Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-91-01156/USCOURTS-ca10-91-01156-0/pdf.json

Parties Involved:
Loretta Case
Appellant
Richard Case
Appellant
Continental Airlines Corporation
Appellee
Steering Committee
Not Party
Texas Air Corporation
Not Party

Document Text:

F li,DD 

umtro s~ ~rt~ Ap?i:.~h UNITED STATES COURT OF APPEALS T~b C•rmtL 

FOR THE TENTH CIRCUIT AUG 111992 

ROBERT L. HOECKER 

Clerk RICHARD CASE; LORETTA CASE, 

Plaintiffs-Appellants, 

v. 

CONTINENTAL AIRLINES CORPORATION, 

Defendant-Appellee, 

and 

TEXAS AIR CORPORATION, 

Defendant. 

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No. 91-1156 

(D.C. No. 89-F-137) 

(D. Colo.) 

ORDER AND JUDGMENT* 

Before LOGAN, ~BEL, and KELLY, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.9 . 

submitted without oral argument. 

* 

The case is therefore ordered 

This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

Appellate Case: 91-1156 Document: 010110276715 Date Filed: 08/11/1992 Page: 1
Plaintiffs Richard and Loretta Case and their counsel, 

Allen H. Browning, appeal from a district court order dated March 

22, 1991, directing the Cases and Browning to pay a pro rata share 

of expenses due counsel appointed in the consolidated 

multi-district litigation surrounding the Continental Airlines 

crash at Stapleton Airport in November, 1987. 1 We review the 

district court's determination for an abuse of discretion. See 

Pelican Prod. Corp. v. Marino, 893 F.2d 1143, 1148 (10th Cir. 

1990)(standard of review for attorney fees awards by district 

court is abuse of discretion). 

All cases filed as a result of the air disaster were 

consolidated for trial in the District of Colorado by transfer and 

consolidation order dated November 29, 1988; the issue of 

liability was determined by jury trial of an exemplar case in 

June, 1989. Plaintiffs filed suit in the District of Idaho in 

November, 1988. Their case was transferred to the District of 

Colorado and consolidated with the multi-district litigation at 

some point following completion of the exemplar trial. Pursuant 

to the district court's Order MDL 751-48, Final Pretrial Order, 

issued September 27, 1989, the Cases' suit was declared not bound 

by the verdict of the exemplar trial, the terms of the district 

1 The caption of the notice of appeal in this case does not 

name the attorney, Allen H. Browning, as a party in interest. 

However, the body of the notice contains adequate reference to 

Browning to alert the opposition and the court to the fact that he 

intends to appeal on his own behalf as well as on behalf of his 

clients. Therefore, all parties in interest are correctly before 

the court and we have jurisdiction. See Fed. R. App. P. 3(c); 

Torres v. Oakland Scavenger Co., 487 U.S. 312, 314 (1988). 

2 

Appellate Case: 91-1156 Document: 010110276715 Date Filed: 08/11/1992 Page: 2
court's transfer and consolidation orders, or the principles of 

collateral estoppel. Appellants' App. at 40. 

Prior to the exemplar trial, the district court issued Order 

No. 751-1 Re: Practice and Procedure for Consolidated Discovery. 

Supplemental App. at 4. This order provided for the establishment 

of a plaintiffs' steering committee to coordinate pretrial matters 

related to discovery. It also provided for the appointment of 

plaintiffs' liaison counsel to act as administrator. Among other 

duties, liaison counsel was responsible for the accounting, 

collection, and disbursement of fees and expenses due the steering 

committee. See Gordon v. Eastern Air Lines, Inc. (In re Air Crash 

Disaster at Florida Everglades on December 29, 1972), 549 F.2d 

1006, 1014-15 (5th Cir. 1977)(court has the power to designate one 

attorney or several attorneys to handle pre-trial activity in 

complex litigation). 

Order No. 751-1 provided that the expenses of the steering 

committee and liaison counsel were to be paid by plaintiffs in all 

consolidated cases on a pro rata basis. 

In every action terminated by settlement later than 

May 27, 1988, each plaintiff shall be obligated for a 

proportionate share of the expenses of the Committee and 

Liaison Counsel through the date a written settlement 

agreement is approved by the court. 

Supplemental App. at 11. The order further required that counsel 

for all plaintiffs not represented by a member of the steering 

committee or by liaison counsel, deposit with liaison counsel an 

amount equal to three percent of the settlement amount. This 

amount was to be deducted from the representing counsel's attorney 

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fees and was to be used to pay the attorney fees of the steering 

committee and liaison counsel. Id. at 10-11. 

Although this order was clear as to the responsibility of the 

consolidated and bound litigants, the status of the unbound 

litigants remained unclear. On June 7, 1989, the district court 

addressed this issue in Order MDL 751-39. The court stated that 

eight cases, including this case, were not consolidated before the 

January, 1989, exemplar trial, and determined that those 

plaintiffs would not be allowed to rely on the verdict of the 

exemplar trial to establish their own claims. Appellants' App. at 

200. The court was emphatic in its order that these "wait and 

see" litigants could not benefit in any way from the consolidated 

trial. Id. at 187-200. On July 17, 1989, the district court 

issued Order MDL 751-43, referring the issue of payment of fees 

and expenses by these unbound litigants to the magistrate judge 

for findings and recommendations. Id. at 210. 

The Cases settled their claims against Continental Airlines 

in October, 1989. On November 30, 1989, the magistrate judge 

recommended that the unbound plaintiffs and their respective 

counsel not be bound by Order MDL 751-1 for payment of the three 

percent of the fees and their pro rata share of the expenses of 

the steering committee and the liaison counsel. Id. at 217-18. 

He further found that the Cases represented a unique situation in 

that they were not represented by a member of the steering 

committee and were the only litigants in the consolidated action 

represented by Browning. Id. at 218-19. The magistrate judge 

stated that it would be "inequitable for Mr. Case to pay for the 

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litigation expenses and attorneys' fees of the exemplar trial and 

receive no benefit other than knowing the results of that trial." 

Id. at 219. 

Upon review, the district court issued Order 1990-1 dated 

January 10, 1990, disagreeing with the magistrate judge's 

recommendation and ordering the plaintiffs and counsel in the 

unbound cases to pay their share of the fees and expenses up to 

the first day of the exemplar trial. Id. at 221-22. The Cases 

objected to this order and the district court referred the matter 

back to the magistrate judge for a hearing on the parties' request 

to be excluded from payment. Following a hearing, the magistrate 

judge agreed with the district court and , on May 31, 1990, issued 

an order holding the parties liable for the payment of fees and 

expenses.

2 Id. at 228-30. 

Subsequent to the magistrate judge's order, Browning paid 

three percent of the Cases' settlement amount to the steering 

committee and liaison counsel in the amount of $5,250.00. In his 

brief, Browning requests a reimbursement of this amount. 

Appellants' Br. at 20 . The liability for payment of the three 

percent attorneys' fees was addressed in the district court's 

order of January 10, 1990, and the magistrate judge's order of 

May 31, 1990. Neither of these orders was timely appealed from by 

2 In the notice of appeal, the parties indicate an intent to 

appeal from this order of the magistrate judge. We do not reach 

the issue of whether this is a final appealable order because the 

notice of appeal as to this order is untimely in any event. See 

Gooch v. Skelly Oil Co., 493 F.2d 366, 368 (10th Cir.)(a timely 

notice of appeal is necessary to bestow jurisdiction upon an 

appellate court), cert. denied, 419 U.S. 997 (1974). 

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the parties. The district court's order of March 22, 1991, from 

which the parties did file a timely appeal, does not address 

payment of the three percent of attorneys' fees. Consequently, 

this issue is not properly before us on appeal. See Cunico v. 

Pueblo Sch. Dist. No. 60, 917 F.2d 431, 444 (10th Cir. 1990)("Our 

appellate review is limited to final judgments or parts thereof 

that are designated in the notice of appeal."); Robison v. 

Maynard, 829 F.2d 1501, 1502 (10th Cir. 1987)(failure to appeal 

ruling on an issue precludes argument on appeal). 

The Cases, however, were unable to pay the approximate 

$12,000.00 pro rata share of the expenses. It appears they paid 

$1,500.00 and offered to make payments on the balance. Following 

the Cases' failure to pay the full amount, liaison counsel filed a 

motion for an order to show cause as to why the Cases and Browning 

should not be held in contempt for failure to pay the pro rata 

share of expenses. The district court issued an order to show 

cause on October 29, 1990. Although the district court did not 

make a specific finding of contempt, on March 22, 1991, it issued 

an order directing Allen Browning and Richard and Loretta Case to 

pay the pro rata share of expenses due the steering committee. 

Appellants' App. at 236-37. It is from this order that the 

parties appeal. 

Liaison counsel argues that Order No. 751-1 requires Mr. 

Browning to deposit the Cases' pro rata share of the expenses in 

liaison counsel's interest bearing account following notification 

and confirmation of the amount. Liaison counsel contends that 

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Browning's failure to do so amounts to an act of bad faith. We do 

not agree. Paragraph J of Order No. 751-1 actually states: 

Within ten (10) days following receipt of 

appropriate settlement documents, and upon order of the 

court, counsel for plaintiff will submit for court 

approval an order of compromise and dismissal with 

prejudice. Each order shall state, inter alia, the 

amount of money payable to the Committee and Liaison 

Counsel. This share of expenses shall be deposited in 

an interest-bearing account by Plaintiffs' Liaison 

counsel, who shall certify that such monies have been 

received by him. 

Supplemental App. at 11-12. Contrary to liaison counsel's 

interpretation, this language does not personally obligate counsel 

for payment of these expenses. During the hearing regarding the 

obligation of the unbound litigants, the magistrate judge further 

clarified the intent of the order by querying Browning regarding 

his understanding that the pro rata share of the expenses would be 

the Cases' obligation. See Appellants' App. at 256. The record 

is void of any indication that the court ever intended that the 

representing attorneys be liable for the expenses of the steering 

committee and liaison counsel. Therefore, it is our determination 

that the district court's assessment of these expenses against 

Browning is incorrect. 

As to whether the Cases, as unbound plaintiffs, should be 

liable for a pro rata share of the expenses of the steering 

committee and liaison counsel, we must reach a conclusion in light 

of the equities of the situation. In class action cases, the 

Supreme Court has stated that, in awarding litigation expenses 

from a common fund, the court must consider: (1) whether the 

classes of persons benefiting from the lawsuit were small in 

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number and readily identifiable, (2) whether the benefits bestowed 

on the classes are easily traced, and (3) whether the costs could 

be "shifted with some exactitude to those benefiting." Boeing Co. 

v. Van Gernert, 444 U.S. 472, 478-79 (1980); see also Brown v. 

Phillips Petroleum Co., 838 F.2d 451, 454 (10th Cir.)(underlying 

purpose of common fund doctrine is to place cost of litigation 

upon persons who benefit from the lawsuit), cert. denied, 488 U.S. 

822 (1988). Although this is not a class action case and the 

common fund doctrine is not applicable per se, an assessment of 

the benefits bestowed may serve to guide us in this determination. 

The record contains no evidence that Browning or the Cases 

had any access to, or derived any direct benefit from, the 

discovery and pretrial procedures of the consolidated proceedings. 

In fact, in Order MDL 751-48, Final Pretrial Order, the district 

court was clear that access to the joint document depository was 

to be denied any plaintiffs not entering into a stipulation and 

agreement to share in the fees and expenses incurred. Appellants' 

App. at 41-42. The Cases did not enter into any such stipulation 

or agreement. 

The record indicates no traceable benefits flowing to the 

Cases. The Cases' lawsuit was not consolidated at the time of the 

exemplar litigation. The district court's order was clear that 

unbound cases would not be allowed to benefit from the 

consolidated trial. See id. at 187-200. Liaison counsel argues 

that the Cases did benefit in that they were placed in a more 

favorable bargaining position at the time of settlement 

negotiation because of Continental's knowledge that they had the 

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potential for access to the liability litigation discovery. 

argument is tenuous, conclusory, and without merit. 

This 

In sum, we determine that the district court abused its 

discretion in assessing a pro rata share of the expenses of the 

steering committee and liaison counsel against Richard and Loretta 

Case and Allen Browning. Any monies paid by Richard and Loretta 

Case in compliance with the district court order are to be 

refunded. The judgment of the United States District Court for 

the District of Colorado is REVERSED, and the cause is REMANDED 

for proceedings in conformity with this order and judgment. 

Entered for the Court 

David M. Ebel 

Circuit Judge 

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