Liebman v. J. W. Petersen Coal & Oil Co.

63 F.R.D. 684, 1974 U.S. Dist. LEXIS 9109
CourtDistrict Court, N.D. Illinois
DecidedApril 5, 1974
DocketNo. 71 C 1340
StatusPublished
Cited by24 cases

This text of 63 F.R.D. 684 (Liebman v. J. W. Petersen Coal & Oil Co.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Liebman v. J. W. Petersen Coal & Oil Co., 63 F.R.D. 684, 1974 U.S. Dist. LEXIS 9109 (N.D. Ill. 1974).

Opinion

OPINION

WILL, District Judge.

I. BACKGROUND FACTS

All of the cases here are in the process of settlement by virtue of the Court’s approval of settlement agreements between the plaintiffs and substantially all of the defendants: The aggregate settlement will be approximately $2,300,000, of which $500,000 will consist of credits to be applied by defendants to current purchases of coal by members of the plaintiff class and the balance will be cash or its equivalent. All but one defendant having deposited the amount of its cash settlement payment, the stage is set for a distribution to class members. The only determination to be made prior thereto is the allowance of fees and expenses, the deduction of which will enable calculation of the per ton distribution to be made to class members.

While a detailed history of these cases . is unnecessary, some background information is essential to an understanding of the court’s conclusions. In 1969, the Antitrust Division of the Illinois Attorney General’s office initiated an investigation of the trade practices of Chicago retail coal dealers. Over 100 witnesses and more than 750,000 documents were examined and eleven of the largest retail coal dealers in the Chicago area were indicted. The state criminal action was filed in June of 1971 and, shortly thereafter, several of the civil cases presently before the court were filed. Some few months later the Attorney General also filed a civil action, No. 71 C 2545, one of those here involved. His office made available to all plaintiffs all the material developed for the criminal trial. In addition, his staff took the initial responsibility for developing economic data on the coal industry and, in particular, information on the financial status of the defendants.

The state criminal action resulted in a directed acquittal on January 17, 1972, of all defendants. Until the state criminal action was concluded, discovery in the federal civil actions was understandably limited. After the conclusion of the state criminal action, counsel for the plaintiffs in 71 C 1348, the so-called Harper Building case, having previously obtained an order permitting all plaintiffs to inspect the documents produced by the defendants in response to subpoe-naes duces tecum obtained by the Attorney General’s office for use in the state action, obtained on April 21, 1972, an order from the Chief Judge of this court, requiring the Attorney General to produce what are known as the “Hughes tapes” and impounding them in the Clerk’s office of this court. Considerable legal maneuvering followed in both the Federal and State courts as to the disposition to be made of the tapes which contained contemporaneous summaries reflecting one of the individual defendant’s recollections as to what had been considered, discussed and decided at meetings of representatives of the principal defendants.

Meanwhile, counsel for the principal defendants opened discussions with the same plaintiffs’ counsel and representatives of the Attorney General’s office concerning a possible settlement with at least some of the defendants. These discussions continued through the summer of 1972. On September 25, a settlement of $1,000,000 in cash, plus $500,000 in purchase credits, was agreed upon subject to approval by the Court with the question of the amount and the source of payment of attorneys’ fees left open for future determination by the Court.

The Attorney General personally presented the proposed settlement in open court on October 5, 1972, the first hearing on the cases after their transfer from the calendar of the late Judge Na-poli to us. At that hearing, approval of the proposed settlement was urged by [688]*688the Attorney General and counsel for the plaintiffs in the Harper Building case, as well as by counsel for the principal defendants. Counsel for the plaintiffs in the other four private actions objected on the grounds that (1) the proposed settlement was premature since no determination of the appropriate class or classes of plaintiffs had been made with the result that there was no way of knowing the identity or number of the class members; (2) substantial discovery with respect to the issues of liability, damages and the financial condition of the defendants was necessary; and (3) objecting counsel had not participated in the settlement negotiations.

We concluded that consideration of the fairness of the settlement was premature. Accordingly, we ordered that the plaintiff class or classes be determined, the appropriate notices be sent to the prospective members, and discovery be conducted on the issues of liability and damages, as well as with respect to the financial condition of the defendants since it was urged that the proposed settlement was the maximum which they could afford to pay. To insure coordination of the pretrial activities and minimize any further suggestion of divided action by counsel for the plaintiffs in the various cases, we designated co-lead counsel for the plaintiff class or classes, naming a representative of the Attorney General and one of the counsel who had objected to consideration of the initial settlement proposal.

Thereafter, notices were sent to all potential class members, a number of depositions were taken, interrogatories were served and answered, documents were obtained and examined with respect to the defendants’ financial conditions, and an economic expert was retained. In March 1973, preliminary hearings were held on the proposed settlement and .on May 29, we filed an opinion and order declining to authorize sending the proposed settlement to the class members. That opinion spelled out in detail the reasons for our action and they need not be repeated here.

In June, the defendants filed a motion for reconsideration of our ruling which we denied on June 29. The defendants, and some plaintiffs, then sought to appeal our decision and private co-lead counsel moved to dismiss the appeals on the ground that they were improper because the order was not a final one. A record was prepared and briefs were filed but the appeals were subsequently dismissed by the appellants when a new settlement proposal was negotiated.

During the summer of 1973, co-lead counsel negotiated with counsel for the principal defendants concerning a possible settlement which would satisfy the criteria enunciated in our opinion of May 29. As a result, an augmented settlement proposal was presented to the court for preliminary consideration. On October 1, 1973, we authorized its submission to members of the class and set a final hearing on the fairness of the proposed settlement for November 9, 1973.

At that hearing, a large number of class members appeared in person and the proposed settlement was summarized for them by Mr. Sachnoff, private co-lead counsel. Members of the class’ asked a number of pertinent questions concerning the settlement, including an inquiry as to why it was necessary to compensate private counsel in view of the fact that the Attorney General’s office was representing the class. After a full hearing, the court approved the settlement which involved defendants whose sales constituted 82 per cent of the total relevant sales by all defendants in the years involved. The approved settlement called for a payment of $1,339,000 in cash, plus $500,000 in credits, with the specific provision that attorneys’ fees as allowed by the court were to be paid from the cash fund.

As well as the additional cash payment of $339,000, the augmented settlement proposal provided for payment in [689]

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Bluebook (online)
63 F.R.D. 684, 1974 U.S. Dist. LEXIS 9109, Counsel Stack Legal Research, https://law.counselstack.com/opinion/liebman-v-j-w-petersen-coal-oil-co-ilnd-1974.