BRIEF OF APPELLANTS WHITE LUNG
ASSOCIATION OF NEW JERSEY, ET AL.

     On May 10, 1996, this Court overturned the Georgine "futures" asbestos settlement in order to "avoid a serious rend in the garment of the federal judiciary that would result from the Court, even with the noblest motives, exercising power that it lacks." Georgine v. Amchem Prods., Inc., 83 F.3d 610, 618 (3d Cir. 1995). In this latest chapter of the Georgine saga, the Court is asked to consider whether the district court "exercis[ed] power that it lacks" in awarding more than $2.3 million in litigation expenses to former class counsel Ronald L. Motley, Joseph F. Rice, and Gene Locks, even though the Supreme Court had already invalidated the class action settlement in which those expenses had allegedly been incurred. See Amchem Products, Inc. v. Windsor, 117 S. Ct. 2231 (1997).

     When the settlement was first presented to the district court, objecting class members, including the appellants here, argued that it was the product of a collusive suit. The objectors relied on the fact that the litigation had been instigated at the urging of the defendants, not the lawyers for the class, and that the case was settled even before it was filed. The objectors also maintained that, on the eve of the class action, the defendants agreed to settle thousands of former class counsel's individual asbestos cases on terms more favorable than those provided in the class settlement. See Georgine, 83 F.3d at 630; see also Koniak, Feasting While The Widow Weeps: Georgine v. Amchem Products, Inc., 80 Cornell L. Rev. 1045, 1064-78 (1995). The district court rejected the claim of collusion, and, although this Court never reached that issue, it did note the considerable public controversy aroused by the conduct of Messrs. Motley, Rice, and Locks. Georgine, 83 F.3d at 630 (citing Symposium, Mass Tortes: Serving Up Just Desserts, 80 Cornell L.Rev. 811 (1995)).

     As discussed below (at 11-15), the settlement agreement itself negates any right to reimbursement of former class counsel's litigation expenses. Moreover, if there were any doubt on the collusion question, the events surrounding former class counsel's requests, and the defendants' response to those requests, eliminates it. Thus, even though the Supreme Court voided the settlement--in other words, even though the class plaintiffs lost the case--former class counsel are seeking their litigation expenses, and the defendant asbestos companies do not object. Indeed, unbeknownst to anyone involved in this litigation, the defendants apparently agreed before the suit was filed to pay class counsel's expenses, regardless of the outcome. This guarantee to cover counsel's litigation costs is conclusive evidence of collusion, and, as we show below (at 16-19), it underscores the district court's error in granting the expense applications.

STATEMENT OF SUBJECT MATTER AND APPELLATE JURISDICTION

     The plaintiff class asserted diversity jurisdiction under 28 U.S.C. 1332. R. 1, Complaint, ¶¶ 1-2. Objecting class members maintained that section 1332 jurisdiction was lacking because the class members did not have the requisite amount in controversy. They also maintained that the district court did not have jurisdiction because the complaint did not present an Article III case or controversy. The district court rejected those arguments, Carlough v. Amchem Prods., Inc., 834 F. Supp. 1437 (E.D. Pa. 1993), and although the appellate courts expressed concern as to the district court's subject matter jurisdiction, neither court reached that question. See Georgine v. Amchem Prods., Inc., 83 F.3d 610, 617, 623 (3d Cir. 1995), aff'd sub nom. Amchem Prods., Inc. v. Windsor, 117 S. Ct. 2231, 2244 n.15 (1997). But see Georgine, 83 F.3d at 635-38 (Wellford, J., concurring)(concluding that plaintiffs lacked Article III standing).

     The district court orders at issue in this appeal were entered on July 17, 1997. Joint Appendix ("JA") 179-80. Those orders were final decisions as to all claims and all parties on the issue of former class counsel's entitlement to an expense award. Appellants filed a timely notice of appeal on August 5, 1997. JA 182. This Court has jurisdiction under 28 U.S.C. 1291.

ISSUE ON APPEAL

     Did the district court lack the power to award former class counsel more than $2.3 million in litigation expenses, allegedly incurred in seeking approval of a class action settlement, after both this Court and the Supreme Court ordered the class decertified on the ground, among others, that the class had not been adequately represented?

STANDARD OF REVIEW

     Because the question whether the district court had the authority to award litigation expenses is a legal issue, this Court should exercise plenary review.

STATEMENT OF THE CASE

     The issue in this appeal is whether the district court had the authority to award more than $2.3 million to former class counsel to cover expenses allegedly incurred in seeking court approval of a class action settlement that this Court and the Supreme Court have rejected. In order to place this issue in context, we first review the proceedings leading to the rejection of the settlement and then turn to the events surrounding the district court's expense awards.

A. The Class Action "Suit" and Settlement.

     In late 1991 or early 1992, lawyers for the Center for Claims Resolution ("CCR" or "defendants")--a consortium of 20 asbestos producers--approached two prominent members of the plaintiffs' asbestos bar, Ronald L. Motley and Gene Locks, in an attempt to negotiate a settlement of all future asbestos claims against the CCR defendants. Messrs. Motley and Locks were then, and are now, the co-chairs of a vast multi-district litigation before Judge Charles Weiner, which effectively involves all federal asbestos personal-injury cases, including those against the CCR defendants.

     On January 15, 1993, with an agreement reached, Mr. Motley, his partner, Joseph F. Rice, and Mr. Locks, joined by CCR, filed the class action complaint, an answer, and the Stipulation of Settlement. The purpose of the suit was not to litigate current asbestos personal-injury claims, but rather to substitute an extra-judicial administrative claims procedure for the remedies available to future asbestos victims in the tort system. JA 125-27 (Deposition of Lawrence Fitzpatrick, CCR's Chief Executive Officer). The case was assigned to Judge Weiner, who promptly granted conditional class certification and appointed Messrs. Motley, Rice, and Locks as class counsel, and then assigned much of the case to Judge Lowell Reed. R. 11, at 1.

     The class was defined to include all U.S. residents occupationally exposed to asbestos for whom the CCR defendants might then, or at any time in the future, bear legal liability, all individuals residing with such persons, and the spouses and other relatives of both groups. See Georgine, 83 F.3d at 619 n.3. The class was estimated to include as many as 20-30 million people. See Georgine v. Amchem Prods., Inc., 157 F.R.D. 246, 325 (E.D. Pa. 1994).

     The vast majority of the class members were "exposure only" plaintiffs, i.e., people exposed to CCR asbestos but not currently suffering from any asbestos-related disease. The settlement established a claims procedure. Under it, all class members who sought compensation in the future were to submit a claim to the CCR providing medical evidence of disease and proof of significant exposure to a CCR asbestos-containing product. Georgine, 83 F.3d at 620. If found eligible, class members would receive cash payments within strict monetary limits. Id.

     Various class members, labor unions, and asbestos advocacy organizations, including appellants here, objected to the court's jurisdiction. They claimed that the district court lacked subject matter jurisdiction over claims of the "exposure-only" class members because those class members did not have the requisite amount in controversy to establish diversity jurisdiction under 28 U.S.C. 1332, and because there was no Article III case or controversy involving the uninjured class members.

     The district court rejected the challenge to its jurisdiction. Carlough, 834 F. Supp. 1437. Later, after a lengthy hearing, the court certified the class under Rule 23(b)(3) and approved the settlement as fair, adequate, and reasonable. Georgine, 157 F.R.D. 246. Shortly thereafter, Judge Reed enjoined the plaintiff class members from prosecuting any suit, in any state or federal court, against any of the CCR defendants. Georgine v. Amchem Prods., Inc., 878 F. Supp. 716, 726-27 (E.D. Pa. 1994). Objecting class members, including the appellants here, appealed that injunction to this Court.

B. This Court's Initial Decision.

     In a unanimous decision, this Court reversed the district court's injunction and held that the class met neither "the [Rule] 23(a) requirements of typicality and adequacy of representation, nor the 23(b)(3) requirements of predominance and superiority." Georgine, 83 F.3d at 626. The Court held first that common questions did not "predominate over any questions affecting only individual [class] members" under Rule 23(b)(3). The Court relied on the large number of individual factual variations, such as differences in types of illness and smoking history, particularly regarding the "futures plaintiffs [who] share little in common, either with each other or with the presently injured class members," 83 F.3d at 626, and concomitant legal variations regarding causation, comparative fault, and the types of damages available to each class member. Id. at 627; see also id. at 632 (also concluding that Rule 23(a)(3) typicality was lacking because "hodgepodge" of claims and factual variations made it impossible for a class representative's claim to be typical of that of any other class member).

     The Court also ruled that "serious intra-class conflicts preclude this class from meeting the adequacy of representation requirement" of Rule 23(a)(4). Id. at 631. The "most salient conflict," the Court concluded (id.), was between presently-injured and future class members; the former would want to maximize current benefits, while the latter would want protections, such as an adjustment for inflation or a back-end opt-out procedure (which allows the class member the option of going directly to court after an illness arises), neither of which the settlement provided. Finally, the Court found that class treatment was not "superior" to individual adjudication under Rule 23(b)(3), because the class members had significant interests in controlling their own litigation since asbestos personal-injury claims are judicially viable on their own. Id. at 632-33.

C. The Supreme Court's Decision.

     On June 25, 1997, the Supreme Court affirmed this Court in a 6-2 decision authored by Justice Ginsburg. Amchem v. Windsor, 117 S. Ct. 2231 (1997). First, tracking this Court's decision, the High Court ruled that the proposed class did not meet Rule 23(b)(3)'s "predominance" requirement, because the class members' alleged "common interest in a fair compromise," id. at 2249, did not remotely overcome the large number of uncommon questions. Id. at 2250 (quoting Georgine, 83 F.3d at 626). And of particular significance to the issue now on appeal, Justice Ginsburg concluded that the class members had not been adequately represented under Rule 23(a)(4). The Supreme Court relied on the same factors that this Court had cited: the inherent conflicts between class members who currently suffer from asbestos-related injuries and class members who may become injured in the future, the lack of back-end opt-out rights, and the elimination of claims for loss of consortium. Id. at 2250-51.

D. The Present Controversy Over Counsel's Expense Request.

     On June 24, 1997, former class counsel Ronald L. Motley and Joseph F. Rice filed an application seeking an award of $138,553.54 in litigation expenses. JA 152-61. On July 1, 1997, former class counsel Gene Locks filed an application seeking $2,166,643.74. JA 162-71. Counsel sought reimbursement for a wide range of expenses, including travel and printing costs connected with their unsuccessful efforts before this Court and the Supreme Court. JA 155-56, 166-67. The applications contained very little explanatory detail. Locks' description of "appellate expenses," for instance, says only that he "edit[ed] briefs" and incurred travel, lodging, and communications expenses relating to oral arguments before this Court and the Supreme Court (JA 167), a curious point since neither Locks nor any of his co-counsel argued those appeals.

     Attached to the expense applications were affidavits of counsel, which were even more vague than the applications themselves. For instance, Mr. Rice claimed $87,143.43 for "contract labor" and $4,602.32 for "supplies," with no additional explanation as to how the labor or supplies related to the litigation. JA 160. Similarly, Mr. Locks demanded a flat $170,000 for "photocopying/printing," more than $1.3 million for "financial experts," and $135,392.00 for "contract labor/consultations." JA 170. Most unusual was Mr. Locks' claim that he had incurred exactly $65,000 for "miscellaneous," without any further detail. JA 170.

     Counsel asserted that CCR was obligated to cover the alleged expenses under Part XVIII of the now-rejected class action settlement agreement (known as the Stipulation of Settlement). Part XVIII provided that, with a few exceptions, the "costs of administering the procedures set forth in this Stipulation, including the costs of the dispute resolution procedures ... shall be paid by the CCR defendants." JA 98. Class counsel did not attempt to explain how this provision--which covered who, as between CCR and individual claimants, would bear the costs of the claims procedures--authorized payment for expenses incurred to obtain approval of the settlement for the class as a whole.

     Moreover, former class counsel failed even to mention Part XXVII.G.4 of the settlement agreement, under which "[a]ny obligations under this Stipulation shall cease ... if ... [the district] Court's judgment approving the settlement is overturned on appeal to the United States Court of Appeals for the Third Circuit, or the United States Supreme Court." JA 109-10. Indeed, although Locks' application was filed a week after the decision in Amchem, it did not even note that the settlement had been overturned by the Supreme Court.

     Appellants White Lung Association of New Jersey, et al. ("WLANJ objectors") filed an opposition to the expense applications. The WLANJ objectors--who were among the principal opponents of the settlement (see Amchem, 117 S. Ct. at 2241 n.7)--include members of the Georgine class and a broad consortium of advocacy groups whose members have been harmed by asbestos. See JA 114-24. They also include the Oil, Chemical, and Atomic Workers International Union, whose membership embraces tens of thousands of members and retirees who have been occupationally exposed to asbestos, some of whom have filed litigation against the CCR defendants. See JA 128-39. The WLANJ objectors are concerned that former class counsel's duties as co-chairs of the multi-district litigation will be compromised by accepting fees to which they are not entitled and which the CCR defendants have no legal obligation to pay.

     The WLANJ objectors opposed the expense applications on four grounds. See generally JA 172-76. First, they explained that the settlement agreement did not justify an expense award because, by its own terms, it was void once the Supreme Court invalidated it. Second, they argued that the provision of the settlement agreement upon which former class counsel relied did not authorize an award of litigation expenses, but dealt only with which costs should be borne by CCR and which by individual claimants in the settlement's claims procedures. Third, they noted that even if the settlement agreement did authorize an award, it could not override the requirement in class actions that counsel may be awarded fees or costs only if their clients prevail in the litigation. Finally, the WLANJ objectors argued that the applications should be denied because they lacked the detail necessary to determine whether the alleged expenses had been properly incurred.

     The CCR defendants did not file a formal response to former class counsel's requests, not even to demand proof that the amounts requested had actually and reasonably been incurred in connection with the case. The defendants did, however, send a private letter directly to Judge Weiner, in which CCR's lead lawyer stated that CCR "will be filing no objection to class counsel's application for reimbursement of costs and expenses." JA 178.(1)

     In one-paragraph orders entered on July 17, 1997, Judge Weiner approved the applications in their entirety. JA 179, 180. The orders authorize CCR to pay Messrs. Locks, Motley, and Rice, provided that their requests for payment are supported by bills, receipts, or like documents, or, if no such documentation is available, by affidavit. Judge Weiner did not cite any legal authority for the awards, did not require that the supporting documentation be filed with the court or be served on interested objectors, and did not make any attempt to separate compensable from non-compensable expenses.

STATEMENT OF RELATED CASES AND PROCEEDINGS

     Different aspects of this case have been before this Court in Georgine v. Amchem Prods., Inc., 83 F.3d 610 (3d Cir. 1995), aff'd Amchem Prods., Inc. v. Windsor, 117 S. Ct. 2231 (1997); Georgine v. Amchem Prods., Inc., 47 F.3d 1160 (3d Cir. 1995)(Table); Carlough v. Amchem Prods., Inc., 10 F.3d 189 (3d Cir. 1993); and Carlough v. Amchem Prods., Inc., 5 F.3d 707 (3d Cir. 1993).

ARGUMENT

A. THE SETTLEMENT AGREEMENT DID NOT AUTHORIZE THE AWARD OF LITIGATION EXPENSES AND, IN FACT, EXPRESSLY NEGATES ANY RIGHT TO THOSE EXPENSES.

     Former class counsel and CCR apparently recognize that, before money could change hands, the district court had to approve any expense payments. See generally In re General Motors Corp. Pick-up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 819-20 (3d Cir.), cert. denied, 116 S. Ct. 88 (1995); Mokhiber v. Cohn, 783 F.2d 26 (2d Cir. 1986). And they have indicated that the only possible basis for an award is the settlement agreement, because no other exception to the American Rule applies. See Opp. of CCR to App. by Baron & Budd for Reimbursement of Expenses, at 3-10, JA 189-96; Motley-Rice App., at 6, JA 157; Locks App., at 7, JA 168. Thus, they rely solely on Part XVIII of the settlement agreement as authorization for the award of litigation expenses made by the district court. Part XVIII provides:

     The costs of administering the procedures set forth in this Stipulation, including the costs of the dispute resolution procedures in Parts IV.B., V.C., VI.B., the Exceptional Medical Panel (Part V.D.), the Extraordinary Claims Panel (Part IX), and the procedures for binding arbitration in Part X shall be paid by the CCR Defendants, except to the extent provided in Part V.C.1.b. and V.C.2.b. If, however, a Claimant elects to resolve a Claim through the tort system under the procedures set forth in Part X, each party (i.e., the Claimant and any CCR Defendant) shall bear its own costs. (JA 98).

     Simply put, this provision does not justify the rulings below because it has nothing to do with the award of litigation expenses incurred by former class counsel in seeking approval of the now-rejected class action settlement. Rather, by its plain terms, this provision concerns only "the costs of administering" the alternative dispute resolution ("ADR") mechanisms set up by the settlement.

     A comparison of the terms of Part XVIII with the types of expense reimbursements sought by Messrs. Motley, Rice, and Locks further illustrates the error committed by the district court. Each of the specific ADR procedures mentioned in Part XVIII--such as the procedures for resolving disputes on pathological diagnoses (Part V.C.) and on statutes of limitation (Part VI.B.) or for obtaining "Extraordinary" relief (Part IX)--concern who, as between individual claimants and the CCR, will bear the cost of individual adjudications under those procedures. See JA 33-43, 56-57, 68-73. This plain meaning is underscored by Part XVIII's particular exceptions, such as the requirement that individual claimants in individual cases--not class counsel--bear the costs of appealing adverse ADR decisions (Parts V.C.1.b. and V.C.2.b.) and of exiting to the tort system (Part X). See JA 44, 48-49, 74-80.

     It is thus not surprising that the expense categories in former class counsel's applications are unrelated to the matters covered by Part XVIII. Mr. Locks, for example, sought reimbursement for "[e]xpenses incurred in negotiating, preparing and concluding [the] Stipulation of Settlement from January 1992 to January 15, 1993" as well as those incurred from January 15, 1993 "to the conclusion of the notice period." JA 164. Obviously, these expenses have no relation to "administering the procedures" of the settlement, which had not even been approved when Mr. Locks incurred them.

     Equally far afield is Mr. Locks' demand to be paid for setting up an "800" number to notify the class during the objection and opt-out period and to "retain[] expert financial and legal witnesses" for the fairness hearing. JA 165. Perhaps most absurd is former class counsel's claim that the settlement agreement requires that they be reimbursed for all expenses incurred in their singularly unsuccessful efforts to sustain the settlement before this Court and in the Supreme Court. JA 155-56, 166-67. In sum, Part XVIII does not remotely support an award of litigation expenses to former class counsel.

     Even if Part XVIII covered the kinds of litigation expenses for which former class counsel seek reimbursement, the district court's decision would still be in error. Part XXVII.G.4 of the settlement agreement provides that all obligations under the settlement "shall cease" if either this Court or the Supreme Court were to reverse the district court's approval of the settlement, which those courts did on May 10, 1996, and June 25, 1997, respectively. Thus, with the settlement no longer in effect, Part XXVII.G.4. eliminates any conceivable basis in the agreement for awarding litigation expenses.(2)

     Mr. Locks' expense application is particularly bizarre in this regard, because, although the application was served nearly a week after the Supreme Court's ruling, it does not even mention that ruling, despite its obvious relevance. Indeed, Locks' application discusses at some length the trial court's opinion approving the settlement as if it were still operative. JA 162-63. This Court should reject this gross misinterpretation of the settlement agreement and hold that the district court was without power, once the settlement was invalidated, to implement or enforce any part of the Stipulation, including any provision purportedly authorizing the award of expenses sought by former class counsel.

      Finally, even if Part XXVII.G.4 did not exist, its terms would be implicit in the Georgine settlement agreement, just as they would be in any class action settlement agreement. If that were not so, Federal Rule of Civil Procedure 23(e)--which requires court approval for all class settlements, including applications for fees and expenses, before they can bind absent class members--would be a nullity, as would appellate review of district court Rule 23(e) determinations. See generally General Motors, 55 F.3d 768. In this case, for instance, no one would seriously suggest that the class members are still bound by the settlement's medical eligibility criteria (JA 28-55), or that CCR is still obligated to waive statutes of limitations under the circumstances set forth in Parts VI.A and XIV. See JA 56, 83-84. In sum, the Supreme Court's decision in Amchem, by its own force, invalidates the settlement and all of the benefits and obligations thereunder, including any provisions relating to an award of litigation expenses.(3)

B. EVEN IF THE SETTLEMENT AGREEMENT HAD AUTHORIZED AN AWARD OF LITIGATION EXPENSES, THE DISTRICT COURT HAD NO AUTHORITY TO MAKE SUCH AN AWARD.

     Even if the settlement agreement could be read to obligate CCR to pay former class counsel's expenses under the circumstances presented here, the district court still would have been without authority to award those expenses. In General Motors, 55 F.3d 768, the parties to a class action settlement argued that absent class members lacked standing to object to a large attorney's fee award because the defendant had agreed to pay the fee separate from the non-monetary relief awarded to the class. This Court rejected that argument, noting that the fee agreement was irrelevant, that the fee together with the class members' relief was a "constructive common fund," and that, therefore, "a thorough judicial review of fee applications is required in all class action settlements." Id. at 819-20. The reason for such judicial scrutiny is the potential for collusion, that is, "that the lawyers might urge a class settlement at a low figure or on a less-than-optimal basis in exchange for red-carpet treatment for fees." Id. at 820 (quoting Weinberger v. Great Northern Nekoosa Corp., 925 F.2d 518, 524 (1st Cir. 1991)); see also Piambino v. Bailey, 757 F.2d 1112, 1139 (11th Cir. 1985)(same); Prandini v. National Tea Co., 557 F.2d 1015, 1020 (3d Cir. 1977). Although the foregoing cases involved attorney's fees, the same principle applies to litigation expenses, especially here, where the amount awarded--more than $2.3 million--is so large.(4)

     Indeed, the need for independent judicial scrutiny of all fee and expense applications, rather than deference to an agreement between the defendants and plaintiffs' counsel, applies here to a far greater degree than it did in General Motors, where at least the plaintiffs instigated the lawsuit and the fee agreement was operative only if the settlement was approved. See General Motors, 55 F.3d at 819 (noting that fees would be paid only if a settlement were approved on remand). Here, the defendants invited former class counsel to file suit. See Amchem, 117 S. Ct. at 2239. And although not evident on the face of the settlement agreement, the parties claim that, before the case was filed, CCR agreed to cover all expenses incurred by Messrs. Motley, Rice, and Locks, regardless of whether the settlement was approved.(5) To allow an award of litigation expenses in these circumstances would create a breeding ground for just the type of collusion that occurred here. Put differently, an affirmance would send a signal to plaintiffs' lawyers that they could disregard the interests of their clients at any stage of the litigation since they will be paid in any event. Cf. United States v. Johnson, 319 U.S. 302, 303-04 (1943)(case dismissed as collusive effort to invoke Article III jurisdiction, in part because defendant agreed to pay plaintiff's costs).

     Former class counsel have not, and cannot, point to any authority that permits an award of fees or expenses in a class action settlement where, as here, the settlement was ultimately disapproved by the courts. See Jenkins v. Missouri, 115 F.3d 554, 557 (8th Cir. 1997)("Naturally, reversal on appeal of the merits can change a prevailing party into a non-prevailing party, and require that earlier fee awards be vacated"); cf. Mokhiber, 783 F.2d at 27-29 (payment of fees under private settlement impermissible after court had dismissed derivative action on forum non conveniens grounds). No federal fee-shifting statute of which we are aware permits such a result. Similarly, the common law requires the establishment of a common fund or benefit before a fee may be awarded. See Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 257 (1975). And for good reason. In the fee-shifting context, Congress does not want to encourage the bringing of frivolous cases or award attorneys where the clients have not benefitted. And in neither context should the courts be a lightning rod for collusion or the sponsors of a lawyers' employment program. In sum, regardless of the terms of the settlement agreement, the district court had no authority to award litigation expenses under the circumstances presented here.

CONCLUSION

    For the reasons stated above, the decision of the district court should be reversed.

Respectfully submitted,


Brian Wolfman
Alan B. Morrison
Public Citizen Litigation Group
1600 20th Street, N.W.
Washington, D.C. 20009
(202) 588-1000

Attorneys for Appellants White Lung
November 5, 1997 Association, et al.

CERTIFICATE OF COUNSEL


I, Brian Wolfman, counsel of record in this appeal, am a member of the bar of this Court.

__________________________

Brian Wolfman
November 5, 1997

CERTIFICATE OF SERVICE


I hereby certify that, on November 5, 1997, I caused to be served by first class mail two copies of the foregoing Brief of Appellants on the following counsel who have entered their appearance in this appeal:

Joseph F. Rice
Ness, Motley, Loadholt, Richardson & Poole
151 Meeting Street, Suite 600
Charleston, SC 29402

L. Joel Chastain
Ness, Motley, Loadholt, Richardson & Poole
2202 Jackson Street
P.O. Box 365
Barnwell, SC 29812

John M. Mason
Greitzer & Locks
1500 Walnut Street
Philadelphia, PA 19102

John Aldock
Shea & Gardner
1800 Massachusetts Avenue, N.W.
Washington, DC 20036


________________________________
Brian Wolfman

1. 1 This letter was not served on any counsel of record, not even on counsel for the WLANJ objectors. The letter became known only because it was filed by the district court when the court granted the expense applications.

2. 2 Part XXVII.G. provides in relevant part:

Operational Date. This Stipulation shall have perpetual existence, and the CCR shall begin operating under its terms (including making appropriate payments) at the close of the time period for individuals to opt out of the class pursuant to the Court's orders implementing Fed. R. Civ. P. 23(c)(2). Any obligations under this Stipulation shall cease, however, if any of the following occurs: * * *

4. The Court's judgment approving the Stipulation is overturned on appeal to the United States Court of Appeals for the Third Circuit, or the United States Supreme Court. (JA 109-10).

3. In preparing this appeal, we became aware of a June 1995 district court order authorizing the payment of more than $1.9 million in litigation expenses to Messrs. Motley and Rice. JA 151; see also JA 140-50 (expense application). For the reasons given above, and because the appellate courts have since invalidated the settlement, the 1995 payment should be returned.

4. 4 Although the decisions below apply only to the award of litigation expenses, we assume that class counsel also believe that they are entitled to their attorney's fees under Part XIX of the settlement agreement, which provided that CCR would pay those fees in an amount set by the Court. See JA 99. Presumably, if the judgment below is affirmed, requests for attorney's fees, in amounts that dwarf the expense requests, will be forthcoming on the same "contract" theory espoused here.

5. 5 See Schmitt, "Payments to Plaintiffs' Lawyers in Failed Asbestos Deal Stir Anger," Wall St. Journal, July 31, 1997, at B10 (CCR lead counsel: "We agreed that we would pay their expenses, and we honor our commitments").