Carpa, Inc. v. Ward Foods, Inc.

• Decision Date: 17 February 1978
• Docket Number: No. 77-1245,77-1245
• Citation: 567 F.2d 1316
• Parties: 1978-1 Trade Cases 61,890 CARPA, INC., et al., Plaintiffs-Appellees, Cross-Appellants. v. WARD FOODS, INC., et al., Defendants-Appellants, Cross-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1316

567 F.2d 1316

1978-1 Trade Cases 61,890

CARPA, INC., et al., Plaintiffs-Appellees, Cross-Appellants. v. WARD FOODS, INC., et al., Defendants-Appellants, Cross-Appellees.

No. 77-1245.

United States Court of Appeals, Fifth Circuit.

Feb. 17, 1978.

Charles L. Stephens, Fort Worth, Tex., George H. Kolb, Joe B. Harrison, Dallas, Tex., for Ward Foods et al.

Ralph G. Langley, William T. Armstrong, III, San Antonio, Tex., for Carpa, Inc., et al.

Appeals from the United States District Court for the Western District of Texas.

Before THORNBERRY, GOLDBERG and CLARK, Circuit Judges.

GOLDBERG, Circuit Judge:

After seven years of litigation in this private antitrust suit the original dispute between the parties has become a mere footnote, ¹ and the adversaries and their attorneys now litigate over costs, attorneys' fees, interest on the judgment, and even interest on attorneys' fees. In Biblical times, such prolonged efforts in the fields were followed by a cessation of tillage and a year of rest. Litigants here seem to prefer the injunction of a different period,

Lay on, Macduff

And damn'd be 'him that first cries,

"Hold, enough!"

Plaintiffs Carpa, Inc. (owned by plaintiff Payne) and Boone owned and operated Zuider Zee Restaurant franchises. They brought suit under the antitrust laws against defendant franchisor corporation Zuider Zee Oyster Bar, Inc. and its related corporations, against defendant Martin, who prior to 1968 was the chief stockholder of those corporations, and against defendant Ward Foods, ("Ward") which purchased Martin's shares in those corporations in 1968. Defendant Ward counterclaimed against plaintiff Boone for unpaid items purchased from Ward and its affiliates. The trial court entered judgment in the plaintiffs' favor on the antitrust action. Boone's share of the treble-damage award was $228,350.90, less $140,754.22 awarded to Ward on its counterclaim. In addition to the treble damage award, $202,380 was assessed against the defendants for plaintiffs' attorneys' fees. $76,904.40 of this attorneys' fee award was allocable to plaintiff Boone. The authorizing statute, 15 U.S.C. § 15, provides for attorneys' fees to successful antitrust plaintiffs. Here, because the plaintiffs had assigned their rights to attorneys' fees to their counsel, the court awarded this sum directly to the plaintiffs' attorneys. On an earlier appeal this court disallowed one item of the damage award amounting to $45,000 when trebled and affirmed the trial court's judgment "in all (other) things." Carpa, Inc. v. Ward Foods, Inc., 536 F.2d 39 (5th Cir. 1976) (hereinafter "Carpa I "). The case was remanded for entry of a final judgment. On remand, the district court (1) refused to offset against plaintiffs' award for attorneys' fees a state court judgment held by defendant Martin against plaintiff Boone, (2) allowed plaintiffs to recover six percent interest on attorneys' fees, and (3) allowed plaintiffs to recover all their requested costs of court. Defendants now appeal from these portions of the judgment. The district court in its order also (4) refused to allow plaintiffs nine percent post-judgment interest from the effective date of a Texas enactment increasing the state statutory interest rate from six percent to nine percent. Plaintiffs cross-appeal from this portion of the judgment.

We hold (1) that the district court correctly concluded that defendants were not entitled to offset their state court judgment against the attorneys' fee award, (2) that plaintiffs' counsel were not entitled to recover interest on the attorneys' fee award, (3) that the district court abused its discretion in taxing as costs sums spent for reproducing depositions without first making the necessary factual inquiries, but did not abuse its discretion in taxing as costs the plaintiffs' share of the special master's fee, and (4) that the district court's order denying a nine percent rate of interest on the plaintiffs' judgment should be reconsidered on remand in light of the Texas Supreme Court's resolution of the issue in two cases presently pending before it.

I.

The first issue raised on appeal is whether the trial court erred in overruling defendants' motion to set off against plaintiff Boone's attorneys' fee award a state court judgment held by defendant Martin. ² Prior to the original judgment of the district court, Boone assigned his entitlement to recover attorneys' fees to his counsel. After concluding that this assignment was valid, the district court awarded $76,904.40 in attorneys' fees directly to Boone's attorney. This assignment was challenged on appeal in Carpa I. We held that while the right to attorneys' fees is accorded the injured party and not his counsel, an antitrust plaintiff may assign counsel his right to those fees. 536 F.2d at 52.

Defendant Martin now contends that even though the assignment is valid, Martin has a right to setoff against his obligation to pay attorneys' fees his state court judgment against Boone. We disagree and hold that the decision of this Court in Carpa I upholding the assignment of attorneys' fees encompassed this issue by necessary implication and, as the law of the case, precludes consideration by the district court or by us of defendant Ward's setoff motion. We therefore affirm the district court's denial of defendants' motion.

Under well-settled principles of law, a decision of this court at an earlier stage of the same case represents the law of the case. See Lehrman v. Gulf Oil Corp., 500 F.2d 659 (5th Cir. 1974), cert. denied, 420 U.S. 929, 95 S.Ct. 1128, 43 L.Ed.2d 400 (1975); Terrell v. Household Goods Carriers' Bureau, 494 F.2d 16 (5th Cir.), cert. denied, 419 U.S. 987, 95 S.Ct. 246, 42 L.Ed.2d 260 (1974); Hodgson v. Brookhaven General Hospital, 470 F.2d 729 (5th Cir. 1972); Prudential Insurance Co. v. Morrow, 368 F.2d 813 (5th Cir. 1966) 1B J Moore's Federal Practice P 0.404 et seq (2d ed. 1974). As such, the earlier decision generally precludes consideration of any legal question that has already been decided. In White v. Murtha, 377 F.2d 428 (5th Cir. 1967), we noted that

(t)he "law of the case" rule is based on the salutary and sound public policy that litigation should come to an end. It is predicated on the premise that . . . it would be impossible for an appellate court to perform its duties satisfactorily and efficiently and expeditiously if a question, once considered and decided by it were to be litigated anew in the same case upon any and every subsequent appeal thereof.

Id. at 431.

The reach of the law of the case doctrine is not limitless. The doctrine is not an inexorable command that rigidly binds a court to its former decisions but rather is an expression of good sense and wise judicial practice. Terrell v. Household Goods Carriers' Bureau, supra, 494 F.2d at 19. Thus an intervening decision by the Supreme Court or the en banc Court of Appeals on a relevant issue may warrant a re-examination of the earlier decision. Generally, however, the doctrine is waived "only for the most cogent of reasons and to avoid manifest injustice." Id. at 19-20.

The doctrine is further limited insofar as it applies only to issues that were decided in the former proceeding and does not pertain questions that might have been decided but were not. Nevertheless "the doctrine does mean that the duty of a lower court to follow what has been decided at an earlier stage of the case comprehends things decided by necessary implication as well as those decided explicitly." Id. at 19 (emphasis supplied).

In applying these principles to the case at bar, we must examine the factual background underlying this court's decision on the assignment issue in Carpa I. At the time this court adjudicated that issue, the federal trial court and the state court had already rendered their decisions on damages. Boone's net recovery from defendants Martin and Ward in the federal action (the treble damage award not including attorneys' fees or other costs, less Ward's award on the federal counterclaim) was less than the amount of Martin's state court judgment. Thus unless Martin could either garnish the fee award to Boone's attorney or offset his own liability against the attorneys' fee award, he would be unable to recover all of his state court judgment against Boone from his own liability to Boone. ³ Apparently recognizing that a set off against the attorneys' fee award would be much more difficult to obtain if the assignment were upheld, see Brief for Appellees-Cross Appellants Ward-Martin at 64-65, Carpa I, supra, the defendants argued in Carpa I that the assignment was invalid. We rejected this argument, reasoning that the policies underlying the antitrust laws would be best served by validating assignments which assured counsel that they would receive their fees:

While noting that the fee recovery was plaintiffs' personal right, the judgment below enforced an agreement, the existence of which was not disputed, assigning any awarded fees directly to counsel. Defendants vigorously contest this, for obvious reasons. After applying Boone's treble damage recovery to the accounts and other judgments owed defendants, Boone will still be in the red. Ward would much prefer to flesh out its recovery from the fund to which the attorneys must look for their fees. We know of no statute or public policy denying an antitrust plaintiff the privilege enjoyed by plaintiffs in other cases, that of making an assignment to his attorneys in order to secure their services in the prosecution of his case. To deny counsel the fees awarded, and to do so at the instance of an antitrust defendant, would, we think, be inconsistent with the purpose of the statute in allowing, if not encouraging, private enforcement of the antitrust laws."

Carpa I, supra, 536 F.2d at 52 (emphasis supplied). When making this statement, we were aware that Martin contemplated offsetting his liability to pay attorneys' fees against his ...