Friends for All Children, Inc. v. Lockheed Aircraft Corp.

• Decision Date: 13 January 1984
• Docket Number: 82-1814,Nos. 82-1739,s. 82-1739
• Citation: 725 F.2d 1392,233 U.S. App. D.C. 286
• Parties: FRIENDS FOR ALL CHILDREN, INC., as legal guardian and next friend of the named 150 infant individuals, et al. v. LOCKHEED AIRCRAFT CORPORATION, A California Corporation and United States of America, Appellants. FRIENDS FOR ALL CHILDREN, INC., as legal guardian and next friend of the named 150 infant individuals, et al., Appellants v. LOCKHEED AIRCRAFT CORPORATION, a California Corporation and United States of America.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1392

725 F.2d 1392

233 U.S.App.D.C. 286

FRIENDS FOR ALL CHILDREN, INC., as legal guardian and next

friend of the named 150 infant individuals, et al. v. LOCKHEED AIRCRAFT CORPORATION, A California Corporation and United States of America, Appellants.

FRIENDS FOR ALL CHILDREN, INC., as legal guardian and next

friend of the named 150 infant individuals, et

al., Appellants v. LOCKHEED AIRCRAFT CORPORATION, a California Corporation and United States of America.

Nos. 82-1739, 82-1814.

United States Court of Appeals District of Columbia Circuit.

Argued May 2, 1983.

Decided Jan. 13, 1984.

Appeals from the United States District Court for the District of Columbia (D.C. Civil Action No. 76-00544).

Carroll E. Dubuc, Washington, D.C., with whom Nichols H. Cobbs, Richard M. Sharp, Patrick M. Hanlon, Bruce C. Swartz, and William Kanter and Linda Jan S. Pack, Attys., Dept. of Justice, Washington, D.C., were on the brief for appellants and cross-appellees.

J. Vernon Patrick, Jr., Birmingham, Ala., with whom Oren R. Lewis, Jr., Arlington, Va., was on the brief, for appellees and cross-appellants. Michael S. Marcus and William M. Cohen, Washington, D.C., also entered appearances for appellees and cross-appellants.

Before WILKEY and MIKVA, Circuit Judges, and McNICHOLS, ^* Senior District Judge, United States District Court for the District of Idaho Opinion for the Court filed by Senior District Judge mCNICHOLS.

Dissenting opinion filed by Circuit Judge MIKVA.

RAY McNICHOLS, Senior District Judge:

The court has for review a partial final judgment entered below pursuant to Rule 54(b) Federal Rules of Civil Procedure.

The underlying facts of this massive litigation are fully set out in the published report of previous consolidated appeals to this court. Schneider v. Lockheed Aircraft Corp., 658 F.2d 835 (1981). Briefly, the infant plaintiffs are Vietnamese orphans allegedly injured during an airlift operation in April of 1975. The aircraft involved was manufactured by the defendant Lockheed Aircraft Corporation (Lockheed or Appellant). The children were being flown to the United States and ultimately were to be delivered to adoptive parents in this country and in Western Europe. Due to a malfunction a large cargo door opened while the aircraft flew at high altitude creating an explosive decompression and loss of oxygen. The plane subsequently crashed. It is claimed that the surviving children, plaintiffs herein, suffered various physical injuries to their persons as well as organic brain injuries. On April 2, 1976, Friends For All Children, Inc. (FFAC) filed a complaint in the United States District Court for the District of Columbia against Lockheed, claiming to represent the 150 surviving children as legal guardian and seeking damages.

The complaint alleged separate counts of negligence, breach of warranty, and strict tort liability, all generally based on alleged faulty design, manufacture, and maintenance of the aircraft which crashed. Punitive or exemplary damages were also sought.

Lockheed brought the United States of America in as a third party defendant. Subsequently the United States agreed not to contest liability to Lockheed for contribution or indemnification.

Lockheed contested the legal status of FFAC and its ability to represent the minors. Further, an ethical question regarding the position of counsel representing the plaintiffs was raised by the United States. It developed that a very complicated problem faced the trial judge. For reasons fully explicated in Schneider, supra, he decided to appoint a Guardian Ad Litem to represent the children.

The parties engaged in considerable discovery and finally on September 14, 1979, a stipulation was entered into, the interpretation of which is important to this appeal. The parties agreed that, if the plaintiffs would refile proper amended complaints by adoptive parents or other legal representatives, in which complaints claims for punitive or exemplary damages would be eliminated, Lockheed would: (1) not contest liability for compensatory damages proved to have been proximately caused by the aircraft crash; (2) pay each plaintiff so refiling a complaint the sum of $5,000 to provide medical treatment, therapy and litigation expenses; and (3) pay, upon the entry of judgment for any plaintiff from which an appeal was taken, thirty percent of the amount of the judgment, such payment to be non-refundable. The stipulation further provided that Lockheed did not admit responsibility or liability for any of the compensatory damage alleged to have been suffered by any plaintiff child; all such liability was expressly denied.

Subsequently, three cases involving individual children, with adopted surnames of Schneider, Marchetti and Zimmerly were tried and resulted in jury verdicts for the minors. Lockheed's appeals of these cases were consolidated and are reported as Schneider, supra. The trial court had ordered payment of substantial sums for the fees and expenses of the Guardian Ad Litem to be assessed as costs against Lockheed in the three cases consolidated on appeal in Schneider.

In the Schneider appeal, Lockheed alleged, inter alia, that the trial court erred in awarding as an item of costs the fees and expenses of the Guardian Ad Litem. A panel of this court reversed all three cases on the merits based on a perceived error in the admission of certain evidence. New trials were ordered. However, the court proceeded to determine the question of the propriety of allowing as an item of costs the fees and expenses of the guardian. The court held that under the particular circumstances of this case it was not an abuse of judicial discretion to include the fees and expenses of the guardian as costs.

Lockheed unsuccessfully sought a rehearing on this issue and, failing in that, applied for certiorari to the United States Supreme Court. The Petition for Certiorari was denied. We now hold that Schneider is the law of the case on the question of allowing as costs the fees and expenses of the Guardian Ad Litem.

While Schneider was on appeal, several other individual cases were settled by the parties. While the instant appeal was pending a so-called "Global Settlement" was accomplished whereby all of the claims of the children now residing in the United States, some 45 children, were settled. ¹ We are advised that the settlements of the United States resident plaintiffs all provide that the fees and expenses of the Guardian Ad Litem are to be paid out of settlement proceeds. At oral argument the parties appeared to agree that as to these settled claims, the issues presented in this appeal have become moot. We so hold.

There remain for disposition before the trial court the claims of some 70 children who reside overseas. ²

We turn now to the details of the judgment below from which this appeal has been taken. On July 22, 1981, subsequent to the reversal of Schneider, a motion was made on behalf of the guardian for "Partial Summary Judgment and Final Judgment" taxing accrued fees and costs for the guardian for the period from February 22, 1979 to May 19, 1981. On January 27, 1982 the court filed a Memorandum and entered an "Order and Partial Judgment" allowing most of the fees and expenses sought by the guardian. He reduced the request by various amounts paid to the guardian from certain settled cases. He also disallowed a portion of the claim which was made up of legal services rendered by the guardian. The sum allowed in the January 27, 1982 Order was $222,510.00. However this order, while purporting to be final, provided for a further hearing as to some aspect of the fee allowance.

On May 18, 1982, the court filed a "Supplemental Memorandum" and entered an "Order" updating the January 27, 1982 memorandum and ordering payment by Lockheed to the Guardian Ad Litem the sum of $282,225.01 for services rendered through May 19, 1981. The additional amounts allowed were for services not previously approved and for a portion of the legal charges disallowed in the prior order, but found in the May Order to be proper. In ordering this interim payment of fees and expenses to the guardian, the court reasoned that the plaintiffs in the cases were to be considered prevailing parties under the terms of the stipulation. He noted that Lockheed had agreed, inter alia, not to contest liability and to make an immediate payment to each plaintiff of $5,000.00. The court felt impelled to provide interim payments to the guardian for the stated reason that to delay compensation would cripple the ability of the guardian to perform his duty to the plaintiffs and the court and potentially deny the plaintiffs an opportunity to fully and fairly present their claims.

The present appeal is from this final May 1982 order, which was specifically made a final partial judgment pursuant to Rule 54(b) of the Federal Rules of Civil Procedure. It is important to keep in mind that while this and other appeals are being processed in this complex litigation, trials, settlements, payments and other procedures are ongoing in the trial court. The situation has somewhat blurred the issues on this appeal. Questions we are struggling with here may be being mooted by developments below. However we perceive that the following issues may be reasonably thought to remain for our disposition:

a. Did the court err in holding that plaintiffs were the prevailing parties and entitled to certain costs to be paid pendente lite?

b. Whether, in any event, the allowance of fees and expenses of the Guardian Ad Litem attributable to legal research constituted error.

c. Did the court err in declining to apply the 30% provision of the September 14, 1979 stipulation to the May 18, 1982 judgment as claimed on the cross-appeal?

As indicated above, the court below granted an interim final judgment on May 18, 1982 in favor of the plaintiffs and the Guardian Ad Litem providing for payment as an item of costs to the...