In re Chicken Antitrust Litigation

Citation560 F. Supp. 963
Decision Date04 August 1980
Docket NumberCiv. No. C74-2454A.
PartiesIn re CHICKEN ANTITRUST LITIGATION.
CourtUnited States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Northern District of Georgia

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ORDER

O'KELLEY, District Judge.

In keeping with the conditions set forth in the class notice, the court conducted an evidentiary hearing on November 19, 1979, to air objections to the settlement agreements, fee applications, and the interclass sharing proposal. By order of March 7, 1980, the court approved the settlement agreements, with the unanimous consent of all the parties, as fair, adequate, and reasonable. Final judgments were then entered on March 19, 1980, dismissing with prejudice the complaints as to all defendants not previously dismissed—except for the National Broiler Marketing Association, which was dismissed without prejudice— and the counterclaims filed by certain defendants, but the court retained jurisdiction over No. C74-2454A to administer the settlements. The entry of judgment signaled a sonorous end to a protracted, contentious litigation; however, it may be that the hostilities between the plaintiffs and the defendants will pale in comparison with the disputes yet to be resolved. All told, the settlement agreements created a fund of approximately 35 million dollars. The next and final step in terminating this litigation is to distribute the settlement fund among the more than 2,700 claimants.

The first order of business, though, is to pass upon the fee applications submitted by the plaintiffs' counsel, who claim a portion of this fund for out-of-pocket costs and as fees for their role in negotiating these settlements.1 These applications, 15 in number, contain requests for fees amounting to over $2,900,000.00, not including any multiplier, and costs of $199,113.03. These petitions are not based upon any pre-existing arrangements between the represented members of the plaintiff class and their attorneys2 or upon any statutory authority for awarding attorneys' fees, since the pertinent statute, section 4 of the Clayton Act, 15 U.S.C.A. § 15, does not apply to cases such as this one where the parties stipulated to the dismissal of the suit rather than litigated to a judgment. Their source is instead an independent outgrowth of the court's equitable power to prevent unjust enrichment of members of a class who derive benefits from a common fund created by the labors of others by spreading the costs of the litigation among the fund's beneficiaries. Under the principle recognized in Trustees v. Greenough, 105 U.S. 527, 26 L.Ed. 1157 (1881), and later refined in Sprague v. Ticonic National Bank, 307 U.S. 161, 59 S.Ct. 777, 83 L.Ed. 1184 (1939), an attorney of the prevailing party may apply for a portion of the fund as compensation for his successful efforts above and beyond reimbursement for out-of-pocket expenses, a notable exception to the American practice of denying to the prevailing party recovery of his attorney's fees as costs or otherwise. See Boeing Co. v. Van Gemert, 444 U.S. 472, 100 S.Ct. 745, 62 L.Ed.2d 676 (1980); Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975); Mills v. Electric Auto-Lite Co., 396 U.S. 375, 391-92, 90 S.Ct. 616, 625, 24 L.Ed.2d 593 (1970). But, notwithstanding the universal acceptance of the equitable fund doctrine as a basis for awarding attorney's fees to the successful party, the courts have experienced considerable problems in accommodating the competing interests involved. On one hand, the court is anxious to encourage private parties represented by private counsel to undertake litigation for the common good as private attorney generals in the hope that the threat of litigation will deter further violations of the law and that the successful prosecution of antitrust suits will disgorge antitrust violators of their illegal profits and return them to the victims. By adopting a policy of rewarding counsel for their efforts, the court can make the difficult decision to undertake an antitrust suit more palatable, thus ensuring that the plaintiff's antitrust bar will contain members with the skill and experience necessary to wrestle with these usually complex antitrust suits. At the same time, however, the court's desire to provide counsel with an incentive to prosecute antitrust suits must be tempered by its responsibility to jealously guard the rights of the beneficiaries of the fund, whose legal injuries prompted the litigation and whose redress is the principal reason for the creation of the fund. Though the common fund doctrine may be predicated upon an equitable principle disfavoring unjust enrichment and encouraging the recapture of any windfall to the class, the recovery due the plaintiffs here is not a windfall in the sense that it represents undeserved gain. Upon the premise that the plaintiffs' allegations of trade restraint and artificially high prices are true, the claimants incurred some injury for every broiler purchased from the defendants during the NBMA's existence; yet due to the large number of claims, each claimant will recover only a fraction of the excess prices paid. Therefore, the court cannot discharge its responsibility to protect the unrepresented, absent class members unless the plaintiffs' litigation costs are allocated in some reasonable proportion to the benefits conferred upon the class.

While the court has wrestled with several difficult legal issues during the course of this litigation, perhaps none was more complicated than the valuation of the legal services rendered on behalf of the plaintiff class. The approximation of a reasonable value is a proper exercise of the court's discretion, but to say that the award of reasonable fees is committed to the sound discretion of the court is only to state the crux of the problem. Little in the way of guidance is offered the court in evaluating these applications to assure that the attorneys are not shortchanged or that the class is overcharged. Indeed, given the nature of the court's task, no method could be devised that would permit the court to determine with mathematical precision the monetary value of each attorney's contribution to the successful settlement of these cases. What is reasonable depends first upon the outcome. If the plaintiffs' counsel succeed in negotiating a favorable settlement for the class, then their fee award should reflect this fact, but a large settlement fund can stand as a monument to the outstanding prestige, skill, and vigor of the class' counsel, or may simply reflect the number of possible claimants or the broad scope of the defendants' activities, with only a modest contribution by counsel. To compensate for the lack of a tested formula for computing the market value of these services, the courts have fallen back on a medley of variables designed to isolate the contribution by the plaintiffs' counsel from the impact of these other factors, to appraise its value, and to distribute these costs fairly among the beneficiaries. E.g., City of Detroit v. Grinnell Corp., 560 F.2d 1093 (2d Cir.1977); Lindy Bros. Builders, Inc. v. American Radiator & Standard Sanitary Corp., 540 F.2d 102 (3d Cir.1976), and 487 F.2d 161 (3d Cir.1973); Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir.1974); In re Master Key Litigation, 1978-1 Trade Cas. (CCH) ¶ 61,887 (D.Conn. 1977); In re King Resources Co. Securities Litigation, 420 F.Supp. 610 (D.Colo.1976); In re Coordinated Pretrial Proceedings in Antibiotic Antitrust Actions, 410 F.Supp. 680 (D.Minn.1975). See also Code of Professional Responsibility Canon 2, EC 2-17, EC 2-18, Disciplinary Rules DR 2-106(B). The clear tendency has been to analyze fee applications more critically to ensure that the class is charged with only those services benefiting it by eliminating, and thereby discouraging, duplication and wasted effort. Though basically the same standard is used nationwide, the results have differed, with some courts using a sharper scalpel than others. Compare In re Armored Car Antitrust Litigation, 472 F.Supp. 1357 (N.D.Ga. 1979) with Arenson v. Board of Trade of Chicago, 372 F.Supp. 1349 (N.D.Ill.1974).

For several reasons the court does not relish the task of passing on these applications. To begin with, the court is pleased with the results and with counsel's performance on behalf of the class. As are most individuals who have followed the course of this litigation since its inception six years ago, the court is impressed by the favorable terms upon which the plaintiffs agreed to dismiss their suits. Surely a good deal of the credit for this result goes to counsel who by their unwavering persistence and imaginative strategy were able to wear down the defendants' opposition until they capitulated to the plaintiffs' demands. In keeping with its duty to absent class members, however, the court must measure the full extent of each applicant's commitment to this litigation, awarding fees for only that time spent for the benefit of the class. A principal criticism of awarding fees under the equitable fund doctrine has been that attorneys receive a windfall at the expense of the injured class members, that the courts, mesmerized by the extraordinary success on what was believed to be a weak claim, have failed to show solicitude for the class members' interests. If in response to this criticism the courts have demonstrated a propensity to scrutinize fee applications more carefully, the experience has not made the task easier each time it arises. Although the applicants have supplied reams of paper documenting the hours spent on these cases, and the court has been overseeing this litigation since its commencement, the court still finds it exceedingly difficult, without painstakingly examining each allocation of attorney time down to the fraction of an hour, to pinpoint instances when less attorney time would have accomplished the same...

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6 cases
  • Edmonds v. US, Civ. A. No. 75-1624-8
    • United States
    • United States District Courts. 4th Circuit. United States District Court of South Carolina
    • 24 March 1987
    ...the significance that should be accorded to the risk of non-recovery that counsel assumed at the outset. In re Chicken Antitrust Litigation, 560 F.Supp. 963, 991-94 (N.D.Ga.1980); In re Corrugated Container Antitrust Litigation, 1983-2 Trade Cases (CCH para. 65,629 at pp. 69, 175-76 (S.D.Te......
  • Brewer v. Southern Union Co., Civ. A. No. 83-F-1173
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • 21 September 1984
    ...(N.D.Ohio 1984); In Re Corrugated Container Antitrust Litigation, 1983-2 Trade Cases ¶ 65,628 (S.D.Tex. 1983); In Re Chicken Antitrust Litigation, 560 F.Supp. 963 (N.D.Ga.1980). In summary, the Supreme Court in Hensley The amount of the fee, of course, must be determined on the facts of eac......
  • Layman v. State
    • United States
    • United States State Supreme Court of South Carolina
    • 28 January 2008
    ...must be adjusted to comport with the court's perception of the proper fee award under the circumstances. In re Chicken Antitrust Litigation, 560 F.Supp. 963, 995 (N.D.Ga.1980); see also Edmonds, 658 F.Supp. at 1149. 10. Any attempt to characterize the expenses incurred as being related to t......
  • Plumb v. State, 900012
    • United States
    • Supreme Court of Utah
    • 10 December 1990
    ...of class claims is to ensure that the court protects the class members from potential abuse. See, e.g., In re Chicken Antitrust Litig., 560 F.Supp. 963, 967-68 (N.D.Ga.1980); Cantor v. Detroit Edison Co., 86 F.R.D. 752, 758-59 With this perspective, which we find fully applicable to our Uta......
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2 books & journal articles
  • Table of Cases
    • United States
    • ABA Antitrust Library Proving Antitrust Damages. Legal and Economic Issues. Third Edition Part III
    • 8 December 2017
    ...546 F.2d 570 (4th Cir. 1976), 68 Chattanooga Foundry & Pipe Works v. Atlanta, 203 U.S. 390 (1906), 227 Chicken Antitrust Litig., In re , 560 F. Supp. 963 (N.D. Ga. 1980), 230 Chipanno v. Champion Int’l Corp., 702 F.2d 827 (9th Cir. 1983), 77 Chiropractic Coop. Ass’n v. Am. Med. Ass’n, 867 F......
  • Overcharges
    • United States
    • ABA Antitrust Library Proving Antitrust Damages. Legal and Economic Issues. Third Edition Part III
    • 8 December 2017
    ...“defendants’ prices were actually lower than would have been expected during the conspiracy period.”); In re Chicken Antitrust Litig., 560 F. Supp. 963, 993 (N.D. Ga. 1980) (noting that regression yielded negative coefficient for the collusion dummy variable). was outweighed by other events......

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