The opinion of the court was delivered by: OBERDORFER
On August 28, 1982, the Court approved a Stipulation of Compromise Settlement resolving the claims of 45 infant plaintiffs who alleged that they suffered compensable injury when a C-5A military transport airplane, designed and built by Lockheed Aircraft Corporation and operated by the United States Air Force, crashed near Saigon, Vietnam, on April 5, 1975. In return for the dismissal of these 45 claims and of a related motion for sanctions arising from alleged discovery abuse by defendants, defendants paid into the Registry of the Court the total sum of $13,500,000.
The amounts and timing of disbursements from this recovery to the individual plaintiffs and to plaintiffs' counsel and the guardian ad litem for fees and expenses were left solely to the discretion of this Court, with the proviso that
it is the intent of this agreement that the net proceeds of this compromise settlement inure solely to the benefit of the American plaintiffs [participating in the settlement]. . . . Awards, distributions, etc. to the Guardian ad litem for fees, costs or expenses (past and future) shall be limited to amounts directly related to activities performed on behalf of one or more of the American plaintiffs . . . pursuant to the guidelines set forth by the Court of Appeals in Schneider v. Lockheed, 212 U.S. App. D.C. 87, 658 F.2d 835 (D.C. Cir. 1981). None of these funds are to be allocated or used in any way whatsoever for litigation expenses, offsets, or advances for any other cases not covered by this Stipulation of Compromise Settlement.
On July 26, 1982, plaintiffs' counsel, in anticipation of final approval of the settlement agreement by the Deputy Attorney General and the Court, filed several motions seeking disbursement of the settlement proceeds in the following proportions:
1. 33 1/3% directly to the guardians of the individual plaintiffs, free of trust;
2. 16 2/3% to a central trust;
3. 33 1/3% to attorney fees;
4. 3 1/3% to the guardians ad litem for their fees and expenses; and
5. 13 1/3% to litigation expenses.
This allocation of the settlement recovery was also recommended by the guardian ad litem in his Report and Recommendation filed August 25, 1982.
On February 16, 1983, the Court authorized payment of $100,000, free of trust, to each individual plaintiff who submitted to the Court a proposed order, signed by that plaintiff's locally appointed guardian and representing that the funds would be administered in accordance with local law. On May 3, 1983, the Court gave its approval to the creation of a central trust to provide additional funds to those plaintiffs who, over time, prove to be in need of greater medical assistance. The time has now come for the Court to turn its attention to final payments to plaintiffs' counsel and the guardians ad litem for their fees and expenses.
Interim payments for these items from the global settlement have been made from time to time over the last few months,
but the Court has withheld final payment for these items pending further submissions from the guardians ad litem on the subject of their fees and expenses and the Final Report of the Special Masters appointed to examine the litigation expenses.
For the reasons explained below, the Court authorizes payments for fees and expenses in the amounts described on slip op. pp. 60-62 and in Table 12.
II. The Litigation and Global Settlement
The original action in this litigation was filed by the firm of Lewis, Wilson, Jones and Lewis in 1975 on behalf of Friends for All Children ("FFAC") as personal representative of the 150 infants who survived the crash. The complaint sought both compensatory and punitive damages. At that time, the Lewis firm quoted to FFAC the firm's normal contingent fee of one-third of any recovery; if there were no recovery, the Lewis firm would earn no fee. The clients would be responsible for expenses.
In 1978, the Lewis firm associated the firm of Berkowitz, Lefkovits & Patrick of Birmingham, Alabama. Thereafter, in late 1978, the Court appointed Charles Work, Esq., as amicus curiae to advise about the propriety of certain communications from the Lewis firm to the parents of the children. Those communications recommended that individual parents substitute for FFAC as plaintiffs' legal representatives, while continuing to retain the Lewis firm as counsel. Thereafter, the Court appointed Mr. Work and his firm as guardian ad litem with the responsibility, among others, of establishing communications with the plaintiffs' adoptive parents, many of whom were residents of European countries. The guardian carefully drafted a letter designed to give each parent a fair description of the lawsuit brought by FFAC and the prospects and risks of participating. The letter offered further consultation with any parent who had questions not answered by the letter.
The guardian ad litem's letter to the parents included a statement that the Lewis firm had agreed to represent each plaintiff for a contingent fee not to exceed one-third of any recovery, with the understanding that each plaintiff would be responsible for any expenses incurred in the prosecution of the lawsuit. The letter explained the fee agreement in the following terms:
(c) Counsel Fees: In the United States although other fee arrangements can be made, suits for personal injury or wrongful death are typically handled by attorneys on a contingent fee basis. This means that the attorney receives no compensation for legal services rendered unless there is a recovery. If there is no recovery, the court costs and litigation expenses advanced by the attorney for that case must be borne by the client. The contingent fees charged by attorneys handling such claims typically vary from approximately 20 percent to 40 percent of the recovery. In this case, all applications for attorney fees and reimbursements of costs and expenses would be subject to court approval, after a hearing, of which you would be given notice, and at which you would have a right to be heard with respect to the reasonablness of the request for fees, expenses, and costs.
Report of the Guardian ad litem, October 12, 1979; Affidavit of Oren R. Lewis, Jr., October 25, 1982, p. 2.
In 1979, when these preliminary matters were resolved and the guardian ad litem was in place, defendants entered into an agreement with plaintiffs and the guardian ad litem pursuant to which plaintiffs dismissed their claim for punitive damages in exchange for a payment by defendants to the guardian ad litem of $5,000 for each child's medical care and legal expenses
and an agreement by defendants not to contest the jurisdiction of the court, to conduct discovery in the District of Columbia, and to pay 30 percent of any jury verdict without appeal.
Defendants admitted liability for the crash, and the sole issue for trial, according to the agreement, was what damages, if any, were due the individual plaintiffs.
These express commitments in the 1979 agreements settling liability gave hope, if not promise, that the cases could be disposed of expeditiously. The plaintiffs were all about the same age and had shared a common experience, both before and after the crash. There was medical testimony that an unusually large number had symptoms common to a single syndrome, Minimum Brain Dysfunction ("MBD"). The Court expected that it would be a relatively simple matter to adduce expert testimony as to the cause and extent of any injury suffered in two or three typical cases. Jury verdicts on those cases should have provided parties and counsel, litigating and negotiating in good faith, an adequate basis for quick settlement of the remaining cases. Settlements had been the result in the many cases involving adult, United States citizen victims of the crash. Contrary to this expectation, however, instead of brief, administrative-like hearings to resolve what was thought to be a relatively simple medical/legal issue, there erupted one of the most protracted, costly, and unpleasant litigations in the history of this district.
In the Spring of 1980, this Court tried three bellwether cases seriatim to the same jury. Contrary to the Court's expectations, each trial consumed three full weeks, as defendants vigorously contested the plaintiffs' claim that the damages they had incurred were proximately caused by the accident. The jury awarded $500,000 to one plaintiff and $1,000,000 to another. After a settlement of one issue in the third case outside the presence of the jury, the jury returned a verdict for defendant that the Court later set aside; on retrial another jury returned a verdict of $400,000 for that plaintiff. After these verdicts, however, the parties continued to be unable either to settle or to agree upon streamlining trial of the remaining cases, and it became apparent that trying them would require the services of several judges over a period of several years. Accordingly, this Court conducted hearings about the plaintiffs' entitlement to funds for medical help before their cases could be reached for trial. Following these hearings, trial counsel for the parties negotiated a settlement to establish a trust to provide for the immediate needs of the children. These efforts to provide interim payments were ultimately frustrated in 1980 and 1981 at the policy level of the Department of Justice, where the tentative settlement agreement suffered long delays and ultimate rejection.
The Court, assisted by counsel, developed a comprehensive pretrial order providing a form of collateral estoppel built upon the experience of the bellwether trials, attempted to complete pretrial of the domestic cases, and arranged for their distribution by the Calendar Committee among all the judges of this Court for trial on an expedited basis in accordance with the comprehensive pretrial order. Plaintiffs pressed for trial of the reassigned cases without awaiting the results of appeals from the bellwether judgments in the hope that this would enable the guardian ad litem to obtain funds sufficient to continue the litigation despite the heavy cost of the attrition defense mounted by Lockheed and the United States.
In May 1981, the Court of Appeals set aside the verdicts in the bellwether cases and disapproved of collateral estoppel as a means of streamlining the remaining trials. Schneider v. Lockheed Aircraft Corporation, 212 U.S. App. D.C. 87, 658 F.2d 835 (D.C. Cir. 1981), cert. denied, 455 U.S. 994, 71 L. Ed. 2d 855, 102 S. Ct. 1622 (1982). Recognizing that this action would "in practical terms, require the retrial of several cases," the Court of Appeals expressed "our hope that the setting forth of our views . . . will speed these cases to swift and proper resolution." Id. at 837.
Responding to that expression, the District Court en banc scheduled one of the remaining cases of United States resident plaintiffs (the "American cases") for trial each month beginning January 1, 1982, with the general understanding that an assigned judge would try a case each month. As a result, the parties settled several cases on the eve of their scheduled trials, and the proceeds of these settlements were distributed to the individual plaintiffs, to counsel for fees and expenses, and to a set-aside for the guardian ad litem.
The comprehensive pretrial order had limited plaintiffs' use of photographs of the crash scene in an effort to contain the potential of some of them to inflame juries. When the Court of Appeals struck down the collateral estoppel elements of that order, such photographs assumed an increased value to plaintiffs. Plaintiffs' counsel renewed efforts to locate and to obtain production of more photographs of the crash scene than the handful that defendant and the United States had produced in response to earlier discovery demands unsupported by court orders to produce. When the United States attempted to avoid these renewed requests, plaintiffs persisted. In September 1981, as counsel were preparing for retrial of one of the bellwether cases, the United States belatedly discovered approximately 1,000 photographs of the crash scene and wreckage and other documents that had been requested at the outset of discovery but had not been produced previously. Plaintiffs then filed, and from time to time supplemented, a motion for sanctions against defendants and launched a substantial discovery program in support of the motion. Shortly thereafter, the pending bellwether case was settled on the eve of retrial, but after jury selection, for $850,000. At about the same time, defendants increased their offer to settle the balance of the cases of United States resident plaintiffs to a "non-negotiable" sum of $300,000 each, provided that all of the United States plaintiffs agreed. After protracted negotiations, some of which were conducted on the record by two judges of this Court, the guardian was unable to reccomend the offer as sufficient, and defendants were unwilling to enhance it.
In the first case tried in 1982, the Court refused to permit plaintiffs to present evidence to the jury supporting an adverse inference from defendants' delayed production of the photographs and other documents. The jury returned a verdict for defendant. Kurth v. Lockheed Aircraft Corp., Civil Action No. 80-3223.
Shortly thereafter, this Court held an evidentiary hearing on the plaintiffs' motion for sanctions and received extensive briefs from all parties. In the meanwhile, for various reasons, other trials scheduled pursuant to the en banc order were continued by the several judges responsible for them. In June 1982, this Court deferred decision on the pending motion for sanctions on a representation that the parties were on the verge of a global settlement of all the "American" cases. Finally, after much backing and filling, trial counsel entered a Stipulation of Compromise Settlement on August 4, 1982. It was approved by the Deputy Attorney General on August 24, 1982, and by this Court on August 28, 1982. In approving the settlement, the Court wrote:
Upon the entire record, and for reasons, inter alia, those stated in the Guardian Ad Litem's Report and Recommendation dated August 25, 1982, including the reference on page 23 to repayment to foreign plaintiffs, and with a view to early attention to their claims, the foregoing Stipulation of Compromise is approved.
Meanwhile, during various phases of this litigation, the parties had settled six other individual cases for amounts ranging from $300,000 to $1,000,000. In addition, the plaintiffs in the three bellwether cases received, pursuant to the stipulation with defendants, 30% of their judgments despite the appeal that later overturned those judgments. The allocation of the proceeds of those settlements and partial judgments among the plaintiffs, their counsel (for fees and expenses), and the guardian ad litem (for fees and expenses) is laid out in Table 1.
III. Fees and Expenses of the Guardians Ad Litem
The history of the appointment and activities of the guardians ad litem has been fully discussed in the Court's Memorandum on Payments to the Guardians Ad Litem for Fees and Expenses Incurred on Behalf of U.S. Resident Plaintiffs (filed March 11, 1983). Mr. Work, who is the principal guardian ad litem, and his law firms (originally Peabody, Lambert & Meyers, now McDermott, Will & Emery) have served as guardians ad litem for all the infant plaintiffs in this litigation since 1979. As stated in the Memorandum of March 11, 1983, Mr. Work has been tireless in his dedication to the interests of his wards. Mere money can never compensate fully for the value and example of his service.
The guardians have now filed a supplement to their fee application which purports to provide the information necessary for a further fee award from the settlement recoveries. While this supplementary submission does indeed provide more detailed information supporting the fee application, the Court still does not find sufficient support for the full amount claimed by the guardians.
As the Court explained fully in its Memorandum of March 11, 1983, allocation of the guardians' time between settled and non-settled cases is crucial to any fee award. Such an allocation is clearly required by the express terms of the Stipulation of Compromise Settlement. The importance of this type of allocation was also recognized in Schneider, when the Court of Appeals stated that "for all services rendered from the date of this judgment forth, the guardian should be required to show that the particular plaintiff had need of the particular services for which the guardian seeks a fee." 658 F.2d at 855.
Defendant has consistently argued that this language requires the Court to make payments to the guardian only for fees and expenses that can be specifically allocated to a particular plaintiff. As the Court noted in its Memorandum of March 11, 1983, that interpretation of the Schneider dictum is neither fair to the language and clear intent of the Court of Appeals nor reasonable in the context of this group litigation, where many of the guardian's activities have been on behalf of groups of plaintiffs. Even time that was apparently expended on behalf of one plaintiff alone was frequently of benefit to others and should properly be shared by them as well.
Defendants are correct, however, in their assertion that the documentation supporting the guardians' fee applications has been consistently below the quality anticipated by the Court of Appeals and this Court.
Most notably, contemporaneous time sheets attached to the affidavits make no attempt to indicate how much time specifically was allocated to particular activities. In nearly all cases, several different activities are grouped together and allocated to large blocks of time. It is often impossible to determine which plaintiffs were involved in certain activities, such as conferences with plaintiffs' counsel or review of pleadings. Overall, it is impossible for the Court to determine from these documents the proper allocation of the guardians' time, even for time that should be clearly allocable to particular plaintiffs.
To date, the Court has done its best with the documents supplied by the guardian ad litem. In keeping with the spirit of Parker v. Lewis, 216 U.S. App. D.C. 91, 670 F.2d 249 (D.C. Cir. 1982), the Court has authorized interim payment as promptly as possible for all amounts that are clearly "incontestible" as to both amount and allocation to the source from which payment is sought. In making these payments, the Court has relied upon the information supplied by the guardians, the submissions on the subject of guardians' fees filed by defendants, and the Court's own knowledge of events in the case and of the guardians' involvement in them.
However, the guardians have now had ample notice, both from Schneider and this Court's opinions in this case and from the recent attorney fee opinions in this circuit, of what is required in an acceptable fee application. From this date forward, therefore, the guardian will be paid only for time that is ...