In re Coordinated Pretrial Proceedings, Etc.

• Decision Date: 01 May 1975
• Citation: 410 F. Supp. 680
• Parties: In re COORDINATED PRETRIAL PROCEEDINGS IN ANTIBIOTIC ANTITRUST ACTIONS.
• Court: U.S. District Court — District of Minnesota

410 F. Supp. 680

In re COORDINATED PRETRIAL PROCEEDINGS IN ANTIBIOTIC ANTITRUST ACTIONS.^*

United States District Court, D. Minnesota, Fourth Division.

May 1, 1975.

COPYRIGHT MATERIAL OMITTED

Cochrane & Bresnahan, St. Paul, Minn., Chestnut, Jones, Brooks, Kennedy & Burkard and Chestnut, Brooks & Burkard, P. A., Minneapolis, Minn., Crane, Martin, Claussen, Hamilton & Barry, Topeka, Kan., Foley, Lardner, Hollabaugh & Jacobs, Washington, D. C., Anderson, Granger, Nagels & Lastelic and John Anderson, Jr., Overland Park, Kan., Hamrick & Hamrick, Rutherfordton, N. C., Joyner & Howison, Raleigh, N. C., Jack M. McCann, Waverly, Ohio, Graham & Graham, Zanesville, Ohio, H. Derrell Dickens, El Dorado, Ark., John W. Elrod, Rison, Ark., Brown, Compton & Prewett, El Dorado, Ark., Ferguson & Burdell, Seattle, Wash., Shea, Gallop, Climenko & Kramer, New York City, Beddow, Embry & Beddow, Birmingham, Ala., Doherty, Rumble & Butler, St. Paul, Minn., Lee Johnson, Atty. Gen., of the State of Oregon, Salem, Ore., Law Office of Joseph L. Alioto, San Francisco, Cal., for Doughboy Committee Counsel.

MEMORANDUM APPROVING PLAN OF DISTRIBUTION AND ATTORNEYS FEES

MILES W. LORD, District Judge.

This matter comes before the Court upon motion of the "Doughboy Committee of Counsel" for the Court to accept the plan of distribution recommended by the Committee of Counsel and to distribute the "Doughboy Settlement Fund" to certain class claimants. Also before the Court are some sixteen petitions for attorneys fees and allowances from various lawyers representing the class.

1. HISTORY OF THE ACTION: The Doughboy action is one of the many class actions and class action settlements involved in the In Re Antibiotic Antitrust Actions, 4-71-Civ. 435 and M19-93A. A history of these actions and of this particular settlement, is contained in the opinions of this Court and of the Court for the Southern District of New York, and also in the opinions of the Court of Appeals for the 2nd and 8th Circuits. This Court does not intend to fully review the history of all the tetracycline cases, nor the settlement of the Doughboy action. That history can be found in this Court's "Memorandum Opinion Approving Settlement" in the Doughboy class action, dated February 11, 1974. For the uninitiated, however, a brief review of the Doughboy class action follows.

The Doughboy action is one of three "farm actions, or agricultural actions" involved in the overall tetracycline litigation. The first suit in the Doughboy class action was filed in 1968 in the District of Minnesota by the law firms of Chestnut, Brooks & Burkard and Cochrane & Bresnahan, Doughboy Industries, Inc., et al. v. American Cyanamid Company, et al., 468 Civ. 409. (Doughboy)¹ That particular suit, and subsequent ones filed in this district and throughout the United States, alleged, in essence, that Defendants had conspired to monopolize, and did monopolize, foreign and domestic commerce in the sale of broad spectrum antibiotics for non-human use. The complaint in that suit further alleged that Defendants conspired to, and in fact did, restrain trade among the several states in the market for broad spectrum antibiotics for non-human use.

When the Doughboy action was filed, certain actions were pending in the Southern District of New York, including a criminal case brought by the United States Government and private civil cases for treble damages brought on behalf of purchasers of broad spectrum antibiotics for human use. To the Court's knowledge, the Doughboy action was the first class action filed involving the agricultural market, or non-human use market.

Besides alleging violations of the antitrust laws of the United States, the Doughboy, Grange and Minnesota Fur Foods cases alleged a national class of all persons, firms or corporations engaged in the production, manufacture, formulation and use of feeds, fodders, forages, supplements and medications used in the agriculture, livestock, poultry and allied industries for the feeding and growing of livestock, poultry and animals, whose principal offices were located throughout the United States of America, its possessions and territories, and who had purchased broad spectrum antibiotics and sustained damages as a result thereof.

On January 28, 1969, an Order to Show Cause why the Doughboy, Grange, Minnesota Fur Foods, and certain other agricultural cases, should not be transferred to the Southern District of New York, before the Honorable Inzer B. Wyatt, was issued by the Judicial Panel on Multi-District Litigation. On April 3, 1969, the Judicial Panel ordered these agricultural cases to be so transferred.

Prior to transfer of the cases, certain settlement negotiations were conducted. Counsel for the class have stated that initially they were offered $200,000 for the "nuisance value" of the case.

On February 6, 1969, while approximately 140 actions were pending before Judge Wyatt, defendants made a global settlement offer, in an attempt to settle most or all of the cases. In essence, this settlement offer was made to the fifty states, to private non-profit hospitals, to certain hospital insurers, to retail and wholesale pharmaceutical houses, and others. The agricultural cases were not included in the settlement offer.

The original amount offered was $120,000,000.00. During these settlement talks, there was some discussion as to whether or not the agricultural plaintiffs were included in the global settlement offer. It finally was concluded and agreed by all parties that the agricultural cases were not included in the global settlement offer.

On June 24, 1970, Judge Wyatt approved the final settlement of approximately 100 of the cases then pending before him in the antibiotics litigation. State of West Virginia v. Chas. Pfizer & Company, Inc., et al., 314 F.Supp. 710 (S.D.N.Y.1970). The settlement was rejected by seven states, private non-profit hospitals and a few others. Judge Wyatt's approval of the settlement left him with approximately forty to fifty litigating cases.

On February 24, 1970, Judge Wyatt issued Pretrial Order No. 1, which ordered defendants to establish a document depository for discovery purposes, and also created the Plaintiffs' National Steering Committee (PNSC). The PNSC was broken down into three large subcommittees: (a) a Government Committee, which included the seven non-settling states, and the United States Government, (b) a Miscellaneous Committee consisting of private insurance companies, union health and welfare funds, competitors and foreign governments, and (c) a Farm Committee, consisting of all the cases involving broad spectrum antibiotics for non-human use.

The PNSC elected John Cochrane, Esq., co-counsel in the Doughboy action, as its chairman. Once the committee was organized, various subcommittees for discovery, briefing, etc., were created and began to prepare the cases for trial.

Throughout this Court's opinions, one finds many references to the Plaintiffs' National Steering Committee. The Court has seldom seen such a large group of prominent plaintiffs' antitrust lawyers, often with differing goals and ideas, work in such great harmony and unison. It is the Court's opinion that the leadership of that committee, plus the strength and cohesiveness with which it bound itself together over the years, was one of the primary factors in achieving the $78,000,000.00 worth of settlements which have occurred since its inception, in the "non-settling" cases.

The Plaintiffs' National Steering Committee proceeded with discovery in New York, including review of the documents which were being deposited in the Document Depository.

Because of the tremendous burden placed upon Judge Wyatt in administering the settlement covering 43 states and certain other classes, the Judicial Panel on Multi-District Litigation, with the consent and recommendation of Judge Wyatt, transferred the non-settling cases to the undersigned Judge on December 2, 1970. In re Antibiotic Drugs Antitrust Litigation, 320 F.Supp. 586, (Jud. Pan.Mult.Lit., 1970). In 1971, these actions were transferred, pursuant to 28 U.S.C. § 1404(a), to the District of Minnesota for the completion of pretrial proceedings and for trial. In re Antibiotic Drug Antitrust Litigation, 333 F.Supp. 309 (S.D.N.Y. 1971). Pretrial Order No. 1, with some modification, remained in effect. The Plaintiffs' National Steering Committee, with John Cochrane, Esq. as chairman, marched on with discovery.

In January of 1971, this Court established three national class actions. E. J. Hoffert, et al. v. American Cyanamid Company, et al., was approved as a national class action on behalf of doctors of veterinary medicine who purchased broad spectrum antibiotics for non-human use. See e. g. Class Action Order 71-2, January 15, 1971. By Class Action Order 71-3 of January 21, 1971, it was determined that Doughboy Industries, Inc., et al. v. American Cyanamid Company, et al., should proceed as a national class action, with the plaintiffs in that action as the class representatives for all:

"2 . . . Persons or entities located in the United States or the Commonwealth of Puerto Rico who, during the periods covered by the complaints herein:

a) Purchased for manufacture or use broad spectrum antibiotics or broad spectrum antibiotic products for non-human use directly from the defendants; and/or

b) Purchased for manufacture or use, but not for the purpose of resale, broad spectrum antibiotics or broad spectrum antibiotic products for non-human use from wholesalers, including distributors and subjobbers, in the same form as originally sold by the defendants."

The third national class action, Midwest Veterinary Supply, et al. v. American Cyanamid Company, et al., was designated as a class representing wholesalers of broad spectrum antibiotic products for non-human use.

In the case at bar, the Doughboy action, 17,790 notices were mailed to potential class members, pursuant to Rule 23,...