General Motors Corp., In re, 94-1011

• Decision Date: 28 February 1997
• Docket Number: No. 94-1011,94-1011
• Citation: 110 F.3d 1003
• Parties: In Re GENERAL MOTORS CORPORATION.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1003

110 F.3d 1003

In Re GENERAL MOTORS CORPORATION.

No. 94-1011.

United States Court of Appeals,Fourth Circuit.

Feb. 28, 1997.

ORDER

DONALD S. RUSSELL, Circuit Judge.

James E. Butler, Jr. represented numerous plaintiffs who brought products liability actions against General Motors in state and federal court. One of these actions was Cameron v. General Motors Corp., from which U.S. District Judge G. Ross Anderson, District of South Carolina, recused himself. ¹ As part of his recusal order, Judge Anderson made certain factual findings, including that a review of the documents in the case revealed "a substantial likelihood that perhaps perjury and the systematic destruction of documents involving gross misconduct by General Motors' regional counsel occurred." ² Holding that the new factual findings were improper, in March 1994 we issued an order stating, in pertinent part: "[S]ection III of the recusal order, as well as any other statements in the order relating to the possible destruction of documents [or] perjury by [General Motors or its counsel] ... are hereby stricken from the [recusal] order and should not be hereafter cited as authority." ³

Ignoring our ruling, Butler cited the stricken recusal order passages during separate proceedings before a Georgia state court and the U.S. District Court for the District of Kansas. On August 8, 1995, we found Butler in civil contempt of our earlier order and awarded General Motors reasonable costs for its efforts to correct Butler's misconduct. ⁴ We referred the matter to U.S. District Judge Robert G. Doumar of the Eastern District of Virginia for a determination of the proper amount to be assessed against Butler. ⁵ Judge Doumar subsequently filed a report and recommendation.

We have carefully reviewed the report, Butler's objections and General Motors' response. In order to calculate the award, Judge Doumar waded through the murky waters of legal billing. We find no error in his meticulous findings of fact or his conclusions of law.

As Judge Doumar notes, in a pun that bears repeating, if the Butler did it, the Butler pays for it. Butler may have had to pay less, however, if he had not followed an ill-advised policy of contesting each and every aspect of this contempt proceeding. Judge Doumar recommends awarding General Motors $24,894.50 for its legal costs in correcting the effects of Butler's misconduct, and $165,646.81 for its legal costs stemming from this contempt proceeding. Butler, of course, had the right to put on a vigorous defense. But in the aftermath of our decision to hold Butler in contempt, a conciliatory stance on some issues would have softened the blow of this order by reducing General Motors' overall legal expenses.

For the foregoing reasons, we adopt Judge Doumar's report and recommendation in its entirety and award General Motors a total of $190,541.31.

HAMILTON and WILLIAMS, JJ., concur.

FINAL REPORT AND RECOMMENDATION UNDER SEAL

This matter has been referred to the Court by the Fourth Circuit for a determination as to the appropriate civil contempt amount that should be assessed against a lawyer, Mr. James E. Butler ("Butler" or "Respondent"). The final response having been filed on May 20, 1996, this case is ripe for decision. The Court DENIES Respondent's motion for an evidentiary hearing. This Court recommends that Petitioner receive $18,897.50 for the harm caused by Respondent's contempt in Moseley v. General Motors, $5997.00 for the harm caused by Respondent's contempt in Cockrum v. General Motors, and $165,646.81 in attorneys' fees for this contempt proceeding. Thus pursuant to the Fourth Circuit's directive, this Court recommends that Petitioner be awarded a total of $190,541.31 against the Respondent, including attorneys' fees through January 30, 1996.

PROLOGUE

Revenge is a kind of wild justice, which the more man's nature runs to, the more ought law to weed it out. ⁶

The issues in this case have been so much like every case the Court has ever seen before, and yet at the same time, its parts have been quite exaggerated, so that the entirety has been like no other case over which the Court has presided. When all is said and done, however, the matter is simply one of attorneys' fees: what actions did Butler's contempt reasonably force General Motors' counsel to undertake, and what were the reasonable fees for General Motors ("GM") to prosecute this action to right the scales.

Likely typical of many federal district judges, the Court estimates that it passes on between sixty and one hundred fee applications per year for attorneys representing indigent criminal defendants and parties in civil rights cases. ⁷ Thus the Court would further estimate that the average federal judge in this district spends between five and ten percent of his or her time considering and passing on applications for fee awards. The Court has become quite knowledgeable of the standards set forth in this Circuit in Barber v. Kimbrell's, Inc., 577 F.2d 216 (4th Cir.), cert. denied, 439 U.S. 934, 99 S.Ct. 329, 58 L.Ed.2d 330 (1978).

At this point a little background of the present case would be instructive. Butler represented numerous plaintiffs across the country in state and federal courts who sued GM after accidents occurred in their C/K pickup trucks which resulted in gasoline tank explosions. The discovery of certain information by plaintiffs' attorneys caused them to believe that young GM attorneys, who have been derisively called by some individuals "fire babies," had destroyed or hidden documents relating to GM's liability for those fires, or committed perjury relating to the alleged destruction of documents. Judge Anderson was referring to these alleged incidents of misconduct in Cameron. The Fourth Circuit thereafter struck that part of Judge Anderson's order, yet Butler cited the stricken language on at least two occasions.

Given that background, the present matter between Butler, one of the country's most successful trial attorneys, and General Motors, one of the world's largest industrial corporation, has posed no great problems for the Court at its most basic level, fees. Now that the Court has finally come to the point where it may reach these most elemental questions, the Court can honestly say that it has judged the fairness and equity, as well as the legal requirements, for each and every task claimed by General Motors, and has reached what it believes is the most appropriate outcome. It has read what it believed to be the pertinent portions of the transcripts in various hearings as well as reviewed the documents as filed in all of the relevant cases. Looking back on the process to get to this point, however, the Court also sees, with the perfect clarity that hindsight affords, the exaggerations that have come to make this case so time-consuming. This too may be whittled down to what the Court believes has created so much difficulty: hubris. The resultant conflict between GM and its customers arising out of the truck fires put at issue literally hundreds of millions of dollars in tort awards. Thus lawyers' fees in this vast expanse of litigation would rise into the millions on both sides, and the parties in this action were the major contestants. With enormous awards (and contingent fees), it is by no means an exaggeration that these suits became personal to the lawyers involved. Each opponent felt it necessary to field an army of attorneys. Thus the stage was set for the battles with Butler and his team of attorneys on one side and GM's team on the other.

It appears to the Court that at some point during all of this litigation, the attorneys chose to attack each other personally. Though the Court does not doubt that the issue may have been relevant to the plaintiffs' cases, it certainly made for better publicity and no doubt was used to persuade GM to approach the bargaining table, regardless of whether GM believed the allegations had any merit. Like the escalation during any war, when Butler and his team began attacking the professionalism and ethics of General Motors' attorneys on a public and national scale, General Motors felt that it had to defend itself and its lawyers by responding with a similar attack on the plaintiff's main counsel, Butler. As counsel for GM stated at oral argument,

the gravamen of the complaint [was] possible perjury, possible obstruction of justice. Your honor, that is an allegation of possible crimes. Quite apart from what impact that may have in product liability litigation, it goes to integrity, the integrity of the company, its 800 thousand men and women, and then the integrity of its outside lawyers. Some very fine lawyers from across the country. And let us not kid ourselves.... This was the battleground, the national battleground that Mr. Butler chose.... The stakes, your Honor, were [extra]ordinarily high because that was profoundly wrong. Profoundly wrong.

Transcript of January 30, 1996, hearing, at 53-54. Thus when Butler attacked General Motors' counsel, GM responded and attacked Butler. In any war between attorneys, and this case has been no exception, justice has a tendency to become obscured while personalities predominate.

All of which brings us to the present action, in which Butler responded to GM's petition, fighting every step of the way. In this Court he has seen fit to attack each and every item and each and every ruling, including those of the Fourth Circuit which this Court must and will follow. This tactic has often been referred to as the "Stalingrad Defense," named after the Soviet defenders of that city during the German eastern offense in World War II--give up not a single inch, and eventually the opposition may be beaten down into submission by not only the cold, unforgiving winter, but also by the sheer tenacity and persistence of the defenders. What was obvious was that the opponents here came in with such large numbers of attorneys that the Court was...