In re Amino Acid Lysine Antitrust Litigation, 95 C 7679. MDL No. 1083.

• Citation: 918 F. Supp. 1190
• Decision Date: 18 January 1996
• Docket Number: No. 95 C 7679. MDL No. 1083.,95 C 7679. MDL No. 1083.
• Parties: In re AMINO ACID LYSINE ANTITRUST LITIGATION. (This Document Relates to All Actions).
• Court: U.S. District Court — Northern District of Illinois

918 F. Supp. 1190

In re AMINO ACID LYSINE ANTITRUST LITIGATION.

(This Document Relates to All Actions).

No. 95 C 7679¹. MDL No. 1083.

United States District Court, N.D. Illinois, Eastern Division.

January 18, 1996.

Bailey, Harring & Peterson, James S. Bailey, Jr., Denver, CO, Bainbridge & Straus, Philippa McC. Bainbridge, Michael Straus, Birmingham, AL, Berger & Montague, P.C., David Berger, Merrill G. Davidoff, Philadelphia, PA, Boies & McInnis, Mary Boies, Mac McInnis, Bedford, NY, Louis F. Cainkar, Ltd., Michael G. Cainkar, Chicago, IL, Cohen, Milstein, Hausfeld & Toll, Michael D. Hausfeld, Washington, DC, Daughtry, Woodard, Lawrence & Starling N. Leo Daughtry, Smithfield, NC, Duane Morris & Heckscher, Michael M. Baylson, Elise E. Singer, Philadelphia, PA, Duker & Barrett, L.L.P., William F. Duker, Kathryn L. Bedke, Kenneth G. Alberstadt, New York City, Dyer, Donnelly

& Lilley, James Donnelly, Denver, CO, Fine, Kaplan & Black, Allen D. Black, Jeffrey S. Istvan, Philadelphia, PA, Freedman, Boyd, Daniels, Peifer, Hollander, Guttmann & Goldberg, Joseph Goldberg, Albuquerque, NM, Gilman and Pastor, Kenneth G. Gilman, David Pastor, Boston, MA, Goodkind Labaton Rudoff & Sucharow, L.L.P., Lawrence Sucharow, Bernard Persky, Barbara Hart, New York City, Heins Mills & Olson, P.L.C., Samuel D. Heins, Stacey L. Mills, Karla M. Gluek, Minneapolis, MN, Keller Rohrback, Lynn Lincoln Sarko, Seattle, WA, Kohn, Swift & Graf, P.C., Harold H. Kohn, Robert A. Swift, Joseph C. Kohn, Philadelphia, PA, Kost & Kost, Keith K. Kost, Lewiston, IL, Levin, Fishbein, Sedran & Berman, Howard J. Sedran, Philadelphia, PA, Lieff, Cabraser, Heimann & Bernstein, Robert Lieff, San Francisco, CA, Meredith Cohen & Greenfogel, P.C., Joel C. Meredith, Philadelphia, PA, Much Shelist Freed, Denenberg & Ament, P.C., Michael J. Freed, Steven A. Kanner, Chicago, IL, Reaser & Wall, Vernon Reaser, Victoria, TX, Reinhardt & Anderson, Mark Reinhardt, St. Paul, MN, Ritchie & Rediker, J. Michael Rediker, Thomas R. Krebs, Birmingham, AL, Robert B. Silver & Associates, Robert B. Silver, New York City, Specks & Goldberg, Granvil I. Specks, Perry Goldberg, Chicago, IL, Van Steenberg, Chaloupka, Mullin, Holyoke, Pahlke, Smith, Snyder & Hofmeister, Robert C. Pahlke, Scottsbluff, NE, Watson, Fees & Jimmerson, P.C., Herman Watson, Jr., Michael Fees, Huntsville, AL, Cochrane & Bresnaham, St. Paul, MN, Chestnut & Brooks, Minneapolis, MN, Rohan, Goldfarb & Shapiro, P.S., Seattle, WA, Levy, Angstreich Finney Baldante Mann & Burkett, Philadelphia, PA, Wiest, Wiest, Saylor & Muolo, Robert J. Muolo, Sunbury, PA, Bracewell & Patterson, L.L.P., Houston, TX, Blumenfeld, Kaplan & Sandweiss, P.C., John Blumenfeld, St. Louis, MO, Charles H. Johnson & Associates, Charles H. Johnson, New Brighton, MN, Specks & Goldberg, Perry Goldberg, Chicago, IL, for Plaintiffs.

Ross & Hardies, P.C., Timothy C. Klenk, Richard J. Rappaport, Alison C.B. Laing, Patricia Klein Smoots, Amy Beth Manning, Chicago, IL, Williams & Connolly, Aubrey M. Daniel, III, John E. Schmidtlein, Williams & Connolly, Washington, DC, for Defendant A.D.M.

McDermott, Will & Emery, David Marx, Anne R. Pramaggiore, Chicago, IL, for Defendant Heartland Lysine.

Hopkins & Sutter, P.C., Mark Crane, Antony S. Burt, Chicago, IL, for Defendant BioKyowa, Inc.

Weil, Gotshal & Manges, A. Paul Victor, Debra J. Pearlstein, Steven Alan Reiss, New York City, for Defendant BioKyowa.

Law Offices of Vito R. Vincenti, P.C., Vito R. Vincenti, New York City, for Defendant Sewon America, Inc.

MEMORANDUM OPINION AND ORDER

SHADUR, Senior District Judge.

This Court originally received the first-filed of these prospective class actions in this District Court (K & L Feeds, Inc. v. Archer Daniels Midland Co., Inc., 95 C 4587) via reassignment by the Executive Committee from the calendar of this Court's colleague Honorable George Lindberg. Next the four other cases that were later filed in this District Court² were reassigned to this Court's calendar (also from Judge Lindberg's calendar) on grounds of relatedness under this District Court's General Rule 2.31. Then, as had been regarded a likely possibility, on December 15, 1995 the Judicial Panel on Multidistrict Litigation ("MDL Panel") transferred MDL-1083, In re Amino Acid Lysine Antitrust Litigation, to this Court under 28 U.S.C. § 1407. That transfer carried with it, in addition to the K & L Feeds and General Utility cases, three cases from other districts.³ In the only other case reassignment that has taken place up to now, on December 26 the MDL Panel entered a conditional transfer order to bring two more cases from the Northern District of Alabama⁴ into the group.⁵

Before the transfer from Judge Lindberg, at the behest of plaintiffs' counsel he had entered Pretrial Order No. 1 (Initial Case Management Order) ("Order No. 1") — an order of the type provided as a sample in the Manual for Complex Litigation (3d). In part Order No. 1 ¶ 10 designated lead counsel for the entire set of cases. But by definition not all of the relevant players had the opportunity to provide input for that determination. And at least as importantly, from the time of its initial receipt of this litigation this Court was concerned that the best interests of the putative plaintiff class would not be served by the kind of proliferation of plaintiffs' counsel that ordinarily marks a like proliferation of the number of cases that so often spring up after a triggering event — whether in the field of securities law or (as here) in the antitrust area or in some other area potentially ripe for class treatment.

This Court therefore advised counsel that, as it had presaged five years ago in the context of its dealing with fee requests from ten sets of lawyers in a just-settled group of securities class actions (In re Telesphere Sec. Litig., 753 F.Supp. 716, 721 (N.D.Ill.1990)), it would give serious consideration to the possibility (1) of obtaining sealed bids from any interested law firms and (2) of then designating the class counsel based on those bids.⁶ To that end this Court ordered the contemporaneous filing of such bids and of submissions from any interested parties as to the desirability or undesirability of employing that bidding procedure rather than some other approach to the appointment and compensation of class counsel.

Eight sets of lawyers have responded by tendering bids under seal.⁷ And five submissions have been made (two of those were included as part of the bids) as to the desirability or undesirability of following the bidding procedure. As a logical matter the latter subject will be addressed at the outset, for if a negative answer were given to that question the bids would become moot and would simply be returned to the respective bidders — still under seal.

Bidding Vel Non

One of the submissions in opposition to the use of a bidding procedure frankly borders on the absurd — the memorandum that is signed by Perry Goldberg, Esq. of Specks and Goldberg, filed on behalf of the six firms (counsel for plaintiff in the Consumers Supply lawsuit) that have joined in the bid shown as headed by Reinhardt & Anderson. In principal part attorney Goldberg and his cohorts advance the position that a competitive bidding process "violates Supreme Court precedent," specifically Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983).

That flawed notion stems from the bizarre idea that an up-front bidding process is somehow at odds with the need for the court to make a finding as to the extent of plaintiffs' success in the litigation. Of course Hensley, id. at 434-37, 103 S.Ct. at 1940-41 spoke of the need for a court to examine such success in order to make the dramatically different determination whether a lodestar calculation — reasonable hours times a reasonable rate — produces a reasonable fee. By sharp contrast, here the bid that was actually submitted by the group of counsel who have also tendered the objection now under discussion, like all of the other bids received by this Court (with one possible exception discussed later), is itself already solely and directly geared to the level of plaintiffs' success — for it expressly predicates the amount of the fee on a percentage-of-recovery formula (rather than a lodestar or enhanced lodestar calculation or some other methodology). It was after all entirely within the discretion of all bidding counsel to decide just how they would formulate their proposals, and what all of them have chosen to submit (just as this Court had expected) clearly calls for the summary rejection of that objection.

Another of the statements as to whether this Court should employ the bidding process (the one submitted as part of the bid tendered by the three firms headed by Heins, Mills & Olson, counsel for plaintiff in the Munco action originally filed in the Central District of Illinois) favors that process so long as the selection criteria include considerations of quality rather than simply being limited to the cheapest bid:

Competitive proposals to serve as lead counsel for the plaintiff class may be beneficial to the plaintiff class in this antitrust action provided that the selection criteria include qualitative factors affecting representation of the class, as well as attorneys' fees that would be charged by proposed lead class counsel. See In re Wells Fargo Sec. Litig., 157 F.R.D. 467 (N.D.Cal.1994).⁸ If the proposals to serve as lead counsel address qualitative factors that proposed lead counsel will bring to bear to the litigation such as their experience, knowledge, reputation, and ability to finance the litigation, as well as a proposal for fees and expenses, submission of proposals to represent the class will put the emphasis where it properly belongs — on the best interests of the class.

That has indeed been this Court's expected approach from the beginning if it were to consider following the bidding concept. Nothing that this Court has either...