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VAN GEMERT v. BOEING CO.

May 28, 1981

William R. VAN GEMERT et al., Plaintiffs,
v.
The BOEING COMPANY et al., Defendants



The opinion of the court was delivered by: COOPER

The six petitions for attorneys' fees and disbursements before us bring closer to finality a long and hard fought battle stretching over fourteen years. *fn1" Van Gemert v. Boeing Co., No. 66 Civ. 1820 (S.D.N.Y., consolidated on October 4, 1966); Van Gemert v. Boeing Co., 520 F.2d 1373 (2d Cir.), cert. denied, 423 U.S. 947, 96 S. Ct. 364, 46 L. Ed. 2d 282 (1975); Van Gemert v. Boeing Co., 553 F.2d 812 (2d Cir. 1977); Van Gemert v. Boeing Co., 573 F.2d 733 (2d Cir. 1978); Van Gemert v. Boeing Co., 590 F.2d 433 (2d Cir.) (en banc), cert. granted, 441 U.S. 942, 99 S. Ct. 2158, 60 L. Ed. 2d 1043 (1979); Boeing Co. v. Van Gemert, 444 U.S. 472, 100 S. Ct. 745, 62 L. Ed. 2d 676 (1980).

Petitioners have represented the plaintiff class of debenture holders since 1966. After extensive discovery, pretrial stipulations as to the relevant facts (some 55 pages) and a three-day trial on the merits, the consolidated complaint was dismissed by Judge Ryan. The Second Circuit Court of Appeals reversed the dismissal and ordered that judgment be entered for the plaintiff class on an implied reasonable notice theory. Subsequently, defendant, the Boeing Co., was denied certiorari in the Supreme Court.

 On remand, Judge Ryan refused to award prejudgment interest to the class and petitioners again went before our Circuit's Court of Appeals. The Court of Appeals held that prejudgment interest should be awarded to the plaintiff class. On this second remand, Judge Ryan additionally ordered that attorneys' fees be shared by the plaintiff class (claiming as well as nonclaiming members) on a pro-rata basis.

 The defendant, Boeing, appealed that portion of Judge Ryan's order relating to pro-rata sharing of attorneys' fees. Defendant argued that because it had a colorable interest in the unclaimed portion of the judgment fund, any pro-rata sharing which included the unclaimed portion of the judgment fund would effectively tax plaintiffs' attorneys' fees to defendant. The Second Circuit panel agreed, only to be reversed after petitioners sought and were granted en banc reconsideration.

 The novelty of this attorneys' fees issue was taken up by the United States Supreme Court when it granted defendant's petition for certiorari. The Supreme Court affirmed Judge Ryan's order on the theory that unclaiming class members would have to share in the costs of a fund in which they had at least an equitable interest.

 Petitioners' separate statements seek reimbursement for the nearly fourteen thousand hours of work in representing the plaintiff class of debenture holders. The aggregate request amounts to almost five million dollars *fn2" in attorneys' fees and fifty thousand dollars in disbursements.

 Our Circuit has clearly set forth the considerations to be employed for determining just and adequate attorneys' fee awards in City of Detroit et al. v. Grinnell et al., 495 F.2d 448 (2d Cir. 1974) ("Grinnell I ") and City of Detroit et al. v. Grinnell et al., 560 F.2d 1093 (2d Cir. 1977) ("Grinnell II ").

 "The starting point of every fee award ... must be a calculation of the attorney(s') services in terms of the time (they have) expended on the case." Grinnell I, supra, 495 F.2d at 470. The calculations made by petitioners are, of course, subject to our own determination of reasonableness. Steinberg v. Carey, 470 F. Supp. 471, 479 (S.D.N.Y.1979) (Weinfeld, J.); Seigal v. Merrick, 619 F.2d 160, 164, n.9 (2d Cir. 1980). We have thoroughly read the applications, amended applications, affidavits, briefs, reply briefs and numerous letters of petitioners and have relatively minor cavils with their inclusion of hours.

 PREPARATION OF FEE APPLICATION HOURS

 This Circuit's policy is clear. "Services performed in connection with the fee application are necessary to the attorney(s') recovery. They benefit him, for without them, the attorney cannot ... recover. But such services do not benefit the fund they do not create, increase, protect or preserve it.... There being no benefit to the fund from services performed by (petitioners) in connection with their fee application(s), there should be no attorneys' fee award for those services." Grinnell II, supra, 560 F.2d at 1102 (quoting Lindy Bros. Builders Inc. v. American Radiator & Supply Sanitary Corp., 540 F.2d 102, 111 (3d Cir. 1976) (en banc )).

 We recognize that at the time of filing of their original applications in late March, 1977, petitioners did not have the benefit of the subsequent Grinnell II decision. Nevertheless, we shall deduct 170 hours (approximation) from the petitioning firm of Kass, Goodkind, Wechsler, and Labaton, chargeable at partner rates and 150 hours (approximation) from the petitioning firm of Norman Winer, chargeable to Norman Winer for time included in preparation of their respective fee applications. *fn3" Application, Kass firm, verified 7-29-77, Appendix No. 1; Supplemental and amended application, Kass firm, verified 3-31-80, Exh. D; Affirmation, Winer, verified 8-2-77, par. 84; Petition, Winer, verified 3-28-80, Exh. A.

 INDIVIDUAL REPRESENTATION

 On December 29, 1980, the petitioning firm of Moses & Singer made application for attorneys' fees and disbursements. Petitioners seek compensation "... for work actually and necessarily performed by (petitioners) ... in its representation of (their client,) Mr. Bonnard ...." Petition, Fishman, verified 12-26-80, par. 4. The petition must be, and hereby is, denied in all respects.

 These petitioners have done nothing to benefit the plaintiff class. As the Supreme Court stated, "... this Court has recognized consistently that a litigant or a lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to a reasonable attorney's fee from the fund as a whole." Boeing Co., supra, 444 U.S. at 478, 100 S. Ct. at 749 (emphasis added); See Mills v. Electric Auto-Lite Co., 396 U.S. 375, 90 S. Ct. 616, 24 L. Ed. 2d 593 (1970); Sprague v. Ticonic National Bank, 307 U.S. 161, 59 S. Ct. 777, 83 L. Ed. 1184 (1939).

 Additionally, we note that this petition is devoid of the specific factors that Grinnell I, supra and Grinnell II, supra, demand when making application ...


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