Fine Paper Antitrust Litigation, In re

• Decision Date: 18 February 1988
• Docket Number: No. 87-1151,87-1151
• Citation: 840 F.2d 188
• Parties: 1988-1 Trade Cases 67,892, 10 Fed.R.Serv.3d 1009 In re FINE PAPER ANTITRUST LITIGATION, Walter E. Riordan, P.A. on its own behalf and on behalf of Hennepin Press, Inc., one of the plaintiffs and a member of the class.
• Court: U.S. Court of Appeals — Third Circuit

Page 188

840 F.2d 188

1988-1 Trade Cases 67,892, 10 Fed.R.Serv.3d 1009

In re FINE PAPER ANTITRUST LITIGATION, Walter E. Riordan P.A. on its own behalf and on behalf of Hennepin Press, Inc., one of the plaintiffs and a member of the class.

No. 87-1151.

United States Court of Appeals Third Circuit.

Argued Dec. 16, 1987.

Decided Feb. 18, 1988.

Robert W. Dygert (argued), Dygert & Dygert, Minneapolis, Minn., for appellant.

Harold E. Kohn, Dianne M. Nast (argued), Elkan M. Katz, Victor P. Barall, Kohn, Savett, Klein & Graf, P.C., Philadelphia, Pa., for appellees.

Before GIBBONS, Chief Judge, COWEN, Circuit Judge and DEBEVOISE, District Judge. ^*

OPINION OF THE COURT

GIBBONS, Chief Judge:

Walter E. Riordan, P.A. (Riordan) and Hennepin Press, Inc. (Hennepin) appeal from Post-Judgment Order No. 107, which awards from a class action fund in court $1,500,000 to be distributed to 22 law firms. Riordan is a law firm which seeks a fee award from the settlement fund. Hennepin is a member of the plaintiff class to which the settlement fund, less fees and costs awarded, will be distributed. Order No. 107 provides that there is no just reason for delay and final judgment is entered pursuant to Fed.R.Civ.P. 54(b). Thus the appeal is from a final judgment. The law firms to which the $1,500,000 award was made have moved to dismiss the appeal. We will deny that motion, and we will reverse Order No. 107.

I. Proceedings in the District Court

The fund in court from which Order No. 107 makes the contested award was created by settlements of class action antitrust actions against a number of paper manufacturers. Twelve of these actions were transferred by the Judicial Panel on Multi-District Litigation to the Eastern District of Pennsylvania, where they were consolidated with four such actions pending there. The settlement fund totaled $50,650,000, and post-settlement interest earned by the fund ultimately raised it to over $80 million. After the settlement, 41 separate petitions were filed seeking awards from the fund in the aggregate amount of $21 million in fees and expenses. Objections to these petitions were filed by a number of law firms and class members. After contested hearings, the district court awarded fees aggregating approximately $4.3 million and expenses of approximately $1.1 million. In re Fine Paper Antitrust Litig., 98 F.R.D. 48 (E.D.Pa.1983).

Of the 41 fee petitioners affected by the district court's rulings, 20 filed notices of appeal. Of those who appealed, nine formally withdrew their appeals before this court acted on them. Eleven fee petitioners pursued their appeals. This court affirmed insofar as the judgment denied the fee application of one petitioning law firm, but reversed and remanded for redetermination of the amounts of fees and expenses to be awarded to the other ten. In re Fine Paper Antitrust Litig., 751 F.2d 562 (3d Cir.1984). On remand, after further proceedings, additional awards were made to the ten successful appellants, only one of whom has appealed from the modified awards. ¹ The additional awards made as a result of this court's mandate are not the subject of this appeal.

Our decision in the prior appeal was handed down on December 13, 1984. Thereafter, between March and December of 1985, thirteen fee claimants who were not parties to that appeal filed Fed.R.Civ.P. 60(b) motions to reopen the fee judgment and increase their awards. The moving parties included seven law firms who had appealed, but whose appeals were withdrawn, and six law firms which had not appealed the original awards. The moving parties sought adjustments of historic hourly rates, application of an increased contingency multiplier, and adjustments for delay in payment. A fair characterization of their position is that they sought the same treatment as was required by this court's mandate for the successful appellants.

Timely objections to the Rule 60(b) motions were filed in April of 1985, on behalf of several class members. Objectors included the firm of Weil, Gotshal & Manges, which represented the class members who objected to the original fee requests and appeared for those class members as appellees in our prior appeal, the State of Illinois, a class member, Sloan & Associates, P.C., a law firm representing class members and holding a fee claim against the fund, and several other class members. The objectors contended that the moving parties could not remedy their failure to appeal by a Rule 60(b) motion filed long after the judgment affecting them had become final.

A hearing on the motions and objections was scheduled for June 26, 1986. For reasons which do not appear of record that hearing was never held. Apparently settlement negotiations had taken place in the meantime. Riordan was aware of these negotiations, although he apparently did not participate in them. On July 28, 1986, Riordan filed objections to the Rule 60(b) motions. In his moving papers he specifically adopted the memorandum dated April 1, 1985, filed on behalf of class members by Weil, Gotshal & Manges in opposition to those motions. No hearing was scheduled on Riordan's objections.

On February 17, 1987 the district court filed Post-Judgment Order No. 107. The order recites that Rule 60(b) motions were filed by thirteen firms, and in relevant part provides:

objections to said Motions having been withdrawn; the Court being advised that after extensive negotiations between counsel for the movants on the one hand and counsel for the class member objectors and other objectors on the other, the movants, on behalf of all non-appellant, non-governmental counsel who were awarded attorneys' fees by this Court's Orders of March 3, 1983 (Appendix B hereto), are willing to accept, in full settlement of their claims for attorneys' fees for the services as set forth in the fee applications adjudicated by said Orders, an additional award in the amount of $1,500,000, the Court finding said award to be fair, reasonable and proper for such aforesaid services rendered by these counsel on behalf of the class, and counsel for the class member objectors and other objectors not having objected to the entry of the following Order, it is hereby:

ORDERED

1. Additional attorneys' fees are hereby awarded to all non-appellant, non-governmental counsel who were awarded attorneys' fees by this Court's Orders of March 3, 1983 (listed in Appendix B hereto), in the additional amount of $1,500,000, for the aforesaid services, to be apportioned among said counsel in proportion to the attorneys' fees awarded said counsel respectively by the Orders of March 3, 1983.

2. Thirty-one days after the entry of this Order, Harold E. Kohn, Esquire, as escrow agent of the settlement fund, will cause checks to be issued and mailed, or will cause wire transfers to be made, from said settlement fund in the total additional amount of $1,500,000 payable to said counsel, in the aforesaid respective amounts provided in paragraph 1 above.

3. There being no just reason for delay, final judgment is hereby entered on this award and Order pursuant to Rule 54(b), F.R.C.P.

Listed in Appendix B are not only the thirteen firms which filed Rule 60(b) motions, including the six firms which had not appealed the original awards, but also nine firms which had not appealed and had not even filed Rule 60(b) motions. ² The order does not set forth how much of the $1,500,000 is to be paid to each of the 22 beneficiaries, and that information is nowhere of record. It merely directs payment in proportion to the fee awards made in the original fee judgment, without regard to any individual differences in the respective merits of the individual petitions. The record does not disclose the reason why objections filed on behalf of class members were withdrawn. The recital in the order that all objections to the Rule 60(b) motions had been withdrawn is a misstatement of fact, for it is undisputed that Riordan's objection, at least, was never withdrawn. No notice was given to the class members interested in the fund of the proposal to approve an additional fee award of $1,500,000 to petitioners who were not parties to the prior appeal. No notice was given to class members interested in the fund of the withdrawal of objections by class members who had undertaken to object. The record discloses no independent review by the district court of the merits of the Rule 60(b) motion, and no independent review by the district court of the legality of distributing funds from a fund in court to parties who never even applied for such relief.

II. Appealability Issues

A timely notice of appeal was filed from Order No. 107 by Riordan on his own behalf and on behalf of Hennepin Press, Inc., one of the plaintiffs and a member of the class. Timely notices of appeal were also filed on behalf of other plaintiffs and class representatives by the law firms Barrack, Rodos & Bacine; Berger & Montague, P.C.; Gross & Sklar, P.C.; Kohn, Savett, Marion & Graf, P.C.; Levin & Fishbein; Wolf, Block, Schorr & Solis-Cohen; and Hallisey and Johnson. All of these firms except Hallisey and Johnson are beneficiaries of Order No. 107, who made Rule 60(b) motions, and thus are appellees in the Riordan-Hennepin appeal. Hallisey and Johnson is one of the successful appellants in our prior appeal, whose claim on remand for additional compensation was settled and is not before us. In April of 1987 the appeals of all appellants except Riordan and Hennepin Press, Inc. were dismissed in accordance with a waiver filed pursuant to Fed.R.App.P. 42(b). The dismissals were entered by the Clerk of this Court when the listed law firms filed motions to withdraw the appeals, and supported the motions with the representation:

appellees have consented to the withdrawal of this appeal. Appellants and appellees have each agreed to pay their own costs incurred in respect to this appeal.

The motions did not inform the Clerk that six of the law firms making the...