandum Time 578
(2) Read and Review Time 579
(3) Fee Petition Time 579
(4) Pretrial Conference Time 579
(5) Hours Billed Without Adequate Time Records 579
(6) Industrial Analysis Comittee Time 580
D. Other Specific Rulings 581
(1) Disallowance of Time of John A Kithas and Charles Lamont 581
(2) Disallowance of Time of Rogers, Rude, Candlin, Faulkner &
Sjostrom 581
(3) Sloan and Associates, P.C., Pricing Study Time 581
(4) Disallowance of Other Walter E. Riordan, P.A. Time 582
IV. Appellants' Contentions 582
V. Our Rulings 582
A. Governing Legal Standards 582
B. Objections to the Manner of Conducting the Hearing 584
C. Objectives to the Trial Court's General Guidelines 587
(1) Contingency Factors 587
(2) The Quality Multiplier 589
(3) Use of Uniform Hourly Rates 590
(4) Reduction of Partner Rates for Certain Activities 591
(5) Elimination From the Lodestar of Certain Activities 593
(a) Pretrial Memorandum Time 593
(b) Pretrial Conference Time 595
(c) Fee Petition Time 595
(d) Hours Billed Without Adequate Time Records of Activity 595
(e) Industrial Analysis Committee Time 596
(f) Read and Review Time 597
(6) Other Specific Rulings 597
(a) Saveri & Saveri, P.C. 597
(b) Rogers, Rude, Candlin, Faulkner & Sjostrom 598
(c) Sloan and Connelly, P.C. 598
(d) Walter E. Riordan, P.A. 598
(e) The Specks & Goldberg, Ltd., Negative Multiplier 600
VI. Conclusion 602
Before GIBBONS and BECKER, Circuit Judges, and DEBEVOISE, District Judge. *
Eleven law firms appeal from an order allowing fees out of a fund resulting from the settlement of class actions charging a conspiracy to fix prices in violation of Section 1 of the Sherman Act. 15 U.S.C. Sec. 1 (1982). 1 The order was entered after a hearing on objections to fee applications made on behalf of some members of the plaintiff class. 2 We remand for further proceedings consistent with this opinion.
On March 3, 1978, twelve separate fine paper pricefixing lawsuits were transferred by the Judicial Panel on Multi-district Litigation for coordinated and consolidated pretrial proceedings to the Eastern District of Pennsylvania, where four such actions were already pending. 3 The first of these sixteen actions had been filed on July 18, 1977 in the Northern District of Illinois by the law firm of Specks & Goldberg, Ltd. Other actions were later filed in different districts around the country, and these, too, were eventually transferred to the Eastern District of Pennsylvania.
Prior to the March 3, 1978 transfer, some members of the law firms which had filed the initial cases met, first in Atlanta in January of 1978, and again in Chicago on February 3, 1978, to organize a common strategy for the handling of the litigation. At the February 3, 1978 meeting these plaintiffs' lawyers, acting as a committee of the whole, elected an Executive Committee, which designated Granvil I. Specks, Esq., of the Chicago firm of Specks & Goldberg, Ltd., and Harold Kohn, Esq., of the Philadelphia firm of Kohn, Savett, Marion & Graf, P.C., as co-chairmen. 4 Both Specks and Kohn were experienced in the successful representation of plaintiffs in Fed.R.Civ.P. 23(b)(3) class actions. Those present at the February 13, 1978 meeting also agreed upon a lead counsel team, comprised of Specks, Kohn, Joseph Cotchett, John Noll and, later, Seymour Kurland.
Shortly after the March 3, 1978 transfer order, and ten months prior to any class certification, the trial court held a pretrial conference at which, over the objection of the Attorney General of California, who represented one plaintiff, it approved the organizational structure proposed by plaintiffs' counsel. 5 App.A. 130-43. The court by order expressly approved the creation of the Executive Committee, and expressly contemplated the establishment by that committee of additional standing committees. At the time of this pretrial conference a number of subcommittees, including a Rule 37 Subcommittee, a Plaintiffs' Discovery Committee, a Compliance With Defendants' Discovery Committee, an Industrial Analysis Committee and a Finance Committee, had already been created by the Executive Committee. App. O 262-67.
The same Pretrial Order which approved the organizational structure of plaintiffs' counsel also fixed a 30 day time limit for the filing of a motion or motions for class certification, and a 90 day time limit for completion of discovery relating to class action issues. App. A 138-39. It was not until February of 1979, however, that the court certified a national class of direct purchasers of fine paper. 6
Meanwhile, however, settlement discussions went forward with certain fine paper manufacturer defendants. On July 25, 1978, counsel for the plaintiffs received an offer from St. Regis Paper Co. to settle its total liability for $2 million. Five other defendants made settlement offers between that date and January 16, 1979, when settlement offers totaling $30 million were in hand. Shortly after the entry of the court's February 1979 order certifying a national class of direct purchasers of fine paper the plaintiffs moved, on March 5, 1979, for preliminary approval of the proposed settlements with the six defendants whose offers totaled $30 million. That proposed settlement was opposed by those paper manufacturer defendants who had not yet offered to settle, some of whom had previously filed crossclaims for contribution. Judicial approval of the partial settlements was not obtained until September 2, 1979. Pretrial Order No. 66.
By the time the $30 million settlement with six fine paper manufacturers had been approved, 23 additional separate lawsuits had been...
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