Dutchak v. Central States, Southeast and Southwest Areas Pension Fund, s. 89-3351
Decision Date | 24 April 1991 |
Docket Number | 89-3461,89-3656,Nos. 89-3351,89-3644,89-3645,89-3785 and 89-3786,89-3352,89-3353,89-3462,s. 89-3351 |
Citation | 932 F.2d 591 |
Parties | 13 Employee Benefits Ca 2221 David DUTCHAK, et al., Plaintiffs-Appellees, v. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, Defendant-Appellant, Cross-Appellee, Lawrence Walner & Associates, Ltd., et al., Edmund W. Kitch, Cross-Appellants. Elizabeth M. DOLE, Secretary of Labor, Plaintiff-Appellee, v. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, Defendant-Appellant. Chester J. SULLIVAN, et al., Plaintiffs-Appellees, v. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, Defendant-Appellant, Cross-Appellee, Lawrence Walner & Associates, Ltd., et al., Edmund W. Kitch, Coin, Crowley & Nord, Cross-Appellants. |
Court | U.S. Court of Appeals — Seventh Circuit |
Peter J. Barack, Barack, Ferrazzano, Kirschbaum & Perlman, Lawrence Walner, Walner & Associates, Chicago, Ill., George E. Faber, Faber & Buehler, West Dundee, Ill., Harry B. Bainbridge, Flossmoor, Ill., for plaintiffs-appellees in Nos. 89-3351, 89-3352, 89-3353, 89-3785 and 89-3786 and plaintiffs in Nos. 89-3461, 89-3644 and 89-3645.
Peter J. Barack, Barack, Ferrazzano, Kirschbaum & Perlman, Lawrence Walner, Walner & Associates, Chicago, Ill., Harry B. Bainbridge, Flossmoor, Ill., for plaintiffs in No. 89-3462.
Peter J. Barack, Barack, Ferrazzano, Kirschman & Perlman, Lawrence Walner, Walner & Associates, Anita M. D'Arcy, Julia A. Bruckner, Alice Carroll-Tracy, Coghlan, Joyce, Kukankos, Urbut & D'Arcy, Chicago, Ill., George E. Faber, Faber & Buehler, West Dundee, Ill., Harry B. Bainbridge, Flossmoor, Ill., for plaintiffs in No. 89-3656.
William J. Nellis, Central States, Southeast and Southwest Areas Pension Fund, Rosemont, Ill., James L. Coghlan, Anita M. D'Arcy, Julia A. Bruckner, Coghlan, Joyce, Kukankos, Urbut & D'Arcy, Chicago, Ill., for defendant-appellant in Nos. 89-3351, 89-3352, 89-3353, and defendant-appellee in Nos. 89-3461, 89-3462, 89-3644, 89-3656.
Lionel G. Gross, Jeffrey P. DeJong, Brian C. Witter, Altheimer & Gray, Ellis Sostrin, Chicago, Ill., for appellants in Nos. 89-3461, 89-3462.
Lionel G. Gross, Jeffrey P. DeJong, Brian C. Witter, Altheimer & Gray, Ellis Sostrin, Lawrence Walner, Walner & Associates, Chicago, Ill., for appellant Lawrence Walner & Associates in No. 89-3462.
Phil C. Neal, Neal, Gerber & Eisenberg, Chicago, Ill., for appellant Edmund W. Kitch in Nos. 89-3644, 89-3645.
Wilbert F. Crowley, Jr., Cowen, Crowley & Nord, Chicago, Ill., for appellant Coin, Crowley & Nord in No. 89-3656.
William J. Nellis, Central States, Southeast and Southwest Areas Pension Fund, Rosemont, Ill., James L. Coghlan, Julia A. Bruckner, Coghlan, Joyce, Kukankos, Urbut & D'Arcy, Chicago, Ill., for defendant-appellee in No. 89-3645.
William J. Nellis, Central States, Southeast and Southwest Areas Pension Fund, Rosemont, Ill., James L. Coghlan, Anita M. D'Arcy, Julia A. Bruckner, Alice Carroll-Tracy, Coghlan, Joyce, Kukankos, Urbut & D'Arcy, Chicago, Ill., for defendant-appellant in Nos. 89-3785, 89-3786.
Before CUDAHY, RIPPLE and MANION, Circuit Judges.
The Central States, Southeast and Southwest Areas Pension Fund (Fund) has been involved in a nearly eighteen-year battle over its benefits policies and management. In what may be the final leg of this litigation, the Fund now appeals the district court's award of just over five million dollars in attorney's fees and expenses under the terms of a settlement approved by the district court on November 10, 1987. The settlement outlines the factors that the judge is to use in determining the fee amount. The only issues the Fund raises are whether the district court erred in approving a fee multiplier of two for a substantial portion of the fee award (for a total enhancement of $2,962,830.95) and whether the district court's calculation of the lodestar figure was based on erroneous findings of allowable hours. The plaintiffs cross-appeal on the same issues, arguing that the multiplier should have been even greater and that the judge improperly reduced the lodestar figure for imprecise billing practices.
The history of these consolidated cases is long and complex, and we recite only those facts relevant for this appeal; an earlier opinion recounts most of the case's history. Secretary of Labor v. Fitzsimmons, 805 F.2d 682 (7th Cir.1986) ( ). Attorneys Walner and Sidlinger represented a class of pension contributors challenging administration of the Fund. The class alleged unfair eligibility, break-in-service and vesting rules; unreasonable burdens of proof; and noncompliance by trustees with established rules. Eventually, the Secretary of Labor entered the suit, concerned about mismanagement of the Fund's assets.
On November 10, 1987, the district court approved a second settlement agreement which reformed certain pension administration practices and which governs the award of attorney's fees. In an unusual provision that operates like the "choice of law" provision in many contracts, the settlement authorizes the judge to determine the fee award in accordance with the "factors" identified and discussed in certain federal court cases. In the settlement's terms, the award of fees
shall be made and shall be determined in accordance with the factors delineated in the cases of Lindy Bros. Builders, Inc. v. American Radiator & Standard Sanitary Corp., 487 F.2d 161 (3rd Cir.1973); City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir.1974); In re Folding Carton Antitrust Litigation, 84 F.R.D. 245 (N.D.Ill.1979); and/or Cenco Securities Litigation, 519 F.Supp. 322 (N.D.Ill.1981), and other relevant federal court decisions based thereon. 1
(We refer to this set of cases collectively as the "controlling cases.") The district court received fee applications and allocated awards in the following amounts:
Attorney Lodestar Multiplier Total Lawrence Walner and Associates, Ltd Lawrence Walner $1,681,662.50 $1,681,662.50 $3,363,325.00 Lawrence Walner (Daniel 2 action) 161,500.00 161,500.00 William Sidlinger 383,514.75 383,514.75 767,029.50 William Sidlinger (Daniel action) 3,615.00 3,615.00 Harold Novak 20,250.00 20,250.00 40,500.00 Robert Freud 2,970.00 2,970.00 5,940.00 Sheldon Klein 1,168.20 1,168.20 2,336.40 ------------- $4,344,245.90 Other Participating Attorneys Peter Barack 400,972.00 400,972.00 801,944.00 Edmund Kitch 275,068.00 275,068.00 550,136.00 Coin, Crowley & Nord 161,873.50 161,873.50 323,747.00 Robert Skirnick 17,370.00 17,370.00 34,740.00 Tenney & Bentley 10,182.00 10,182.00 20,364.00 S. John Templeton 7,800.00 7,800.00 15,600.00 ------------- ------------- ------------- $3,127,745.95 $2,962,830.95 $6,090,776.90
The Fund presents two challenges to the award. First, it claims that principles announced in the controlling cases prohibit the fee multiplier of two for the Dutchak/Sullivan litigation (no multiplier was awarded for Daniel time). Second, the Fund asserts that the judge abused his discretion by reducing the lodestar by only ten percent in light of several related objections to Sidlinger's and Walner's time records.
Plaintiffs cross-appeal, arguing that the multiplier should have been greater than two and that the judge's ten percent reduction of the permitted hours is impermissible as a matter of law.
Initially, we must clarify our frame of reference. Fee awards are generally of two types--those pursuant to a statute that authorizes shifting fees, and those where the attorneys are compensated from a common fund won by the plaintiffs. This case falls in a third class because the award of fees is neither in accordance with a statute nor to be withdrawn from a sum that the plaintiffs have won. Instead, this case is a matter of contract interpretation--defendants and plaintiffs have agreed that plaintiffs' attorneys are to be paid by applying principles in the settlement, and the court's job is to interpret the contract's meaning.
At the outset, we therefore reject plaintiffs' argument that because this case is a common fund case, the Supreme Court's general prohibition of multipliers under fee-shifting statutes does not apply. Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 483 U.S. 711, 107 S.Ct. 3078, 97 L.Ed.2d 585 (1987) (Delaware Valley II 3). Cf. Skelton v. General Motors Corp., 860 F.2d 250 (7th Cir.1989) (, )cert. denied, --- U.S. ----, 110 S.Ct. 53, 107 L.Ed.2d 22 (1989). Instead of classifying the case as "common fund" or "fee shifting," we must plumb the language of the settlement to determine its meaning and, if ambiguous, to determine the parties' intent.
The Fund, on the other hand, contends that Delaware Valley II is relevant under the "any other relevant federal court decisions based thereon" phrase. The argument holds that this phrase requires inclusion of subsequent decisions not only interpreting but perhaps altering the holdings of the four named cases. In Delaware Valley II, the Court, reviewing an award under the Clean Air Act's attorney's fees provision, 42 U.S.C. Sec. 7604(d), by a plurality reversed the rule in eight circuits and held that a contingency multiplier was inconsistent with congressional intent. "[W]e...
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