Skelton v. General Motors Corp.

• Decision Date: 11 February 1987
• Docket Number: 80 C 2151.,No. 79 C 1243,79 C 1243
• Citation: 661 F. Supp. 1368
• Parties: Arlie G. SKELTON, Jr., et al., Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant. Josephine NEWTON, et al., Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant.
• Court: U.S. District Court — Northern District of Illinois

661 F. Supp. 1368

Arlie G. SKELTON, Jr., et al., Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant.

Josephine NEWTON, et al., Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant.

Nos. 79 C 1243, 80 C 2151.

United States District Court, N.D. Illinois, E.D.

February 11, 1987.

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William R. Jentes, Garrett B. Johnson, James A. Langan, Kirkland & Ellis, Chicago, Ill., Louis H. Lindeman, Jr., General Motors Corp., Detroit, Mich., for defendant.

Lowell E. Sachnoff, Barry S. Rosen, Jeffrey A. Schumacher, Sachnoff Weaver & Rubenstein, Ltd., Chicago, Ill., Beverly C. Moore, Jr., Law Offices of Beverly C. Moore, Jr., Washington, D.C., Jack Corinblit, Marc Seltzer, Corinblit & Seltzer, Los Angeles, Cal., Francis Goodman, Law Offices of Francis Goodman, Chicago, Ill., Robert S. Schachter, Zwerling Schachter & Zwerling, Jonathan Plasse, Goodkind Wechsler Labaton & Rudoff, New York City, Charles A. Boyle, Charles A. Boyle & Associates, Abraham N. Goldman, Abraham N. Goldman & Associates, William J. Harte, William J. Harte, Ltd., Chicago, Ill., for plaintiffs.

MEMORANDUM OPINION AND ORDER

NORDBERG, District Judge.

In these consolidated class actions, the plaintiffs sued General Motors Corporation ("GM") for damages stemming from GM's installation of THM 200 transmissions into automobiles which allegedly required a THM 350 transmission. The parties entered into a comprehensive settlement agreement, which this court has approved in a separate order entered on this date.¹ The settlement order did not determine the appropriate award of attorneys' fees for class counsel. The court has received fee petitions from nine law firms requesting attorneys' fees in connection with this action.² The class counsel seeks an aggregate "lodestar" amount of $3.3 million, and a 1.75 multiplier. The total fees and expenses requested amount to approximately $5.9 million.

After consideration of all the facts and circumstances, including reviewing the very extensive briefs and petitions and conducting a hearing on November 10, 1986, the court finds that the amounts set forth below provide the appropriate compensation for class counsels' efforts in this litigation.

The court has reduced both the hours and attorney fee rates sought by all attorneys for the reasons set forth in this opinion. However, in this court's opinion, the court has allowed reasonable hours and reasonable attorney fee rates so that all counsel shall be properly compensated for their legal efforts in the consolidated cases. The court's determination of the reasonable hours and rates for each fee petitioner is set forth at the end of this opinion.

Procedural History

This litigation originated in the In re General Motors Engine Interchange Litigation, MDL No. 308 (N.D.Ill.), rev'd, 594 F.2d 1106 (7th Cir.), cert. denied, 444 U.S. 870, 100 S.Ct. 146, 62 L.Ed.2d 95 (1979), aff'd after remand, 620 F.2d 1190 (7th Cir.1980) (the "Engines" case). In Engines, the plaintiffs alleged that GM violated the written warranty provisions of the Magnuson-Moss Warranty Act, 15 U.S.C. ?? 2301-2312, by substituting different engines and other automotive parts, including transmissions, into certain lines of GM automobiles. Specifically, the Engines plaintiffs complained that GM had installed Chevrolet engines in 1977 Oldsmobiles, and THM 200 transmissions in automobiles which were supposed to be equipped with a THM 350 transmission. See Engines, 594 F.2d at 1114, 1132, n. 44. On remand, Judge McGarr, who presided over the Engines litigation, separated the transmissions claims, and ruled that the case would proceed only on the engine interchange issues.

In response to Judge McGarr's decision, plaintiffs filed the Skelton action on March 29, 1979. An amended complaint was filed two months later. Although the Skelton complaint was patterned after the written warranty claims in the Engines litigation, it also contained allegations of deceptive warranties and breach of implied warranties. The Newton claims were filed approximately one year after Skelton, and alleged a different theory of liability stemming from GM's substitution of the THM 200 transmission. These plaintiffs alleged that GM's conduct in replacing the THM 350 transmission with a THM 200 transmission violated the implied warranty provisions contained in UCC ? 2-314(2)(c) because the substituted transmissions were not "fit for their ordinary purpose."

During approximately the same time frame, two other groups of plaintiffs instituted similar litigation in New York. The Attard action was filed in New York state court in 1979, and the Morgan action was filed in the New York federal district court in 1981. These complaints alleged that GM's conduct constituted a breach of its implied and express warranties in violation of the UCC and the Magnuson-Moss Warranty Act.

In 1979, GM moved to dismiss the Skelton complaint, which was then pending before Judge John Powers Crowley. The case was transferred to Judge Moran, and the parties rebriefed the pending motion to dismiss. On October 1, 1980, Judge Moran issued an opinion which upheld plaintiffs' written warranty claim, and dismissed the implied warranty and defective warranty claims. Skelton v. General Motors Corp., 500 F.Supp. 1181, 1190-95 (N.D.Ill. 1980). GM filed an interlocutory appeal, which was accepted by the Seventh Circuit. While Skelton was on appeal to the Seventh Circuit, the Skelton plaintiffs amended their complaint to include the Newton merchantability claims, and GM filed a motion to dismiss all the remaining Skelton and Newton claims.

In September of 1981, the Seventh Circuit issued its opinion in Skelton, reversing Judge Moran's recognition of a written warranty claim based on GM's substitution of the THM 200 transmissions for THM 350 transmissions. Skelton v. General Motors Corp., 660 F.2d 311 (7th Cir.1981). The Seventh Circuit denied plaintiffs' request for a rehearing and rehearing en banc on December 11, 1981; and the Supreme Court subsequently denied plaintiffs' petition for certiorari. Skelton v. General Motors Corp., 456 U.S. 974, 102 S.Ct. 2238, 72 L.Ed.2d 848 (1982).

The Skelton and Newton plaintiffs filed a consolidated complaint under Magnuson-Moss shortly after the Seventh Circuit issued its opinion. The cases were then transferred to Judge Getzendanner, who accepted supplemental briefs and heard oral argument on the motion to dismiss. The cases were transferred to this court a few months later. At the time of this transfer, the parties were still involved in the process of investigating and briefing issues regarding their class certification motions. This process included hiring experts, taking some depositions and responding to numerous inquiries regarding the class action.³ In addition, due to the continuous development of the law in this area, the parties were often required to supplement their certification briefs to address the most recent decisions regarding class certification in cases of this subject and magnitude.

During this same time period, significant developments were taking place in New York and Washington, D.C. In New York, the Attard court denied GM's motion to dismiss, and was affirmed by the New York appellate court. Counsel proceeded with class certification motions and discovery in both Attard and Morgan; and then agreed to informally stay these proceedings pending the outcome of the Skelton/Newton class certification motions before this court. In Washington, GM was involved in an administrative action conducted by the Federal Trade Commission ("FTC"). The parties engaged in extensive discovery during the course of the FTC investigation, and subsequently entered into a consent decree settling the administrative action in November of 1983. This settlement, which was opposed by the Skelton/Newton plaintiffs, provided for the establishment of a Mediation and Arbitration program to resolve consumer complaints stemming from the operation of GM automobiles.⁴

In 1984, the Skelton/Newton plaintiffs suggested that the court proceed with an initial certification of a "failures" class. This court issued an interim order on December 20, 1984, which revealed the court's intent to certify a "failures" class under Count I of the complaint. The court declined to certify any other classes at that time. The court also held that state privity law was applicable to the Magnuson-Moss cause of action. Skelton v. General Motors Corp., No. 79 C 1243, Slip op. at 3 (N.D.Ill. Dec. 20, 1984). In addition, it denied GM's motion to dismiss plaintiffs' label and latent defect claims (Counts III and IV of the consolidated complaint). Id.

The parties began discussing the possibility of settlement following the issuance of this interim order. These discussions extended throughout 1985, and included conferences both in and out of court. After extensive negotiations, the parties reached a general agreement in December of 1985. They expended considerable time negotiating and drafting the final provisions of this agreement, which were presented to the court on June 16, 1986. The Agreement encompasses the following class of plaintiffs:

All original owners (other than solely for purposes of resale) of a General Motors 1976-1980 model year vehicle equipped with a THM 200 transmission purchased in the United States, its possessions and territories, or the District of Columbia, who incurred any transmission repair expense within the first 50,000 miles of use of that vehicle.

In this settlement, GM agreed to establish a $17 million fund which will provide reimbursement for transmission service and repair costs incurred by plaintiffs in the "failures" class.⁵ The parties agreed that the fund would be the only source of any attorneys' fees sought by plaintiffs' counsel, and that plaintiffs' counsel would not seek a fee award calculated on a percentage-of-recovery basis. In accordance...