UNITED STATES DISTRICT COURT, EASTERN DISTRICT OF PENNSYLVANIA
January 17, 1980
In re GAS METERS ANTITRUST LITIGATION
The opinion of the court was delivered by: WEINER
MEMORANDUM OPINION AND ORDER
A joint application for counsel fees and reimbursement of litigation expenses and administrative costs has been filed by counsel for the representative plaintiffs Philadelphia Electric Company (PECO), Philadelphia Gas Works (PGW) and Pennsylvania Gas and Water Company (PaG&W). The application arises out of litigation begun on February 14, 1978, by the filing of a Complaint by PECO against Rockwell International Corporation (Rockwell), The Singer Company (Singer) and Textron Inc. (Textron).
On February 27, 1978, PGW filed its Complaint against the same three defendants,
and on June 22, 1978, PaG&W filed its Complaint against these three defendants.
The Complaints charged the three defendants with violations of Section 1 of the Sherman Act
by reason of their having engaged in unreasonable restraint of interstate trade and commerce in gas meters, resulting in price fixing of gas meters at artificially high and non-competitive levels. The three plaintiffs filed motions for class action determination. By stipulation of the parties, the cases were consolidated and the litigation was maintained as a class action.
Approximately eight months after the first Complaint was filed, the U. S. Government filed an indictment against Rockwell and Textron, together with a civil suit for injunction against Rockwell, Textron and Singer. The defendants and co-conspirators were charged with conspiracy to fix and maintain prices in the sale of gas meters from May, 1973 through November, 1977. Rockwell later pleaded "guilty" and Textron was convicted at a jury trial.
Subsequently, applicants were able to settle the civil case with Textron for $ 2,300,000.00 and the civil case with Singer for $ 5,250,000.00. Counsel placed the settlement funds into an interest bearing account. Finally, a settlement was reached with Rockwell in the amount of $ 7,825,000.00 which brought the total settlement fund to over 8% of the class purchases in the four year period, between 1973 and 1977. The Rockwell settlement fund also was invested at advantageous interest. The total settlement fund aggregated $ 15,375,000.00.
This application was filed on behalf of five law firms seeking as of July 9, 1979, a joint award of counsel fees for the services of counsel in this litigation in the amount of $ 1,400,000.00, and reimbursement of costs disbursed by counsel in the amount of $ 19,516.14. The fees and reimbursement for disbursements are to be paid out of the settlement fund of $ 15,375,000.00, plus accrued interest. The counsel fee requested is the product of approximately four (4) times the hourly rate normally charged by the applicants. The normally charged hourly rate totals $ 333,014.85.
Prior to August 10, 1979, the five law firms supplemented their original Joint Application for Counsel Fees with a document entitled "Schedule of Attorneys Time and Disbursements."
Section II of that document sets forth the additional hours spent by the respective applicants, computed from July 10, 1979 through August 8, 1979, and the value of said time based upon the multiplication of the hours listed by the respective hourly rates. The value of the additional time spent is computed to be $ 29,946.25, thereby increasing the total of the normally charged hourly rate to $ 362,961.10.
Section IV of the document reflects additional disbursements expended by the respective law firms during the July 10, 1979 through August 8, 1979 period. The total of the additional disbursements is $ 1,237.12, thereby increasing the total of the requested reimbursement for disbursements to the sum of $ 20,753.16.
On December 5, 1979, Seymour Kurland, a member of the firm of Wolf, Block, Schorr and Solis-Cohen, co-counsel for plaintiffs and one of the petitioners herein, filed a document entitled "Further Addendum to Fee Application."
This document revises Exhibit B of the original Joint Application. Its purpose is the elimination of the appearance of any duplication of effort and services provided by the respective petitioning law firms. It reduces the total number of hours claimed by the Wolf, Block law firm from 1365.2 hours to 842.8 hours, and includes a corresponding reduction in that firm's hourly charges from $ 125,867.10 to $ 96,961.50.
Some of the class members have filed Objections to the Joint Application for Counsel Fees and Reimbursement of Litigation Expenses and Administration Cost. An evidentiary hearing was held. While most objectors do not object to the normal hourly rate charged by the joint applicants, nor the number of hours credited by the applicants, they do object to any increase over and above the normal hourly rate. The thrust of their objections is that difficulty in this case was removed by reason of the actions of the United States Justice Department and the Singer Company, which had volunteered information about the price fixing to the Government.
When a fund is recovered in a class action, the Court, in determining the fee to be awarded, must carefully examine the services detailed by counsel for which compensation is required. Lindy Brothers Builders v. American Radiator & Standard Sanitary Corp., 540 F.2d 102 (3rd Cir. 1976) (Lindy II). Lindy Brothers Builders v. American Radiator & Sanitary Corp., 487 F.2d 161 (3rd Cir. 1973) (Lindy I).
The purpose of the award of attorneys fees is to compensate the attorneys for the reasonable value of their services. The first inquiry of the Court should be the hours spent by the attorneys in the various general activities, e.g., pretrial discovery, settlement negotiations, and the hours spent by various classes of attorneys, e.g., senior partners, junior partners, associates. (Lindy I). Lindy suggests the logical beginning in valuing an attorney's services is to fix a reasonable hourly rate for his time, taking into account his legal reputation and status (partner, associate). Where, as here, several law firms have requested fees, several different rates apply. The reasonable hourly rate is then multiplied by the reasonable number of hours necessary to perform the services, and this is the "lodestar" of the Court's fee determination. The "lodestar" may be increased or decreased by taking into account the contingent nature of success and the quality of the attorney's work. The contingent nature of success is of special significance where, as in the case sub judice, the attorneys have no private agreement that guarantees payment even if there is no recovery. In determining the quality of the attorney's work we must consider the complexity and novelty of the issues presented, the quality of the work which we have observed, and the amount of the recovery obtained. (Lindy I).
The applicants filed their application for a fee jointly and request a single aggregate fee award. They allege that they worked on the litigation jointly, thereby avoiding duplication of effort.
Each of the law firm applicants has filed an affidavit in support of the joint application for counsel fees and reimbursement, which includes a description of the law firm and a breakdown of the number of hours spent by each firm (and individuals) and their normal hourly billing rate. The breakdown of the hours spent by the individuals in each firm, their hourly rate, and the firm's disbursements is attached for each firm.
As of July 9, 1979,
the time devoted by the respective applicants was as follows:
FIRM HOURS HOURLY RATE VALUE
Kohn, Savett, Marion
& Graf, P.C. 1,023.75 $ 50. to $ 250. $ 119,768.25
Wolf, Block, Schorr
and Solis-Cohen 808.7 $ 74. to $ 150. 93,161.00
Maxwell & Hippel 697.00 $ 60. to $ 130.
$ 35. (legal
Gross & Sklar, P.C. 376.00 $ 65. to $ 135.
$ 25. (para-
& Greenwald 48.75 $ 95. to $ 135. 5,032.00
TOTAL 2,954.20 $ 303,989.75
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