McDaniel et al v. QWest Communications Corporation et al

Filing 342

MOTION by Plaintiffs Brent Bauer, James Becherer, Judy Boren, Wayne Smith, Tri-County Feed Mill, Inc., Willaredt Acres, Inc. for judgment AS TO ARBITRATING COUNSEL ONLY, ON THE FINAL ARBITRATION AWARD, AND FOR THE COURT TO ADOPT THE FEE-AND-COST ALLOCATION IN THE FINAL ARBITRATION AWARD AS TO THE NONARBITRATING COUNSEL (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C)(Kauffman, Kathleen)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
DON WAYNE McDANIEL, et al.,
individually and as a representative of a class
of persons similarly situated,
Plaintiffs,
v.

Case No. 05 C 1008

QWEST COMMUNICATIONS COMPANY,
LLC et al.,

Hon. Rebecca R. Pallmeyer

Defendants.
CERTAIN ARBITRATING COUNSEL’S JOINT MOTION FOR ENTRY OF
JUDGMENT, AS TO ARBITRATING COUNSEL ONLY, ON THE FINAL
ARBITRATION AWARD, AND FOR THE COURT TO ADOPT THE FEE-AND-COST
ALLOCATION IN THE FINAL ARBITRATION AWARD AS TO THE NONARBITRATING COUNSEL
Pursuant to 9 U.S.C.A. § 9, certain of the Arbitrating Counsel1 request that the Court
enter judgment, as to the Arbitrating Counsel only, on the March 6, 2012 Fiber-Optic-Cable Fee
Allocation Arbitration Award and Basis for Decision (the “Final Arbitration Award”)2.

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The Arbitrating Counsel comprise (1) the “45-firm group,” consisting of four sub-groups
totaling 45 law firms led by Ackerson Kauffman Fex, P.C., Cohen & Malad, LLP, Solberg,
Stewart, Miller & Tjon, Ltd., and Hare, Wynn, Newell & Newton; (2) the “Litman Group,”
consisting of Seth A. Litman, Esq. and Alembik, Fine & Callner; (3) John C. Sullivan, Jr., Esq.;
and (4) the estate of Hugh V. Smith, Jr., Esq. (deceased). The 45-firm group files this Motion on
behalf of the 45-firm group only. The 45-firm group asked the Litman Group, Mr. Sullivan, and
the estate of Mr. Smith to join in this Motion but they declined to do so at this time. Presumably,
they will separately inform the Court of their respective positions concerning this Motion.
Pursuant to the Court’s January 5, 2012 Order, a copy of this Motion is being provided to the
Special Master, Judge Wayne R. Andersen (Ret.). (Doc. #340.)

2

A copy of the Final Arbitration Award (Doc. #299) is attached as Exhibit A.

Additionally, the 45-firm group requests that the Court adopt the fee-and-cost allocation in the
Final Arbitration Award as to the Non-Arbitrating Counsel3.
In support of this Motion, the 45-firm group states as follows:
1.

In 2006 and 2007, various plaintiffs’ counsel executed the Agreement to

Negotiate, Mediate and, if Necessary, Arbitrate Division of Attorney-Fee and Costs Award (the
“Med-Arb Agreement”).4 The Med-Arb Agreement created a three-step process—negotiation,
mediation, and binding arbitration (if necessary) — for determining the division among the
various plaintiffs’ counsel of attorneys’ fees and expenses awarded in the right-of-way litigation..
Med-Arb Agreement ¶¶ 1-3.
2.

On August 29, 2011, the Court entered its Order Awarding Attorneys’ Fees and

Reimbursing Expenses to Settlement Class Counsel and Approving Payment of Incentive
Awards to Settlement Class Representatives (the “Final Fee Award”), in which the Court
approved the award of $3,453,000 in fees and expenses (the “Illinois Fee”). The Court issued
the Final Fee Award in connection with settlement of this matter — which is generally known as
the Illinois fiber-optic-cable right-of-way litigation.5
3.

As part of the Final Fee Award, the Court ruled that “the Parties are expected to

proceed pursuant to the mediation/arbitration agreement—signed by all but two attorneys
involved in this case—concerning allocation of the attorneys’ fees and reimbursement of
expenses awarded herein.” Final Fee Award at 10.

3

The Non-Arbitrating Counsel are limited to the “Susman/Gotfryd group,” consisting of
Susman, Heffner & Hurst, LLP, William T. Gotfryd, Esq., Murray, Tillotson, Nelson & Wiley,
and Donaldson & Guin, Ludens Potter Melton & Calvo.

4

A copy of the Med-Arb Agreement is attached as Exhibit B. (See also Doc. #290-6.)

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A copy of the Final Fee Award is attached as Exhibit C.

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4.

As the Court ordered, and the Med-Arb Agreement required, all the Arbitrating

and Non-Arbitrating Counsel attempted to negotiate an acceptable allocation of the Illinois Fee.
Unfortunately, their efforts were unsuccessful, although the 45-firm group was able to negotiate
the internal division of all fees and costs that courts have awarded or may award to it.
5.

After counsel exhausted the negotiation step of the process, all the Arbitrating

Counsel and Non-Arbitrating Counsel mediated this matter before mediators James D. Wilson
and Eric D. Green. See Final Arbitration Award at 2.
6.

The mediation attempted to resolve the allocation of all fees and expenses that

courts have awarded or may award in any of the right-of-way matters nationwide (the “Gross
Fees”). Med-Arb Agreement ¶ 2; Final Arbitration Award at 2. The counsel that participated in
the mediation included both the Arbitrating Counsel and the Non-Arbitrating Counsel. See id;
Final Arbitration Award at 2. As part of the mediation, all parties provided “extensive and
comprehensive” submissions that detailed the hours and expenses each firm incurred during the
decade-long course of the right-of-way litigation.

Final Arbitration Award at 3.

The

submissions generally described each counsel’s claimed contributions to the national and stateby-state litigation and settlement efforts. Id. Additionally, many of these mediation submissions
commented on the claimed contributions of other counsel. Id.
7.

Counsel’s efforts to resolve this matter through mediation also failed. After two

face-to-face sessions with Counsel, the mediators declared an impasse and the arbitration was
commenced. Id. at 2. Under the terms of the Med-Arb Agreement, mediators James D. Wilson
and Eric D. Green also served as the arbitrators (the “Arbitrators”). Med-Arb Agreement ¶ 3.
8.

The scope of the arbitration was limited to allocating the Illinois Fee. And it did

not involve the personal appearance of counsel, but rather was conducted on the basis of the

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voluminous papers submitted in connection with the mediation. The only group of counsel that
did not participate in the arbitration was the Susman/Gotfryd group. Final Arbitration Award at 1.
But as explained in further detail below, in making the Final Arbitration Award, the Arbitrators
did consider the mediation submission of the Non-Arbitrating Counsel, as well as the Arbitrators’
own observations of the Non-Arbitrating Counsel’s contributions to the litigation and settlement
of the national and Illinois right-of-way litigation. Moreover, per the terms of the Med-Arb
Agreement, the Arbitrators allocated a portion of the Illinois Fee to the Non-Arbitrating Counsel.
9.

On March 6, 2012, the Arbitrators rendered the Final Arbitration Award. The

Arbitrators based the Final Arbitration Award on: (1) the evidence and supporting documentation
that all parties submitted in the mediation (including the Non-Arbitrating Counsel); (2) Various
Arbitrating Counsel’s supplemental submissions in the arbitration; and (3) the Arbitrators’
“unusually extensive and comprehensive” personal observations over the last ten years of the
various counsels’ relative contributions to the litigation and resolution of the right-of-way
litigation, including their personal observations of the Non-Arbitrating Counsel. Id. at 3-7.
10.

Under the terms of the Med-Arb Agreement, the Final Arbitration Award

included fees and costs allocated to counsel that did not sign the Med-Arb Agreement (and that
chose not to participate in the arbitration) but that claimed a portion of the Illinois Fee. See MedArb Agreement ¶¶ 3, 11; Final Arbitration Award at 8-10. The Arbitrating Counsel are all bound
by the Final Arbitration Award, including the allocation of the Illinois Fee to the Non-Arbitrating
Counsel. See Med-Arb Agreement ¶¶ 3, 11.

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11.

Based on all the mediation and arbitration submissions and their personal

observations, the Arbitrators allocated the Illinois Fee as follows:
45-firm group
Litman Group
Sullivan (and Smith)
Non-Arbitrating Counsel (the Susman/Gotfryd Group)
TOTAL

$2,982,052
$36,382
$14,875
$419,691
$3,453,000

Final Arbitration Award at 10.
12.

Under the terms of the Med-Arb Agreement, any signatory may apply to any

district court with jurisdiction to have it enter judgment on the Final Arbitration Award. See
Med-Arb Agreement ¶ 3.
13.

Under Paragraph 3 of the Med-Arb Agreement and 9 U.S.C.A. § 9, the 45-firm

group respectfully requests that the Court enter judgment, as to the Arbitrating Counsel only, on
the Final Arbitration Award.
14.

Additionally, the 45-firm group requests that the Court adopt the Final Arbitration

Award and its allocation of the Illinois Fee as to the Non-Arbitrating Counsel.
15.

Adoption of the Arbitrators’ allocation of the Illinois Fee as to the Non-

Arbitrating Counsel is appropriate because the Final Arbitration Award reflects the relative
contributions of all the attorneys to the creation of the settlement fund from which the Court
awarded the Illinois Fee. See generally Final Arbitration Award. See also 4 Newberg on Class
Actions § 14:9 (4th ed.) (overall class attorneys’ fee award should be allocated “among
participating counsel based on the reasonable efforts and relative responsibilities they exercised”
leading to the class settlement or award). The Arbitrators’ determination of each counsels’
relative contributions is based on all the parties’ extensive submissions — including a 38-page
submission and exhibits from the Non-Arbitrating Counsel — as well as the Arbitrators’

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observations of each counsels’ contributions over the last ten-plus years of the litigation and
settlement negotiations. Final Arbitration Award at 3-7. On its face, the Final Arbitration
Award is well-reasoned, well-supported, and equitable.
CONCLUSION
Under a valid and enforceable agreement, binding on the Arbitrating Counsel, the
allocation of the Illinois Fee was arbitrated. The Arbitrators considered all necessary and
appropriate information and ultimately entered a well-reasoned, well-supported, and equitable
allocation among the appropriate counsel. The Non-Arbitrating Counsel participated in the
mediation that preceded the arbitration.

They submitted the information necessary for the

Arbitrators to determine their share of the Illinois Fee — information that identified the NonArbitrating Counsel’s efforts that contributed to the settlement of the Illinois right-of-way
litigation. Based on all the foregoing, the 45-firm group requests that the Court: (1) enter
judgment as to the Arbitrating Counsel on the Final Arbitration Award and (2) adopt the
allocation of the Illinois Fee in the Final Arbitration Award as to the Non-Arbitrating Counsel.
Dated: March 23, 2012

Respectfully submitted,
ACKERSON KAUFFMAN FEX, PC
/s/ Kathleen C. Kauffman
Kathleen C. Kauffman (IL Bar #6191384)
Nels J. Ackerson
1701 K Street, NW, Suite 1050
Washington, DC 20006
Tel: [phone]
Fax: [phone]
Email: [e-mail]

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Of Counsel
Andrew W. Cohen
KOONZ,MCKENNEY, JOHNSON,
DEPAOLIS & LIGHTFOOT, LLP
2001 Pennsylvania Avenue, NW, Suite 450
Washington, DC 20006

Dan Millea
ZELLE HOFMANN VOELBEL &
MASON LLP
500 Washington Avenue South, Suite 4000
Minneapolis, MN 55415

Scott D. Gilchrist
COHEN & MALAD, LLP
One Indiana Square, Suite 1400
Indianapolis, IN 46204

Henry J. Price
PRICE,WAICUKAUSKI & RILEY, LLC
301 Massachusetts Avenue
Indianapolis, IN 46204

Scott A. Powell
HARE, WYNN, NEWELL & NEWTON
The Massey Building, Suite 800
2025 Third Avenue North
Birmingham, AL 35203

Irwin B. Levin
COHEN & MALAD, LLP
One Indiana Square, Suite 1400
Indianapolis, IN 46204

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