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Detroit v. Grinnell Corp.

Detroit v. Grinnell Corp.

United States Court of Appeals for the Second Circuit

October 29, 1973, Argued ; March 13, 1974, Decided

Dockets No. 73-1211, 73-1420, Nos. 14, 18 - September Term, 1973.

Opinion

 [*452]  MOORE, Circuit Judge:

This is an appeal from the District Court's approval of a proposed settlement, pursuant to Rule 23 of the Federal Rules of Civil Procedure, of three consolidated private antitrust national class actions brought in October, 1968, by commercial, industrial and governmental subscribers of "central station protection services" against four defendant corporations to recover treble damages plus attorneys' fees and costs under Section 4 of the Clayton Act. 15 U.S.C. § 15 (1970). The approved settlement, filed on December 27, 1972, calls for payment by the four defendants of $10 million to the three classes of plaintiffs and, in addition, grants a fee award of $1.5 million to counsel for the class representatives. The District Court retained jurisdiction over the case for the purposes of determining whether four other petitioning firms were entitled to share in this fee. The [**4]  first group of appellants, consisting of members of the represented classes, attacks the settlement on the ground that it is so small as to be grossly unfair on its face. They also object to the manner in which the District Court approved the settlement. A second group of appellants, also members of the represented classes, seeks to overturn the fee award and to prohibit any outside attorneys from sharing in whatever award might ultimately be made.

Although all considerations point to the fact that the $10 million dollar settlement is fair and equitable, those same considerations do not justify such a large counsel fee award. Consequently, we affirm the District Court's approval of the settlement and reverse and remand for a hearing as to the fee award. We do not yet have the jurisdiction necessary to decide whether anyone other than counsel for the class representatives ought to share in any fee which might ultimately be awarded.

THE FACTS

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495 F.2d 448 *; 1974 U.S. App. LEXIS 9701 **; 1974 Trade Cas. (CCH) P74,986; 1974-1 Trade Cas. (CCH) P74,986; 18 Fed. R. Serv. 2d (Callaghan) 637

CITY OF DETROIT et al., Plaintiffs-Appellees, v. GRINNELL CORPORATION, AMERICAN DISTRICT TELEGRAPH COMPANY, HOLMES ELECTRIC PROTECTIVE COMPANY, AUTOMATIC FIRE ALARM COMPANY OF DELAWARE, Defendants-Appellees. MANHATTAN-WARD, INCORPORATED, et al., Plaintiffs-Appellees, v. GRINNELL CORPORATION, AMERICAN DISTRICT TELEGRAPH COMPANY, HOLMES ELECTRIC PROTECTIVE COMPANY, AUTOMATIC FIRE ALARM COMPANY OF DELAWARE, Defendants-Appellees. 1225 VINE STREET BUILDING, INC., et al., Plaintiffs-Appellees, v. GRINNELL CORPORATION, AMERICAN DISTRICT TELEGRAPH COMPANY, HOLMES ELECTRIC PROTECTIVE COMPANY, AUTOMATIC FIRE ALARM COMPANY OF DELAWARE, Defendants-Appellees

Prior History:  [**1]   Appeal from an order of the United States District Court for the Southern District of New York, Charles M. Metzner, Judge: (1) approving the proposed settlement reached by defendants and the attorney for the class representatives; (2) awarding counsel fees to the attorney for the class representatives; and (3) acknowledging the standing of certain other attorneys who seek a portion of the fee award.

Disposition: Affirmed as to approval of the $10 million settlement; reversed as to the fee award and remanded for a hearing to develop the facts in accordance with this opinion; and dismissed for lack of appellate jurisdiction as to the standing of other attorneys seeking a portion of the fee award.

CORE TERMS

settlement, district court, class action, settlement offer, approving, objectors, fee award, fraudulent concealment, attorney's fees, defendants', percent, subscribers, discovery, cases, treble damages, factors, prices, proposed settlement, claimants, merits, spent, settlement negotiations, evidentiary hearing, Appellants', competitors, negotiated, courts, potential recovery, antitrust, victory

Civil Procedure, Special Proceedings, Class Actions, Compromise & Settlement, Judicial Discretion, Settlements, Settlement Agreements, General Overview, Appeals, Standards of Review, Abuse of Discretion, Antitrust & Trade Law, Private Actions, Costs & Attorney Fees, Clayton Act, Attorney Fees & Expenses, Basis of Recovery, Statutory Awards, Clayton Act, Remedies, Damages, Statute of Limitations, Tolling of Statute of Limitations, Fraud, Fraudulent Concealment, Discovery Rule, Governments, Legislation, Pleadings & Proof, Time Limitations, State Regulation, Reasonable Fees, Courts, Clerks of Court, Appellate Jurisdiction, Collateral Order Doctrine