Bowling v. Pfizer, Inc.

• Decision Date: 24 May 1996
• Docket Number: No. C-1-91-256.,C-1-91-256.
• Citation: 927 F. Supp. 1036
• Court: U.S. District Court — Southern District of West Virginia
• Parties: Arthur Ray BOWLING, et. al., Plaintiffs, v. PFIZER, INC., et al., Defendants.

927 F. Supp. 1036

Arthur Ray BOWLING, et. al., Plaintiffs, v. PFIZER, INC., et al., Defendants.

No. C-1-91-256.

United States District Court, S.D. Ohio, Western Division.

May 24, 1996.

Stanley Morris Chesley, Waite, Schneider, Bayless & Chesley — 1, Cincinnati, OH, for Arthur Ray Bowling, Julie Whyle, Janet Boggess, Barbara Finley, Jeffrey Laton Taylor, Emma Carolyn Wright, Archie Calvert, James Pauley, Sonja Lee Bowling, Jeffrey James Whyle, Lawrence Boggess, Jackie Wright, Wanda Calvert.

Harry Bernard Plotnick, Cincinnati, OH, Bruce A. Finzen, Minneapolis, MN, for 183 Individuals, Listed at 38-1, Who Fall Within the Definition of the Purported Class.

Janet Gilligan Abaray, Sherrill Patricia Hondorf, Waite, Schneider, Bayless & Chesley Co., Cincinnati, OH, Terrence Lee Goodman, Waite, Schneider, Bayless & Chesley Co., Cincinnati, OH, Fay Elizabeth Stilz, Stanley Morris Chesley, Waite, Schneider, Bayless & Chesley, Cincinnati, OH, for Elaine Pauley.

Marc David Mezibov, Sirkin, Pinales, Mezibov & Schwartz, Cincinnati, OH, for Adrienne Fedak, Ronald Dempster, Freda Dempster, Ministry of Health, Province of Alberta, Canada, Ministry of Health Province of Manitoba Canada.

James Ralph Adams, Frost & Jacobs, Cincinnati, OH, for Pfizer, Inc., Shiley Inc., in Irvine, California.

Larry M. Keller, Gary Green, Sidkoff Pincus & Greenn P.C., Philadelphia, PA, Morton B. Wapner, Philadelphia, PA, for Putative Class in Pennsylvania.

Gates Thornton Richards, Gates T. Richards Company, Cincinnati, OH, John T. Johnson, Johnson & Dylewski P.C., Houston, TX, for Nellie Melling.

Elliot Polanieki, Cincinnati, OH, for Objectors Pennsylvania Class.

Thomas Collins Rink, Strauss & Troy, Cincinnati, OH, John Weld Peck, Peck, Shaffer & Williams, Cincinnati, OH, David B. Malone, Peck Shaffer & Williams, Cincinnati, OH, for Robert L. Black, Jr.

Robert L. Black, Jr., Cincinnati, OH, pro se.

Brian Wolfman, Washington, DC, for Public Citizen, amicus.

Vance C. Simonds, Jr., Kasdan Simonds Peterson McIntyre Epstein & Martin, Irvine, CA, for Dutch Consumentenbond, amicus.

Thomas Collins Rink, Strauss & Troy, Cincinnati, OH, Peter J. Strauss, Graydon, Head & Ritchey, Cincinnati, OH, John Weld Peck, Peck, Shaffer & Williams, Cincinnati, OH, David B. Malone, Peck Shaffer & Williams, Cincinnati, OH, for Peter J. Strauss.

ORDER ON MOTION FOR RECONSIDERATION

NANGLE, District Judge.

Before the Court is Class and Special Counsel's Motion for Reconsideration, Alteration and Amendment (doc. 804) of the Court's Memorandum and Order on Applications for Attorneys' Fees and Expenses, entered in the above-captioned action on March 1, 1996, and amended by Order entered March 12, 1996. Also before the Court are the following: Defendants' Memorandum in Connection With Class and Special Counsel's Motion for Reconsideration (doc. 807); Memorandum of Law of Gary Crane, et al., and Amicus Public Citizen (hereinafter collectively referred to as "Public Citizen") In Opposition to Class and Special Counsel's Motion for Reconsideration (doc. 808); Class and Special Counsel's Reply to Public Citizen's Memorandum in Opposition to Class and Special Counsel's Motion for Reconsideration (doc. 809); Public Citizen's Memorandum in Response to Defendant's Memorandum in Connection With Class Counsel's Motion for Reconsideration (doc. 810); Affidavit of John T. Johnson in Support of Request for Reimbursement of Expenses (doc. 811); Class and Special Counsel's Reply to the Memorandum of Public Citizen in Response to Defendant's Memorandum in Connection With Motion for Reconsideration (doc. 828); Public Citizen's Response to Class and Special Counsel's Reply (doc. 829); Public Citizen's Response to Affidavit of John T. Johnson (doc. 834); and Response of Special Counsel James T. Capretz to March 21, 1996 Response of Public Citizen to Motion for Reconsideration (doc. 835). For the reasons set forth below, the Court will grant Class and Special Counsel's motion in part by increasing their award of expenses, but will deny the remainder of the relief sought in the motion.

BACKGROUND

The history of this litigation as it relates to Class and Special Counsel's joint fee application is set forth in some detail in the Court's Order of March 1, 1996, and will not be recounted herein. In that Order, the Court awarded Class and Special Counsel $10.25 million in attorneys' fees from the common fund created by the class settlement of this case. The Court also held that Counsel would be permitted, as part of their fee award, to make annual applications to the Court for an award of up to 10% of the defendants' annual payments of $6.25 million into the Patient Benefit Fund (a component of the common fund in the case). On March 12, 1996, the Court entered a second Order amending its Order of March 1, 1996, by awarding Counsel an additional $476,938.06 as compensation for the expenses which they had incurred in this case.

On March 11, 1996, Class Counsel, Stanley M. Chesley, along with Special Counsel John T. Johnson and James T. Capretz, filed their motion for reconsideration under Fed. R.Civ.P. 59(e), asserting that the award of $10.25 million for work performed to date is inequitably low, that the procedure established by the Court for the award of future fees is arbitrary and that the award of expenses in the Court's Order of March 12, 1996, does not fully compensate certain Special Counsel for the expenses which they incurred in this case.¹ In support of these assertions, Counsel criticize the Court's Order on a number of grounds, the essence of which is that the Court misunderstood the settlement and failed to recognize the value of Counsel's services. Public Citizen argues in opposition to Counsel's motion that the award of $10.25 million for work which Counsel have performed to date was proper, particularly when compared to Counsel's lodestar, and that the procedure established by the Court for the award of future fees was also proper. Defendants, on the other hand, have taken no position on Counsel's fee award, but nevertheless filed a memorandum in connection with Counsel's motion.

DISCUSSION

I. The Settlement

In support of their assertion that the award of $10.25 million for fees incurred through August of 1995 is inequitably low, Counsel initially contend that the Court misunderstood the Patient Benefit Fund, undervalued the common fund and failed to recognize the full breadth of benefits flowing from the settlement. Counsel also contend that the Court's suggestion that the Class is declining at a rapid rate is without any factual basis.

A. The Patient Benefit Fund and Common Fund

Counsel argue that the Court mischaracterized the Patient Benefit Fund as a guaranteed fund of only $37.5 million, which may increase to as much as $75 million. According to Counsel, the Patient Benefit Fund is a guaranteed fund of $75 million and, as a result, the total value of the common fund is $165 million.

After reviewing the defendants' and Public Citizen's most recent submissions and again reviewing the settlement agreement, the Court concludes that the defendants are in fact required to continue making annual contributions of $6.25 million to the Patient Benefit Fund until they have contributed a total of $75 million. Supplemented Agreement of Compromise and Settlement ("Settlement Agreement"), ¶ 5.1. The Court would point out, however, that the settlement agreement is not particularly clear on this point, and the Court's characterization of the Fund as a guaranteed fund of only $37.5 million was based upon the presentation that Class Counsel made at the hearing held September 14, 1995. During this presentation, Class Counsel outlined all aspects of the settlement agreement to assure that the Court had a full and complete understanding of the benefits available to the Class thereunder. Counsel's outline of the Patient Benefit Fund consisted of the following:

The next aspect of the settlement, which was unique and novel, was a research element called Patient Benefit Fund of up to $75 million. Now, that was a guaranteed thirty-seven-and-a-half million, and that was a very hard-fought negotiation on the basis that at the end of the payment of thirty-seven-and-a-half million dollars, the defendants would be able to go to the Court and say — if the Supervisory Panel of six eminent physicians and a lay person come to the conclusion that we have solved all the problems we can ever solve for research, then and only then could they go to the Court and say they shouldn't have to put in the second thirty-seven-and-a-half million dollars.

If, on the other hand, the Supervisory Fund sic — and Class Counsel are allowed to object to them stopping the thirty-seven-and-a-half million and its up to the continuing jurisdiction of the Court to determine the additional thirty-seven-and-a-half million of research. (emphasis added)

Transcript of September 14, 1995 Hearing on Applications for Attorneys' Fees, at 20-21. Class Counsel made this statement on the record and under oath,² and he clearly indicated that the Patient Benefit Fund is a guaranteed fund of only $37.5 million, which may increase to as much as $75 million if the defendants do not object or if the Court so orders.³ Thus, Class Counsel need look no further than his own words for the reason that the Court characterized of the Patient Benefit Fund as a guaranteed fund of only $37.5 million.

More importantly, the fact that defendants' ultimate payment of $75 million into the Patient Benefit Fund is guaranteed does not affect the Court's analysis of the common fund. The Patient Benefit Fund clearly is not a $75 million fund in the same sense that the Medical and Psychological Fund is an $80 million fund and Spousal Compensation Fund is a $10 million fund. Both of these funds have been fully funded and are being distributed to qualifying class members. Thus, defendants' total payment of $90 million into these two funds equates...