Trans World Airlines, Inc. v. Hughes

• Decision Date: 13 April 1970
• Docket Number: No. 61 Civ. 2324.,61 Civ. 2324.
• Citation: 312 F. Supp. 478
• Parties: TRANS WORLD AIRLINES, INC., Plaintiff, v. Howard R. HUGHES, Hughes Tool Company and Raymond M. Holliday, Defendants.
• Court: U.S. District Court — Southern District of New York

312 F. Supp. 478

TRANS WORLD AIRLINES, INC., Plaintiff, v. Howard R. HUGHES, Hughes Tool Company and Raymond M. Holliday, Defendants.

No. 61 Civ. 2324.

United States District Court, S. D. New York.

April 13, 1970.

Cahill, Gordon, Sonnett, Reindel & Ohl, New York City, for plaintiff; Dudley B. Tenney, Paul W. Williams, Immanuel Kohn and Marshall H. Cox, Jr., New York City, of counsel.

Donovan, Leisure, Newton & Irvine and Chester C. Davis, New York City, for defendants Hughes Tool Company and Raymond M. Holliday; James V. Hayes, Mahlon F. Perkins, Jr., Chester C. Davis, Maxwell E. Cox and Paul E. Goodspeed, New York City, of counsel.

METZNER, District Judge.

Plaintiff, Trans World Airlines, Inc., moves for the award of reasonable attorney's fees and costs of suit as the successful party in this antitrust litigation. Clayton Act § 4, 15 U.S.C. § 15. Plaintiff requests counsel fees in the sum of $10,500,000 and costs of suit in the sum of $2,230,602.

This court has already awarded damages in the sum of $137,611,435.95. 308 F.Supp. 679 (S.D.N.Y. Dec. 23, 1969).

The general rule is that the fixing of counsel fees in an antitrust action is within the discretion of the trial court, "reasonably exercised." Montague & Co. v. Lowry, 193 U.S. 38, 48, 24 S.Ct. 307, 48 L.Ed. 608 (1904). The problem of how to exercise this discretion reasonably has been the subject of much discussion. Farmington Dowel Prods. Co. v. Forster Mfg. Co., 297 F. Supp. 924 (D.Me.1969), modified on appeal, 421 F.2d 61 (1st Cir. 1969); Hanover Shoe, Inc. v. United Shoe Mach. Corp., 245 F.Supp. 258, 302 (M.D.Pa. 1965), vacated on other grounds, 377 F. 2d 776 (3d Cir. 1967), aff'd in part on other grounds, rev'd in part on other grounds, 392 U.S. 481, 88 S.Ct. 2224, 20 L.Ed.2d 1231 (1968); Noerr Motor Freight, Inc. v. Eastern R.R. Pres. Conf., 166 F.Supp. 163, 168 (E.D.Pa.1958), aff'd, 273 F.2d 218 (3d Cir. 1959), rev'd on other grounds, 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961). In Hanover Shoe, supra, the court detailed what appear to be the generally accepted factors to be weighed in determining a reasonable attorney's fee. They are:

"(1) whether plaintiff's counsel had the benefit of a prior judgment or decree in a case brought by the Government,

(2) the standing of counsel at the bar—both counsel receiving the award and opposing counsel,

(3) time and labor spent,

(4) magnitude and complexity of the litigation,

(5) responsibility undertaken,

(6) the amount recovered,

(7) the knowledge the court has of the conferences, arguments that were presented and of work shown by the record to have been done by attorneys for the plaintiff prior to trial,

(8) what it would be reasonable for counsel to charge a victorious plaintiff."

However, these factors are only general guidelines and in the final analysis "The reasonableness of an attorney's fee can only be determined with reference to a particular case." Noerr, supra, at 168.

We have here an unprecedented recovery —some 30 times greater than the next highest recoveries on record. In Union Carbide & Carbon Corp. v. Nisley, 300 F.2d 561, 587 (10th Cir. 1961), petition for cert. dismissed per stipulation, Wade v. Union Carbide & Carbon Corp., 371 U.S. 801, 83 S.Ct. 13, 9 L.Ed. 2d 46 (1962), the treble damages were $4,400,000 and in Hanover Shoe, supra, at 302, they were $4,239,000. Obviously the fee to be awarded will be unprecedented, but the court will attempt to insulate itself against the impact of the amount requested in determining what a reasonable attorney's fee should be in this case.

The action was instituted on June 30, 1961. On August 31, 1961 it was assigned to me for all purposes pursuant to rule 2 of the General Rules of this court. The suit was of great magnitude and complexity, and was bitterly contested from its inception. The first phase of the litigation started with defendant Hughes Tool Company conducting deposition proceedings and discovery being made by both parties. Massive sets of interrogatories were served by both parties. The deposition proceedings covered some 80 days of testimony embodied in 13,000 pages of transcript. During this period attempts were made by TWA to serve Howard Hughes so that his deposition might be taken. Toolco engaged in extensive legal maneuverings to forestall the taking of the deposition. Some of those activities are recited in 332 F.2d 602, 611-613 (2d Cir. 1964). Defendant finally moved to dismiss the complaint, which motion was denied, 214 F.Supp. 106 (S.D.N.Y.1963). The culmination of the maneuvering occurred on February 8, 1963 when counsel for Toolco stated that Hughes would not appear for deposition. He referred to "a business decision" not to proceed further with discovery proceedings, but rather to rest on the merits of the positions theretofore taken and seek judicial review thereof. The Court of Appeals said:

"Hughes' deposition was absolutely essential to the proper conduct of the litigation. Yet he and Toolco seized upon every opportunity to forestall this event. To this end they demanded the production of a multitude of documents by TWA and the additional defendants and secured successive adjournments of the deposition. Indeed, Hughes and Toolco seemed to look upon the entire discovery proceedings as some sort of a game, rather than as a means of securing the just and expeditious settlement of the important matters in dispute. It was only at the very eve of the Hughes deposition— after the other litigants had been put to much delay and expense—that the defendants made a `business decision' to terminate discovery." 332 F.2d at 615.

Twenty-one pretrial hearings were held by this court during this phase of the litigation, resulting in the entry of many orders and opinions after hearing argument and reading papers submitted on contested matters.

The first phase ended, as far as this court was concerned, with the striking of Toolco's answer for failure of Hughes to appear for deposition. A judgment by default was directed to be entered in favor of TWA against Toolco and the counterclaims asserted by Toolco against TWA were dismissed with prejudice. 32 F.R.D. 604 (S.D.N.Y.1963). Separate appeals were taken by Toolco from these two determinations (214 F.Supp. 106 and 32 F.R.D. 604), and the hearing on the amount of damages to be awarded TWA was stayed pending these appeals. The Court of Appeals did not pass upon the propriety of the entry of the default judgment against Toolco with respect to the complaint. It limited its review and affirmance to the holding that the district court had jurisdiction of the treble damage action and that issuance of certain orders by the CAB did not constitute a defense to the action. 332 F.2d 602. At the same time it sustained the dismissal of the counterclaims with prejudice because of Toolco's failure to produce Hughes for examination and its failure to produce certain papers and documents. Id. at 615. It also affirmed the granting of summary judgment to the plaintiff on the sixth counterclaim. Id. at 616. The Supreme Court granted certiorari in both appeals, 379 U.S. 912, 85 S.Ct. 261, 13 L.Ed.2d 184 (1964), and after hearing oral argument on March 3 and 4, 1965, dismissed the writs of certiorari as improvidently granted, 380 U.S. 248, 249, 85 S.Ct. 934, 13 L.Ed.2d 817 (1965).

The second phase of the litigation commenced with the hearings on the damage claims before a special master. Preliminarily, some matters of procedure were disposed of, including an appeal to this court from a ruling of the special master (38 F.R.D. 499 (S.D.N.Y. 1965)), and a motion by the defendant which in effect asked for summary judgment in its favor. This latter motion was denied on January 4, 1966. The special master thereafter directed that on May 2, 1966 plaintiff submit in written form all of the testimony it proposed to offer as its affirmative case. Plaintiff offered eight witnesses who were cross-examined by the defendant for a period of 50 days. The defendant followed the same procedure of submitting the testimony of its witnesses in written narrative form and offered four witnesses who were cross-examined by plaintiff for a total of 35 days. The testimony covered some 11,000 pages of transcript with over 800 exhibits containing 60,000 pages admitted in evidence. Experts of recognized standing in the fields of economics, engineering, finance and accounting were called by both sides. At the conclusion of the hearings before the special master, some 745 pages of briefs were submitted by the parties. The special master then rendered a 323-page report. Cross-motions addressed to the report were submitted to the court with an additional 600 pages of briefs by the parties in support of their respective positions. The court's opinion on these motions was rendered on December 23, 1969. 308 F.Supp. 679.

In this application, counsel of record have stated that they have spent 64,000 hours on this case since they were retained by plaintiff. I have excluded some 4,000 hours that are credited to persons who worked on the case but who were not members of the bar in the year that the services were rendered. One of these persons is credited with 3300 hours over a three-year period. An additional 1400 hours have been excluded, since they are not within the period for which compensation should be considered. I have also made an adjustment of hours depending on whether, at the time the services were rendered, the person involved was a partner or associate. The result is that the firm is credited with 58,600 hours, of which 20,000 hours are allocable to partners' time and 38,600 hours allocable to associates' time. These hours were all attributable to the problems of this litigation.

One of the factors to be considered in determining a reasonable fee is whether the plaintiff had the benefit of a prior government judgment or decree. Defendant contends that the default judgment in this case gave plaintiff even greater...