Court Opinion

ID: 2964650
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:28:52.85415+00
Date Added: 2024-06-11T11:42:59.134964
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                                     
                                 ____________________

        No. 95-2285

                  IN RE SAN JUAN DUPONT PLAZA HOTEL FIRE LITIGATION

                              PASQUALE MASSARO, ET AL.,

                                     Appellants,

                                          v.

                               STANLEY CHESLEY, ET AL.,

                                      Appellees.

                                                     
                                 ____________________

        No. 96-1142

                  IN RE SAN JUAN DUPONT PLAZA HOTEL FIRE LITIGATION

                               RICHARD BIEDER, ET AL.,

                                     Appellants,

                                          v.

                               STANLEY CHESLEY, ET AL.,

                                      Appellees.

                                                     
                                 ____________________

                    APPEALS FROM THE UNITED STATES DISTRICT COURT

                           FOR THE DISTRICT OF PUERTO RICO

                 [Hon. Raymond L. Acosta, Senior U.S. District Judge]
                                          __________________________

                                                     
                                 ____________________

                                        Before

                                Selya, Cyr and Lynch,

                                   Circuit Judges.
                                   ______________

                                                     
                                 ____________________

             Judith Resnik,  with whom Dennis  E. Curtis,  Richard A.  Bieder,
             _____________             _________________   __________________
        Koskoff, Koskoff & Bieder and Jos  E. Fernandez-Sein were on brief for
        _________________________     ______________________
        appellants.
             Will Kemp, with  whom Harrison, Kemp &  Jones, CHTD was  on brief
             _________             _____________________________
        for appellees. 

                                                     
                                 ____________________

                                    April 22, 1997
                                                     
                                 ____________________

                                          2

                    CYR,  Circuit  Judge.   Plaintiffs  and  their  counsel
                    CYR,  Circuit  Judge.
                          ______________

          appeal  from  a district  court  order  awarding the  Plaintiffs'

          Steering  Committee  ("the  PSC") approximately  $10,670,000  for

          costs  incurred  in  representing  plaintiffs  in this  mass-tort

          litigation.   We affirm  the district court  order in substantial

          part and  direct appellees to  remit $1,023,903 ($913,503  in PSC

          "expert" fees, and $110,400 in photocopying charges).

                                          I
                                          I

                                     BACKGROUND1
                                     BACKGROUND
                                     __________

                    Ninety-seven people perished in a tragic New Year's Eve

          fire at the San Juan Dupont Plaza Hotel on December 31, 1986, and

          many  others sustained  serious  personal injuries  and  property

          losses.  After thousands  of individual plaintiffs filed hundreds

          of claims against a  host of defendants in many  different juris-

          dictions  ("multidistrict  litigation"  or "MDL"),  the  Judicial

          Panel  on Multidistrict  Litigation  consolidated  all cases  for

          trial in the  United States  District Court for  the District  of
                              
          ____________________

               1We  relate  only  the  record facts  directly  material  on
               1
          appeal.   The  following  cases offer  the  hardy reader  a  more
          complete history  of these marathon proceedings  at the appellate
          level.  See In re Three Additional Appeals Arising Out of the San
                  ___ _____________________________________________________
          Juan Dupont Plaza Hotel  Fire Litig., 93 F.3d 1  (1st Cir. 1996);
          ____________________________________
          In re Thirteen Appeals Arising Out  of the San Juan Dupont  Plaza
          _________________________________________________________________
          Hotel Fire  Litig., 56 F.3d 295  (1st Cir. 1995); In  re San Juan
          __________________                                _______________
          Dupont Plaza Hotel Fire  Litig., 45 F.3d 569 (1st Cir.  1995); In
          _______________________________                                __
          re San Juan Dupont Plaza Hotel Fire Litig., 45 F.3d 564 (1st Cir.
          __________________________________________
          1995); In re Two Appeals Arising Out of the San Juan Dupont Plaza
                 __________________________________________________________
          Hotel  Fire Litig., 994 F.2d 569 (1st  Cir. 1993); In re San Juan
          __________________                                 ______________
          Dupont  Plaza Hotel Fire Litig., 989 F.2d  36 (1st Cir. 1993); In
          _______________________________                                __
          re  Nineteen Appeals  Arising Out  of the  San Juan  Dupont Plaza
          _________________________________________________________________
          Hotel  Fire Litig., 982 F.2d 603 (1st  Cir. 1992); In re San Juan
          __________________                                 ______________
          Dupont Plaza Hotel Fire Litig., 907 F.2d 4 (1st Cir. 1990); In re
          ______________________________                              _____
          San Juan Dupont Plaza  Hotel Fire Litig., 888 F.2d  940 (1st Cir.
          ________________________________________
          1989).

                                          3

          Puerto Rico (Acosta, J.), see 28 U.S.C.   1407.  
                                    ___

                    As  most  plaintiffs  had already  retained  their  own

          counsel (hereinafter: "individually  retained plaintiffs'  attor-

          neys"  or "IRPAs"),  the district  court recognized  the  need to

          coordinate  their representation  through  the PSC.    Eventually

          comprised of eleven attorneys with expertise in mass-tort litiga-

          tion, the PSC served as plaintiffs' lead counsel, responsible for

          coordinating  discovery, settlement  negotiations and,  if neces-

          sary, trial matters  common to  all plaintiffs.   The eleven  PSC

          members  nonetheless  retained their  respective roles  as IRPAs,

          directly  representing  approximately  seventy  percent   of  the

          individual plaintiffs.   The IRPAs,  on the other  hand, were  to

          focus their  efforts on  litigation tasks idiosyncratic  to their

          respective clients' cases.  

          A.   Pretrial Case-Management Orders
          A.   Pretrial Case-Management Orders
               _______________________________

                    In  two pretrial  orders, the  district court  directed

          plaintiffs, who would derive common benefit from PSC services, to

          pay PSC attorney fees  and costs from the common  fund ultimately

          recovered in the litigation.  See Pretrial Order No. 127 (Dec. 2,
                                        ___

          1988); Pretrial  Order No. 2 (Mar.  23, 1987).  At  the time, the

          district  court tentatively proposed to  limit the PSC  to a com-

          bined attorney fee/cost  award not exceeding  ten percent of  the

          eventual  common fund, see Pretrial  Order No. 127,  at 48, which
                                 ___

          ultimately approximated $220 million.   The district court estab-

          lished  the  following cost-submission  and  reimbursement guide-

                                          4

          lines:

                         [A]ssessments2  will  be deposited  in a
                    fund that will defray the reasonable expenses
                    of the PSC in  the performance of its duties.
                    The PSC shall maintain a careful statement of
                    account on  the  fund, that  is, prepare  and
                    keep   accurate,  contemporaneous,   detailed
                           ________   _______________    ________
                    records  of  the receipts,  deposits, accumu-
                    _______          ________
                    lated interest  and subsequent disbursements.
                    The fund shall be used only to make disburse-
                    ments  (whether directly  to creditors  or to
                    reimburse  the PSC) for expenses incurred for
                    the benefit of all plaintiffs.  Any disburse-
                    ments made  for the  benefit of  a particular
                    plaintiff represented by a member of the  PSC
                    shall  be  the  sole  responsibility  of  the
                    plaintiff in question.   The  PSC   shall  be
                    authorized to periodically expend monies from
                    the fund  as needed  to defray the  necessary
                                                        _________
                    "hard" costs  of  its work,  such  as  office
                    overhead, staff salaries, warehousing, dupli-
                    cation, expert fees,  deposition costs,  etc.
                    The members  of the  PSC shall  be reimbursed
                    from time to time  for the "hard" expenses of
                    the  PSC-related  work  incurred by  them  or
                    their  employees/appointees,   provided  they
                    submit to the  PSC careful,  contemporaneous,
                                       _______   _______________
                    detailed records of their expenditures.  
                    ________ _______
                         "Soft"  costs  such  as  travel,  meals,
                    transportation, lodging, etc., shall be borne
                    by  the individual  PSC members who  shall be
                    reimbursed at the conclusion of  this litiga-
                    tion or as otherwise  provided by the  Court.
                    All  persons   interested  in  reimbursement,
                    particularly  members of  the PSC,  must keep
                    careful, contemporaneous, detailed records of
                    _______  _______________  ________ _______
                    individual  expenses.    Only reasonable  and
                                                  __________
                    necessary  expenses will be  reimbursed.  For
                    _________
                    example,   airplane/transportation   expenses
                    should  be  at  economical rates,  not  first
                    class; and  hotel accommodations/meals should
                    be moderate, not deluxe, etc.  Reimbursements
                       ________  ___ ______
                    are  conditioned, of  course,  on the  proper
                                                           ______
                              
          ____________________

               2As commonly occurs  in mass-tort  MDLs, plaintiffs'  attor-
          neys, inter alios, were  required to advance and pool  the monies
                _____ _____
          needed to fund their  clients' litigation, including the interim-
          cost petitions filed  by the PSC  and its members.   See Pretrial
                                                               ___
          Order No. 127, at  37-43.  Reimbursement for their  advances were
          contingent upon their recoveries from defendants.  

                                          5

                    verification of expenses.
                    ____________
                         The  PSC and/or  its members,  as perti-
                    nent, shall  submit to the Court  for its ap-
                                                      ___ ___ ___
                    proval  a  statement for  reimbursable "hard"
                    ______
                    expenses and  another for "soft"  expenses as
                    well  as statements  of account  beginning on
                    August 1,  1987  and every  sixty  (60)  days
                                         _____  _____        ____
                    thereafter.

          Id. at 44-45 (emphasis added). See also  Pretrial Order No. 2, at
          ___                            ___ ____

          14.  

          B.   The PSC-Office Cost Regimen 
          B.   The PSC-Office Cost Regimen 
               ___________________________

                    Although  individual PSC  members  performed  some  PSC

          litigation tasks through their individual law firms, the district

          court  also authorized  the PSC  to recover  its direct  costs in

          establishing, staffing,  and operating  a centralized  PSC Office

          (hereinafter:  "PSC-Office  costs").   Further,  the  PSC  bylaws

          required prior approval, by five  PSC members, for any PSC-office

          cost reimbursement above $500,  as well as payment of  such costs

          by PSC check.

                    In  March  1987,  certified public  accountant  ("CPA")

          Donald  Kevane was  retained  to review  and  submit to  the  PSC

          monthly reports summarizing PSC-office  costs.  In February 1991,

          the  PSC submitted its final report to the district court, claim-

          ing $6,956,368 in PSC-office  costs attributable to Phases  I and

          II of the litigation.3

                              
          ____________________

               3Phase I involved liability claims against the hotel and its
          affiliates, whereas Phase II  involved claims against the suppli-
          ers of goods and services  to the hotel.  The district  court has
          yet to rule on attorney fees and costs attributable to Phase III,
          which  allocated liability  among  defendants' various  insurers.
          See  In re Nineteen Appeals, 982 F.2d at 608-10 (determining that
          ___  ______________________
          Phase I and II cost awards were final, appealable orders).

                                          6

          C.   The PSC-Member Cost Regimen 
          C.   The PSC-Member Cost Regimen 
               ___________________________

                    Similarly, the district court authorized reimbursements

          of  costs incurred by the  eleven individual PSC  members in per-

          forming PSC litigation  tasks (hereinafter: "PSC-member  costs"),

          as  distinguished from their  respective duties as  IRPAs.  Every

          sixty  days, the PSC submitted,  under seal and  "for [court] ap-
                                                            ___         ___

          proval,"  a  consolidated  report summarizing  each  PSC member's
          ______

          individual "hard" and "soft" costs. (Emphasis added.)4  

                    In  September 1989,  the  district  court appointed  C.

          Terry Raben, a CPA, to "review the [PSC-member cost]  information

          supplied  to . .  . date to  ensure it is  complete, accurate and
                                                     ________  ________

          contemporaneous[,] as well as to organize the reports  before the
          _______________

          sheer number of them unduly complicates any reasonable accounting

          procedures."  Order No. 222 (docket No. 12671, entered under seal

          Sept. 15,  1989).  Raben previously had performed comparable cost

          oversight responsibilities in  another mass-tort litigation.  See
                                                                        ___

          generally In re MGM Grand Hotel Fire Litig., 660 F. Supp. 522 (D.
          _________ _________________________________

                              
          ____________________

               4On July 2,  1987, the district  court approved PSC  bylaws.
          Article XI, entitled "Accounting and Expense Management," provid-
          ed, inter  alia, that:  (1)  all PSC members were  to "insure the
              _____  ____
          exact  and  efficient  management  of  plaintiffs'  resources  by
          strictly complying  with proper accounting and expense management
          principles  . . . [as]  set forth in the Orders  of the Court, in
          the  Manual  for Complex  Litigation,  and herein,"  id.    11.01
               _______________________________                 ___
          (emphasis added);   (2) PSC  members were  to submit  to the  PSC
          secretary every 60 days a  standardized form listing their  total
          costs, broken down into  ten broadly enumerated categories (e.g.,
                                                                      ____
          "air travel," "hotels and  meals"), id.     11.02, 11.03 & 11.05;
                                              ___
          (3) the PSC Secretary was to consolidate these member reports for
          submission to  the district  court, with the  individual members'
          summary reports attached, id.   11.04;  and (4) the PSC Secretary
                                    ___
          would nominate an  auditor for  appointment by the  court, id.   
                                                                     ___
          11.07.

                                          7

          Nev.  1987) (or  "the MGM  case").   The district  court directed
                                ___

          Raben  to scrutinize the PSC files for compliance with the crite-

          ria  in Pretrial Order No.  127, supra, to  obtain any additional
                                           _____

          documentation deemed  appropriate,  and submit  findings  to  the

          court.  

                    In November 1990, almost four years into these proceed-

          ings,  the PSC  became  concerned that  outside accountants  like

          Raben,  who were not  attorneys and lacked  intimate knowledge of

          the PSC's  litigation responsibilities and inner  workings, might

          not adequately appreciate whether  PSC-member cost claims met the

          compliance  criteria  prescribed  in  Pretrial  Order   No.  127.

          Accordingly, the PSC directed Monita Sterling, a paralegal  for a

          PSC-member law firm  with prior exposure to PSC litigation tasks,

          to review  each PSC-member cost claim  independently to determine

          whether  the  expenditures  were "necessary"  to  legitimate  PSC

          litigation tasks, "reasonable" in  amount, and not duplicative of

          other  PSC-member  cost  claims.   Sterling  thereafter  reviewed

          "every receipt or other piece of documentation submitted," noting

          each  questionable claim.5   Sterling  submitted her  reports and
                              
          ____________________

               5Sterling, who had  acquired extensive  prior experience  in
          the MGM case, established eleven criteria for determining whether
              ___
          PSC-member  costs were reimbursable:  (1) major expenditures only
          if documented  by receipts;  (2) minor expenditures  (e.g., tips,
                                                                ____
          pay-phone charges), for which the use of receipts was impractica-
          ble, only if supported by affidavit; (3) coach air fare only; (4)
          federal express  charges if  documented  by airbills  designating
          origin  and  destination;  (5)  long distance  phone  charges  if
          documented  according to  date, number,  duration, and  cost; (6)
          photocopying  expenditures  at  25  cents per  page  and  postage
          charges at  actual cost if  the member indicated  compliance with
          normal in-house procedure  at the member's law firm  for tracking
          these  costs; (7)  telefax charges at  actual cost, not at a page

                                          8

          supporting documentation to Adamina Soto, a CPA who reviewed  the

          Sterling report  and randomly  checked its  underlying documenta-

          tion, then contacted PSC members about problem items and request-

          ed further documentation.  Soto eventually disallowed $207,475 in

          costs and submitted her reports to Raben.

                    Raben submitted  three final  reports  to the  district

          court, covering PSC-member cost claims through January 31, 1991.6

          He disallowed an  additional $138,569 of the total  $3,847,233 in

          claimed  expenditures.   The district  court approved  each Raben

          report as submitted.  See In re San Juan Dupont  Plaza Hotel Fire
                                ___ _______________________________________

          Litig., 768 F.  Supp. 912,  934 (D.P.R. 1991),  vacated on  other
          ______                                          _______ __  _____

          grounds, 982  F.2d 603 (1st  Cir. 1992).  PSC members  ultimately
          _______

          recovered $3,708,665.  Id.
                                 ___

          D.   Attorney Fee/Cost Rulings
          D.   Attorney Fee/Cost Rulings
               _________________________

                    In February 1991, the  PSC submitted its final applica-

          tion  for cost  reimbursements, attaching  the report  previously

          prepared by Donald Kevane and requesting $6,956,368 in PSC-office

          costs  attributable to Phases I  and II.  See  supra p. 6.  Three
                                                    ___  _____

          months later, the district  court abandoned its earlier tentative

                              
          ____________________

          rate; (8)  secretarial expense if specifically  authorized by the
          PSC; (9) costs relating to equipment placed at the PSC Office for
          use  by PSC staff; (10)  no reimbursement for court-ordered mone-
          tary  sanctions imposed  on  the PSC;  and  (11) duly  authorized
          miscellaneous  costs only  if  "reasonable and  necessary in  the
          prosecution of the case, . . . for the benefit of the PSC and the
          plaintiffs as a whole, and not for individual clients." 

               6These  reports  were dated:    March 13,  1990  (costs from
          January 1987  to September 1989);  October 12,  1990 (costs  from
          October  1989 to March 1990);  and February 20,  1991 (costs from
          April 1990 to January 1991).

                                          9

          proposal,  see supra p. 4,  to limit the  PSC's combined attorney
                     ___ _____

          fee/cost  award to ten percent  of the common  fund.  Thereafter,

          the  court approved  the  entire PSC  fee/cost application.   See
                                                                        ___

          Order No. 346 (June 21, 1991).  

                                          10

                    On appeal, we vacated the fee/cost award for failure to

          afford the plaintiffs and IRPAs a meaningful opportunity to chal-

          lenge the PSC attorney fee application on the merits.  According-

          ly,  we remanded  for further  proceedings.   See In  re Nineteen
                                                        ___ _______________

          Appeals  Arising  Out of  the San  Juan  Dupont Plaza  Hotel Fire
          _________________________________________________________________

          Litig., 982  F.2d 603, 608,  615-16 (1st Cir.  1992) [hereinafter
          ______

          "Nineteen Appeals"].  Following  the remand and a  second appeal,
           ________________

          the  PSC and IRPAs were directed to share the available attorney-

          fee fund ($68 million) equally.  See In re Thirteen Appeals Aris-
                                           ___ ____________________________

          ing  Out of the San Juan Dupont  Plaza Hotel Fire Litig., 56 F.3d
          ________________________________________________________

          295, 312 (1st Cir. 1995) [hereinafter "Thirteen Appeals"]. 
                                                 ________________

                    Following the remand in Nineteen Appeals, the  district
                                            ________________

          court  separately  reconsidered the  PSC  application for  costs,

          fixing March 12,  1993, as  the deadline for  the plaintiffs  and

          IRPAs  to submit  "specific/detailed written  objections" to  all

          PSC-cost submissions through January 31, 1991.  See Order No. 478
                                                          ___

          (Jan.  15, 1993).  The court further directed three categories of

          documents to  be filed in  the joint document  depository ("JDD")

          for review  by the  plaintiffs and  IRPAs:   (1) the  three Raben

          reports  analyzing  PSC-member  costs;  (2)  the  Kevane  monthly

          reports summarizing PSC-office costs; and (3) the PSC-member cost

          documentation.  See Order No. 479 (Jan.  20, 1993).  Although the
                          ___

          court  rejected a request by  the plaintiffs and  IRPAs for addi-

          tional  formal discovery,  see Thirteen  Appeals, 56 F.3d  at 303
                                     ___ _________________

          (noting that  mandated  exchanges of  documentation, rather  than

          "searching discovery,"  are appropriate where  only attorney fees

                                          11

          and expenses are  at issue), it ordered both  Raben and Kevane to

          submit  descriptions of  their auditing  procedures and  directed

          Kevane to  produce his working papers,  correspondence, and docu-

          mentation.  See Order No. 485 (Mar. 3, 1993).
                      ___

                    Within the extended deadline for further objections  to

          costs, the  plaintiffs and IRPAs submitted a report and affidavit

          by William Torres,  a CPA  newly retained to  audit the  PSC-cost

          submissions,  attesting that he had requested the PSC to "provide

          [him] with access  to all  of the records  documenting the  costs

          incurred  in this  case, .  .  . including  but  not limited  to,

          original bills or  statements kept by  the PSC  staff or any  PSC

          member, and any summaries or supporting documentation  (including

          charge  account bills) of the same."   Even though necessary to a

          "meaningful analysis," Torres attested, the PSC failed to provide

          the requested documents, including the Raben working papers; and,

          until March 10, 1993,  the "critical" Kevane working  papers were

          not made  available; many  documents made available  were unread-

          able; the PSC  did not allow access  to the PSC-member-cost-reim-

          bursement policies or the  PSC-policy meeting minutes relating to

          cost reimbursements; and, finally, the  PSC refused to permit him

          to depose Raben, Kevane or any PSC member  regarding questionable

          cost submissions or documentation. 

                    On November 24, 1993, the district court overruled most

          major objections to the PSC-cost submissions.  See Order No. 510-
                                                         ___

          A.  For example, as regards hotel charges, the court rejected the

          contention that the  maximum per  diem rate should  be $116,  the

                                          12

          rate considered "reasonable" by the IRS for tax-deduction purpos-

          es.  It ruled  that reasonableness must be assessed case by case,

          to reflect  such variants as locale,  seasonal fluctuations, room

          availability, the number of persons sharing a room, accessibility

          of equipment and facilities essential  to the litigation task  at

          hand, as  well as other exigencies.  Id. at 7-8.  The court ruled
                                               ___

          that, like the IRPAs,  PSC members were entitled  to "reasonable"

          reimbursement  for photocopying  costs and  had not  "profit[ed]"

          from the authorized twenty-five-cents-per-copy rate.  Id. at 9.  
                                                                ___

                    The district court further  noted, inter alia, that the
                                                       _____ ____

          objections the plaintiffs and IRPAs  made to the PSC-cost submis-

          sions were  so voluminous and  entwined with  issues relating  to

          attorney  fees that it was  difficult to determine the particular

          costs  to  which the  plaintiffs and  IRPAs  were objecting.   It

          directed the plaintiffs and  IRPAs to "sort out this  chaos," id.
                                                                        ___

          at 12; Torres  and Sterling to  meet and consult  at the JDD  not

          later  than December  10; and  the plaintiffs  and IRPAs  to file

          particularized objections to the remaining expenditures not later

          than January 12, 1994.  

                    The  district court conducted an evidentiary hearing in

          December 1993, to determine  whether to allow the PSC  to recover

          its final cost installment  for retaining Thomas Foulds, Esquire,

          as an expert.  The PSC maintained that Foulds, who had worked for

          many years in the insurance industry before attending law school,

          had been retained as an insurance  expert, to interpret insurance
                                  _________  ______

          contracts, rather than as an attorney, and that his fee therefore

                                          13

          was  fully reimbursable as a PSC-office cost.  See Pretrial Order
                                                         ___

          No. 127, at 48.   Although the plaintiffs and IRPAs objected that

          Foulds  had  performed  many  litigation tasks,  including  legal

          research and conducting depositions, normally performed by attor-

          neys and not by insurance experts, the district court allowed the

          Foulds fee  reimbursement as  a PSC-office cost  after concluding

          that  Foulds  "was  not contracted  merely  as  an attorney"  but

          primarily for his insurance expertise.  See Order No. 520, at 3-4
                                                  ___

          (Jan. 28, 1994).  The final installment brought the total Foulds-

          fee reimbursement to $913,503.7

                    The  plaintiffs and IRPAs  filed their final objections

          to PSC-member costs in January 1995, essentially reiterating that

          the cost  review and  verification process had  proven hopelessly

          inadequate to document either the necessariness or reasonableness

          of the claimed  costs, and that it was unfair  to require them to

          sort through the chaotic documentation created by the PSC and its

          members.    Alternatively,  the  plaintiffs  and  IRPAs  asserted

          specific objections to a sampling of allegedly inappropriate PSC-

          member  costs (e.g.,  phone  calls, tips,  charges for  "drinks,"
                         ____

          etc.)  and urged  an across-the-board  reduction of  all PSC-cost

          claims by  a fixed percentage  (25-33%) to reflect  the sampling-

          based  estimate of alleged PSC  overcharges.  Finally, the plain-

                              
          ____________________

               7The district  court had  approved two prior  PSC reimburse-
          ments relating  to Foulds, totaling  $850,000.  See  Margin Order
                                                          ___
          No.  755 (filed under  seal Dec. 27, 1990);  Order No. 398 (filed
          under seal Oct. 15, 1991).  The final PSC installment  of $84,107
          was disallowed  in part,  due to deficiencies  in contemporaneous
          documentation.

                                          14

          tiffs and IRPAs  complained that Monita  Sterling had refused  to

          allow CPA Torres to inspect  the documentation pertaining to PSC-

          office costs at the joint meeting required by Order No. 510-A.

                    The district court once again overruled the bulk of the

          objections.   See Order No. 584 (Aug. 29, 1995).  First, it found
                        ___

          the PSC review process  adequate, noting that it had  resulted in

          disallowance of  several questionable  expenditures based on  the

          independent review  conducted by Raben, Sterling,  and Soto under

          objective criteria.  Second,  except for a handful of  de minimis
                                                                 __ _______

          mischarges  totaling less  than  $2,000, the  court rejected  the

          specific challenges asserted by the plaintiffs and IRPAs based on

          their samplings of alleged overcharges.  Finally, the court ruled

          that its Pretrial Order No. 510-A, see supra pp. 11-12, had envi-
                                                                  
                                             ___ _____

          sioned  only  that  Sterling  and  Torres  inspect  documentation

          relating to  "outstanding issues"     those  involving PSC-member

          costs, not PSC-office-cost issues. 

                    In due course,  the plaintiffs and IRPAs  [hereinafter:

          "appellants"] appealed from the various orders approving PSC-cost

          reimbursements (Order Nos. 478, 485, 510-A, 520, and 584).

                                          II
                                          II

                                      DISCUSSION
                                      DISCUSSION
                                      __________

          A.   The PSC-Cost Reimbursement Regimen 
          A.   The PSC-Cost Reimbursement Regimen 
               __________________________________

                    1.   Appellants' Position
                    1.   Appellants' Position
                         ____________________

                    Appellants  aim  their main  broadside  at  the regimen

          established  for documenting, monitoring, submitting, and approv-

          ing  PSC costs.  Although the PSC, IRPAs, and plaintiffs in mass-

                                          15

          tort MDLs share the same litigation goal (viz., an optimum common
                                                    ____

          fund),  internecine  differences  as  to  subsidiary  matters    

          particularly the appropriate allocations from the common fund for

          their respective attorney fees and costs    are commonplace.  The

          greater the attorney fees  and costs awarded the PSC,  of course,

          the less  available for the  IRPAs and their  individual clients.

          Appellants  maintain that these conflicting self-interests neces-

          sarily entail  heightened oversight responsibilities on  the part

          of  the district  courts in  mass-tort MDLs  to ensure  stringent

          monitoring and review procedures adequate to protect the individ-

          ual plaintiffs and IRPAs from overreaching by the PSC.  

                    Appellants  fault  the   district  court  for  adopting

          reimbursement  procedures  which   delegate  important   judicial

          oversight responsibilities  to auditors  appointed either by  the

          court or  the PSC.   It  is the PSC,  they say,  rather than  the

          appellants, which  must bear the ultimate  burden in establishing

          entitlement to reimbursement, see  Grendel's Den, Inc. v. Larkin,
                                        ___  ___________________    ______

          749  F.2d 945, 956-57 (1st Cir. 1984), which in turn necessitates

          three distinct showings  by the PSC  for each claimed  reimburse-

          ment; viz., that it  document:  (i) the actual  expenditure; (ii)
                ____                              ______  ___________

          its necessariness to the assigned litigation task; and  (iii) its
              _____________

          reasonableness, see, e.g., In re Agent Orange Prod. Liab. Litig.,
          ______________  ___  ____  _____________________________________

          611 F. Supp. 1296,  1314 (E.D.N.Y. 1985) ("Expenses must  be both

          reasonable in amount and  reasonably related to the interests  of

          the class."), aff'd in pertinent part, 818 F.2d 226, 238 (2d Cir.
                        _____ __ _________ ____

          1987).  

                                          16

                    Appellants contend  that the Raben and  Kevane "audits"

          did not inform the  district court adequately regarding potential

          PSC excesses.  Raben and Kevane were accountants, neither trained

          in the law nor familiar with the litigation tasks assigned to the

          PSC.   At best they  could verify  that the PSC  and its  members

          actually made the claimed expenditures, but in many instances PSC

          members maintained no detailed  records relating to their reason-

          ableness and  necessariness.  Moreover, appellants  argue, though

          Monita  Sterling  and  others  similarly designated  by  the  PSC

          undoubtedly  were more  familiar than Kevane  and Raben  with the

          nature and  demands  of the  PSC's  litigation  responsibilities,

          their  assessments of  claimed  expenses were  inherently  biased

          because their employment with the PSC gave them a vested interest

          in justifying PSC reimbursements.

                    Appellants  contend that  the district  court erred  in

          suggesting  that it was incumbent upon them, rather than the PSC,

          to demonstrate  that particular  PSC expenditures were  not reim-

          bursable.  See, e.g., Order No. 520, at 1 n.1 ("Parties question-
                     ___  ____

          ing payments  previously approved  carried the burden  of setting

          them aside  whereas the PSC/Mr.  Foulds were required  to justify

          the pending request.").  The court based its ruling on the ground

          that most PSC cost-reimbursement  claims during earlier stages in

          the litigation had been  approved, without opposition, as submit-

          ted.  

                    Appellants  complain not only  that the  district court

          thereby subverted the well-established burden of proof  incumbent

                                          17

          upon the PSC, see Grendel's Den, 749 F.2d at 956-57, but  foisted
                        ___ _____________

          on the plaintiffs  and IRPAs the impracticable  task of rummaging

          through mountainous PSC documentation to determine    within very

          restrictive court-ordered deadlines    which PSC-cost submissions

          were either inadequately documented or otherwise nonreimbursable.

          Appellants therefore urge  that all otherwise  allowable PSC-cost

          reimbursements  be reduced  by  a fixed  (if somewhat  arbitrary)

          discount  (25% to 33%), see, e.g., Mokover v. Neco Enters., Inc.,
                                  ___  ____  _______    __________________

          785 F. Supp. 1083,  1093-94 (D.R.I. 1992), to reflect  the likely

          extent  to which the PSC inferably overcharged due to its failure

          to maintain "appropriate" documentation. 

                    2.   Standard of Review
                    2.   Standard of Review
                         __________________

                    District  court  orders  awarding  costs  normally  are

          reviewed  only for abuse of  discretion.  See  Grendel's Den, 749
                                                    ___  _____________

          F.2d at  950; see also  Anderson v. Secretary  of Health &  Human
                        ___ ____  ________    _____________________________

          Servs.,  80  F.3d 1500,  1507  (10th Cir.  1996);  National Info.
          ______                                             ______________

          Servs., Inc.  v. TRW, Inc.,  51 F.3d 1470, 1471  (9th Cir. 1995);
          ____________     _________

          Estate  of Borst  v. O'Brien, 979  F.2d 511, 517  (7th Cir. 1992)
          ________________     _______

          ("The  award of  costs 'is  the type  of discretionary  ruling to

          which  appellate courts  should give "virtually  complete" defer-

          ence.'") (citations omitted).  

                    3.   "Burdens of Proof"
                    3.   "Burdens of Proof"
                          ________________

                    The  PSC and  its  members  undoubtedly must  establish

          their entitlement  to reimbursement.  See Grendel's Den, 749 F.2d
                                                ___ _____________

          at 956-57.  Furthermore, there can be no quarrel that the respec-

          tive  self-interests of the plaintiffs, the IRPAs, and the PSC in

                                          18

          mass-tort  MDLs often diverge, nor for that matter that the cost-

          containment regimen initiated at the outset in this case (without

          benefit  of  hindsight)  ultimately  proved inadequate  and  even

          chaotic,  see supra  Section I.D,  as the  district  court itself
                    ___ _____

          acknowledged several years later.

                    We nevertheless  part company with  appellants' conten-

          tion  that the  belatedly perceived  shortcomings in  the adopted

          safeguards  against  PSC  overreaching  proximately   caused  the
                                                                ______

          unsatisfactory  regimen in  this case,  or that  the PSC  and its

          members  must therefore be required  to bear the  entire brunt of

          its  failure to  function as  envisioned by  the district  court.

          Quite  apart from  formal  burdens of  proof, all  litigants must

          share in their mutual obligation to collaborate with the district

          court ab initio in fashioning adequate case  management and trial
                __ ______

          procedures, or  bear the reasonably foreseeable  consequences for

          their failure to do so.  See, e.g., Reilly v.  United States, 863
                                   ___  ____  ______     _____________

          F.2d 149, 160 (1st Cir. 1988) (noting that district court reason-

          ably  may presume affected parties, which take no exception to an

          announced course of action, have no objection); see also Clemente
                                                          ___ ____ ________

          v.  Carnicon-Puerto Rico Mgt. Assocs., 52 F.3d 383, 387 (1st Cir.
              _________________________________

          1995);  K-Mart Corp. v. Oriental  Plaza, Inc., 875  F.2d 907, 913
                  ____________    _____________________

          (1st Cir. 1989);  Austin v. Unarco Indus.,  Inc., 705 F.2d 1,  15
                            ______    ____________________

          (1st Cir.), cert. dismissed, 463 U.S. 1247 (1983).
                      _____ _________

                    As  the lawbooks  bear out,  in many respects  this has

          been a groundbreaking mass-tort MDL from its onset in 1987.  See,
                                                                       ___

          e.g., supra n.1.  The district court was confronted not only with
          ____  _____

                                          19

          the  daunting task  of  devising (sometimes  from "whole  cloth")

          mechanisms for streamlining case  administration (e.g., the JDD),
                                                            ____

          but with establishing  auxiliary administrative entities, includ-

          ing the PSC  itself, which would permit adequate ongoing judicial

          oversight to  be  reserved for  the most  pressing and  essential

          litigation.   The PSC,  IRPAs, and plaintiffs  were indispensable

          partners in this important endeavor.  Spurred by their respective

          self-interests, these  broadly allied  litigants were  far better

          positioned  than  the trial  judge  to  propose the  prophylactic

          procedures believed necessary to protect  their respective inter-

          ests from undue encroachment by potential  adversaries, including

          one another.

                    These complex and unwieldy "mass tort cases are a breed

          apart,"   Thirteen Appeals,  56 F.3d  at 311,  to the  point that
                    ________________

          efficient,  and  often  innovative,  administrative  arrangements

          become absolutely essential to  enable the "court[] [to]  run [a]

          tight  ship[] to ensure  that [the] litigation  stays on course."

          Nineteen Appeals, 982 F.2d at  614. See In re Reticel  Foam Corp.
          ________________                    ___ _________________________

          (In re San  Juan Dupont Plaza Hotel Fire Litig.),  859 F.2d 1000,
           ______________________________________________

          1004 (1st Cir. 1988) ("In multi-party, multi-case litigation, the

          district court's success is largely dependent upon its ability to

          uncomplicate matters.").   Trial  judges newly immersed  in mass-

          tort  MDLs simply  cannot reasonably  be expected  to anticipate,

          from  the  inception,  all  potential flaws  in  their  unopposed

          procedural and administrative initiatives.

                    It  is essential,  therefore, that  counsel collaborate

                                          20

          with  the  trial judge  from  the outset  in  fashioning workable

          programmatic  procedures, and  thereafter  alert the  court in  a

          timely  manner  as  operating  experience points  up  infirmities

          warranting further judicial attention.  Absent this collaborative

          administrative monitoring, there inevitably remains  an unaccept-

          able potential for internecine conflicts among the PSC, IRPAs and

          plaintiffs  over their  respective dormant  claims to  the common

          fund, which threaten to convert their cost-reimbursement disputes

          into wasteful  satellite litigations.  See  Hensley v. Eckerhart,
                                                 ___  _______    _________

          461 U.S. 424, 437 (1983) (cautioning that cost claims "should not

          [be allowed to] result in a second major litigation").  

                    Even at the outset,  while their primary focus remained

          on establishing defendants' liability, the PSC, IRPAs, and plain-

          tiffs  surely could  anticipate that  their  respective financial

          stakes in future PSC-cost reimbursement rulings would be substan-

          tial  (e.g., $10  million,  or 4  1/2  percent of  common  fund),
                 ____

          especially  since the district  court had authorized  the PSC not

          only  to take over certain IRPA litigation tasks but to establish

          and finance its own ad hoc law firm at a centralized and inevita-
                              __ ___

          bly costly adjunct  office.  Confronted with  this serious poten-

          tial  for conflicting  self-interests, see  Pretrial Order  No. 2
                                                 ___

          (cautioning counsel  that "your  working relationship  will occa-

          sionally be  strained, communication  hampered, and  mutual trust

          impeded"), and  the virtually  certain prospect that  the massive

          litigation would be protracted,  see id. (cautioning that counsel
                                           ___ ___

          would "probably be laboring together [in strained  relationships]

                                          21

          for  several  years"), the  PSC,  IRPAs, and  plaintiffs  were on

          reasonable  notice from  the  outset  that establishing  adequate

          prophylactic procedures was a priority matter.

                    Thus forewarned,  the  PSC, IRPAs,  and plaintiffs  all
                                                                        ___

          were fairly  alerted that the  massive cost-submission documenta-

          tion  generated  over the  years  ahead  would become  critically

          important to them;  viz., to  satisfy the PSC's  burden of  proof
                              ____

          under Grendel's Den and  enable both the IRPAs and  plaintiffs to
                _____________

          assert informed  objections to inappropriate  PSC cost-reimburse-

          ment  submissions.   Clearly,  then, their  timely fashioning  of

          mutually  satisfactory  documentation  and monitoring  procedures

          offered the  most reasonable prospect for  forfending this satel-

          lite litigation.   See Hensley, 461 U.S. at 437. 
                             ___ _______

                    As  appellants acknowledge  that  there  are  no  legal

          precedents which  provide detailed models for  designing suitable

          mass-tort cost-reimbursement procedures, they now urge, after the

          fact, that we define the relevant responsibilities incumbent upon

          the district  court and  the PSC  in these matters.   We  decline

          their request, however,  in large  part for the  reason that  the

          guidance  presently  available  plainly  runs  counter  to  their

          premise  that the  primary  responsibility  for  designing  cost-

          submission procedures, ab initio, rests with the district court.
                                 __ ______

                    Although the Manual for  Complex Litigation ("the MCL")
                                                                      ___

          itself  includes no  detailed provisions  on the  subject, opting

          instead to encourage counsel  for the principal parties  to forge

                                          22

          ad  hoc  prophylactic procedures  by  mutual  agreement from  the
          __  ___

          outset,8 it  envisions that  prescriptive procedural  models will

          emerge, and deserving ones  gain currency, through the litigants'

          own collaborative  ad hoc  initiatives, rather than  originate in
                             __ ___

          appellate  case  law. See  Pretrial Order  No.  127, at  22 ("The
                                ___

          Manual for Complex Litigation . . . has been and will continue to
                              
          ____________________

               8The MCL provides, in relevant part:

                    Expenses  incurred and  fees earned  by designated
               counsel  acting in  that capacity  should not  be borne
               solely by their clients, but rather shared equitably by
               all benefiting  from their services.   If possible, the
               terms and  procedures for payment should be established
               _____ ___  __________
               by agreement  among  counsel, but  subject to  judicial
                  _________  _____  _______
               approval and control (see infra section 24.214, compen-
                                     ___ _____
               sation for designated counsel).   Whether or not agree-
               ment is reached,  the judge has the authority  to order
               reimbursement  and compensation  and the  obligation to
               ensure  that the  amounts  are reasonable.   Terms  and
               procedures  should  be  established before  substantial
               __________                          ______
               services are  rendered  and should  provide for,  among
               other things,  the following: periodic  billings during
                                             ________  ________
               the litigation or creation of a fund through advance or
               ongoing assessments of members  of the group; appropri-
               ate contributions  from parties making  partial settle-
               ments  with  respect to  services  already  rendered by
               designated counsel; and  contributions from parties  in
               later  filed or  assigned  cases who  benefit from  the
               earlier work of designated counsel.
                    Designated  counsel  should  render   services  as
               economically  as  possible  under   the  circumstances,
               avoiding  unnecessary activity and  limiting the number
               of  persons attending  conferences and  depositions and
               working on briefs and  other tasks.   The  court should
               make clear  at the first pretrial  conference that com-
               pensation  will  not  be approved  for  unnecessary  or
               duplicative  activities or  services. The  court should
               also  inform counsel  what records  should be  kept and
               when they  should be submitted to the  court to support
               applications to recover  fees and expenses from  copar-
               ties.  See infra  section 24.21, which discusses ground
                      ___ _____
               rules and  record  keeping where  attorneys'  fees  are
               awarded by the court.

          MCL   20.223 (3d ed. 1995) (emphasis added).  
                                     
          ___

                                          23

          be a primary  reference text  in this litigation.   Counsel  must

          become familiar with  the Manual.").  Furthermore,  ex post facto
                                                              __ ____ _____

          pronouncements detailing  model procedures would  be particularly

          inappropriate in  these circumstances  as it is  readily apparent

          that the present dispute sprang inexorably from the flawed proce-

          dural design  in which appellants acquiesced from the outset, and

          for  six  years thereafter,  to the  point that  its deficiencies

          became both systemic and  irremediable.  Appellants simply waited

          too long before  asking the  district court to  undo, with  their

          broad axe (viz., a 25% to 33% across-the-board cut), the documen-
                     ____

          tary muddle allowed to accumulate. 

                     Moreover, pressed on many  other fronts since 1987, it

          was not practicable  for the district  court alone to  scrutinize

          all cost-related  documentation maintained by the  PSC for nearly

          half a decade.   See Grendel's Den, 749 F.2d  at 950 (noting that
                           ___ _____________

          courts  must strive  for  cost-setting processes  which are  "not

          unnecessarily burdensome to the courts themselves").  Unlike less

          attenuated and  complex litigation, mass-tort MDLs  by their very

          nature  predetermine that detailed monitoring of case-administra-

          tion-related responsibilities be  delegated.  The  early pretrial

          orders entered  by the district court,  with appellants' acquies-

          cence,  accordingly  established a  cost-monitoring  regime which

          required  the PSC to submit  cost summaries every  sixty days for

          interim  approval by  the court.   The PSC-cost  summaries, which
          _______

          merely  reflected total  expenses by  general type  and category,

          represented  the  cumulative, edited  product  of  the Raben  and

                                          24

          Kevane "audits," without the underlying documentation.  Thus, the

          interim-approval regime  was reasonably  designed to  ensure that

          cost verification and containment by the parties not simply await

          an end to the  entire litigation, by which time  the accompanying

          avalanche of documentation would all but preclude cogent review. 

                    Nevertheless, two  serious deficiencies made  their way

          into  these interim-approval procedures with appellants' acquies-

          cence:  (1) the failure to include defined criteria for assessing

          "reasonableness" and "necessariness"; and (2) the failure explic-

          itly to authorize or require appellants to monitor the underlying

          documentation as interim PSC-cost summaries were submitted to the

          district court.9  Thus, appellants settled from the outset simply

          for the broad, undefined  general criteria that claimed-PSC costs

          be "necessary"  and  "reasonable," thereby  implicitly  foregoing

          such  ongoing prophylactic  measures  as particularized  monetary

          guidelines and/or ceilings on major cost categories; for example,

          maximum per diem  rates for hotels and page-rates  for photocopy-

          ing.10  
                              
          ____________________

               9The record  discloses no indication that  appellants either
          objected to  these deficiencies  or  proposed alternative  proce-
          dures.  See  Silva v. Witschen,  19 F.3d 725,  729 n.4 (1st  Cir.
                  ___  _____    ________
          1994)  (appellant bears  brunt  of failure  to include  pertinent
          material in record).

               10The MCL notes:

                         Rules  and  practices  vary widely  with
                    respect to reimbursement of expenses incurred
                    by lawyers in the course of the case out of a
                    fee  award.  Charges for  paralegals  and law
                    clerks at market rates and the fees of neces-
                    sary experts are generally reimbursable. Sec-
                    retarial assistance, on the  other hand, is a

                                          25

                    Yet  more fundamentally, the pretrial procedural orders

          did not identify a  minimum level of detail in  the documentation

          required to  substantiate that  a particular PSC-member  cost was

          "necessary" to a  PSC litigation task and "reasonable" in amount.

          Rather, the  orders  simply directed  the PSC  to keep  "careful,

          contemporaneous, detailed records"  and provide "proper verifica-

          tion" of its  expenditures.  Although  Grendel's Den makes  clear
                                                 _____________

          that an entity requesting  reimbursement must document its actual
                                                                     ______

          expenditures, normally by itemized receipt,  see 749 F.2d at 956-
          ____________                                 ___

          57, the more amorphous and subjective criteria for substantiating

          that a given expenditure was "necessary" and "reasonable" may not

          be  so readily documented.  For example, in some instances courts

          do  not require exacting documentation  even for major cost reim-

          bursements, such as overhead expenses incurred in connection with

          the PSC  office, relying instead  on their intimate  knowledge of

          the litigation for determining whether entire categories of costs

          pass the  reasonableness test;  viz., whether the  nature of  the
                                          ____

          expenditure  strikes  the court  as  clearly  superfluous or  its

          amount  transcends  the broad  bounds  of  reasonableness in  the
                              
          ____________________

                    normal  part of  overhead,  but  courts  have
                    differed over whether  overtime is  reimburs-
                    able.  Similarly, rulings vary  on such items
                    as copy and printing costs, certain meals and
                    travel,  and  fax,  telephone,  and  delivery
                    charges. The determination of these  kinds of
                    claims should  not  be  left  to  costly  and
                    time-consuming adversary  adjudication at the
                    end of  the litigation; ground rules on reim-
                    bursement should be  established at the  out-
                                                     __ ___  ____
                    set.
                    ___

          MCL   24.215 (emphasis added).  
          ___

                                          26

          circumstances.11

                    Furthermore, the early pretrial orders afforded both an

          obvious  and ready  opportunity for  appellants, inter  alios, to
                                                           _____  _____

          propose,  with  somewhat  greater  particularity  at  least, more

          definite  contours  for monitoring,  testing,  and verifying  PSC

          compliance  with the  amorphous "necessariness"  and "reasonable-

          ness" criteria laid down by the  district court.  As this litiga-
                              
          ____________________

               11The district  courts differ  quite  sharply regarding  the
          detail needed in cost-reimbursement submissions:

               The defendants next object that the  plaintiffs' attor-
               neys  have not  documented their  request for  expenses
               with receipts.   It is  not necessary or  desirable for
               federal courts to review receipts for every five dollar
               expenditure.   Judges,  being former  practicing attor-
               neys, are quite capable of  determining the reasonable-
               ness of expenses incurred  during litigation.   Neither
               is it  necessary to  itemize expenses in  great detail.
               For example,  it is  sufficient that copying costs were
               submitted without listing how many pages of which docu-
               ments were copied during the three years of litigation.
               Law firms generally do not keep such records and little
               would  be served by requiring them except to make liti-
               gation  more expensive.    The amount  of the  expenses
               submitted is certainly reasonable given the  length and
               complexity of this case. 

          Duke v. Uniroyal Inc.,  743 F. Supp. 1218, 1227  (E.D.N.C. 1990),
          ____    _____________
          aff'd,  928  F.2d 1413  (4th Cir.),  cert.  denied, 502  U.S. 963
          _____                                _____  ______
          (1991).  See  Laffey v.  Northwest Airlines, Inc.,  572 F.  Supp.
                   ___  ______     ________________________
          354,  383 (D.D.C. 1983) ("It  is not necessary  for plaintiffs to
          explain the purpose of every photocopy that is produced and every
          expenditure  that is made in connection with the litigation.  For
          most  out-of-pocket costs,  it is  enough for  the plaintiffs  to
          identify the expenses by category, with a  general description of
          the  types of charges included in each  category.  In the case of
          particularly  large  or  unusual  expenditures,  some  additional
          explanation of the purpose  of the expense may be  necessary, but
          it is  not the norm."), aff'd  in pertinent part, 746  F.2d 4, 30
                                  _____  __ _________ ____
          (D.C. Cir.  1984), cert. denied, 472 U.S.  1021 (1985).  But cf.,
                             _____ ______                          ___ ___
          e.g.,  Starnes v. Hill, 635  F. Supp. 1270,  1273 (W.D.N.C. 1986)
          ____   _______    ____
          (requiring exquisite detail).

                                          27

          tion demonstrates all too well, the terms "detailed records"  and

          "proper  verification"      though  perhaps   perfectly  adequate

          benchmarks in a smaller, non-MDL litigation    simply were not up

          to the task in this mass-tort MDL.   See MCL   20.223 ("The court
                                               ___ ___

          should also inform counsel what records should be kept . . . .").

          For example,  even though  early pretrial orders  forewarned that

          the  litigation would be prolonged and that it would be impracti-

          cable  for the  PSC to  submit  all its  underlying documentation
                                          ___

          directly to  the district court for  interim-approval review, the

          PSC, IRPAs, and  plaintiffs nonetheless refrained from  proposing

          any  further  definition of  the  required  level of  documentary

          particularity.   Thus, these  matters were left  unattended until

          the end of the litigation at their peril. 
                                    __ _____ _____

                    Moreover, appellants exacerbated the documentary muddle

          from  the start by opting to forego ongoing monitoring of the PSC

          documentation.   Unlike  less prolonged  and complex  litigation,

          wherein interim-cost reimbursement claims may  be deferable until

          the litigation nears completion,  the hands-off approach taken by

          appellants is  utterly impracticable in these  large and enduring

          mass-tort proceedings.

                    Given the potential for serious, long-term overreaching

          by  the PSC under the relaxed regime envisioned by these pretrial

          orders, we discern no sound justification for appellants' failure

          to propose in 1987 that one  of their own number be designated to
                     __ ____      ___  __ _____ ___ ______

          conduct closer review of the underlying PSC-cost documentation on

                                          28

          an ongoing basis.12   See Francis Bacon, Of Suspicion  ("There is
                                ___                __ _________

          nothing  makes a man suspect  much, more than  to know little.").

          Alternatively, the IRPAs could  have sought district court autho-

          rization  to  retain an  auditor  to  monitor these  interim-cost

          reports on an ongoing  basis for "necessariness" and "reasonable-

          ness."  Thus, appellants'  failure even to attempt interim  moni-

          toring directly  contributed to the serious  and otherwise avoid-

          able  consequences ultimately  brought  to  the district  court's

          attention at a  time when  corrective action could  no longer  be

          considered practicable.

                    Nor are appellants absolved of their  primary responsi-
                                                          _______ _________

          bility  for protecting their own interests based on the mere fact
          ______  ___ __________ _____ ___ _________

          that  the  pretrial  orders  did not  explicitly  direct  interim

          monitoring.   Rather, the  record is  clear that  appellants were
                              
          ____________________

               12The  PSC submitted  its  interim-cost claims  under  seal,
          presumably  to  preclude  their perusal  by  "adverse"  litigants
          (i.e., the defendants).   In some attorney fee and  cost shifting
           ____      __________
          disputes, the  requesting  party may  not  wish to  disclose  its
          documentation to  a party-opponent during the  litigation, out of
          fear that its litigation strategies  may be divulged, even though
          the party-opponent  eventually  may be  liable  for the  fees  or
          costs.  See, e.g., Ring v.  Commercial Union Ins. Co., 159 F.R.D.
                  ___  ____  ____     _________________________
          653, 659-60 (M.D.N.C. 1995) (party-opponent barred from obtaining
          fee statements in circumstances where  it could "examine the bill
          to find out the nature of the services in order  to discover what
          advice  the attorney was providing defendants  and to learn other
          details about defendants' investigation of her claim");  Colonial
                                                                   ________
          Gas  Co. v.  Aetna Cas. &  Sur. Co.,  144 F.R.D.  600, 607-08 (D.
          ________     ______________________
          Mass.  1992) ("To  the extent  that time  records and  statements
          reveal the nature of the  services provided, however, such  docu-
          ments are privileged.").  
               Of  course, these  IRPAs  and plaintiffs  were not  opposing
          parties in the underlying litigation.  Thus, there was no privacy
          impediment to allowing them access to the PSC's interim materials
          and supporting  documentation simply on  request.   In fact,  the
          appellees note that their  cost documentation was always accessi-
          ble to the IRPAs and plaintiffs on request.

                                          29

          neither precluded  nor incapacitated from taking  appropriate and

          timely precautions.  First and foremost, fundamental deficiencies

          in  the interim  PSC-cost  submissions to  the court,  especially

          their lack  of particularity,  readily could have  been addressed

          and corrected  ab initio, rather than  at the end of  the litiga-
                         __ ______

          tion.  Second, appellants  placed too much reliance upon  non-MDL
                                                                    ___

          case authority, see,  e.g., Grendel's Den,  supra, in failing  to
                          ___   ____  _____________   _____

          conduct interim monitoring, based on their ill-advised assumption

          that  the PSC's  ultimate burden  of proving  its entitlement  to

          reimbursement  relieved appellants of their independent responsi-
                         ________ __________ __ _____ ___________ _________

          bility to collaborate  with the district court  and other parties
          ______

          to develop and monitor appropriate cost-containment procedures.  

                                          30

                    Appellants were well aware, throughout the proceedings,

          that the PSC had  not been directed to submit its voluminous cost

          documentation  to the  district court  together with  the interim

          summaries.   Thus,  appellants knowingly  failed to  assume their

          rightful responsibilities for safeguarding their own interests by

          monitoring interim  PSC-cost submissions  as  required to  ensure

          that the  evolving documentation  practices actually utilized  by

          the PSC were equal to the task and, if  not, to broach the matter

          first with the  PSC and, as need  be, with the court,  in time to

          permit   effective  preventive  and  corrective  measures  before

          matters became completely unmanageable.13

                    We underscore  the central administrative  necessity in

          mass-tort MDLs, that  the PSC, IRPAs, and plaintiffs attempt very

          early on to work out mutually acceptable procedures for document-

          ing and monitoring costs for which reimbursement is to be sought.

          No less importantly,  both at  the outset  and thereafter,  where

          cooperative efforts fail  to produce  agreement, or  cost-benefit

          considerations   independently  warrant,   judicial  intervention
                              
          ____________________

               13For example, in 1993  Torres and Sterling were at  logger-
          heads  over  whether  the  PSC  cost-documentation  records  were
          adequate.    Torres considered  them an  incomprehensible muddle.
          Sterling countered that the  records were thoroughly organized at
          the outset  but  that Torres  had  "disorganized" them  with  his
          haphazard  rummaging.    The   district  court,  after  crediting
          Sterling's account, attempted to resolve the impasse by directing
          Torres  and Sterling to  meet and consult  at the JDD.   By then,
                                   ____ ___ _______
          however, the  damage had  been  done and  the resultant  adminis-
          trative "chaos" alluded to by the district court made it impossi-
          ble even  to ascertain  whether the  PSC had  maintained suitable
          documentation for the  vast majority  of its cost  claims.   With
          prudent  ongoing monitoring  by  appellants from  the outset,  of
          course, the  administrative confusion need never  have gotten out
          of hand.

                                          31

          should be promptly sought before matters worsen or become irreme-

          diable.   See Jaquette v. Black Hawk  County, Iowa, 710 F.2d 455,
                    ___ ________    ________________________

          463 (8th Cir. 1983) ("[T]he key to avoiding excessive costs . . .

          is early and stringent judicial management of the case.") (empha-
             _____

          sis added).

                    The  individual  plaintiffs and  IRPAs  have enough  at

          stake in these matters  to prompt their early intervention.   For

          example,  if  overly  particularized  PSC-cost  documentation  on

          "reasonableness" and "necessariness" were  to be required without

          regard  to sound  cost-benefit  considerations,  its  unnecessary

          procedural  costs ultimately  would  be borne  by the  individual

          plaintiffs.  See Laffey v. Northwest Airlines, Inc., 572 F. Supp.
                       ___ ______    ________________________

          354, 383 (D.D.C. 1983) ("Indeed, the amount of time that would be

          required to document each item of expense in the detail apparent-

          ly suggested  by Defendant would be  prohibitive; the compensable

          time required to  generate the detail  would exceed the  expenses

          claimed.").  Conversely, if appellants were to designate an IRPA,

          or  retain an  independent auditor,  to monitor  PSC-cost submis-

          sions,  the  expense  conceivably  could  exceed  whatever direct

          savings might be derived through any resulting cost-reimbursement

          disallowances.    Thus, as  the  ultimate  payors the  individual

          plaintiffs  and IRPAs have enough  at stake to warrant reasonable

          efforts at ensuring that adequate documentation and cost-monitor-

          ing procedures also make cost-benefit sense.  

                    An adequate cost containment and monitoring system in a

          mass-tort  litigation  cannot  be  economically  and  efficiently

                                          32

          designed  and  implemented from  the  outset absent  a  series of

          tradeoffs among the PSC,  IRPAs, and plaintiffs, all of  whom are

          under  a  mutual obligation  to engage  in  an earnest  effort to

          resolve their  differences early  on.   These appellants, on  the

          other hand, elected  to acquiesce  for four years  in the  flawed

          cost containment  and monitoring  system first  set  in place  in

          1987, awaiting an end  to the principal litigation  before coming

          forward  with  their objections.   See  Reilly,  863 F.2d  at 160
                                             ___  ______

          (litigants share mutual burden to collaborate with district court

          in fashioning workable litigation procedures).  

                    4.   Evidence of PSC Overreaching
                    4.   Evidence of PSC Overreaching
                         ____________________________

                    Next  we consider  whether the  PSC-cost reimbursements

          should be  subjected to  the across-the-board  cuts (25% to  33%)

          urged  by appellants  notwithstanding their  own failure  to take

          appropriate preventive  or corrective action.  In our view, their

          crude cuts ought  not be  imposed in  these circumstances  absent

          evidence that the PSC acted in bad faith or took unfair advantage

          of the procedural deficiencies.   Not only have we found  no such

          evidence, but we can discern no appreciable PSC overreaching from

          the record.

                    First,  there  should  be  no  ready  presumption  that

          counsel appointed to  the PSC  expended its funds  in bad  faith;

          that is,  with intent  to inflate PSC-cost  reimbursement submis-

          sions.   This  is especially  true in the  present circumstances,

          since the PSC members repeatedly attested that their cost submis-

          sions were bona fide.   See, e.g., Alabama Power  Co. v. Gorsuch,
                                  ___  ____  __________________    _______

                                          33

          672  F.2d 1,  5 (D.C.  Cir.  1982) ("[I]n  most cases,  the court

          should  be content  to rely  upon the  integrity of  counsel, and

          allow the[] expenses  [claimed]."); Greenspan v. Automobile  Club
                                              _________    ________________

          of Mich., 536 F. Supp. 411, 413-14 (E.D. Mich. 1992) (refusing to
          ________

          "second-guess"  necessariness of  costs  and relying  in part  on

          affidavits filed by requesting  parties and their attorneys); cf.
                                                                        ___

          also, e.g., In re Agent  Orange Prod. Liab. Litig., 611  F. Supp.
          ____  ____  ______________________________________

          at   1322  ("If  there  was  doubt  about  the  reason  for  a[n]

          [attorney's  phone] call,  it was  allowed."); 28  U.S.C.    1924

          (permitting  attorneys  to  vouch  for necessariness  of  costs).

          Whether  or  not there  is  a  direct or  formal  attorney-client

          relationship between plaintiffs and the PSC, the PSC and its IRPA

          members  necessarily owed  a fiduciary  obligation to  the plain-

          tiffs. Cf. In re Agent Orange Prod. Liab. Litig., 818 F.2d at 223
                 ___ _____________________________________

          (noting  that lead  counsel owes  fiduciary duty to  class plain-

          tiffs);  see also  MCL    20.22 (counseling  court to  remind PSC
                   ___ ____  ___

          members of "their  responsibility to the court and  their obliga-

          tion to act  fairly, efficiently, and economically  in the inter-

          ests  of all parties and their counsel").  Furthermore, these PSC

          members simultaneously  were acting in their  respective roles as

          IRPAs, with  direct professional responsibility  for representing

          approximately  seventy percent of the  plaintiff class.  In these

          circumstances especially, given their professional obligations to

          the  court  and  their individual  clients,  we  would  be highly

          reluctant to  suppose that the PSC  members promoted overreaching

          by the PSC.

                                          34

                    Second, the PSC "auditing"  which did occur, whether or

          not adequate,  cannot be dismissed  as perfunctory, since  it did

          screen out some significant cost excesses.  For  example, Adamina

          Soto attested  that she contacted PSC  members concerning problem

          expenses and followed up with requests for further documentation.

          Indeed,  the Raben  and Soto  audits resulted in  cost reductions

          exceeding  $346,000.   Although appellants  object that  some PSC

          auditing was conducted at  random, particularly that performed by

          Kevane and Soto,  as it did  not purport to  verify each  expense

          claim,  the  reviews conducted  by  Raben and  Sterling  were not

          random.   Finally, even  the random  "audit" procedures  were not

          conducted under PSC control.  Thus, we are not persuaded that the
                    _____ ___ _______

          random review procedures were flawed to the point that they could

          provide no effective deterrent to substantial PSC overreaching. 

                    Third, appellants emphasize that  Kevane and Raben were

          accountants, with little personal knowledge regarding the precise

          litigation tasks  assigned to  the PSC.   Both were  professional

          CPAs, however,  and Raben in  particular was no  neophyte, having

          been responsible  for comparable cost oversight in  the MGM case,

          itself a hotel fire  litigation.  It does not  seem unreasonable,

          therefore, absent evidence to the contrary, to expect  that Raben

          was reasonably  qualified for  the professional task  assigned to

          him.

                    Fourth,  as there  is  no indication  in the  appellate

          record that the  PSC ever  attempted to  prevent appellants  from

          examining its  underlying cost  documentation prior to  1991, the

                                          35

          reasonably   foreseeable  prospect  that  appellants  might  well

          (indeed should)  have requested interim access  to the documenta-

          tion presumably had some  deterrent effect upon PSC overreaching.

          Not only did the  pretrial orders not preclude ongoing  access by

          appellants  to the PSC  documentation, but there  would appear to

          have  been no  conflict of  interest or "work  product" privilege

          which  would have  prevented the  individual plaintiffs  or IRPAs

          from  inspecting the  PSC documentation  at  any time  during the

          litigation.  See supra note 12.14  
                       ___ _____

                    Finally,  and  most  importantly,  the  district  court

          initially proposed  to limit  PSC attorney  fees and  costs, com-
                                                                       ____

          bined, to ten percent of the eventual common fund, thus providing
          _____

          PSC members a substantial  inducement to exert reasonable efforts

          to minimize PSC costs with a view to  preserving a larger balance

          with which to fund their attorney fees as PSC members.  See In re
                                                                  ___ _____

          Wells Fargo Sec.  Litig., 157  F.R.D. 467, 470  (N.D. Cal.  1994)
          ________________________

          ("[A]n attorney generally has no incentive to minimize litigation

          expenses  unless  his fee  award  is  inversely related  to  such

          expenses.").  Appellants respond that the ten percent ceiling did

          not  deter inflated  costs, however,  because the  district court
                              
          ____________________

               14Appellants point out that the PSC refused Torres access to
          certain "derivative" documents after 1991, such as the Raben work
          papers.   Nevertheless, Torres  had access  to the  raw materials
          examined by Raben (viz., actual PSC receipts and other documenta-
                             ____
          tion).   Moreover,  appellants were  not necessarily  entitled to
          full-fledged discovery, at  least absent district court  authori-
          zation.   See  Thirteen  Appeals, 56  F.3d  at 303  (noting  that
                    ___  _________________
          normally  it is  sufficient, for  purposes of  a fee  and expense
          application, to order exchange of the "raw materials" or "all the
          data  reasonably necessary to formulate . . . objections") (cita-
          tion omitted).  

                                          36

          announced in January  1991 that  it would not  be enforced  after

          all.  See  Thirteen Appeals,  56 F.3d at  307 n.10 (holding  that
                ___  ________________

          tentative  cap  was  not  binding on  district  court);  Nineteen
                                                                   ________

          Appeals, 982  F.2d at  612 (same).   Nevertheless, until  January
          _______

          1991, by  which time the lion's share of its $10 million in costs
                                   ______ _____

          had accrued, the PSC could not have known that the district court

          would discard the ten percent ceiling.

                    We therefore conclude, based on the foregoing consider-

          ations, particularly  the absence  of reliable evidence  of over-

          reaching or bad  faith on the part  of the PSC, that it  would be

          inequitable to resort to the crude cost-cutting bludgeon proposed

          by appellants, who share at least equal responsibility  for these

          procedural lapses.   Although  the  procedural deficiencies  dis-

          cussed  above may have  led to  some unnecessary  or unreasonable

          expenditures,  appellants clearly  failed to  alert the  district

          court  until  it had  become impracticable  either to  prevent or

          assess,  let alone correct them in any reliable or cost-effective

          manner.

          B.   Individualized Objections
          B.   Individualized Objections
               _________________________

                    Next  we consider appellants'  objections to particular

          categories of cost-reimbursement claims.15

                              
          ____________________

               15We  see no  need to  catalog certain  meritless challenges
          appellants raise to various miscellaneous expenses, especially in
          light of  the deferential standard of review.   See Order No. 584
                                                          ___
          (Aug. 29, 1995).  We note simply that our review has disclosed no
          abuse of discretion in these regards. 

                                          37

               1.   PSC-Office Costs16 
               1.   PSC-Office Costs
                    ________________

                    Appellants  contend  that  the  $913,503  fee  paid  to

          Attorney Thomas H. Foulds by  the PSC for services rendered as  a

          putative "insurance  expert" should  not have  been treated as  a

          PSC-office cost,  see Order No.  520 (Jan.  28, 1994), but  as an
                            ___

          attorney fee  chargeable against the  fifty percent share  of the

          attorney-fee fund already recovered by PSC members.  The district

          court  determined that Foulds, who had worked for twenty years as

          an insurance claims manager before attending law school, had been

          hired  not  as an  attorney, but  primarily  to consult  with PSC

          attorneys regarding the nuts-and-bolts interpretation  of various

          insurance policies.  The PSC concedes that Foulds handled certain

          litigation tasks normally  performed by attorneys  (e.g., deposi-
                                                              ____

          tions  in  the liability  case  against  defendant Alexander  and

          Alexander), but  nonetheless insists that this was the most cost-

          efficient  approach, especially  given  Foulds'  intimate  under-

          standing  of the  pertinent insurance  policies.17   Although the

          parties cite no authority  regarding the appropriate criteria for
                              
          ____________________

               16Appellants likewise  attack the district  court determina-
          tion that  they waived  objection to  any PSC-office  costs other
          than the  Foulds fee.   We need not  resolve the issue,  however,
          since appellants'  objections to these  cost-reimbursement claims
          are based  on their contention  that the  PSC failed to  meet its
          burden of proof  and verification under Grendel's Den, a position
                                                  _____________
          which we have already rejected.  See supra Section II.A; see also
                                           ___ _____               ___ ____
          In  re Agent  Orange Prod.  Liab.  Litig., 611  F. Supp.  at 1331
          _________________________________________
          (allowing "[a]ll reasonable, verifiable expenses for running" the
          PMC's centralized office). 

               17The PSC also  protests that  it came as  no "surprise"  to
          appellants  that Foulds  was retained.   But  this is  beside the
          point.   Appellants simply maintain that they were never informed
          that Foulds would be used as an "attorney." 

                                          38

          determining whether one in  Foulds' position should be considered

          an insurance expert  or an  attorney, we are  persuaded that  the

          district  court  ruling  constituted  error in  these  particular

          circumstances.18

                    As  a general rule,  a PSC  member who  serves simulta-

          neously as  an IRPA in  a mass-tort  MDL is  entitled to  recover

          separate compensation from the common fund for the legal services

          performed in  each distinctive  role.  See  Thirteen Appeals,  56
                        ____                     ___  ________________

          F.3d  at 300  n.2.  The  prospect of  more lucrative  returns for

          their services  prompted many IRPAs to compete  for these coveted

          PSC appointments  in 1987, respectively urging  upon the district

          court their particular experience and expertise in previous mass-

          tort suits. See Nineteen Appeals, 982 F.2d at 605 ("[A]ppointment
                      ___ ________________

          to the PSC was much coveted . . . .").

                    On the other hand, all the unsuccessful IRPA candidates

          for PSC appointment must nevertheless contribute toward defraying

          PSC attorney  fees/costs, since the district  court's decision to

          establish a PSC diverts a significant portion of their respective

                              
          ____________________

               18The applicable standard of review is not clear and we find
          no controlling precedent.   Nonetheless, the basic  determination
          as to  what work Foulds  performed would  call for  fact-finding,
          reviewable only  for clear error.  See Damon v. Sun Co., Inc., 87
                                             ___ _____    _____________
          F.3d  1467,  1483 (1st  Cir.1996).   In  this case,  however, the
          parties agree  as to what  work Foulds performed.   On  the other
          hand, the determination as to which fund    attorney fee or  cost
              should bear  the expense  incurred for  a particular  type of
          service, would appear to be a legal question, or a mixed question
          in  which  the  legal  component predominates,  either  of  which
          normally would be reviewed de novo.  As we are persuaded that the
                                     __ ____
          district  court  ruling  cannot  withstand  review  under  either
          standard,  we need  not determine  the  precise standard  at this
                                                                    
          juncture.

                                          39

          contingent fees toward  funding the PSC.  Cf.  id. at 310 (noting
                                                    ___  ___

          that though the PSC  may be "a necessary concomitant  to skillful

          case management of mass tort suits, it nevertheless significantly

          interferes  with [the  respective IRPAs']  expectations regarding

          the fees  that his or her client has agreed to pay").  According-

          ly, due  regard should be  had for these  nonmember-IRPAs' dimin-

          ished fee  expectations, at least to the extent that "the judge .

          . . attempt to  avoid any perception of favoritism"  in mediating

          disputes between PSC  members and nonmember IRPAs.   See Nineteen
                                                               ___ ________

          Appeals, 982 F.2d at 605.  
          _______

                    At the time the nine original PSC members were appoint-

          ed,  from among  forty applicants,  the district  court expressly

          directed, inter alia, that the PSC "shall neither be enlarged nor
                    _____ ____

          diminished in size or membership without Court approval," Pretri-

          al Order  No. 127,  at 29,  that  the PSC  "conduct all  pretrial

          liability  and damage discovery," id.  at 30, and  that "only two
                                            ___

          members  of  the PSC,  or counsel  duly  authorized by  them, may

          question [] deponent[s],"  id.  Given the  acknowledgement by the
                                     ___

          appellees  that Foulds,  on occasion,  served as  a de  facto PSC
                                                              __  _____

          attorney without prior  district court authorization,  his reten-

          tion, to that extent at least, directly contravened  the explicit

          pretrial orders prohibiting any de facto expansion of PSC member-
                                          __ _____

          ship.   Thus,  the district  court's subsequent  authorization of

          reimbursement  to  the PSC  for the  Foulds  fee as  an insurance

          expert  cannot cure the  PSC's unauthorized, unilateral expansion

          of its attorney ranks, without inviting similar circumventions in

                                          40

          the future.

                    We therefore  reject the  suggestion that we  remand to

          permit the  district  court  to  apportion the  $913,503  fee  as

          between the "insurance expert" and "attorney"  services performed

          by Foulds.  We wish  to make clear, however, that the PSC was not

          precluded from retaining Foulds based on a reasonable belief that

          he  was the  best  qualified insurance  expert available,  simply

          because he happened to be an attorney.  Nonetheless, once the PSC

          did retain Foulds, it owed nonmember IRPAs a duty of fair dealing

          to  ensure that  he  undertook no  unauthorized "attorney"  tasks

          which might  have been  performed by some  disappointed candidate

          for PSC membership. 

               2.   PSC-Member Costs 
               2.   PSC-Member Costs 
                    ________________

                    a)   Photocopying Costs
                    a)   Photocopying Costs
                         __________________

                    Appellants  oppose the  twenty-five-cent  page rate  at

          which the  district court permitted reimbursement  to PSC members

          for  photocopying; in all,  amounting to $184,000.   The district

          court explained that  it "fail[ed] to see  the difference between

          PSC  members and any IRPA  charging a client  a reasonable amount

          for  copying charges."  Order No.  510-A, at  8 (Nov.  24, 1993).

          Appellants cite  numerous decisions  which hold the  twenty-five-

          cent  rate unreasonable, and argue that the PSC provided no proof

          that it actually incurred that cost to copy each page. 

                    The  PSC  members offer  three  justifications  for the

          approved  rate.   First, most  photocopying was  done at  the PSC

          office and no  reimbursement claim was made.   Second, appellants

                                          41

          knew early on in the litigation that the PSC had  voted to permit

          its members to claim reimbursement at twenty-five cents per page.

          Third, the  twenty-five-cent rate, standard in  many law offices,

          had  been allowed in the MGM case.  Although the district court's

          cost-allowance  rulings  are  entitled  to   deferential  review,

          Grendel's Den, 749 F.2d at 950, we are persuaded  that its ruling
          _____________

          does not withstand scrutiny.

                    Unlike  the PSC, the IRPAs are free to assess their own

          clients  for photocopying  in  accordance  with their  respective

          contingent fee agreements and any  applicable ethical-code provi-

          sion.  On  the other hand, the PSC is a  creature of the district

          court, whose mission is to promote more efficient litigation, see
                                                                        ___

          MCL     20.223 ("Designated  counsel  should  render services  as
          ___

          economically  as  possible  under  the circumstances.").    In  a

          "common  benefit" case  of this  sort, therefore, the  court must

          ensure  that PSC members recover only their actual costs, with no
                                                      ______

          "profit" margin.  See Fogleman v. Aramco, 920 F.2d  278, 286 (5th
                            ___ ________    ______

          Cir. 1991) ("To the extent that counsel charges a party more than

          actual cost for any  service, be it reproduction of  documents or

          telephone calls, counsel is recovering additional fees."); Spicer
                                                                     ______

          v. Chicago Bd. Options Exch., Inc., 844 F. Supp. 1226, 1260 (N.D.
             _______________________________

          Ill.  1993); In re Washington Pub. Power Supply Sys. Sec. Litig.,
                       ___________________________________________________

          779  F. Supp. 1063,  1111-12 (D.  Ariz. 1990)  (reducing in-house

          photocopying  costs  claimed  at  twenty  or  twenty-five  cents:

          "[t]hat  this amount  may be  charged to  regular clients  by the

          firm, or that it is 'standard' in the firm's area of practice, is

                                          42

          not controlling,  [and] Class  members  will not  be assessed  an

          amount  that produces  a  clear and  unwarranted  profit for  the

          firm"), rev'd on other grounds, 19 F.3d 1306 (9th Cir. 1994).19 
                  _____ __ _____ _______

                    Unlike  the  PSC's  alleged  failure  to  document  the

          "necessariness" and  "reasonableness" of other  types of expenses

          (e.g.,  hotel charges,  air fares),  see supra Section  II.A, its
           ____                                ___ _____

          failure to document its  own in-house photocopying costs presents

          a  fundamental problem.   As in-house photocopying  costs are not

          incurred with "outside" providers  (e.g., hotel, airline, or even
                                              ____

          an outside photocopying service), there is no third-party receipt

          to verify the expenditure and its amount.20
                              
          ____________________

               19See also ABA Comm. on Ethics and Professional Responsibil-
                 ___ ____
          ity,  Formal Op. 379 (1993)  (noting that counsel  is "obliged to
          charge  the client no more  than the direct  cost associated with
          the service  (i.e.,  the actual  cost  of making  a copy  on  the
                        ____
          photocopy  machine)  plus  a  reasonable  allocation of  overhead
          expenses directly  associated with  the provision of  the service
          (e.g., the salary of a  photocopy machine operator)"); id. ("[I]t
           ____                                                  ___
          is impermissible for a  lawyer to create an additional  source of
          profit for the  law firm beyond  that which  is contained in  the
          provision of professional services themselves. The lawyer's stock
          in trade is the sale of legal services, not photocopy paper, tuna
          fish sandwiches,  computer  time or  messenger  services.");  cf.
                                                                        ___
          Alpine Pharmacy, Inc. v. Chas. Pfizer & Co., Inc., 481 F.2d 1045,
          _____________________    ________________________
          1050 (2d Cir. 1973)  (counsel in class actions "serve[]  in some-
          thing of a position of public trust  . . . [and] share[] with the
          court the  burden of protecting  the class action  device against
          public  apprehensions   that  it  encourages  .   .  .  excessive
          attorneys' fees).

               20See In re Motor  Freight Express, 80 B.R. 44  (Bankr. E.D.
                 ___ ____________________________
          Pa. 1987)) ("In  the case of photocopying,  counsel should inform
          the  Court of the  number of copies,  the cost of  each copy, and
          provide, if possible, a breakdown of the reasons why photocopying
          of certain  documents was necessary.");  In re Old  South Transp.
                                                   ________________________
          Co.,  134 B.R.  660,  667 (Bankr.  M.D.  Ala. 1991)  (same);  cf.
          ___                                                           ___
          Berryman  v.  Hofbauer, 161  F.R.D.  341, 344  (E.D.  Mich. 1995)
          ________      ________
          (noting  that,   under  28  U.S.C.      1920,  cost-reimbursement
          claimant's conclusory statement that copying costs were necessary
          is insufficient).

                                          43

                    Even if only by  reasoned approximation, therefore, the

          PSC needed  either to demonstrate  the various components  of its

          in-house photocopying costs (e.g.,  the prorated cost of purchas-
                                       ____

          ing  or leasing  the photocopier,  the copy  paper,  and salaries

          attributable to making the copies),  or show the prevailing  cost

          of comparable outside copy  services, see, e.g., Haroco, Inc.  v.
                                                ___  ____  ____________

          American Nat'l  Bank and Trust Co. of Chicago, 38 F.3d 1429, 1441
          _____________________________________________

          (7th Cir. 1994) (holding  that "charges for in-house reproduction

          may not  exceed the  charges  of an  outside print  shop").   See
                                                                        ___

          Grendel's  Den, 749 F.2d at 950 (noting that the district court's
          ______________

          discretion "must,  of  course, be  exercised  within  evidentiary

          bounds,"  and the court must "provide a 'clear explanation of its

          reasons for the fee award'"). 

                                          44

                    The PSC does  not pretend to  have established that  it

          actually incurred a twenty-five-cent-per-page  photocopying cost.
          ________ ________

          As all  three PSC  justifications for the  requested twenty-five-

          cent rate, supra,  are inapposite to  this essential showing,  we
                     _____

          vacate the district court  ruling, and direct the PSC  members to

          reimburse appellants  for  all  PSC  in-house  photocopying  cost

          claims calculated  at a rate exceeding ten cents per page.  Thus,

          appellees  are to remit $110,400 of the $184,000 disbursed to the

          PSC.

                    b)   Hotel Rates
                    b)   Hotel Rates
                         ___________

                    Lastly,  appellants  contend  that  the  district court

          abused its  discretion by  allowing reimbursement to  various PSC

          members for hotel-room charges ranging from $180 to $450 per day,

          notwithstanding its  pretrial order cautioning that "hotel accom-

          modations/meals should be moderate, not deluxe . . . ."  Pretrial

          Order No. 127, at  44-45.  Appellants assert that  any hotel-room

          charge above the $116 per diem rate then deemed deductible by the

          Internal Revenue  Service, should not have  been reimbursed, that

          less expensive rooms were  available in Puerto Rico, and  that on

          occasion PSC members obtained less expensive rates.  There was no

          abuse of discretion.

                    First, the district court correctly noted that substan-

          tial leeway was due PSC members regarding  their scheduling needs

          during  the frenetic  early stages  of the litigation,  when most

          investigation and discovery had  to be conducted.  See  Order No.
                                                             ___

          584, at 9 (noting  that the PSC conducted over  2300 depositions,

                                          45

          and retained  twenty-nine expert witnesses); id.  ("[The investi-
                                                       ___

          gative]  stage was  decisive in  terms of  immediately preserving

          evidence  and conducting  valuable  investigations regarding  the

          fire  origin and spread.  Time was  of the essence and because of

          this,  the activity  was feverish,  leaving scant  opportunity to

          fine-tune  the  preparation  and  justification  of  expenses.").

          Consequently, the appropriate inquiry  here is not simply whether

          an individual attorney  might have booked a room at  a lower rate

          during  a  given time  period.   Rather,  the PSC  frequently was

          required to  coordinate lodging for many  individuals and without

          much advance notice.

                    Thus, the appropriate inquiry  must be whether the rate

          was reasonable in  relation to the legitimate needs occasioned by

          the litigation tasks at hand.  Against  this backdrop, appellants

          have failed to demonstrate  an abuse of discretion.   None of the

          hotel rates strike  us as  facially abusive  in these  particular

          circumstances.  Cf. Grendel's Den, 749 F.2d at 957 (finding abuse
                          ___ _____________

          of  discretion  where hotel  bill  of  $917 could  be  considered

          "unreasonable on its face"). 

                    Second,  as  with other  PSC-costs,  see supra  Section
                                                         ___ _____

          II.A, appellants  settled, from  the outset and  without protest,

          for  amorphous general  standards,  such as  "moderate" and  non-

          "deluxe" hotel  accommodations, whereas  they were free  from the

          start  to propose  the  $116  per-diem  rate  they  now  suggest.
                    _______

          Furthermore, there has been no showing that the hotel charges for

          which  reimbursement  was  sought  were either  "deluxe"  or  not

                                          46

          "moderate"  in   the  circumstances.21    Finally,   as  concerns
                      __   ___  _____________

          appellants'  contention that  PSC members  did not  keep adequate

          supporting  documentation  relating  to the  "necessariness"  and

          "reasonableness" of  each hotel expense, their  position is fore-

          closed.  See supra Section II.A. 
                   ___ _____

                                         III
                                         III

                                      CONCLUSION
                                      CONCLUSION
                                      __________

                    We  acknowledge  the  rational  force   in  appellants'

          contention that inherent conflicts  of interest exist between the

          PSC  and individual  plaintiffs  in mass-tort  MDLs, yet  serious

          deficiencies  in  the  cost-submission   procedures  nevertheless

          persisted  throughout  this  litigation.    Nonetheless,  despite

          reasonable notice  of the  obvious peril  to their own  financial

          interests, and their clear obligation to forfend  against it from

          the outset, appellants did not turn serious attention to the PSC-

          cost  reimbursement regime  deficiencies until  the Gordian  knot

          could no longer  be undone.   Consequently, we  determine, as  we

          must, that the requested  relief has been rendered impracticable,

          through appellants' inaction, to  the extent that further redress

          at this point would extend this satellite litigation for no cost-

          effective purpose.  See Hensley, 461 U.S. at 437.  
                              ___ _______

                    Accordingly, within  30 days, appellees shall  remit to
                    Accordingly, within  30 days, appellees shall  remit to

          the Clerk of the United States District Court for the District of
          the Clerk of the United States District Court for the District of

                              
          ____________________

               21With respect to the $450 per diem rate, the district court
          supportably  made the specific finding that  the room in question
          was  a suite, shared by several members and situated near facili-
          ties necessary to the litigation tasks to be performed.

                                          47

          Puerto  Rico $1,023,903  (consisting of  the $913,503  previously
          Puerto  Rico $1,023,903  (consisting of  the $913,503  previously

          received  as reimbursement  for PSC  costs incurred  for services
          received  as reimbursement  for PSC  costs incurred  for services

          rendered by  Mr.  Foulds  and  the $110,400  for  the  PSC-Member
          rendered by  Mr.  Foulds  and  the $110,400  for  the  PSC-Member

          photocopying costs),  plus interest calculated at  the legal rate
          photocopying costs),  plus interest calculated at  the legal rate

          (6% per annum), P.R. Laws Ann. tit. 31,   3025, from the dates of
          (6% per annum), P.R. Laws Ann. tit. 31,   3025, from the dates of

          the  respective  disbursements to  the  PSC  from the  litigation
          the  respective  disbursements to  the  PSC  from the  litigation

          expense  fund  established in  Pretrial Order  No.  127.   In due
          expense  fund  established in  Pretrial Order  No.  127.   In due

          course,  the Clerk shall  distribute the remitted  funds to those
          course,  the Clerk shall  distribute the remitted  funds to those

          plaintiffs who  prosecuted the  instant appeal, in  equal shares.
          plaintiffs who  prosecuted the  instant appeal, in  equal shares.

          In  turn,  these  plaintiffs  shall pay  their  respective  IRPAs
          In  turn,  these  plaintiffs  shall pay  their  respective  IRPAs

          whatever share of the rebated funds (if any) may be due the IRPAs
          whatever share of the rebated funds (if any) may be due the IRPAs

          under  their respective  contingent  fee contracts  for  services
          under  their respective  contingent  fee contracts  for  services

          rendered  in prosecuting this appeal.  In all other respects, the
          rendered  in prosecuting this appeal.  In all other respects, the

          district court order is  affirmed.  The parties shall  bear their
          district court order is  affirmed.  The parties shall  bear their

          own costs on appeal.  SO ORDERED.
          own costs on appeal.  SO ORDERED.
                                __ _______

                                          48