United States District Court, E.D. Pennsylvania
IN THE MATTER OF THE PETITION OF MCLEAN CONTRACTING AS OWNER OF THE M/V YORKTOWN, SWEET PEA, AND JOSEPHINE FOR EXONERATION FROM, OR LIMITATION OF, LIABILITY
MEMORANDUM AND ORDER
Darnell Jones, II, J.
a wrongful death case involving allegations of benzene
exposure on various vessels owned by Mclean Contracting Co.
The deceased, Christopher Carlile Jr., was a member of the
crews of those vessels. The complaint alleged that, during
Mr. Carlile's employment with McLean, he was exposed to
benzene, he developed acute myeloid leukemia (AML) as a
result of this exposure, and he died at thirty-eight because
of his AML in 2012. His three surviving heirs are Laura
Carlile, wife and administratrix of his estate, and his two
children, Madelynn Rose Carlile and Christopher Pennock
Carlile, III. Madelynn is seven and Christopher is five.
more than three years of litigation, the parties settled and
Ms. Carlile now petitions this Court for approval of the
settlement agreement involving her minor children pursuant to
Pennsylvania Rule of Civil Procedure 2039(a). This Court held a
hearing to consider the petition on June 14, 2017. The
petition raises two items this Court must approve: (1) the
total amount of the settlement, and (2) the allocation of the
settlement proceeds between attorneys and beneficiaries,
including the minors. Pet. 15-16, ECF No. 71.
typically afford “considerable weight” to the
judgment of counsel and the parties in determining the
“fair value of the lawsuit.” Calvert v. Gen.
Acc. Ins. Co., No. 99-3599, 2000 WL 124570, at *6 (E.D.
Pa. Feb. 2, 2000). Given the technical aspects of the subject
matter and the agreement of all the parties, this Court will
not second-guess the settlement amount. However, with respect
to the sufficiency of the petition for purposes of approving
the allocation of the proceeds between counsel and the
minors, three significant deficiencies stand out.
the petition lacks any description of the children's
current mental condition or any possible future mental health
needs. See Id. (denying petition with leave to
renew, because it lacked any information on the
children's present and future mental health needs,
“relevant facts” for deciding “the best
interests of the minors” in a wrongful death case). At
the hearing, counsel stated that the minors have not been
subjected to any psychological evaluation, nor have their
future mental health needs been taken into account in
determining their respective allocations.
the petition does not offer enough information to assess the
reasonableness of counsel's fee. The proposed counsel fee
is set at forty percent of the gross settlement amount,
including the children's share, consistent with a
contingency agreement signed by Ms. Carlile. See Ex.
C, ECF No. 71-3. But a court “is not bound to all of
the terms of a contingency fee arrangement” involving
minors. Calvert, 2000 WL 124570, at *6. Rather,
“as the protector of the minor's interests, the
court must independently investigate the fee to be charged to
ensure that it is fair and reasonable.” Nice v.
Centennial Area Sch. Dist., 98 F.Supp.2d 665, 670 (E.D.
Pa. 2000). The burden is on counsel to persuade the court
that “the attorneys' fees and costs requested are
reasonable and equitable.” Id.
analysis begins with the “lodestar amount”
determined by “the court of common pleas in the county
with jurisdiction over the minor[.]” Id. In
deciding whether to deviate from that amount, “courts
consider the following factors: (1) the amount of work
performed; (2) the character of the services rendered; (3)
the difficulty of problems involved; (4) the importance of
the litigation; (5) the degree of responsibility incurred;
(6) whether the fund involved was ‘created' by the
attorney; (7) the professional skill and standing of the
attorney in her profession; (8) the result the attorney was
able to obtain; (9) the ability of the client to pay a
reasonable fee for the services rendered; and (10)
‘very importantly' the amount of money in
question.” Id. (citing to Gilmore v.
Dondero, 582 A.2d 1106, 1109-10 (Pa. Super. 1990)).
petition does not address these factors directly and, as
counsel conceded at the hearing, no such analysis was
conducted in determining counsel's fee. Instead, the
petition states that the fee is appropriate “due to the
complexity of the medical, scientific and legal issues
involved in this case and the extensive and sophisticated
work performed by counsel.” Pet. 18. Counsel had to
establish Mr. Carlile's entire work history and benzene
exposure by reviewing “tens of thousands” of
Defendants' documents. Id. at 19. Counsel also
“obtained and reviewed over 6, 400 pages of medical
records, ” and took twelve depositions and defended
three others. Id. And he interviewed other witnesses
and worked with various experts.
information is not enough to perform a thorough lodestar
analysis. To start, the petition does not say where the
children live, an indispensable fact in determining the
reasonableness of counsel's fee. See Nice, 98
F.Supp.2d at 670. At the hearing, counsel averred the
children live in Montgomery County, which has a presumptive
lodestar fee of twenty-five percent. See Montgomery
County Court of Common Pleas Local Rule 2039(a)(1)(A)(7).
Although counsel is asking for an upward deviation of fifteen
percent from the lodestar to the proposed forty-percent fee,
the petition offers no benchmark or comparative data to
justify the significant increase. See Nice, 98
F.Supp.2d at 671 (rejecting thirty-seven percent fee in favor
of the usual lodestar of twenty-five percent because
“counsel provided no information concerning the
customary hourly rates in plaintiffs' counsel's
relevant geographic area or the customary rates for similar
petition also lacks any information as to “the ability
of the client to pay a reasonable fee for the services
rendered.” Nice, 98 F.Supp.2d at 670. This
information allows the court to determine whether a reduction
in damages awarded to the minors is warranted in order to pay
the higher counsel fee on the basis that the plaintiff has
the ability to pay the higher amount without compromising the
children's well-being. At the hearing, counsel stated
that Ms. Carlile's ability to pay had been considered in
determining the proposed counsel fee, but offered no further
details. Suffice it to say, the petition states that Ms.
Carlile will be able to draw from the children's
allocation to provide for their most basic needs, further
suggesting that the higher counsel fee may be
disproportionately affecting the children's fund.
it should be noted that this Court sanctioned the
plaintiff's counsel in the course of this litigation for
repeatedly failing to comply with scheduling orders to the
potential detriment of his client's case, a fact that
could weigh against deviating upwards from the lodestar.
See Johnson By Johnson v. Coletta, No. 88-4480, 1989
WL 69512, at *1 (E.D. Pa. June 20, 1989) (“in
determining the reasonableness of a contingent fee agreement
contained within a proposed minor's settlement, the Court
may consider such factors as . . . the quality of the [legal]
work, ” quoting McKenzie Construction, Inc. v.
Maynard, 758 F.2d 97, 100 (3d Cir. 1985) (alternations
supplied)); Nice, 98 F.Supp.2d at 671 (“in
assessing the effectiveness of counsel's performance,
” courts may consider “the professional skill and
standing of the attorney in her profession, ” quoting
Gilmore, 582 A.2d at 1109-10). Counsel fails to
address this foible.
hearing, counsel indicated he was prepared to conduct a
lodestar analysis. This Court directed him instead to submit
supplemental briefing with relevant evidence and indicated
that this matter would be referred to a magistrate judge for
a report and recommendation on the reasonableness of
counsel's proposed fee under a lodestar analysis. Counsel
consented to the reference. Accordingly, this Court issues
the following order:
NOW, this 16th day of June, 2017, upon
consideration of Plaintiff's Petition to Approve
Settlement of a Wrongful Death and Survival Action and For
Leave to Settle or Compromise Minor's Action (ECF No.
71), and the representations of counsel during the in camera
hearing held June 14, 2017, it is hereby
Petition is GRANTED IN PART. It is granted
only insofar as the gross settlement amount is
APPROVED, but a decision is
RESERVED with respect to the allocation of
the proceeds between counsel fees ...