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In re Agent Orange Product Liability Litigation

decided: April 21, 1987.

IN RE "AGENT ORANGE" PRODUCT LIABILITY LITIGATION (APPEAL OF ATTORNEYS' FEE AWARDS)


Appeal from an order and judgment of the United States District Court for the Eastern District of New York (Weinstein, Ch.J.) awarding fees to those counsel who performed services beneficial to the class. Various counsel challenge the court's use of national hourly rates, the level of quality multipliers allowed, and the failure to award a risk multiplier and to credit certain hours and expenses. Affirmed in part and reversed in part.

Author: Miner

Before: Van Graafeiland, Winter and Miner, Circuit Judges.

Miner, Circuit Judge:

Our discussion of the background and procedural history of the litigation appears in Judge Winter's lead opinion, No. 84-6273. The nine members of the Plaintiffs' Management Committee ("PMC") and various outside counsel appeal, on a number of grounds, the district court's decision setting attorneys' fees. On June 18, 1985, the district court issued an amended order, awarding over seven million dollars in fees and three million dollars in expenses to eighty-eight attorneys and law firms involved in the action. In re "Agent Orange" Product Liability Litigation, 611 F. Supp. 1296 (E.D.N.Y. 1985) ("Agent Orange"). The nine members of the PMC, individually and as a group, challenge the district court's use of a national hourly rate in calculating the fee awards under the lodestar formula set forth in City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974) ("Grinnell I"), and City of Detroit v. Grinnell Corp., 560 F.2d 1093 (2d Cir. 1977) ("Grinnell II"), the level of the quality multipliers it set, and its failure to apply a risk multiplier to the fee awards and to credit certain hours and expenses. Four outside counsel challenge the district court's findings as to the value of their work to the class and the decision to abrogate various contingency fee arrangements between counsel and certain class members. For the reasons set forth below, we affirm in part and reverse in part.

I. BACKGROUND

In May of 1984, on the eve of trial, a settlement was reached with the chemical company defendants, calling for the establishment of a $180 million dollar fund for the benefit of the class. By order dated June 11, 1984, the district court required fee petitions to be filed no later than August 31, 1984, and scheduled hearings on the petitions for the early fall. Notice of Proposed Settlement of Class Action, reprinted in In re "Agent Orange" Product Liability Litigation, 597 F. Supp. 740, 867 (E.D.N.Y. 1984). Pursuant to this procedure, well over 100 attorneys and law firms filed petitions, claiming tens of thousands of hours of work performed for the benefit of the class. The fee petitions fell into three categories: those filed by the nine members of the PMC; those filed by members of Yannacone and Associates, the original consortium of attorneys in charge of the action; and those filed by attorneys not connected with any court-appointed entity representing the class.

In reviewing fee petitions, the district court developed guidelines falling into two categories - one covering the hours to be credited for work performed and the other covering the expenses to be reimbursed. The hourly guidelines were as follows:

1. Court Time : One half of the time requested for review of court orders was permitted on the ground that the majority of court orders were made in open court or after extensive briefing. Telephone conference time with court personnel was awarded in full, except that no time was awarded for conferences relating to internal management difficulties of the PMC. Attendance at, and preparation for, court hearings was awarded in full. Review of hearing transcripts was awarded in full for those attorneys attending the hearing. Nonattending attorneys were awarded for only half such time. Travel to and from hearings and court appearances also was awarded on a fifty percent basis.

2. Management Committee Meetings : All time for PMC meetings on substantive issues was permitted. Travel to and from such meetings was awarded on a fifty percent basis. No time was awarded for meetings on nonsubstantive topics. The same division was made for telephone conferences among PMC members.

3. Educational Reading : Time for review of scientific materials relating to the causation issue and other issues in the case was awarded on a fifty percent basis on the ground that such knowledge could be used by counsel in future cases.

4. Depositions. Half of the time was awarded for travel to and from depositions, for attendance by nonparticipating attorneys, and for review and reading. All time for preparing and summarizing depositions was granted. No limit on the length of depositions was enforced.

5. Document Preparation : All time for review and preparation of legal documents was awarded, except that those hours used to prepare documents concerning internal PMC organizational issues were not credited.

6. Mail : If a short period of time for review of a substantial amount of mail was requested, no time was awarded under the assumption that counsel simply was opening the mail. If a lengthy period of time was claimed for review of only a few letters, all time was credited under the assumption that counsel was reviewing a letter brief.

7. Intra-Firm Conferences : This time was credited on a fifty percent basis when related to substantive issues.

Agent Orange, 611 F. Supp. at 1320-21, 1350-51. The expense guidelines were as follows:

1. Travel : Documented expenses for hotels were reimbursed at ninety dollars per day. meals were reimbursed at fifty dollars per day and twenty dollars per day of the attorney was in his home city.

2. Paralegal Time : Paralegals were treated as an expense and reimbursed at a rate of twenty dollars per hour.

3. Out-of-Pocket Expenses : Telephone, mailing, duplication and similar expenses were reimbursed in full if adequately documented.

4. Percentage Approval : When counsel submitted adequate documentation to prove expenses but were unable to establish that those expenses were all related to compensable activity, expenses were reimbursed on a percentage basis.

5. Fees for Non-Causation Experts : A cap of $5,000 per expert was set on the ground that their input was not substantial and not reasonably related to class interests.

Id. at 1321-22, 1351.

Following these guidelines and applying the lodestar formula for calculating attorneys' fees in an equitable fund action, see Grinnell I, 495 F.2d at 471, the district court awarded $10,767,443.63 in individual fees and expenses to various counsel who, in the court's view, had performed work beneficial to the class. In arriving at the lodestar figure, the court employed national hourly rates of $150 for the work of partner, $100 for the work of an associate, and $125 for the work of a law professor. Agent Orange, 611 F. Supp. at 1326. The court, in its discretion, further applied quality multipliers, ranging from 1.50 to 1.75, to the fees allowed various members of the PMC and other counsel who had exhibited exceptional skill in the litigation and settlement negotiations. Id. at 1328. The district judge, however, declined to apply a risk multiplier to the lodestar figure. Id.

Not satisfied with these awards, two groups of attorneys, including the PMC, now raise numerous objections on appeal.

II. DISCUSSION

A. PMC ...


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