Sala v. National Railroad Passenger Corp.

128 F.R.D. 210, 1989 U.S. Dist. LEXIS 13594, 1989 WL 140016
District Court, E.D. Pennsylvania·Decided November 13, 1989·No. Civ. A. No. 88-1572·Published·Cited by 7 cases

Opinion

MEMORANDUM

RAYMOND J. BRODERICK, District Judge.

In this class action in mass tort, plaintiffs’ legal counsel, Fine, Kaplan and Black of Philadelphia and Williams & Connolly of Washington, D.C., have produced a settlement valued approximately at $1.79 million, including accrued interest. Counsel now moves jointly for an award of attorneys’ fees amounting to one-third of the settlement fund, in addition to costs of $97,-538.56.

I.

The underlying litigation arose out of a collision between Amtrak Train No. 66 (The Night Owl) and a 17-ton piece of track equipment during the early morning hours of January 29, 1988. The accident occurred near Hook Interlocking, an area in which trains may cross from one track to another by means of switches. Two and one-half hours before The Night Owl was to pass through Hook Interlocking, track 2 was closed to the north so that a maintenance crew could service it. When The Night Owl approached Hook Interlocking on track 2, Tom Connor, the tower operator on duty who possessed control of the switches and signal levers, failed to divert the train from track 2 to track 1 and to set the safety signals properly. The train thus proceeded up track 2 at its maximum au[212]*212thorized speed of ninety miles per hour and collided with the maintenance equipment. Upon impact, The Night Owl’s two engines and eight cars derailed, injuring an estimated forty to fifty passengers. Fortunately, no one was killed.

Tom Connor immediately fled the scene of the wreck. He was not located uptil three days later, at which time he was interrogated and tested for drug use. Toxicological tests disclosed the presence of marijuana, amphetamines, methamphetamines, and cocaine in Mr. Connor’s system.

Although some passengers on The Night Owl suffered concussions and one lost several teeth, most of those who eventually became class members sustained “soft tissue” injuries, such as bruises, strains, and stiffness. Twenty-one class members received medical attention, and eleven missed some work. Plaintiffs also later reported either temporary or enduring emotional injury and various degrees of pain and suffering. The most common psychological malady experienced was a fear of travel, which has hampered a few class members from properly fulfilling job responsibilities.

Marta Sala commenced this action against Amtrak on February 25, 1988. Her complaint, filed on behalf of herself and all other passengers injured in the accident, sought compensatory and punitive damages against Amtrak for alleged negligence and willful misconduct. This Court granted class certification pursuant to Federal Rules of Civil Procedure 23(a) and (b)(3) on April 29, 1988. Sala v. National Railroad Passenger Corp., 120 F.R.D. 494 (E.D.Pa.1988). Seeking dismissal of plaintiffs’ punitive damages claims, Amtrak then filed a motion for partial summary judgment, which the Court denied on June 14, 1989. The parties submitted a detailed pre-trial order on June 19, and plaintiffs filed six motions in limine. On the last business day before trial, scheduled for June 26, the parties agreed to a settlement, which the Court later approved. Sala v. National Railroad Passenger Corp., 721 F.Supp. 80 (E.D.Pa.1989).

II.

The Supreme Court has recognized that a “litigant 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. v. Van Gemert, 444 U.S. 472, 478, 100 S.Ct. 745, 749, 62 L.Ed.2d 676 (1980); see also Alyeska Pipeline Serv. v. Wilderness Society, 421 U.S. 240, 257, 95 S.Ct. 1612, 1621, 44 L.Ed.2d 141 (1975); Mills v. Electric Auto-Lite Co., 396 U.S. 375, 393, 90 S.Ct. 616, 626, 24 L.Ed.2d 593 (1970); Central R.R. & Banking Co. v. Pettus, 113 U.S. 116, 5 S.Ct. 387, 28 L.Ed. 915 (1885); Trustees v. Greenough, 105 U.S. 527, 532-37, 26 L.Ed. 1157 (1882). This common fund doctrine rests on the perception that individuals who profit from a lawsuit “without contributing to its costs are unjustly enriched at the successful litigant’s expense.” Boeing Co., 444 U.S. at 478, 100 S.Ct. at 749. To prevent this inequitable result, a court may assess fees against the entire fund and thereby spread litigation costs proportionately among those whom the suit benefits. Id. Similarly, the Third Circuit has noted that in the class action context, attorneys who create a settlement fund are entitled to recover fees against that fund. “The award of fees under the equitable fund doctrine is analogous to an action in quantum meruit; the individual seeking compensation has, by his actions, benefited another and seeks payment for the value of the service performed.” Lindy Bros. Builders v. American Radiator & Standard Sanitary Corp. (Lindy I), 487 F.2d 161, 165 (3d Cir.1973); see also Silberman v. Bogle, 683 F.2d 62, 64 (3d Cir.1982); Lindy Bros. Builders v. American Radiator & Standard Sanitary Corp. (Lindy II), 540 F.2d 102, 110 (3d Cir.1976).

Although it is well established that attorneys’ fees may be drawn from a fund in court, there is some controversy regarding the proper method by which the amount of compensation should be calculated. Until 1973, the size of the fee award in both common fund cases and statutory fee shifting cases was left to the court’s discretion. “Awards often reflected what the court [213]*213believed was a ‘reasonable percentage’ of the amount recovered.” Court Awarded Attorney Fees: Report of the Third Circuit Task Force (1985), reprinted in 108 F.R.D. 237, 242 [hereinafter Task Force Report ]. Although judges at that time utilized a multitude of factors in establishing amounts for fee awards, they relied most heavily on “the size of the fund or the amount of benefit produced for the class.” Id. Yet, given the open-ended and contextual nature of the reasonable percentage standard, it often was maligned as investing unlimited discretion in trial judges, producing inconsistent results, and authorizing the collection of windfall profits by attorneys. Task Force Report, 108 F.R.D. at 242 (remarking award percentages varied “considerably from case to case”); see also Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air (Delaware Valley I), 478 U.S. 546, 563, 106 S.Ct. 3088, 3097, 92 L.Ed.2d 439 (1986); Coffee, Rescuing the Private Attorney General: Why the Model of the Lawyer as Bounty Hunter is Not Working, 42 Md.L.Rev. 215, 241-43 (1983); Note, Determining the Reasonableness of Attorneys’ Fees — The Discoverability of Billing Records, 64 B.U.L. Rev. 241, 243-44 (1984).

Responding to these criticisms, the Third Circuit, in Lindy I and Lindy II, developed the lodestar method of setting fees. This approach is composed of two steps.

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Sala v. National Railroad Passenger Corp., 128 F.R.D. 210, 1989 U.S. Dist. LEXIS 13594, 1989 WL 140016 (E.D. Pa. 1989).

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