In Re Gypsum Cases

386 F. Supp. 959, 1974 U.S. Dist. LEXIS 7095, 1974 Trade Cas. (CCH) 75,272
CourtDistrict Court, N.D. California
DecidedAugust 19, 1974
DocketCiv. 46414-A AJZ
StatusPublished
Cited by37 cases

This text of 386 F. Supp. 959 (In Re Gypsum Cases) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Gypsum Cases, 386 F. Supp. 959, 1974 U.S. Dist. LEXIS 7095, 1974 Trade Cas. (CCH) 75,272 (N.D. Cal. 1974).

Opinion

ORDER DIRECTING PAYMENT OF ATTORNEYS’ FEES

ZIRPOLI, District Judge.

After duly noticed evidentiary hearings held on April 22, 23 and 25, 1974, the court is prepared to fix and direct the payment of attorneys’ fees in this antitrust litigation, in which, probably more than in any other such litigation, the congressional objective of private antitrust enforcement was realized. 1 To achieve this result it took seven years of vigorously contested litigation involving a nationwide price fixing conspiracy on the part of the major manufacturers of gypsum products — litigation initiated and prosecuted throughout all these years without benefit of any governmental assistance whatsoever. 2

Under such circumstances, the attorneys for their able and arduous efforts in litigation involving complex and novel issues of substantial magnitude and doubtful success and undertaken at substantial financial risk on a contingency basis are clearly entitled to reasonable attorneys’ fees commensurate with the benefits conferred upon purchasers of gypsum products. The purchasers of such products who benefited from this litigation might otherwise have been denied any protection or benefit whatsoever, since their claims individually would for the most part hardly justify the time and expense of litigation.

While counsel are entitled to adequate attorneys’ fees commensurate *962 with the fund created and the prevention of future corporate abuse in the gypsum industry (see footnote 1, supra), they seem to have forgotten that the equity power of the court to award attorneys’ fees and thus reward them as vindicators of public policy is definitely limited by the caution that such awards, though they shall not be niggardly, must be reasonable attorneys’ fees, no more and no less. Otherwise the recompense would overshadow the result achieved and diminish the settlement fund to the point where the individual class member obtains only a token recovery.

In the instant litigation, the applications for attorneys’ fees filed by twenty-eight petitioners total in excess of $20,000,000, an exaggerated and untenable figure which only serves to make more difficult and more distasteful the exercise of the court’s discretion in the evaluation of these claims. The resultant evaluations will probably prove to be totally satisfactory to no one.

Mindful that “[f]ew subjects associated with the class action device have generated as much critical commentary in recent years as the matter of attorneys’ fees”, Alpine Pharmacy v. Chas. Pfizer, 481 F.2d 1045, 1049 (2d Cir. 1973), the court has separately reviewed, analyzed and evaluated each of the claims. In so doing, it has reviewed the' various tabulations of attorneys’ fees and the guidelines suggested by counsel in their respective memoranda in support of their applications and the record made at the evidentiary hearing thereon, and indeed the record made throughout the entire history of this litigation.

These tabulations (and even the suggested guidelines) are meaningless without detailed knowledge of (1) the time and labor properly employed by the attorneys in the processing of these cases; (2) the quality of the services rendered; (3) the scope of the activity and conspiracy under attack; (4) the financial risk involved and contingent nature of the action undertaken; (5) the magnitude, complexity and novelty of the issues involved; (6) the true measure of the beneficial results achieved, including the prophylactic effect thereof; and (7) the degree to which, if any, plaintiff’s efforts were supported by prior governmental action. 3

These factors, which are controlling and of which this court has firsthand knowledge, having lived with this litigation and every facet thereof over the past seven years, rather than a percentage of success 4 formula suggested by some counsel, are the factors employed by the court in the exercise of its discretion in the making of the awards hereinafter provided.

Background.

Before making an evaluation and award on the respective applications, a brief review of the history and nature of this litigation is in order.

On January 27, 1967, the first gypsum case, Wall Products Co. et al. v. National Gypsum Co. et al., 326 F.Supp. 295; 357 F.Supp. 832; 367 F.Supp. 972, was filed by the law office of Frederick P. Furth on behalf of a “dealer” (direct purchaser from the manufacturer for resale). By March 1, 1967, suits had been filed against United States Gypsum Company (USG), National Gypsum Company (National), Kaiser Gypsum Company (Kaiser). The Flintkote Company (Flintkote), and Fibreboard Company (Fibreboard) by three dealers *963 and an applicator represented by the Furth office, two dealers represented by the Weir office and four builders and one applicator represented by the Alioto office. All cases were assigned to this court and discovery was coordinated. By the end of 1968, twenty-four significant depositions were taken, extensive interrogatories were exchanged and in excess of 500,000 documents were copied or inspected.

These initial filings were followed by a wave of suits instituted in this district and throughout the country covering every marketing level of the gypsum industry. These cases, which totaled in excess of 140 with approximately 5,500 named plaintiffs, were eventually transferred to this court by the Judicial Panel on Multidistrict Litigation. Through the years and in the course of the pretrial of these cases, forty-two major pretrial orders, preceded by pretrial hearings, and ten postsettlement orders were issued relating to a myriad of problems, including designation of and procedure for operation of document depositaries for plaintiffs and defendants; pass-on, remoteness, statute of limitations and Robinson-Patman defenses; summary judgment estopping denial of liability on the part of the major manufacturers of gypsum products; counterclaims, set-offs and liens; designation of classes, representative cases and representative counsel for each class; decertification; approval of settlements; awarding of costs and attorneys’ fees and supervision of all distribution procedures.

By stipulation of counsel entered on November 27, 1968, the parties then before the court waived jury trial and agreed that the court could designate the first case or cases and the first issue or issues to be tried. Having before it twenty-four cases involving direct sales to six dealers in gypsum wallboard, the court concluded that these should be the first to be tried since they represented the first line of contact with the manufacturers, could be effectively managed and could well be the lead or pilot cases from which to determine the liability issue in all cases. Thereafter, pursuant to pretrial orders issued on April 1, 1969, and June 26, 1969, the “dealer” cases were ordered to trial on the issue of alleged violations of Section 1 of the Sherman Act (15 U.S.C.

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Bluebook (online)
386 F. Supp. 959, 1974 U.S. Dist. LEXIS 7095, 1974 Trade Cas. (CCH) 75,272, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-gypsum-cases-cand-1974.