Adkins v. Hoechst Celanese Corp.

23 S.W.3d 428, 2000 Tex. App. LEXIS 2105
CourtCourt of Appeals of Texas
DecidedMarch 30, 2000
DocketNos. 01-96-01528-CV, 01-98-00409-CV, 01-98-00016-CV, 01-98-00413-CV, 01-98-00124-CV, 01-98-00103-CV, 01-97-01321-CV, 01-98-00414-CV, 01-00-00289-CV, 01-00-00288-CV, 01-98-00018-CV, 01-98-00412-CV, 01-98-00415-CV, 01-98-00410-CV, 01-98-00411-CV and 01-00-00290-CV
StatusPublished
Cited by2 cases

This text of 23 S.W.3d 428 (Adkins v. Hoechst Celanese Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Adkins v. Hoechst Celanese Corp., 23 S.W.3d 428, 2000 Tex. App. LEXIS 2105 (Tex. Ct. App. 2000).

Opinion

OPINION

MARGARET GARNER MIRABAL, Justice.

The main issue presented in this case is whether, under Texas law as applied to these facts, a trial judge has the authority to change the terms of attorneys’ fee contracts between attorneys and their clients. This is mass tort litigation, but not a class action. Appellants1 complain about the trial court’s “Final Order Approving Attorney’s Fees and Expenses.” We reverse.

Procedural History

We granted a joint motion to decide these 16 appeals together. These appeals arise out of lawsuits filed in district courts in 11 Texas counties.2 They arrived in the First Court of Appeals in the following manner:

By order of October 17, 1995, all cases then pending in the district courts of Harris County, in which claims were made for damages allegedly resulting from the installation and use of polybutylene plumbing systems, were ordered consolidated for discovery and for pretrial purposes only. Judge Russell Lloyd, Judge of the 334th District Court, was appointed as the Coordinating Judge of the cases for pretrial purposes.3 As will be discussed in detail later, a settlement was reached in most of the cases pending in Harris County and the 10 other counties, resulting in orders by Judge Lloyd in connection with the settlement of the Harris County cases. Upon joint motions, trial judges with pending polybutylene plumbing cases in Harris County and other counties adopted the orders of Judge Lloyd in their cases that were part of the settlement, resulting in final judgments. Thus, although this appeal involves 16 different cases from 11 different counties, we are reviewing the correctness of one order, by one judge, the Honorable Russell Lloyd.4 The appeals originally filed in other courts of appeals ended up in the First Court of Appeals by order dated March 24, 1998, from the Texas Supreme Court transferring the cases to the First Court of Appeals.

The Lawsuits

The law firm of Fleming, Hovenkamp & Grayson is lead counsel with a group of 48 other law firms5 that represented approxi[433]*433mately 37,000 plaintiffs who owned in excess of 67,000 property units containing allegedly defective polybutylene plumbing systems.6 Each of the 37,000 plaintiffs had individual fee contracts through either lead counsel Fleming, Hovenkamp & Gray-son directly, or through one of the 48 other law firms involved in the litigation. The attorneys’ fee contracts were negotiated on an individual basis by the parties before their suits were filed. All of the plaintiffs are adult individuals or business entities.

The lawsuits filed on behalf of the plaintiffs alleged that for many years Shell Oil Company and Hoechst Celanese Corporation provided the defective materials from which polybutylene plumbing systems were manufactured. It was alleged that, due to the defective materials supplied by Shell and Celanese, the plumbing systems failed and leaked. The polybutylene plumbing systems had been installed in many homes and businesses and had experienced massive failures.

The lawsuits sought the cost of replumb-ing the dwellings and buildings and cash for the water damage, inconvenience, and aggravation caused by the leaks. All of the plaintiffs participated in individual case discovery. The discovery included the completion of nearly 50,000 sets of answers to interrogatories and the taking of more than 8,000 depositions of property owners. Over 30,000 individual home inspections were performed by a plaintiffs’ inspector and damage appraiser, with individual damage calculations done for each home. Expenses of over $10 million were incurred by the plaintiffs’ attorneys in developing and prosecuting the cases. Three large polybutylene pipe cases, involving approximately 300 .plaintiffs, actually went to trial or arbitration.

The polybutylene litigation was the dominant activity of the lead law firm, Fleming, Hovenkamp & Grayson, through nine years, involving the work of eight attorneys, five legal assistants, a number of contract attorneys, investigators, law clerks, and other support personnel with an estimated aggregate of more than 140,-000 hours of time expended. George Fleming stated he spent 60% of his time during this period on the polybutylene pipe litigation, with other FH & G attorneys spending up to 90% of their time prosecuting the cases. A large operation for development and maintenance of a computer data base to manage the litigation was required because of the large number of plaintiffs involved. It is undisputed that the lead law firm used the large database and telephone banks to communicate with its clients. The lead law firm stated it had sent more than 800,000 pieces of mail to its clients in the past four years, and it had coordinated their answers to interrogatories and depositions.

The polybutylene pipe cases were undertaken by FH & G on a contingency fee basis, so that if there was no recovery there would be no fee or reimbursement of expenses.

The Settlement

The settlement agreement was finalized December 20, 1995. It was the result of years of intense negotiations culminating in over two months of nearly daily discussions. The settlement agreement was specifically “subject to the approval of’ each of the involved plaintiffs, and subject to each plaintiffs “agreement to his/her indi[434]*434vidual distribution as proposed by FH & G.”

Under the settlement, Shell and Cela-nese agreed, in order to resolve all polybu-tylene plumbing-related claims of each of approximately 60,000 plaintiffs represented by FH & G,7 to the following:

1. to pay $170 million cash;
2. to replumb or to reimburse replumb costs, for up to 60,000 property units (retail value of replumb: approximately $72 million).

The agreement provided that, in order to be covered, claimants “must be individually represented by FH & G,” and they must “have participated in the litigation process in some manner including, but not limited to, providing claim/damage information for answering written interrogatories, having their Property Units inspected, or having their deposition taken.” The cash payment of $170 million was to be distributed as follows:

(a) to reimburse FH & G for expenses incurred in prosecuting the litigation;
(b) to pay to the plaintiffs amounts sufficient to cover past polybutylene plumbing-related property damages (including personal property costs, leaks costs, insurance deductibles paid, repaired damages costs, and existing damages costs, but excluding costs of replumb and diminution of property values) plus some additional amount to be calculated in a formula to be approved by a special master.8 To be subtracted from the amount paid per plaintiff was his/her attorneys’ fees.

Attached to the settlement agreement is Exhibit “D,” titled “Client Settlement Statement,” to be signed by individual plaintiffs who approved the settlement agreement. The Exhibit “D” form contains language releasing Shell and Cela-nese from liability, and also sets out the formula for computing the net cash proceeds due the settling plaintiff, as follows:

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Related

In Re Polybutylene Plumbing Litigation
23 S.W.3d 428 (Court of Appeals of Texas, 2000)

Cite This Page — Counsel Stack

Bluebook (online)
23 S.W.3d 428, 2000 Tex. App. LEXIS 2105, Counsel Stack Legal Research, https://law.counselstack.com/opinion/adkins-v-hoechst-celanese-corp-texapp-2000.