IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
TYLER DIVISION

GERALD AHEARN, ET AL.
V.
FIBERBOARD CORPORATION, ET AL.
CIVIL ACTION NO. 6:93CV526

ORDER

I. Introduction

    The parties to this lawsuit negotiated a complex $1.535 billion settlement of Fiberboard and its insurers' future liability for asbestos bodily injury claims. The attorneys involved filed motions and supporting documentation regarding attorneys' fees. The applications for attorneys' fees were referred to United States Magistrate Judge Harry W. McKee for proposed findings and recommendations pursuant to 28 U.S.C. § 636(b). The magistrate judge held a hearing on the award of attorneys' fees, hearing testimony from the attorneys for the plaintiffs' class, the attorneys for the intervenors, and the attorneys for the defendants. On July 21, 1995, the magistrate judge issued his Report and Recommendation. On August 1, 1995, the magistrate judge issued a Supplemental Report and Recommendation on Attorneys' Fees for Owens-Illinois' Counsel, and on August 17, 1995, the magistrate judge issued an Amended Supplemental Report and Recommendation on Attorneys' Fees for Owens- Illinois' Counsel. Attorneys for the Settling Parties and attorneys for the Longshore Intervenors filed objections to the magistrate judge's Report and Recommendation, which are now before this Court.

II. Discussion and Analysis

    This Court reviews a magistrate's report and recommendation of attorneys' fees de novo. Fed. R. Civ. P. 54(d) (2) (D) ; Hensley v. Eckerhart, 461 U.S. 424 (1983).

     The Settling Parties object to the recurring statement in the magistrate judge's Report and Recommendation that the Insurers have agreed to pay $46,050,000 in attorneys fees. This objection is sustained. The Insurers agreed to pay "the fees of Class Counsel as determined and approved by the Court up to a maximum of 3% (of the settlement amount) ." It turns out that 3% of the settlement amount is $46,050,000, but the Insurers did not specifically agree to pay that amount.

    Additionally, the Settling Parties object because the Insurers agreed to pay the fees of Class Counsel, up to 3% of the settlement amount, but did not agree to pay the fees of the Longshore Intervenors' counsel. However, the magistrate judge's Report and Recommendation advises that the fees awarded to the Longshore Intervenors' counsel should be paid from the 3% figure, meaning that the Insurers would be paying the fees of the Longshore Intervenors' counsel. This objection is sustained.

    Furthermore, the magistrate judge reduced the fees of Class Counsel by the amount awarded to the Longshore Intervenors' counsel, concluding that fees for the latter should be paid out of the 3% figure. Because the award for the Longshore Intervenors's counsel is not to come out of this 3% figure, the amount awarded to Class Counsel will be restored to $46,050,000, the full 3%.

    As to the recommended award for the Longshore Intervenors' counsel, the Court agrees and adopts the lodestar calculation of $237,477.20. The efforts of these attorneys in helping present and solve difficult legal problems benefited the entire class. These issues were of sufficient significance that if they had not been resolved they could have defeated the entire settlement agreement. An award of attorney's fees is therefore appropriate.

    However, the Court disagrees that no multiplier is warranted. The problem that the Longshore counsel helped to solve was novel and complex, and required a high degree of skill in a specialized area of law to resolve. The Court therefore under Johnson finds that a multiplier of 2.0 is appropriate. See Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974). Furthermore, because Longshore counsel's efforts allowed the $1.535 billion settlement to go forward, benefiting the entire class, their fees are to be paid from the Trust created by the settlement. See Gottlieb v. Barry, 43 F.3d 474, 488 (10 Cir. 1994); In re Domestic Air Transp. Antitrust Litig., 148 F.R.D., 297, 359 (N.D. Ga. 1993).

    The Court adopts all other analysis, calculations, and recommendations of the magistrate judge.

III. Conclusion

    It is therefore ORDERED that counsel for the Plaintiffs' class be awarded attorneys' fees of $46,050,000.00 and $1,222,742.10 in expenses to be paid by Fibreboard's insurers, Continental Casualty Company, CNA Casualty Company of California, Columbia Casualty Company, and Pacific Indemnity Company. This amount is subject to division in accordance with any agreement between counsel.

    It is further ORDERED that counsel for the Longshore Intervenors be awarded attorneys' fees in the amount of $474,954.40 and $25,257.56 in expenses to be paid out of the settlement Trust.

    Signed this 15th day of August, 1995

    Robert M. Parker
    United States Circuit Judge
    United States Court of Appeals for the Fifth Circuit
    Sitting by Designation