Appeal by class members-claimants from an award of attorneys' fees entered by the United States District Court for the Southern District of New York, the Honorable Charles M. Metzner, Judge, on remand, see 495 F.2d 448 (2d Cir. 1974). Affirmed in part and reversed in part.
Tom C. Clark,*fn* Associate Justice, and Moore and Mulligan, Circuit Judges.
This is the second appeal taken by class members-claimants Bay Fair Shopping Center, et al. ("appellants") from an award of counsel fees to David Berger, Esq. and his law firm, David Berger, P.A. ("appellee").*fn1 The fees were awarded for work appellee performed in obtaining a common settlement fund for three national classes of plaintiffs in a suit brought against the Grinnell Corporation, et al. In the first appeal, City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974) (" Grinnell I "), this Court reversed as excessive an initial fee award to appellee of $1.5 million out of the settlement fund of approximately $10 million. On remand, after a hearing, the district court awarded appellee counsel fees of $870,607.00 plus disbursements of $53,267.00 for employment of paraprofessionals and $27,505.00 for employment of accountants.*fn2 1976-1 Trade Cases para. 60,913.
The evolution of the litigation from which this appeal arises has previously been presented in detail by both the district court and this court. See City of Detroit v. Grinnell Corp., 356 F. Supp. 1380 (S.D.N.Y. 1972), aff'd in part, rev'd in part, 495 F.2d 448 (2d Cir. 1974).
In 1961, the Government brought an injunctive action against Grinnell Corporation and several of its subsidiaries ("defendants"). The subsidiaries were in the business of providing "central station protection services" which monitored the premises of subscribers to guard against loss by burglary or fire. The Government's case was directed primarily to monopoly charges under §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2, and was supported by evidence of predatory pricing in cities where the defendants encountered competition. On the basis of documentary evidence, the district court filed an opinion finding violations of both § 1 and § 2. United States v. Grinnell Corp., 236 F. Supp. 244 (D.R.I. 1964). In 1966, the Supreme Court affirmed the district court in part, reversed in part, and remanded for hearings on relief. United States v. Grinnell Corp., 384 U.S. 563, 16 L. Ed. 2d 778, 86 S. Ct. 1698 (1966). After over a year of further documentation, the district court entered a final decree on July 11, 1967.
Promptly following the Government's success, a number of the defendants' competitors and subscribers filed a host of private actions seeking treble damages for alleged predatory pricing. Over 80 private cases were eventually filed. The possibility of a suit against the defendants apparently came to the attention of Mr. Newberg, a lawyer working with Mr. Berger, in November of 1967, when he learned at a Harvard Law School function that a friend represented plaintiffs against "the manufacturers of burglar alarms who are charged with antitrust violations". Mr. Newberg asked his friend to send him a copy of the complaint already filed in Allied Stores Corporation v. Grinnell Corporation, et al., for Mr. Newberg suspected that his law firm might have clients "who may have claims" of a similar nature. App. at 1128. He promptly received a copy of the filed complaint and was advised that discovery had already been instituted and that a conference between plaintiffs' and defendants' counsel was scheduled for the near future. App. at 1129.
Thereafter, three class actions were brought in the Eastern District of Pennsylvania by appellee: City of Detroit v. Grinnell, 68 Civ. 4026, was brought on behalf of a "government class"; 1225 Vine Street Building v. Grinnell, 68 Civ. 4027, on behalf of a "commercial class"; and Manhattan-Ward, Inc. v. Grinnell, 68 Civ. 4028, for an "industrial class". These class actions were filed on July 10 and 11, 1968, exactly one year after the final judgment in the Government's action, and after the filing of most of the other private suits. The Judicial Panel on Multidistrict Litigation transferred all of the private actions to the Southern District of New York for consolidation and pretrial coordination. In re Protection Devices, 295 F. Supp. 39 (J.P.M.D.L. 1968). All suits came under the aegis of Judge Charles M. Metzner.
In their complaints, the plaintiffs represented by appellee alleged violations of the Sherman Act as the United States had charged in its civil action against the defendants.*fn3 Moreover, the "findings of fact, conclusions of law and final judgment" in the Government's action were expressly "incorporated . . . by reference" into the class complaints. App. at 43. Attached to the complaints was a copy of the final decree filed against the defendants on July 11, 1967.
To facilitate the handling of so many cases, Judge Metzner designated three firms, referred to collectively as the "Troika", to carry the laboring oar in prosecuting the suits. As the Court said: "The purpose for creating the Troika was to have a uniform discovery application". App. at 845. Appellee was never a member of the Troika. Apart from the Troika, a Steering Committee for subscriber plaintiffs was formed, to which Mr. Berger requested, on November 5, 1968, that his name be added. Mr. Berger also requested membership on the Steering Committee's Subcommittee on Discovery. App. at 1038. To this a member of one of the Troika firms replied that he was "sure those members of the Discovery Subcommittee with whom you will be serving will be delighted to have your services". App. at 1040.
On April 17, 1969, a memorandum from Mr. Newberg to Mr. Berger advised him that at a meeting of all plaintiffs' counsel in New York on April 16, 1969, "it was decided that since we have the benefit of a governmental trial, discovery should be kept to a simple level and an early trial date should be sought". App. at 1041. Thereafter, Mr. Newberg revised a draft of a motion for an order for production of documents and invited comments from the discovery subcommittee. App. at 1042.Appellee has characterized the motion as the "singularly most important and significant discovery tool in these cases". App. at 1004. Appellee did not take any depositions, and Mr. Berger did not himself visit the document depository, though others in his firm did. App. at 845-46.
Appellee helped to draft a response to a motion by defendants for partial summary judgment on grounds of the statute of limitations. That issue was later decided against the defendants in a decision affirmed by this Court. Russ Togs, Inc. v. Grinnell Corp., 304 F. Supp. 279 (S.D.N.Y. 1969), aff'd 426 F.2d 850 (2d Cir.), cert. denied, 400 U.S. 878, 27 L. Ed. 2d 115, 91 S. Ct. 119 (1970). Appellee stresses the importance of this statute of limitations victory and his prominent role in achieving it. Yet the initial draft of the brief in the Court of Appeals was prepared, pursuant to agreement, by Mr. Hoffman, counsel for a competitor plaintiff. Appellee had previously informed a member of the Troika that he wished to assist in the preparation of the appellate brief, and he did collaborate in preparing the final version. App. at 1032. The brief was formally filed by a member of the Troika. App. at 1074. Although the appeal was argued principally by Mr. Hoffman, Mr. Berger, having requested fifteen minutes time from the Court, did appear and argue.
In 1969, appellee moved to have the three national classes certified pursuant to Rule 23 of the Federal Rules of Civil Procedure. Oral argument was heard on June 18, 1971, with appellee presenting the case for certification.
Settlement negotiations between defendants and the national claimants had been instituted in early 1970. No progress was made, however, until immediately after oral argument on the certification issue. At that time, defendants offered to negotiate a settlement agreement which, after only four bargaining sessions, was concluded by a $10 million-plus-interest settlement fund for the three classes. The settlement was dated August 27, 1971, and was approved by the district court on December 27, 1972. Appellee was given responsibility for its administration.
Appellee had filed a petition, with supporting affidavits and a memorandum of law, for an attorneys' fee of $2.5 million plus disbursements. App. at 101-220. After a hearing at which appellants' request to present evidence was denied, the district court awarded appellee $1.5 million, or approximately 15 percent of the entire fund. City of Detroit v. Grinnell Corp., 356 F. Supp. 1380 (S.D.N.Y. 1972).
A number of members of the represented classes appealed that award, which this court reversed in the same decision that approved the settlement. Grinnell I, 495 F.2d 448 (2d Cir. 1974). The award was overturned as "excessive", displaying "too much reliance upon the contingent fee syndrome", and because the district court failed to hold an adequate evidentiary hearing for the determination of the fee. The case was remanded for the fixing of a fair and adequate ...