Air Crash Disaster at Florida Everglades on December 29, 1972, In re

• Decision Date: 29 December 1972
• Parties: In re AIR CRASH DISASTER AT FLORIDA EVERGLADES ON
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1006

549 F.2d 1006

In re AIR CRASH DISASTER AT FLORIDA EVERGLADES ON DECEMBER 29, 1972.

Dorothy GORDON, etc., Joseph Mazur and Rose Mazur, Meryl

Adrienne Rubin, etc., Plaintiffs, and Fuchsberg &

Fuchsberg, their attorneys, Appellants, v. EASTERN AIR LINES, INC., et al., Appellees.

Steve N. MINGUZZI et al., Plaintiffs, and Landes, Wingate &

Shamis, their attorneys, Appellants, v. EASTERN AIR LINES, INC., et al., and "Plaintiffs'

Committee," Appellees.

No. 74-2074.

United States Court of Appeals Fifth Circuit.

April 4, 1977.

Fuchsberg & Fuchsberg, Cyrus M. Diamond, New York City, for Gordon.

Landes, Wingate & Shamis, New York City, for Minguzzi.

Susan Goldman, Miami, Fla., for appellants.

Stanley Jay Bartel, Robert Orseck, Miami, Fla., for appellees.

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

Before TUTTLE, GODBOLD and MORGAN, Circuit Judges.

GODBOLD, Circuit Judge:

This is a dispute over attorney fees awarded to a small group of plaintiffs' counsel who were designated by the district court as lead or liaison counsel for plaintiffs' side in a massive consolidated multidistrict case. The fees were awarded out of fees receivable by other plaintiffs' counsel.

The consolidated case embraced more than 150 claims for death and injuries arising from the crash of a large Eastern Airlines passenger plane near Miami, Florida. The District Court for the Southern District of Florida appointed as "lead counsel" for plaintiffs a "Plaintiffs' Committee," and counsel for the Committee, who between themselves represented 60 plaintiffs. ¹ The real appellees in interest are the lawyers composing the Committee and its counsel. While the nominal appellants are persons who were plaintiffs below, the real appellants in interest are two of the law firms required by the court to contribute to the fees of the Committee. None of the parties plaintiff or defendant in the primary litigation is actively involved in this appeal.

Originally the authority of the Committee was limited to leading and coordinating discovery and other pre-trial matters. Later it was broadened to include service as lead counsel to prepare and conduct test cases on the issue of liability. The two test cases were never tried. The extensive discovery and pre-trial preparation carried on by the Committee were largely responsible for an ultimate concession of liability by defendant Eastern on the eve of trial and the consequent settlement of many cases. The court awarded compensation to the Committee for their work as lead counsel by ordering each other attorney representing a plaintiff, except those attorneys who had actively participated in the pre-trial activities, to pay to the Committee a part of the fee that he was entitled to receive from his client.

We hold that the district judge had the power to award compensation to the Committee to be paid by other plaintiff counsel out of the fees they were entitled to receive. But we hold that the power was exercised in an erroneous manner, and, therefore, reverse and remand the case for setting of appropriate fees.

On December 29, 1972, an Eastern Airlines jet en route from New York to Miami crashed in the Florida Everglades, killing 96 of its 191 passengers and crew and injuring many others. Many lawsuits claiming damages for death and for personal injuries suffered in this crash were soon filed in Florida state courts, and in federal district courts in New York and Florida, against Eastern Air Lines, Lockheed and the United States government. On April 23, 1973, the United States District Court for the Southern District of Florida appointed a temporary plaintiffs' committee to coordinate and handle discovery in both federal and state courts.

On June 28, 1973, the federal cases were transferred to the Southern District of Florida for consolidated or coordinated discovery by the Judicial Panel for Multi-district Litigation (MDL) pursuant to 28 U.S.C. § 1407. In re Air Crash Disaster at Florida Everglades on December 29, 1972, 360 F.Supp. 1394 (Jud.Pan.Mult.Lit., 1973). The MDL panel alluded to the coordinated discovery in progress:

(N)umerous actions have been filed in the Florida state courts and, through the cooperation of the parties and the state and federal court judges involved, discovery proceedings in the state court actions are being coordinated with the discovery in the Florida federal court actions. Transfer of all actions to the Southern District of Florida, therefore, will take advantage of this state-federal accommodation in discovery and will greatly enhance the expeditious processing of all actions arising out of the crash. . . .

Id. at 1395-96. After the transfer the District Court for the Southern District of Florida entered an order that the temporary committee would continue until further order of the court. This committee came to be known as the "Plaintiffs' Committee." ² The court entered no precise instructions defining the Committee's authority but made clear in notices to parties and at pre-trial hearings that the Committee was to coordinate discovery and take the lead in discovery and that all counsel were free to participate in discovery. Only a few other plaintiff attorneys took part in the Committee's discovery efforts, and it is conceded that appellants did not.

At pretrial conferences in September ³ there was discussion of a consolidated trial on the question of liability. On suggestion of counsel, the court attempted to secure consent of all parties to be bound by trial of two test cases. On September 24 it sent to all parties and all crash victims who had not yet filed suit a proposed stipulation for a consolidated test trial on liability, along with a statement that the court approved the stipulation and recommended that all plaintiffs execute it. The proposed stipulation contained this provision concerning fees for lead counsel:

10. That plaintiffs and claimants have and will be deriving benefits from efforts of the Plaintiffs' Committee and Counsel authorized by the Court and the Committee (sic) should bear their fair share of repayment of the costs and payment for counsel's skill and time and effort which have been devoted to the common question of liability. After conclusion of the liability trial, this Court, upon application and hearing by all interested parties, shall determine the matter of the fair and reasonable contingent fee and return of disbursements to be paid to the Plaintiffs' Committee and counsel authorized by the Court and the Committee.

Not all plaintiffs joined in the stipulation. At a pre-trial hearing on October 10 the court stated that the Committee was to continue and was to be in charge of preparing and trying the case for the plaintiffs. Also the court twice pointed out that it was of no consequence whether the title given to the Committee and its members was "lead counsel," "liaison counsel," "co-lead counsel," "co-liaison counsel," or "Committee."

On October 18 the court issued an order consolidating the various cases before it pursuant to 28 U.S.C. § 1404 and Rule 42(a), F.R.Civ.P., for a joint trial on liability. ⁴ The October 18 order "appointed" (actually, re-appointed) the two committee members as liaison counsel and as lead counsel to prepare for and conduct the test trials, and they were authorized to utilize the two counsel for the Committee. See n. 2, supra. They were directed to act as spokesmen for all plaintiffs at pre-trial conferences and authorized to enter into stipulations as necessary for the liability trial. The order provided:

6. That Plaintiffs and claimants have and will be deriving benefits from efforts of lead counsel and the counsel authorized by the Court and the Committee who have in fact prepared this matter for trial on behalf of the Plaintiffs and who will represent the Plaintiffs in the trial of this matter. After conclusion of the necessary trial, this Court, upon application and hearing by all interested parties, will determine the matter of fair and reasonable contingent fees and return of disbursements to be paid to lead counsel and to the counsel authorized by the Court who have conducted the pre-trial discovery and preparation and who will conduct the trial on behalf of the Plaintiffs.

9. No settlement of any claim or judgment of dismissal based upon a settlement will be approved as to any of these related civil actions or claims without a showing that such Plaintiff or claimant has reimbursed said participating and lead counsel for expenses and services and no sum of money proceeds shall be paid by any defendant on any settlement without prior approval of this Court. ⁵

On November 16, ten days before trial was scheduled to begin, the defendant Eastern conceded liability, and the defendants Lockheed and the United States agreed to contribution toward the payment of claims without conceding liability. With these stipulations by the three defendants, trial on the issue of liability became unnecessary and the parties began to negotiate settlements.

The court set for hearing the matter of attorney fees, directed the Committee to submit to the court and all counsel "a detailed list of expenses incurred and such other data as they deem necessary," and requested from other plaintiff counsel recommendations with respect to the computation of fees. Committee members and the two committee counsel submitted and served on other plaintiff counsel written statements describing their respective services and listing expenses totalling $60,411.11. They requested a fee of 10% of the settlements received by plaintiffs other than those by whom they had been retained. Numerous counsel filed objections and briefs at the hearing held on November 30. No testimony was taken but numerous counsel orally argued. ⁶ On December 5 the court entered its order awarding the Committee and counsel a fee of 8% of the settlement obtained by each plaintiff who had retained counsel not a...