Bowling v. Pfizer, Inc.
| Decision Date | 13 August 1996 |
| Docket Number | 95-4054,96-3744 and 96-3774,96-3568,96-3740,Nos. 94-4322,s. 94-4322 |
| Citation | 102 F.3d 777 |
| Parties | Arthur Ray BOWLING, et al., Plaintiffs-Appellees, Jeffrey A. Crane, Gene Randall, Gerard Benedik, Intervenors-Appellants (96-3568)/Cross-Appellees, Stanley M. Chesley, Waite, Schneider, Bayless & Chesley Company, L.P.A., John T. Johnson, Johnson & Dylewski, James T. Capretz, Capretz & Radcliffe, Brian R. Magana, Magana, Cathcart & McCarthy, Charles M. Wolfson, Cross-Appellants (96-3744)/Appellees, Sidkoff, Pincus & Green, P.C., Wapner, Newman & Wigrizer, Appellants (95-4054; 96-3774)/Cross-Appellants (96-3740)/Appellees, Elizabeth W. Ridgeway, et al., on behalf of themselves and as representatives on behalf of the Pennsylvania Class Objectors, Appellants (94-4322; 95-4054)/ Cross-Appellees, v. PFIZER, INC., Shiley, Inc., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Stanley M. Chesley (argued and briefed), Fay E. Stilz, Waite, Schneider, Bayless & Chesley, Cincinnati, OH, for Arthur Ray Bowling in Nos. 94-4322 and 95-4054.
Stanley M. Chesley (argued and briefed), Waite, Schneider, Bayless & Chesley, Cincinnati, OH, for Arthur Ray Bowling in Nos. 96-3568 and 96-3774, Waite, Schneider, Bayless & Chesley Company, L.P.A. and Stanley M. Chesley in Nos. 96-3568, 96-3740, 96-3744 and 96-3774, Brian R. Magana and Magana, Cathcart & McCarthy in No. 96-3568.
Morton B. Wapner, Wapner, Newman & Associates, Philadelphia, PA, Larry M. Keller, Gary Green (argued and briefed), Sidkoff, Pincus & Green, Philadelphia, PA, for Elizabeth W. Ridgeway, Rosemary Grunsby, Fred Grunsby in Nos. 94-4322 and 95-4054.
Larry M. Keller, Gary Green (argued and briefed), Sidkoff, Pincus & Green, Philadelphia, PA, for Sidkoff, Pincus & Green, P.C. in Nos. 95-4054, 96-3568, 96-3740 and 96-3744, Wapner, Newman & Wigrizer in No. 96-3568.
Elliot Polanieki, Cincinnati, OH, Larry M. Keller, Gary Green (briefed), Sidkoff, Pincus & Green, Philadelphia, PA, for Sidkoff, Pincus & Green, P.C. in No. 96-3774.
Morton B. Wapner, Wapner, Newman & Associates, Philadelphia, PA, for Wapner, Newman & Wigrizer in No. 95-4054.
Morton B. Wapner, Wapner, Newman & Associates, Philadelphia, PA, Gary Green (argued), Sidkoff, Pincus & Green, Philadelphia, PA, for Wapner, Newman & Wigrizer in Nos. 96-3740, 96-3744 and 96-3774.
William H. Hawkins, II (briefed), James R. Adams, Frost & Jacobs, Cincinnati, OH, David Klingsberg (argued), Kaye, Scholer, Fierman, Hays & Handler, New York City, for Pfizer, Inc. and Shiley, Inc. in Nos. 94-4322 and 95-4054.
William H. Hawkins, II, James R. Adams, Frost & Jacobs, Cincinnati, OH, for Pfizer, Inc. and Shiley, Inc. in Nos. 96-3740, 96-3744 and 96-3774.
Paul A. Levy, Brian Wolfman, Public Citizen Litigation Group, Washington, DC, for Jeffrey A. Crane, Gene Randall, Gerard Benedik in No. 96-3568.
Brian Wolfman (argued and briefed), Public Citizen Litigation Group, Washington, DC, for Jeffrey A. Crane, Gene Randall, Gerard Benedik in Nos. 96-3740, 96-3744 and 96-3774.
John T. Johnson, Johnson & Dylewski, Houston, TX, for John T. Johnson and Johnson & Dylewski in Nos. 96-3568, 96-3740, 96-3744 and 96-3774.
James T. Capretz, Capretz & Radcliffe, Newport Beach, CA, for James T. Capretz, Capretz & Radcliffe in Nos. 96-3568, 96-3740, 96-3744 and 96-3774.
Charles M. Wolfson (argued), Wolfson Law Offices, Avalon NSW 2107, Australia, for Charles M. Wolfson in Nos. 96-3568, 96-3740, 96-3744 and 96-3774.
James R. Adams, Frost & Jacobs, Cincinnati, OH, David Klingsberg, Kaye, Scholer, Fierman, Hays & Handler, New York City, for Pfizer, Inc. in No. 96-3568.
David Klingsberg, Kaye, Scholer, Fierman, Hays & Handler, New York City, for Shiley, Inc. in No. 96-3568.
Mary Griffin (briefed), Consumers Union of the U.S., Inc., Washington, DC, for amicus curiae Consumers Union of the U.S., Inc. in Nos. 96-3568, 96-3740, 96-3744 and 96-3774.
Before: MARTIN, Chief Judge; KRUPANSKY and DAUGHTREY, Circuit Judges.
Four hundred years ago William Shakespeare observed that lawyers "dream on fees." During the ensuing centuries, few lawyers, even in their wildest dreams, have envisioned fees such as those that have resulted from mass tort litigation. 1
Three separate parties in this heart-valve implant class action appeal district court orders relating to an award of fees to class and special counsel. Intervenors, who are absent class members, appeal the district court's denial of a motion to compel discovery of class counsel's fee-sharing agreements with special counsel. Class counsel cross-appeals the district court's award of attorneys' fees as insufficient. The Pennsylvania Class Objectors, another group of claimants composed of Elizabeth Ridgeway, Rosemary Grunsby, and Fred Grunsby, as well as the law firms of Sidkoff, Pincus & Green, P.C., and Wapner, Newman & Wigrizer, also appeal from the district court's order awarding attorneys' fees and expenses to class and special counsel.
These appeals arise out of a worldwide class-action settlement involving an allegedly defective heart valve implant. In 1992, a settlement agreement was reached between class counsel and the defendants. Although numerous objections to that settlement were filed, most of the objections were withdrawn before the district court approved the settlement. Prior to the district court's approval of the settlement, class counsel filed a motion to have several of the formerly objecting attorneys appointed as special counsel to class counsel. The district court approved the appointment, and the newly appointed special counsel subsequently entered into fee-sharing agreements with class counsel. The intervenors brought a motion to compel discovery of the fee-sharing agreements that remain undisclosed. The district court denied the motion.
In the meantime, class counsel filed a fee application in district court seeking $33 million in attorneys' fees. After removing himself from the attorneys' fees portion of the case, the original judge transferred the case to an out-of-circuit senior district judge. On March 1, 1996, after conducting a hearing on the attorneys' fees issue, the court awarded class and special counsel $10.25 million in attorneys' fees and $476,938.06 in expenses from the settlement's medical and psychological, patient benefit, and spousal compensation funds to be split among the attorneys on a pro rata basis. Bowling v. Pfizer, 922 F.Supp. 1261 (S.D.Ohio 1996), amended by 927 F.Supp. 1036 (S.D.Ohio 1996). The court also recognized class and special counsels' continuing obligations to the class and ordered that those attorneys be permitted in the future to apply annually for additional fees and expenses in an amount not to exceed 10% of the annual $6.25 million payments to be made to the common funds by Pfizer and Shiley. The district court also granted $105,037.46 in fees and expenses to Public Citizen, Inc., but denied all other fee and expense requests.
Class and special counsel subsequently filed a motion to reconsider, alter, and amend the district court judgment. In an order entered on May 28, 1996, the district court denied that motion in part, but did increase the award of expenses to the attorneys by $75,344.10.
We review a district court's award or denial of attorneys' fees for an abuse of discretion. Cramblit v. Fikse, 33 F.3d 633, 634 (6th Cir.1994). It is within the district court's discretion to determine the "appropriate method for calculating attorney's fees in light of the unique characteristics of class actions in general, and of the unique circumstances of the actual cases before them." Rawlings v. Prudential-Bache Properties, Inc., 9 F.3d 513, 516 (6th Cir.1993). The district court's award of attorneys' fees in common fund cases need only be "reasonable under the circumstances." Id. The Pennsylvania class objectors and class counsel separately contest the district court's award of attorneys' fees. After careful scrutiny of the alleged errors referenced by class counsel, we find that the district court did not abuse its discretion in its award of attorneys' fees.
The district court based its fee award on a percentage of the common fund and then cross-checked the fee against class counsel's lodestar. Applying this methodology, the district court awarded class and special counsel 10% of the $102.5 million that has been paid into the common fund to date, 2 an immediate award of $10.25 million plus expenses. In addition, class and special counsel could receive up to $6.25 million more over the next ten years because the district court permitted class and special counsel to petition for up to 10% of the $6.25 million annual payments set to be paid into the Patient Benefit Fund over the next 10 years. In determining whether this was a reasonable award, the district court examined the following six factors, stressing the first two as the most important:
(1) the value of the benefit rendered to the plaintiff class ...;
(2) the value of the services on an hourly basis;
(3) whether the services were undertaken on a contingent fee basis;
(4) society's stake in rewarding attorneys who produce such benefits in order to maintain an incentive to others;
(5) the complexity of the litigation; and
(6) the professional skill and standing of counsel involved on both sides.
Bowling, 922 F.Supp. at 1280 (citing Rawlings, 9 F.3d at 516-17). As to the first factor, the district court, while recognizing that the settlement offered substantial benefits beyond the common fund, found that the present value was less than $165 million but indisputably exceeded $100 million. In calculating the value of services provided, the district court assumed that class and special counsel were entitled to compensation for every hour and expense listed by them and arrived at a...
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