On Appeal from the United States District Court for the Eastern District of Pennsylvania, D.C. No. MDL 323.
Walter E. Riordan, P.A. (Riordan) and Hennepin Press, Inc. (Hennepin) appeal from Post-Judgment Order No. 107, which awards from a class action fund in court $1,500,000 to be distributed to 22 law firms. Riordan is a law firm which seeks a fee award from the settlement fund. Hennepin is a member of the plaintiff class to which the settlement fund, less fees and costs awarded, will be distributed. Order No. 107 provides that there is no just reason for delay and final judgment is entered pursuant to Fed. R. Civ. P. 54(b). Thus the appeal is from a final judgment. The law firms to which the $1,500,000 award was made have moved to dismiss the appeal. We will deny that motion, and we will reverse Order No. 107.
Proceedings in the District Court
The fund in court from which Order No. 107 makes the contested award was created by settlements of class action antitrust actions against a number of paper manufacturers. Twelve of these actions were transferred by the Judicial Panel on Mult-District Litigation to the Eastern District of Pennsylvania, where they were consolidated with four such actions pending there. The settlement fund totaled $50,650,000, and post-settlement interest earned by the fund ultimately raised it to over $80 million. After the settlement, 41 separate petitions were field seeking awards from the fund in the aggregate amount of $21 million in fees and expenses. Objections to these petitions were filed by a number of law firms and class members. After contested hearings, the district court awarded fees aggregating approximately $4.3 million and expenses of approximately $1.1 million. In re Fine Paper Antitrust Litig., 98 F.R.D. 48 (E.D. Pa. 1983).
Of the 41 fee petitioners affected by the district court's rulings, 20 filed notices of appeal. Of those who appealed, nine formally withdrew their appeals before this court acted on them. Eleven fee petitioners pursued their appeals. This court affirmed insofar as the judgment denied the fee application of one petitioning law firm, but reversed and remanded for redetermination of the amounts of fees and expenses to be awarded to the other ten. In re Fine Paper Antitrust Litig., 751 F.2d 562 (3d Cir. 1984). On remand, after further proceedings, additional awards were made to the ten successful appellants, only one of whom has appealed from the modified awards.*fn1 The additional awards made as a result of this court's mandate are not the subject of this appeal.
Our decision in the prior appeal was handed down on December 13, 1984. Thereafter, between March and December of 1985, thirteen fee claimants who were not parties to that appeal field Fed. R. Civ. P. 60(b) motions to reopen the fee judgment and increase their awards. The moving parties included seven law firms who had appealed, but whose appeals were withdrawn, and six law firms which had not appealed the original awards. The moving parties sought adjustments of historic hourly rates, application of an increased contingency multiplier, and adjustments for delay in payment. A fair characterization of their position is that they sought the same treatment as was required by this court's mandate for the successful appellants.
Timely objections to the Rule 60(b) motions were filed in April of 1985, on behalf of several class members. Objectors included the firm of Weil, Gotshal & Manges, which represented the class members who objected to the original fee requests and appeared for those class members as appellees in our prior appeal, the State of Illinois, a class member, Sloan & Associates, P.C., a law firm representing class members and holding a fee claim against the fund, and several other class members. The objectors contended that the moving parties could not remedy their failure to appeal by a Rule 60(b) motion filed long after the judgment affecting them had become final.
A hearing on the motions and objections was scheduled for June 26, 1986. For reasons which do not appear of record that hearing was never held. Apparently settlement negotiations had taken place in the meantime. Riordan was aware of these negotiations, although he apparently did not participate in them. On July 28, 1986, Riordan filed objections to the Rule 60(b) motions. In his moving papers he specifically adopted the memorandum dated April 1, 1985, filed on behalf of class members by Weil, Gotshal & Manges in opposition to those motions. No hearing was scheduled on Riordan's objections.
On February 17, 1987 the district court filed Post-Judgment Order No. 107. The order recites that Rule 60(b) motions were filed by thirteen firms, and in relevant part provides:
objections to said Motions having been withdrawn; the Court being advised that after extensive negotiations between counsel for the movants on the one hand and counsel for the class member objectors and other objectors on the other, the movants, on behalf of all non-appellant, non-governmental counsel who were awarded attorneys' fees by this Court's Orders of March 3, 1983 (Appendix B hereto), are willing to accept, in full settlement of their claims for attorneys' fees for the services as set forth in the fee applications adjudicated by said Orders, an additional award in the amount of $1,500,000, the Court finding said award to be fair, reasonable and proper for such aforesaid services ...