

July 7, 1995      UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT

                                             

Nos. 94-1156, 94-1164, 94-1409, 94-1414, 94-1422, 94-1423,
     94-1426, 94-1427, 94-1430, 94-1438, 94-1439, 94-1440,
     94-1442

           IN RE:  THIRTEEN APPEALS ARISING OUT OF THE

           SAN JUAN DUPONT PLAZA HOTEL FIRE LITIGATION.

                                             

                           ERRATA SHEET

     The opinion of this  Court issued May 31, 1995,  is ammended
as follows:

     Delete cases #94-1430 and  #94-1442 from the Court's opinion
and judgement  of May 31, 1995.

                  UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT

                                             

Nos. 94-1156, 94-1164, 94-1409, 94-1414, 94-1422, 94-1423,
     94-1426, 94-1427, 94-1438, 94-1439, 94-1440

           IN RE:  THIRTEEN APPEALS ARISING OUT OF THE

           SAN JUAN DUPONT PLAZA HOTEL FIRE LITIGATION.

                                             

          APPEALS FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF PUERTO RICO

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

                                             

                              Before

                      Selya, Circuit Judge,                                                    

                  Bownes, Senior Circuit Judge,                                                        

                     and Cyr, Circuit Judge.                                                     
                                             

     Judith  Resnik,  with  whom  Dennis E.  Curtis,  Richard  A.                                                                           
Bieder, and Koskoff, Koskoff  &amp; Bieder, P.C., were on  brief, for                                                      
appellants Bieder, et al.
     Jose E. Fernandez-Sein on brief for appellant Nachman.                                     
     Steven C. Lausell, with whom Jimenez, Graffam &amp; Lausell  was                                                                      
on brief, for appellee Jimenez, Graffam &amp; Lausell.
     Will Kemp, with whom Stanley Chesley, Wendell Gauthier, John                                                                           
Cummings, David Indiano and Harrison, Kemp &amp; Jones, Chtd. were on                                                                   
brief, for remaining appellees.

                                             

                           May 31, 1995

                                             

          SELYA,  Circuit Judge.    These appeals  require us  to                    SELYA,  Circuit Judge.                                         

revisit the war zone where two groups of plaintiffs' lawyers have

struggled over the proposed  allocation of roughly $68,000,000 in

attorneys'  fees.    One  camp, dissatisfied  with  the  district

court's  latest formula  for distributing  the fees,  attacks the

court's order on three  fronts.  The disgruntled lawyers  contend

that the district  court (1) violated  their due process  rights,

(2)  used an  improper method  to determine  the awards,  and (3)

divided  the available  monies in  an arbitrary  and unreasonable

manner.   We  find appellants'  first two  plaints to  be without

merit, but  we agree with them that allocating 70% of the fees to

the  appellees   constituted  an  abuse  of   the  trial  court's

discretion.   And, because we  are reluctant to  prolong a matter

that, like the proverbial cat, seems to have  nine lives, we take

matters into our own hands and reconfigure the fee awards.

I.  BACKGROUND          I.  BACKGROUND

          The lay of the land is familiar.  We  explored much the

same  terrain in an earlier encounter, see In re Nineteen Appeals                                                                           

Arising Out of San Juan Dupont  Plaza Hotel Fire Litig., 982 F.2d                                                                 

603  (1st Cir. 1992), and  a plethora of  opinions describing the

details of  the underlying litigation  pockmark the pages  of the

Federal  Reports, see,  e.g., id.  at 605  n.1  (offering partial                                           

listing).  Thus, a brief overview of the litigation will suffice.

          In 1987, the Judicial Panel on Multidistrict Litigation

consolidated  over  270  cases  arising  out  of  the  calamitous

conflagration that had ravaged the San Juan Dupont Plaza Hotel on

                                3

the evening of  December 31, 1986.   See In  re Fire Disaster  at                                                                           

Dupont  Plaza  Hotel,  660  F. Supp.  982  (J.P.M.L.  1987)  (per                              

curiam).   The designated trial  judge, Hon.  Raymond L.  Acosta,

handpicked  certain  attorneys, denominated  collectively  as the

Plaintiffs' Steering Committee (PSC), to act as  lead and liaison

counsel for the plaintiffs.   In Nineteen Appeals, we  summarized                                                           

the  roles  played  by  the  PSC and  the  individually  retained

plaintiffs' attorneys (IRPAs), respectively:

          The PSC members looked after the big picture:
          mapping the overarching discovery, trial, and
          settlement  strategies  and coordinating  the
          implementation  of  those  strategies.    The
          IRPAs handled individual client communication
          and   other   case-specific  tasks   such  as
          answering   interrogatories    addressed   to
          particular    plaintiffs,    preparing    and
          attending the depositions  of their  clients,
          and taking depositions which bore on damages.
          The IRPAs also worked with Judge Bechtle [the
          "settlement judge"] on  a case-by-case  basis
          in his  efforts to identify  and/or negotiate
          appropriate settlement  values for individual
          claims.   When  Judge Acosta  determined that
          the    plaintiffs     should    try    twelve
          representative   claims   as   a   means   of
          facilitating   settlement,   a  collaborative
          composed of three PSC members and  four IRPAs
          bent their backs to the task.

Nineteen Appeals, 982 F.2d at 605.                          

          The  combined  efforts  of  all concerned  generated  a

settlement  fund approximating $220,000,000.   The district court

computed  the  payments  due  under the  various  contingent  fee

agreements, deducted  the total  (roughly  $68,000,000) from  the

overall settlement proceeds, and placed that sum in an attorneys'

                                4

fee  fund (the Fund).1   In his  initial attempt to  disburse the

Fund, Judge Acosta used an enhanced lodestar to compute the PSC's

fees,  and  awarded some  $36,000,000 (52%  of  the Fund)  to PSC

members  in their  capacity as  such, leaving  the balance  to be

distributed among the IRPAs.  A group of lawyers (mostly, but not

exclusively, "non-PSC" IRPAs)2  succeeded in vacating  this award

on the ground that the proceedings were procedurally flawed.  See                                                                           

id. at 610-16.             

          The  victory proved  to be  illusory.   On remand,  the

district  court  abandoned  the  lodestar approach,  adopted  the

percentage of  the fund (POF)  method, and recalculated  the fees

based on what it  termed "the relative significance of  the labor

expended by the  IRPAs and PSC members in instituting, advancing,

or  augmenting  the plaintiffs'  settlement  fund."   Using  this

                                                  

     1In  addition to  attorneys' fees,  the lawyers  are seeking
reimbursement of certain costs  and expenses from the plaintiffs'
share of the settlement proceeds.  The district court  has yet to
make a final  determination relative  to costs, and  we have  not
considered  that  aspect of  the matter.    Thus, our  opinion is
without  prejudice  to  the  parties' claims  and  objections  in
respect to costs.

     2Since each  PSC member is also an IRPA in the sense that he
or  she has been individually retained by one or more plaintiffs,
the  PSC  members  will  receive  payments  in  both  capacities.
Nevertheless,  due to the wide disparity in the number of clients
that each PSC member  represents, a generous PSC award  stands to
benefit certain  PSC members  who have relatively  few individual
clients and  to disadvantage those who  represent many claimants.
See Nineteen Appeals, 982  F.2d at 607.  Similarly,  an oversized                              
PSC  award is  even more  detrimental to  the interests  of those
IRPAs who are not members of the PSC, as each dollar that is paid
to the PSC shrinks the  pot that otherwise will be divided  among
the IRPAs.   See id.   Due to  this phenomenon, some  PSC members                              
were  among  the lawyers  who  fought  to  overturn the  original
allocation.

                                5

methodology, the court awarded 70% of the Fund to PSC members  in

their capacity  as such,  thereby increasing  their share  of the                                                      

fees  by  some  $11,000,000,  while simultaneously  reducing  the                                                                      

IRPAs' share  of the  Fund by  the  same amount.   These  appeals

ensued.

II.  ADEQUACY OF THE PROCEEDINGS          II.  ADEQUACY OF THE PROCEEDINGS

          In a virtual  echo of the  claims advanced in  Nineteen                                                                           

Appeals,  appellants (all  of  whom are  IRPAs) characterize  the                 

proceedings by which the district court determined the allocation

of  the Fund as unfair.  Specifically, appellants assert that the

revamped  procedural  framework  violated  their  rights  to  due

process, and that, in all events, the court abused its discretion

in  erecting  the framework.    We consider  these  assertions in

sequence.

                         A.  Due Process.                                   A.  Due Process.                                                  

          In Nineteen  Appeals, 982 F.2d at  610-16, we discussed                                        

the  due  process considerations  implicated  in  the fee-setting

aspect of this litigation.  We again use the triangular construct

of Mathews v. Eldridge, 424 U.S. 319 (1976), to determine whether                                

the  district court  afforded the  IRPAs "the  opportunity to  be

heard `at a meaningful time and in a meaningful manner.'"  Id. at                                                                        

333 (quoting Armstrong v. Manzo, 380 U.S. 545, 553 (1965)).                                         

          The first  Mathews factor  involves a  specification of                                      

"the  private interest  that  will be  affected  by the  official

action . . . ."  Id. at 335.  Rehashing this point would serve no                              

useful  purpose.   We conclude,  for  precisely the  same reasons

                                6

articulated in our earlier opinion, that the IRPAs have a salient

private interest in the fees due them for services rendered.  See                                                                           

Nineteen Appeals, 982 F.2d at 612.                          

          The second  Mathews factor  requires us to  examine the                                       

risk  of error presented by the district court's procedures.  See                                                                           

Mathews, 424  U.S. at 335.   The last  time around  we determined                 

that the hearing format invited error.  See Nineteen Appeals, 982                                                                      

F.2d at 612-13.  Appellants urge  us to find that the proceedings

on remand represented no real  improvement and again presented an

intolerable  risk of error   this time because the district court

refused  to  hold  an  evidentiary hearing,  to  allow  free-form

discovery, or  to permit cross-examination  of PSC  members.   We

conclude, for reasons  described more fully in Part II(B), infra,                                                                          

that  the format revisions cured  the infirmities that  led us to

invalidate the district court's earlier effort.

          The third Mathews factor  necessitates an assessment of                                     

the  public  interest, including  "the fiscal  and administrative

burdens"  that  improved  procedural requirements  would  entail.

Mathews,  424 U.S.  at 335.   Here,  too, past  is prologue:   we                 

studied this point in the course of the first appeal and remarked

the  "substantial  governmental  interest  in  conserving  scarce

judicial resources."  Nineteen Appeals, 982 F.2d at 614.  We also                                                

recognized the  reasonableness of  keeping tight controls  on the

fee dispute in light of the large number of lawyers involved, the

lengthy shelf life  of the  litigation, and  the Supreme  Court's

admonition  that  "[a] request  for  attorney's  fees should  not

                                7

result  in a second major litigation."  Hensley v. Eckerhart, 461                                                                      

U.S. 424,  437 (1983).   This  important public  interest remains

intact.

          To  sum  up,  the  district court  reformed  its  ways,

significantly  moderating the restrictions  originally imposed on

the  IRPAs.  The court  levelled the playing  field by permitting

the IRPAs to present their  case in precisely the same  manner as

their  litigation adversaries.    Moreover, the  court gave  both

camps adequate notice  and a meaningful opportunity  to be heard.

From  a  procedural standpoint,  then,  the  adjudicative process

employed  on remand met the test of fundamental fairness and gave

appellants the process that was due.

                     B.  Abuse of Discretion.                               B.  Abuse of Discretion.                                                      

          Appellants  strive  to  convince us  that  Judge Acosta

abused  his discretion  in  authoring  three procedural  rulings,

namely,  (1) denying  appellants'  entreaty  that an  evidentiary

hearing  be  held;  (2)  denying  the  bulk  of  their  discovery

requests;  and   (3)  denying   them  the  privilege   of  cross-

examination.  We are not persuaded.

          1.  Lack of an Evidentiary Hearing.  We need  not tarry                    1.  Lack of an Evidentiary Hearing.                                                      

over the  supposed  error  in  refusing to  hold  an  evidentiary

hearing.3   A  district  court  is  not  obliged  to  convene  an
                                                  

     3The lower court did not make this decision casually.  After
reminding the protagonists of  his "detailed first hand knowledge
of the  proceedings," Judge Acosta observed  that "any meticulous
fact-finding  regarding the contemporaneous  time records  of the
PSC  is   unnecessary  because  the  lodestar   method  has  been
abandoned;  and both parties have been granted the opportunity to
file extensive  pleadings describing  their contributions  to the

                                8

evidentiary hearing as a means of resolving every attorneys'  fee

dispute.   See Nineteen Appeals,  982 F.2d at  614; Weinberger v.                                                                        

Great  N. Nekoosa  Corp.,  925 F.2d  518,  528 (1st  Cir.  1991).                                  

Because evidentiary  hearings in fee disputes  are not mandatory,

the decision not to convene one is  reviewed deferentially, using

an  abuse-of-discretion standard.   See  Weinberger, 925  F.2d at                                                             

527.    In conducting  that  review,  appellate tribunals  cannot

woodenly apply a preconceived matrix.  Rather, flexibility is the

watchword.  Because a district court has available to it  a "wide

range  of  procedures" through  which it  can  "bring a  sense of

fundamental  fairness to the  fee-determination hearing  while at

the  same  time  husbanding  the  court's  resources,"   Nineteen                                                                           

Appeals,   982  F.2d  at  614,  flexibility  implies  substantial                 

discretion.    Therefore,  when   the  court  chooses  among  the

available options, it can mix and match.

          This  emphasis on  flexibility  is  heightened when  an

evidentiary  hearing is requested.   Even in  situations far more

inviting than  fee disputes, we  have been chary  about mandating

such hearings.   See, e.g.,  Aoude v.  Mobil Oil Corp.,  862 F.2d                                                                

890,  894 (1st  Cir.  1988) (observing  that  matters often  "can

adequately be `heard'  on the  papers").  We  favor a  "pragmatic

approach"  to the question of  whether, in a  given situation, an

evidentiary   hearing  is  required.    Id.  at  893.    The  key                                                     

                                                  

litigation process."  He  also stated that, "for the  most part,"
the  fee  controversy  presented "no  material  factual  disputes
regarding  the tasks undertaken by the PSC as contrasted to those
undertaken by the IRPAs."

                                9

determinant is  whether, "given  the nature and  circumstances of

the case  . . . the  parties [had] a fair  opportunity to present

relevant facts and  arguments to  the court, and  to counter  the

opponents'  submissions."  Id. at  894.  Taking  this approach in                                        

Aoude, we upheld the issuance of a preliminary injunction without               

an evidentiary  hearing, noting, inter  alia, that the  judge was                                                      

"obviously familiar" with the facts and  had afforded the parties

several opportunities to make written submissions.  Id.                                                                 

          The Aoude model can readily  be adapted to requests for                             

hearings  anent  attorneys'  fees.   Appellants'  protest  cannot

survive the  resultant comparison.   Judge  Acosta knew  the case

inside  and out.  He  gave the protagonists  ample opportunity to

present both factual data  and legal arguments.   He set no  page

restrictions  on  written  submissions, permitting  the  IRPAs to

proffer thousands of pages of documents both in opposition to the

PSC's requisitions and  in support  of their  own fee  requests.4

These filings  allowed the  IRPAs to go  into painstaking  detail

both as to their own contribution to the litigation and as to the

reasons why the PSC members deserved a relatively modest slice of

                                                  

     4To  give the  reader a  taste of  what transpired,  we note
that,  on remand, the  IRPAs' initial submission,  filed June 10,
1993, included a  memorandum of law regarding attorneys' fees and
expenses (110  pages, with a  40-page appendix), an  affidavit by
the IRPAs'  accountant, William Torres, detailing  the results of
his  analysis of  the PSC's claims  (approximately 650  pages), a
memorandum giving  an overview  of the efforts  and contributions
made  by the IRPAs (33 pages), and individual IRPA assessments of
efforts   and   contributions   made   on   behalf   of   clients
(approximately 2700 pages).  The IRPAs also filed a reply  to the
PSC's  main submission,  again  unhampered by  page restrictions,
that totalled approximately 430 pages.

                                10

the pie for their services in that capacity.

          To be  sure, this  is a  high-stakes dispute,  but that

fact,  in and of itself,  does not warrant  handcuffing the trial

court.  Matters  of great consequence  are often decided  without

live  testimony.   See,  e.g., id.  at  893-94 (holding  that  an                                            

evidentiary  hearing   is  not   obligatory  in  respect   to  an

application  for  preliminary   injunction);  United  States   v.                                                                      

DeCologero,  821 F.2d  39, 44  (1st  Cir. 1987)  (same, regarding                    

criminal defendant's motion to reduce his sentence); Amanullah v.                                                                        

Nelson, 811 F.2d 1, 16-17 (1st Cir. 1987) (same, regarding habeas                

review  of   asylum   applicant's  detention   during   exclusion

proceedings).  In the last analysis, what counts is not the prize

at  stake,   but   whether   particular   parties   received   "a

fundamentally fair chance to present [their] side  of the story."

Nineteen Appeals, 982 F.2d at 611.                            

          The controlling legal principle,  then, is that parties

to a  fee dispute do not have the right to an evidentiary hearing

on demand.  When the written record affords an adequate basis for

a reasoned determination  of the  fee dispute, the  court in  its

discretion  may  forgo  an  evidentiary hearing.    Here,  it  is

pellucid  that  the   litigants'  extensive  written  submissions

comprised  an   effective  substitute   for  such  a   hearing   

particularly since the judge had  lived with the litigation  from

the  start and had an encyclopedic knowledge  of it.  Under these

circumstances,  the court  did not  err in  refusing to  hold yet

another  hearing.  See, e.g.,  Norman v. Housing  Auth., 836 F.2d                                                                 

                                11

1292,  1303 (11th  Cir.  1988) (upholding  propriety of  awarding

attorneys' fees  without an evidentiary hearing  "based solely on

affidavits in  the record"); Bailey  v. Heckler,  777 F.2d  1167,                                                         

1171  (6th Cir. 1985) (explaining  that an evidentiary hearing is

not  required so  long  as the  record  is sufficient  to  permit

meaningful review);  National  Ass'n  of  Concerned  Veterans  v.                                                                       

Secretary  of  Defense,  675 F.2d  1319,  1330  (D.C. Cir.  1982)                                

(holding that  district court  may in its  discretion decline  to

convene   a   fee   hearing  where   information   generated   by

"documentation  accompanying  the  fee  application  and  through

appropriate discovery  . . .  provides an adequate  factual basis

for  an award"); Konczak  v. Tyrrell, 603  F.2d 13, 19  (7th Cir.                                              

1979)  (indicating  that "depth  of  the briefing"  can  render a

hearing on fees unnecessary), cert. denied, 444 U.S. 1016 (1980);                                                    

see also                  

DeJesus  v. Banco Popular de P.R., 951  F.2d 3, 7 (1st Cir. 1992)                                           

(finding no  error in  lack of an  evidentiary hearing  regarding

counsel fees absent  some "special  issue as to  which the  court

needed the assistance of counsel or witnesses").

          2.  Restrictions on Discovery.   Apart from the refusal                    2.  Restrictions on Discovery.                                                 

to convene  a full-scale  hearing, appellants also  complain that

the  court  demonstrated  too  great  an  aversion  to  discovery

initiatives.    But  unlimited  adversarial discovery  is  not  a

necessary   or even  a usual   concomitant  of fee disputes,  see                                                                           

National Ass'n of  Concerned Veterans, 675  F.2d at 1329  (noting                                               

that,  in general, fee contests  should not involve  "the type of

                                12

searching discovery that  is typical where  issues on the  merits

are presented"), and, in the circumstances of this case, we think

that the court acted  well within the province of  its discretion

in refusing to allow more elaborate discovery. 

          The Due  Process Clause does  not require  freewheeling

adversarial discovery as standard equipment in fee contests.  See                                                                           

Nineteen Appeals, 982  F.2d at  614.  This  case exemplifies  the                          

wisdom of  the rule.   The district  court did not  shut off  all

discovery,  and   the  procedures  that  the   court  employed   

especially the compelled  exchange of  documentation    minimized

the need for  additional discovery  by giving the  IRPAs the  raw

material  that they needed to sift through the particulars of the

PSC's  fee application.  In  other words, the  court ensured that

the  IRPAs had  access to  all the  data reasonably  necessary to

formulate  their  objections,5  including all  the  PSC  members'

time-and-expense   submissions,   summaries   thereof,   detailed

accounts of the procedures used by the PSC to gather, review, and

audit time  records, and the working  papers, correspondence, and

documentation  generated  by  the  PSC's  accountants  during the

compilation  process.   With this  banquet of  information spread

before them, appellants then partook of the court's liberality in

allowing them to formulate extensive written submissions.

          Furthermore,  the  court  below  also had  a  right  to
                                                  

     5The proof  of the  pudding is  in the  record.   The IRPAs'
initial submission  to  the district  court highlighted  specific
objections to  the PSC's fee  request, and,  following the  PSC's
rejoinder, the IRPAs' reply  took precise aim at the  accuracy of
the supporting materials.

                                13

consider the  extent to  which appellants' request  for discovery

threatened to multiply  the proceedings and turn  the fee dispute

into  a   litigation  of  mammoth  proportions.     Judge  Acosta

characterized the  IRPAs'  discovery foray    which  encompassed,

inter  alia, production of tax  returns for employees  of all PSC                     

members' firms  and  details  anent  fringe  benefits  (including

vacations,  maternity  leaves,  and  the  provision  of  training

programs)   as  "a discovery scheme of needless  and unreasonable

proportions."    It  is  surpassingly  difficult  to  fault  this

characterization.

          The sweeping  nature  of appellants'  request,  coupled

with  the fact that  the focus of  the hearings had  shifted away

from the lodestar  and toward a  task-oriented assessment of  the

lawyers' participation  in the litigation, give  substance to the

district  court's fears  that  granting appellants'  supplication

would have  started the  parties on  the road  to a  wasteful and

time-consuming "satellite litigation."  On  this ramified record,

appellants  can demonstrate  neither  a high  level  of need  for

incremental discovery nor preponderant equities in favor of their

request.  Hence, we  cannot say that the district  court's denial

of  further  discovery  constituted   an  abuse  of  the  court's

considerable discretion.  See,  e.g., National Ass'n of Concerned                                                                           

Veterans, 675 F.2d at 1329 (holding that  district court "retains                  

substantial  discretion based on its view of the submissions as a

whole" to limit further discovery).

          3.   Lack of Cross-Examination.   As a  subset of their                    3.   Lack of Cross-Examination.                                                  

                                14

claims regarding  the supposed necessity for  both an evidentiary

hearing  and additional  discovery, appellants  contend that  the

district court should have allowed them to cross-examine  the PSC

members  concerning   the  hours  that  they   logged  and  their

contribution to the creation of the Fund.  This is merely a back-

door  attempt  to  rekindle  an extinguished  flame  and  satisfy

appellants' thwarted desire for  either an evidentiary hearing or

extensive depositions.

          In  Chongris v.  Board  of Appeals,  811  F.2d 36  (1st                                                      

Cir.), cert. denied, 483 U.S. 1021  (1987), we held that, in  the                             

context  of an administrative  hearing, lack of cross-examination

did not work a violation of due  process.  See id. at 41-42.   So                                                            

it is here.   Moreover, because the lower court  could reasonably

conclude  that   its  liberal  policy  with   regard  to  written

submissions,  in  conjunction  with  the  IRPAs'  access  to  PSC

documentation, obviated  the need for further  probing via cross-

examination, pretermitting cross-questioning  did not  constitute

an abuse  of discretion.  Cf. Copeland v. Marshall, 641 F.2d 880,                                                            

905 n.57 (D.C.  Cir. 1980) (en banc) (noting that  a live hearing

is  not necessary if "the adversary papers filed by plaintiff and

defendant . . . adequately illuminate the factual predicate for a

reasonable fee").

          Appellants' attempt  to anchor  their claimed  right to

cross-question PSC members on language excerpted from our earlier

opinion, see, e.g.,  Nineteen Appeals,  982 F.2d  at 615,  leaves                                               

them  adrift.   We  flatly  reject  the  suggestion, noting  that

                                15

appellants, to their discredit, have pieced the argument together

by  cutting  words  loose   from  their  logical  and  contextual

moorings, and ignoring  limiting language that contradicts  their

interpretation.

          The  bottom line is that the district court did not err

in  refusing  to convene  an  evidentiary  hearing, declining  to

permit   more  wide-ranging   discovery,   and   barring   cross-

examination.  Thus, whether the issue is cast in a constitutional

mold   or  considered   under   an  abuse-of-discretion   rubric,

appellants'  challenge  fails.    Either  way,  the  adjudicative

process employed on remand passes muster.  

III.  APPROPRIATENESS OF THE METHODOLOGY          III.  APPROPRIATENESS OF THE METHODOLOGY

          Appellants  claim that  the district  court erred  as a

matter  of law  in  embracing the  POF  method, rather  than  the

lodestar  method, during  the fee-setting  pavane.  The  issue of

whether  a  district  court  may  use   a  given  methodology  in

structuring an award of attorneys' fees is one of law, and, thus,

is  subject to  de novo  review.   See Liberty  Mut. Ins.  Co. v.                                                                        

Commercial Union Ins. Co., 978 F.2d 750, 757 (1st Cir. 1992).                                   

                   A.  Historical Perspective.                             A.  Historical Perspective.                                                       

          A  few  introductory  comments  may  lend  a  sense  of

perspective.  Traditionally, under  what has come to be  known as

the  "American Rule," litigants bear their own counsel fees.  See                                                                           

Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 245                                                        

(1975).    This rule  is  not without  exceptions.   Fee-shifting

statutes  comprise one  category of  exceptions.   See,  e.g., 42                                                                       

                                16

U.S.C.    1988, 2000e-5(k).  So, too, certain equitable doctrines

furnish  a basis  for  departing from  the  American Rule.    See                                                                           

Nineteen Appeals, 982 F.2d at 606.                          

          When  statutory  exceptions pertain,  we  have directed

district courts, for the most part,  to compute fees by using the

time-and-rate-based lodestar method.  See, e.g., United States v.                                                                        

Metropolitan Dist. Comm'n, 847 F.2d 12, 15 (1st Cir. 1988); Segal                                                                           

v. Gilbert Color Sys., Inc., 746  F.2d 78, 85-86 (1st Cir. 1984);                                     

see also  City of  Burlington  v. Dague,  112 S.  Ct. 2638,  2641                                                 

(1992) (acknowledging, in the statutory  fee-shifting context, "a

strong  presumption that the  lodestar represents  the reasonable

fee")  (citation and internal quotation marks  omitted).  A court

arrives at  the  lodestar  by determining  the  number  of  hours

productively spent on the  litigation and multiplying those hours

by reasonable hourly rates.   See Blum v. Stenson,  465 U.S. 886,                                                           

896-902  (1984); Hensley, 461 U.S. at 433; Lipsett v. Blanco, 975                                                                      

F.2d 934, 937 (1st Cir. 1992).

          Although  the  lodestar  method  is  entrenched in  the

statutory fee-shifting  context, a growing number  of courts have

looked  elsewhere  in  "common  fund" cases     a  category  that

encompasses cases in which  "a litigant or lawyer who  recovers a

common fund for the benefit of persons  other than himself or his

client is entitled to  a reasonable attorney's fee from  the fund

as  a whole."    Boeing Co.  v.  Van Gemert,  444  U.S. 472,  478                                                     

                                17

(1980).6    The  POF   method  represents  one  such  alternative

approach to  fee-setting.  This  method functions exactly  as the

name implies:  the court shapes  the counsel fee based on what it

determines  is a reasonable percentage  of the fund recovered for

those benefitted by the  litigation.  See, e.g., Camden  I Condo.                                                                           

Ass'n, Inc. v. Dunkle, 946 F.2d 768, 771 (11th Cir. 1991).                               

          Contrary to popular belief,  it is the lodestar method,

not the POF  method, that breaks from precedent.   Traditionally,

counsel fees in common  fund cases were computed as  a percentage

of   the  fund,   subject,  of   course,  to   considerations  of

reasonableness.  See, e.g., Central R.R. &amp; Banking Co. v. Pettus,                                                                          

113 U.S. 116, 127-28 (1885).  It was not until the mid-1970s that

judicial infatuation with the  lodestar method started to spread.

See Swedish Hosp. Corp. v. Shalala, 1 F.3d  1261, 1266 (D.C. Cir.                                            

1993) (chronicling  history of the debate).  Many courts embraced

the new approach,  and a wall  of cases soon  arose.  See,  e.g.,                                                                          

Copeland,  641 F.2d at 890-91;  Furtado v. Bishop,  635 F.2d 915,                                                           

919-20  (1st Cir. 1980); City  of Detroit v.  Grinnell Corp., 560                                                                      

F.2d  1093, 1098 (2d Cir. 1977); Grunin v. International House of                                                                           

Pancakes,  513 F.2d 114, 128  (8th Cir.), cert.  denied, 423 U.S.                                                                 

864 (1975);  Lindy Bros. Builders,  Inc. v.  American Radiator  &amp;                                                                           

                                                  

     6The  common  fund  doctrine  is founded  on  the  equitable
principle  that those  who have  profited from  litigation should
share  its costs.  While  class actions furnish  the most fertile
ground for the doctrine, its reach  is not limited to such cases.
See  Sprague  v. Ticonic  Nat'l Bank,  307  U.S. 161,  167 (1939)                                              
(holding that "the  absence of an avowed class suit  . . . hardly
touch[es] the power of equity in doing justice as between a party
and the beneficiaries of his litigation").

                                18

Standard Sanitary Corp., 487 F.2d 161 (3d Cir. 1973).                                 

          A crack in the  wall appeared in 1984 when  the Supreme

Court  took pains to distinguish the  calculation of counsel fees

under fee-shifting statutes from  the calculation of counsel fees

under the common fund  doctrine.  The court described  the latter

group as comprising cases in which "a reasonable fee  is based on

a percentage of the fund bestowed on the class."   Blum, 465 U.S.                                                                 

at 900 n.16.  Since Blum involved the application of the lodestar                                  

under a fee-shifting statute, footnote 16 is dictum.  Yet, it can

hardly be dismissed as a slip  of the pen, and considered  dictum

emanating from  the High  Court carries great  persuasive force.7

See  Dedham Water Co. v.  Cumberland Farms Dairy,  Inc., 972 F.2d                                                                 

453, 459 (1st Cir. 1992) (stating general rule that courts should

give "considerable weight" to  dictum that appears "considered as

opposed to casual"); McCoy  v. Massachusetts Inst. of Technology,                                                                          

950 F.2d 13, 19 (1st Cir. 1991) (same), cert. denied,  112 S. Ct.                                                              

1939 (1992).

          Hard on  the heels of  footnote 16, the  Third Circuit,

which  had been  in  the forefront  of  the movement  toward  the

lodestar method, see, e.g., Lindy Bros., supra, sounded a note of                                                        

caution.   Its  blue-ribbon  task  force,  although  recommending

continued use of the lodestar technique in statutory fee-shifting

                                                  

     7For this  reason, we find it unsurprising that other courts
have  cited  footnote  16  as  evidence  that  the  Blum  Court's                                                                  
"approval of the lodestar method in  the fee-shifting context was
not intended to overrule prior common fund cases. . . ."  Swedish                                                                           
Hosp.,  1 F.3d at 1268; see also Brown v. Phillips Petroleum Co.,                                                                          
838 F.2d 451, 454 (10th Cir.), cert. denied, 488 U.S. 822 (1988).                                                     

                                19

cases,  concluded that all fee awards in common fund cases should

be  structured as a  percentage of the  fund.  See  Report of the                                                            

Third Circuit Task Force, Court Awarded Attorney Fees, 108 F.R.D.                                                               

237, 255 (1985) (hereinafter "Third Circuit Report").

          Together, footnote 16 and  the Third Circuit Report led

to a  thoroughgoing reexamination of the suitability of using the

lodestar method in  common fund  cases.   This reexamination,  in

turn, led to more frequent application  of the POF method in such

cases.  See Federal Judicial Center, Awarding Attorneys' Fees and                                                                           

Managing Fee Litigation  63-64 (1994) (hereinafter "FJC  Report")                                 

(canvassing  case law).  Today, the D.C. Circuit and the Eleventh

Circuit require the  use of the POF method  in common fund cases,

see Swedish Hosp., 1 F.3d at 1271; Camden I, 946 F.2d at 774, and                                                     

four other circuits confer discretion upon the  district court to

choose between the lodestar and POF methods in common fund cases,

see In re Washington Pub. Power  Supply Sys. Sec. Litig., 19 F.3d                                                                  

1291, 1295 (9th Cir.  1994); Rawlings v. Prudential-Bache Props.,                                                                           

Inc., 9 F.3d 513, 516 (6th Cir. 1993); Harman v. Lymphomed, Inc.,                                                                          

945  F.2d 969, 975 (7th  Cir. 1991); Brown  v. Phillips Petroleum                                                                           

Co., 838 F.2d  451, 454 (10th  Cir.), cert. denied, 488  U.S. 822                                                            

(1988).   We  have yet  to pass  upon the  legitimacy of  the POF

method in common fund cases.8
                                                  

     8Of course, we alluded to the trend in Weinberger, stating:                                                                

          We  are aware  of the  tendency  exhibited by
          some  courts,  particularly  in  common  fund
          cases, to jettison the lodestar in favor of a
          `reasonable  percent  of the  fund' approach.
          Because the  absence of any true  common fund

                                20

             B.  Computing Fees in Common Fund Cases.                       B.  Computing Fees in Common Fund Cases.                                                              

          We  have previously  classified this  as a  common fund

case.9   Appellants do not  dispute this  taxonomy, but,  rather,

they  insist  that Judge  Acosta erred  in  using the  POF method

because the lodestar technique should hold sway in all attorneys'                                                                

fee  determinations.10    Though  appellants  concede  that  this
                                                  

          renders  the  percentage approach  inapposite
          here,  we cannot  fault the  district court's
          implied  premise that  the  lodestar  is  the
          soundest available alternative.

Weinberger,  925  F.2d at  526  n.10 (citations  omitted).   This                    
statement  has  been  interpreted as  conferring  discretion upon
district courts to use the POF method  in common fund cases, see,                                                                          
e.g., Wells v.  Dartmouth Bancorp,  Inc., 813 F.  Supp. 126,  129                                                  
(D.N.H. 1993), and, in some quarters, as indicating  a preference
for the use of that method, see, e.g., FJC Report, supra, at 64 &amp;                                                                  
n.305.

     9We reached  this conclusion because the  Fund emanates from
"the disproportionate strivings of a few (the PSC members) to the
benefit   of  a   much   larger  number   (the  plaintiffs   and,
derivatively, the IRPAs)," Nineteen Appeals, 982 F.2d at 610, and                                                     
possesses   each  of  the  three  distinguishing  characteristics
identified by the Boeing Court:                                  

          First,  the   .  .  .  beneficiaries  can  be
          determined with complete assurance.   Second,
          while the  extent  to which  each  individual
          plaintiff and each  IRPA benefitted from  the
          PSC's  efforts  cannot  be   quantified  with
          mathematical  precision,  it  is possible  to
          study the PSC's  contribution to the  overall
          success of the litigation and approximate the
          incremental  benefits   with  some  accuracy.
          Finally,  the  district  court controls  [the
          Fund],  and,  therefore, possesses  the ready
          ability to prorate the  cost of achieving the
          incremental benefits in an equitable manner.

Id. (citing Boeing, 444 U.S. at 478-79).                            

     10In  a sermon  that  is difficult  to  reconcile with  this
display  of newfound  religion, appellants  preach intermittently
that  Judge Acosta's  initial suggestion    that  the  PSC's fees

                                21

court  has not  yet  decided  what  method(s) of  fee  allocation

appropriately may  be invoked in  common fund cases,  they assert

that  the lodestar is  a far better alternative  and that its use

should be mandated in this circuit.

          We think  that a more malleable  approach is indicated.

Thus, we hold  that in a common fund case  the district court, in

the exercise  of its  informed discretion, may  calculate counsel

fees either  on a percentage of the fund basis or by fashioning a

lodestar.   Our decision is  driven both by  our recognition that

use  of the  POF method  in common  fund cases is  the prevailing

praxis and by  the distinct  advantages that the  POF method  can

bring to bear in such cases.

          In  complex litigation   and  common fund cases, by and

large, tend  to  be complex     the POF  approach is  often  less

burdensome to administer than  the lodestar method.  See  Swedish                                                                           

Hosp.,  1 F.3d at 1269  (finding POF approach  "less demanding of               

scarce  judicial resources").   Rather than forcing  the judge to

review the time records of  a multitude of attorneys in  order to

determine  the   necessity  and  reasonableness   of  every  hour

expended, the POF method permits the judge to focus on "a showing

that  the fund conferring a  benefit on the  class resulted from"

the lawyers' efforts.  Camden I, 946 F.2d at 774.  While the time                                         

                                                  

would  probably be  computed  using  the  POF  method  and  would
probably  aggregate "less  than 10%"    should  be enshrined  and
enforced by us.  We have already ruled  that this suggestion "did
not  bind  the district  court to  a  ten percent  cap," Nineteen                                                                           
Appeals, 982 F.2d  at 612, and appellants have  proffered nothing                 
that prompts us to revisit this ruling.

                                22

logged is still relevant to the court's inquiry   even under  the

POF method, time  records tend to illuminate  the attorneys' role

in  the creation  of  the fund,  and,  thus, inform  the  court's

inquiry into  the reasonableness  of a particular  percentage11  

the shift in focus lessens the possibility of collateral disputes

that  might transform  the  fee proceeding  into  a second  major

litigation.

          For another  thing, using  the POF method  in a  common

fund  case enhances efficiency, or, put in the reverse, using the

lodestar method in  such a case  encourages inefficiency.   Under

the latter approach, attorneys not only have a monetary incentive

to spend as  many hours as possible (and bill  for them) but also

face a  strong  disincentive  to early  settlement.    See  Third                                                                    

Circuit  Report, 108 F.R.D.  at 247-48  (finding that,  in common

fund cases,  the lodestar method "encourag[es]  lawyers to expend

excessive  hours"  and  "creates  a disincentive  for  the  early

settlement of  cases"); see also  FJC Report, supra, at  310.  If                                                             

the  POF  method  is  utilized, a  lawyer  is  still  free to  be

inefficient  or to drag her feet in pursuing settlement options  

but, rather  than being rewarded for  this unproductive behavior,

she will likely reduce her own return on hours expended.

          Another  point  is  worth  making:    because  the  POF

technique is  result-oriented  rather than  process-oriented,  it

                                                  

     11For this reason,  and because  the district  court in  any
given case may  eschew the POF  method in favor  of the  lodestar
method, we urge attorneys  to keep detailed, contemporaneous time
records in common fund cases.

                                23

better approximates the  workings of the  marketplace.  We  think

that  Judge Posner  captured the  essence of  this point  when he

wrote that "the market in fact pays not  for the individual hours

but for  the ensemble  of services  rendered  in a  case of  this

character."   In re Continental  Ill. Sec. Litig.,  962 F.2d 566,                                                           

572 (7th  Cir. 1992).   In fine, the  market pays for  the result

achieved.

          Let us be perfectly clear.   We do not pretend that the

POF  approach   is  foolproof,  or   that  it  suffers   from  no

disadvantages.      For   example,   it   may   result   in   the

overcompensation  of  lawyers  in  situations  where actions  are

resolved  before   counsel  has  invested   significant  time  or

resources.  See  Six Mexican Workers  v. Arizona Citrus  Growers,                                                                          

904  F.2d  1301, 1311  (9th Cir.  1990)  (counselling use  of the

lodestar method rather than  the POF method when "the  percentage

recovery  would be either too small or  too large in light of the

hours devoted to the  case or other relevant factors");  see also                                                                           

Third Circuit Report,  108 F.R.D. at 242  (noting "criticism from

within the  profession" that fees under the  POF method sometimes

are   "disproportionate  to   actual  efforts  expended   by  the

attorneys").  The  converse is also true;  law firms may  be less

willing to  commit needed  resources to  common fund cases,  even

those  for  the  public  benefit,  if  the   likely  recovery  is

relatively  small.   It can  also be  argued that  the percentage

method  may lend itself to  arbitrary fee awards  by some courts.

See  generally  Washington  Pub.  Power,  19  F.3d  at  1294  n.2                                                 

                                24

(counselling that, to avoid arbitrary fee awards, neither the POF

nor  the lodestar  method "should  be applied  in a  formulaic or

mechanical fashion"); cf. Laffey  v. Northwest Airlines Inc., 746                                                                      

F.2d 4,  12-13 (D.C. Cir. 1984)  (attributing widespread adoption

of   lodestar  method   to   desire  to   reduce   "arbitrariness

characteristic  of court  awards of  attorneys fees"  under other

methods),  cert.  denied,  472  U.S.  1021  (1985).    Given  the                                  

peculiarities of common fund cases and the fact that each method,

in  its own  way, offers  particular advantages,  we believe  the

approach  of choice is to accord the district court discretion to

use whichever method,  POF or lodestar, best  fits the individual

case.   We  so  hold, recognizing  that  the discretion  we  have

described  may, at  times, involve  using a  combination  of both

methods  when appropriate.   Cf.  Metropolitan Dist.  Comm'n, 847                                                                      

F.2d  at  15 (advocating  flexible  approach  to determining  fee

awards because an overly  mechanical rule "sacrifice[s] substance

on the altar of form").

            In  arriving at this  decision, we reject appellants'

suggestion that Dague,  a case in which the Court  barred the use                               

of  contingency enhancements in respect to fee-shifting statutes,

compels a different conclusion.  Although the Dague  Court stated                                                             

that  "[t]he `lodestar' figure has,  as its name suggests, become

the guiding light of our fee-shifting jurisprudence,"  112 S. Ct.

at  2641,  and  remarked that  it  had  "generally"  abjured "the

contingent-fee  model     which  would  make   the  fee  award  a

percentage  of the  value of  the relief  awarded in  the primary

                                25

action     [in  favor  of]  the  lodestar  model,"  id.  at  2643                                                                 

(citations,  footnotes, and  internal quotations  omitted), these

statements were made in  the course of a discussion  of statutory

fee-shifting  cases.    The  Court's  reasoning   reflected  this

environment;  the  opinion  stressed  the  limiting  effects   of

statutory language in fee-shifting cases, see id., and set out "a                                                           

number of reasons for  concluding that no contingency enhancement

is compatible with the fee shifting statutes at issue," id.  This                                                                     

case,  unlike  Dague,  involves  a  common  fund  rather  than  a                              

statutory fee-shifting  scheme.   Since Dague, fairly  read, does                                                       

not  require abandonment  of  the POF  method  typically used  in

common  fund cases, it is  not controlling here.   Accord Swedish                                                                           

Hosp., 1 F.3d at  1267-70 (concluding that Dague does not bar use                                                          

of the POF method in common fund cases).

                      C.  Applying the Rule.                                C.  Applying the Rule.                                                     

          Having placed our imprimatur on a decisional model that

maximizes flexibility, we  move from the general to  the specific

and turn next to the order  under review.  In this connection, we

rule that  the court below did  not err in purposing  to allocate

fees  based  on  the   POF  method,  emphasizing  the  attorneys'

"relative  contribution" to  the creation  of the  Fund.   In the

first  place, Judge  Acosta had  originally stated  an  intent to

compensate the  PSC  members under  a percentage  approach.   See                                                                           

supra  note 10.  In "justifiable reliance" on this statement, see                                                                           

Nineteen Appeals, 982 F.2d at 614 n.19, the majority of the IRPAs                          

did  not maintain  time records.    The difficulties  inherent in

                                26

implementing the  lodestar under these circumstances  militate in

favor  of sticking to the POF method.  In the second place, as we

have  explained  above,  the  POF   approach  offers  significant

structural  advantages in  common fund  cases, including  ease of

administration,  efficiency, and  a  close approximation  of  the

marketplace.   Finally,  a further case-specific  factor counsels

against using the lodestar here.   Unlike the prototypical common

fund case, this case involves a subdivision of a fee fund amassed                                                     

by the operation of  sundry contractually determined percentages.

Thus, using the POF  method to effectuate the subdivision  of the

Fund  brings a  sort of  elemental symmetry  to   the fee-setting

process.  Relatedly, because this case calls for a subdivision of

a fee fund,  rather than a  unitary award of  fees, "a trier  who

attempted punctiliously to follow  the classic lodestar  formula,

to  the exclusion  of  all  else,  could  theoretically  wind  up

awarding the entire fee pool to  the PSC, leaving nothing for the

IRPAs."  Id.  at 614  n.20.  Use  of the POF  method negates  any                      

possibility of this totally indefensible result.

IV.  APPROPRIATENESS OF THE ALLOCATION          IV.  APPROPRIATENESS OF THE ALLOCATION

          In allocating counsel fees, the district court assigned

70%  of the Fund  to the PSC,  leaving 30% to be  split among the

IRPAs.12    Appellants object.    We review  this  allocation for

abuse of discretion, see, e.g., Foley v. City of Lowell, 948 F.2d                                                                 

10,  18 (1st Cir. 1991), mindful that,  in respect to fee awards,

                                                  

     12The  PSC members  will, of  course,  share ratably  in the
latter portion of the award as well.  See supra note 2.                                                         

                                27

the  trial court's  latitude is  "extremely broad,"  Lipsett, 975                                                                      

F.2d at  937.   After scrutinizing  the Brobdingnagian  record in

this  case,  we  are convinced  that  the  court  below erred  in

weighing  and synthesizing the factors  relevant to a division of

the fees, and in settling upon so lopsided a split.

                       A.  Cutting the Pie.                                 A.  Cutting the Pie.                                                    

          In  the proceedings  on remand,  Judge  Acosta lavished

praise  on all the plaintiffs' lawyers, lauding the "high caliber

legal representation" provided by both the PSC and the IRPAs.  He

then summarized the tasks undertaken by the two sets of attorneys

in the  course of the litigation.  In the judge's view, the PSC's

most  significant  accomplishments   included  (1)  performing  a

comprehensive  on-site investigation  of the accident  scene, (2)

"identif[ying] the  manufacturers  and suppliers  of many  . .  .

products  and  services  .  .  .  and  develop[ing]  theories  of

liability   against  each   opponent,"  (3)   drafting  plethoric

pleadings, including the  master complaint,  weekly agendas,  and

several pretrial  memoranda,  (4) filing  "literally hundreds  of

motions  . .  .  on numerous  topics,  including many  novel  and

creative issues," (5) orchestrating extensive pretrial discovery,

(6) conducting the nine-week Phase I trial and  the fifteen-month

Phase  II  trial (in  the  course  of which  the  PSC  called 313

witnesses  and offered  1,455  exhibits),  and (7)  "aggressively

pursu[ing] settlement negotiations."   The  court visualized  the

IRPAs' main accomplishments as comprising (1)  maintaining direct

client  communication,  counselling  clients,  and  keeping  them

                                28

abreast of  developments in the litigation, (2)  carrying out the

factual investigation incident to individual cases, with especial

emphasis on issues pertaining  to damages, (3) retaining experts,

including  physicians, economists, and  actuaries, and,  once the

experts had  been located,  collaborating with them  to establish

damages,  (4)  researching  client-specific legal  issues  (e.g.,                                                                          

standing,   assumption  of  risk),  (5)  representing  individual

plaintiffs  in  connection  with  ancillary   matters,  including

probate, inheritance, insurance,  and domestic relations matters,

(6)  meeting with Judge Bechtle "as part of the settlement scheme

to negotiate  settlement values for [individual]  cases," and (7)

assisting  clients  in  reaching  informed  decisions  (including

decisions   about   whether  to   accept   or  reject   proffered

settlements).  Moreover, certain selected plaintiffs were used as

exemplars for purposes of  the Phase II trial, and  the IRPAs who

represented  those plaintiffs  actually  presented  the  evidence

pertaining to their clients' damages.

          Having  made these ledger  entries, the  district court

then  tabulated  the  columns.   It  concluded  that  "reasonable

compensation for the work  undertaken requires recognition of the

massive undertaking of the PSC in terms of the organizational and

financial   requirements,   the  overwhelming   amount   of  work

performed,  the significant  time constraints,  and the  numerous

complex and novel issues  addressed during the proceedings .  . .

."   Contrasting this workload "with the IRPAs' efforts in client

communication and counseling, client preparation  for settlement,

                                29

and  handling of the damages  issues," the court  awarded the PSC

70% of the  fee due under each  individual contingency agreement,

thus permitting each IRPA to retain only 30%  of the fee promised

by the client.

              B.  Evaluating the Court's Handiwork.                        B.  Evaluating the Court's Handiwork.                                                            

          We are uneasy with the way in which the lower court cut

the fee pie, and with the size and shape of the resultant wedges,

for several reasons.

          First, we are troubled by  the implications of a scheme

in which the trial judge selects  a chosen few from many  lawyers

who  volunteer,  assigns  legal   tasks  to  those  few  (thereby

dictating, albeit indirectly, the scope of the work  remaining to

be  done  by  the many),  and  then,  in  awarding fees,  heavily

penalizes  the very lawyers to whom he has relegated the "lesser"

duties.  Courts must recognize that while such an arrangement may

be a necessary  concomitant to skillful  case management of  mass

tort  suits,  it nevertheless  significantly  interferes  with an

attorney's expectations regarding the fees that his or her client

has  agreed to  pay.    Conversely,  lead counsel  are  typically

volunteers, as  in this case, and, as such, they have no right to

harbor any expectation beyond a fair  day's pay for a fair  day's

work if a  fee fund  develops.  Cf.  Matthew 20:1-16  (recounting                                                      

parable of the laborers in the vineyard).  We believe that  trial

courts should  take these differing expectations  into account in

allocating fees.   Here, the  judge's rescript  does not  suggest

that he factored these expectations into the decisional calculus.

                                30

          Courts must  also be  sensitive  to a  second facet  of

economic  reality:  the power  to appoint lead  counsel gives the

trial judge an unusual  degree of control over the  livelihood of

the  lawyers  who   practice  before  the  court.    Though  such

appointments  are often  an  administrative necessity  in complex

litigation, and disproportionate fees are at times an unavoidable

consequence of the classic common fund  "free rider" problem, see                                                                           

generally  Mancur  Olson, Jr.,  The  Logic  of Collective  Action                                                                           

(1971),  the  judge  must  attempt to  avoid  any  perception  of

favoritism.    This  need  is  especially  acute  in  mass   tort

litigation where,  as this case illustrates,  free rider concerns

are minimized by  the important nature of the work  to be done by

claimants'  individually  retained  attorneys.    In  this  case,

moreover,  free rider concerns are also lessened by the fact that

most  of  the  IRPAs applied  for  appointment  to  the PSC,  see                                                                           

Nineteen Appeals, 982 F.2d at 605 (noting that over 40  of the 56                          

IRPAs volunteered  to serve  on the PSC),  thus signifying  their

willingness to  pay full fare.   The record does  not contain any

clue  intimating that  Judge Acosta  considered these  factors in

ordering that 70% of the fees be paid to the PSC.

          Third, and relatedly, this  case required the IRPAs not

merely to go along for a free ride but to earn their keep.   They

exhibited  great  versatility,  counseling  clients,  researching

medical   histories,  arranging   for  specialists   to  evaluate

injuries, preparing  the damages  aspect of each  case (including

extensive   work   with  physicians,   psychologists,  actuaries,

                                31

vocational  specialists, and other witnesses), obtaining evidence

needed  to  prove  losses   of  earnings  and  earning  capacity,

responding  to  client-specific   discovery,  preparing  for  and

attending  clients'  depositions,  negotiating settlement  values

before Judge Bechtle, assisting clients with probate,  insurance,

and   tax  matters,   and   handling  a   bewildering  array   of

idiosyncratic problems as they developed.  This is a far cry from

the paradigmatic  common  fund case     say, a  securities  class

action   in  which class counsel  do virtually all the  work, and

other counsel piggyback  on their efforts.  See, e.g., In re Ivan                                                                           

F. Boesky Sec. Litig., 948 F.2d 1358, 1364-65 (2d Cir. 1991); see                                                                           

also  Randall S.  Thomas  &amp; Robert  G.  Hansen, Auctioning  Class                                                                           

Action and Derivative Lawsuits:   A Critical Analysis, 87  Nw. U.                                                               

L.  Rev.  423,  429  (1993) (explaining  that,  in  general, lead

counsel in  class actions have "substantial  authority to conduct

the  litigation,  even  to  the  exclusion  of  other  counsel");

Jonathan  R.   Macey  &amp;  Geoffrey  P.   Miller,  The  Plaintiffs'                                                                           

Attorney's  Role  in  Class  Action  and  Derivative  Litigation:                                                                           

Economic Analysis  and Recommendations for Reform, 58  U. Chi. L.                                                           

Rev.  1,  3  (1991)  (observing  that  plaintiffs'  class  action

attorneys  have   "nearly  plenary  control  over  all  important

decisions in the lawsuit" because of the absence of monitoring by

clients).     We  see  no  sign  that  the  district  court  gave

significant weight to this reality.

          This  leads  directly  to  a  fourth point.    We  have

carefully considered  the IRPAs' compendious  submissions and are

                                32

of the view that Judge Acosta undervalued the worth of the client

contact/counseling aspect of this  litigation.  Such services are

labor-intensive and  frequently low in  visibility   at  least in

visibility from the bench.   Thus, they are susceptible  to being

overlooked, leading to an overemphasis  on the relative value  of

the  court-related  work.    Despite their  lack  of  visibility,

however, the mundane chores incident to client representation are

particularly  critical in  a  mass tort  common  fund case.    We

explain briefly.

          In a securities class action many of the victims do not

participate in the lawsuit, and are aware of their loss dimly, if

at all.   See, e.g.,  Macey &amp; Miller,  supra, at 30  (noting that                                                      

"[i]n the  large-scale, small-claim  class action  context . .  .

[plaintiffs]  are typically unaware  that they even  have a claim

against  the  defendant").   The  mass  tort  context  supplies a

stunning  contrast.  In a  mass tort action,  the victims' losses

(whether of life, limb,  or loved ones) are almost  always keenly

felt, and are  usually not  amenable to computation  by a  simple

arithmetic  formula.   As  a  result,  the individual  plaintiffs

typically require a  multitude of services, many  of which cannot

be satisfied  by  an  impersonal  steering committee.    In  such

circumstances,  the  attention   of  the  individually   retained

attorneys  becomes   crucial  to  the  success   of  the  overall

enterprise.13   That  important contribution  demands appropriate
                                                  

     13One IRPA, now deceased, made this point in a submission to
the district court:

                                33

recognition.

          Fifth, although we do  not dispute the district court's

assessment  of the quality of the PSC's work, this factor cancels

itself  out  to  some extent.    After  all,  the district  court

repeatedly commented  upon "the excellence of  the work performed

by all attorneys" (emphasis supplied), and left no doubt but that                

both sets of plaintiffs'  lawyers had rendered exemplary service.

Given these  widespread plaudits,  it seems manifestly  unfair to

reward excellence on the part of one group and not the other.

          Sixth,  the  district  court  failed   to  advance  any

reasoned explanation as to why it boosted  the PSC's share of the

Fund  from  52%  in the  initial  go-round  to  70% on  remand.14
                                                  

          In the course  of representing these clients,
          the attorneys and staff did hundreds of hours
          of  work that was  not separately  billed but
          that is a part  of the work of competent  and
          dedicated [IRPAs].  For example we helped  to
          arrange  the shipping  of bodies  from Puerto
          Rico to their homes, counseled families . . .
          to help them function as  witnesses, obtained
          [hard   to   locate]  records,   investigated
          possible  criminal   activity,  searched  for
          heirs,  negotiated  with creditors,  and with
          law  enforcement   agencies,  and  researched
          legal  issues such  as the  rights to  awards
          from the State insurance fund.

     14This  discrepancy cannot  be brushed  aside with  the glib
reminder  that,  on  remand,  the district  court  abandoned  the
lodestar in  favor of the POF  method.  The  court had originally
arrived  at the 52% figure through an enhancement of the lodestar
to account for  "the extraordinary results" achieved  by the PSC.
In re San Juan Dupont Plaza Hotel Fire Litig., 768  F. Supp. 912,                                                       
932  (D.P.R. 1991).  Thus, the court premised the original award,
in  large measure,  on its  assessment of the  role that  the PSC
played in creating the Fund.

                                34

Though we have great  confidence in Judge Acosta, his  silence on

this  subject  leaves  the  award   open  to  a  perception  that

appellants have been penalized for successfully prosecuting their

previous appeals.   Cf. North  Carolina v. Pearce,  395 U.S.  711                                                           

(1969)  (discussing importance  of  dispelling any  appearance of

vindictiveness when a judge imposes a more severe sentence upon a

criminal defendant after the defendant wins a new trial).

          Seventh,  the  district  court   erred  in  failing  to

compensate the  representative trial  counsel   those  IRPAs who,

though  not members  of the  PSC, prepared  and/or tried  the so-

called "representative" cases   for  their work in that capacity.

Just as the PSC members deserved compensation for their endeavors

on behalf of the  whole, the IRPAs who labored  as representative

counsel  conferred  a common  benefit,  and  must be  compensated

accordingly.

          Last   but far from least   we are persuaded, on whole-

record review, that it is simply unreasonable to award 70% of the

aggregate  fees  to the  attorneys  who  managed the  litigation,

leaving only 30% of the Fund to those who brought  in the clients

and worked hand-in-hand with them throughout the pendency of this

long  safari of  a case.   Because  mass tort  cases are  a breed

apart, it is difficult  to envision situations in which,  if fees

are  divided  between  lead  counsel  and  individually  retained

counsel  under a POF formula, the latter  will not be entitled to

                                35

at  least  half   the  fees.15    We  do   not  think  that  this

litigation, though unique,  so far overshoots all  other cases as

to  warrant  a substantially  larger  differential.   See,  e.g.,                                                                          

Vincent  v. Hughes  Air W.,  Inc., 557 F.2d  759 (9th  Cir. 1977)                                           

(upholding district  court's allocation of 5%  of gross recovery,

or approximately  20% of the  fee fund, to  lead counsel  in mass

tort action).

          Concluding, as we do,  that the fee allocation reflects

a  serious  error   of  judgment,  and  therefore   an  abuse  of

discretion, we vacate the award.

V.  REMEDY          V.  REMEDY

          Ordinarily, "an improper calculation of attorneys' fees

necessitates remand for reconfiguration  of the award."  Lipsett,                                                                          

975 F.2d at 943.   But this rule admits of exceptions, so long as

"the record is sufficiently  developed that we can apply  the law

to the  facts before us and  calculate a fair and  reasonable fee

without resorting to remand."   Id.  Here, that  qualification is                                             

satisfied; the record  is voluminous and this  court is painfully

familiar   with   the   particulars   of   this   fee  imbroglio.

Nonetheless, an appellate  court must think long  and hard before

usurping the district court's usual prerogatives, and, therefore,

we doubt that this case would fall  within the narrow confines of

the   exception   under   ordinary  circumstances.      But   the

circumstances here are  extraordinary, and common sense  commands
                                                  

     15We have been unable to find any common fund case  in which                                                
a court, using the POF  method, has allocated more than 50%  of a
fee fund to lead counsel.

                                36

that we not turn a blind eye to the reality of events.

          This  litigation has  passed the  point of  diminishing

returns.   The  holocaust that  underlies the  plaintiffs' claims

occurred almost  a decade ago.   The meat-and-potatoes litigation

is over;  with one small exception, see supra note 1, only a side                                                       

dish    attorneys' fees    remains on the  table.  The  amount of

time, energy and  money already devoted  to this peripheral  item

has careened virtually out of control.  Remanding would invite an

even greater  investment in the side dish    and we are reluctant

to  sanction the  squandering  of additional  resources for  this

purpose.  We have, at  times, with considerably less provocation,

simply  grasped  the  bull  by  the  horns  and  fixed  the  fees

ourselves.  See, e.g.,  Jacobs v. Mancuso, 825 F.2d 559, 562 (1st                                                   

Cir. 1987); Grendel's Den v. Larkin, 749 F.2d  945, 951 (1st Cir.                                             

1984).

          We  realize  that dividing  the  Fund  among groups  of

attorneys   in  accordance   with  the   POF  method   cannot  be

accomplished  with surgical precision.  We   or a district court,

for  that matter   must necessarily traffic in estimates.  Taking

into account all the facts and circumstances, we conclude that we

should  subdivide  the Fund  ourselves,  rather  than remand  yet

again.  We also  conclude that, on balance, assigning 50%  of the

Fund to  the  PSC and  50%  to the  IRPAs  comprises a  fair  and

reasonable allocation.

          This   division   reflects    the   district    court's

determination that the PSC contributed handsomely to the creation

                                37

of the Fund   it  is, after all, at the high end of  what a court

should  usually award16   while  at the same  time correcting for

the district court's undervaluation of  the IRPAs' contributions.

This division also strikes a sensible balance between the equity-

based  common  fund doctrine,  which  guards  against the  unjust

enrichment of free riders, and the need to avoid adding insult to

injury in a  situation in  which the court  selects lead  counsel

from  amidst a group of willing volunteers and thereafter invades

the contingency agreements of  the rejected lawyers to compensate

the select few.   Moreover, this  division is not  incommensurate

with the  time records of  the PSC.   Even if,  as an  uncritical

reading of the record suggests, the PSC spent as many as  166,000

hours  on   the   litigation,17   a   50%   allocation   (roughly

$34,000,000)  pays  the  members  well.    Although  we  have  no

tabulation  of IRPA hours to  compare with this  total, the PSC's

time records are still a valid  measure of the vast resources its

members expended in the course of the litigation.

          One  loose  end  remains.    It   involves  appropriate

compensation for the IRPAs  who tried the "representative" cases.

As  we stated earlier, see supra p.33, their participation in the                                          

                                                  

     16Although  we do  not impose  an absolute  ceiling  on lead
counsel fees  in common fund  mass tort cases, cf.  Camden I, 946                                                                      
F.2d at 774-75 (holding that, as a general rule, 50% is the upper
limit in common  fund cases  in the Eleventh  Circuit), cases  in
which  a court  should exceed  50% are  likely to  be hen's-teeth
rare.

     17This  figure includes  time  logged not  only  by the  PSC
members themselves but also  by their associates, paralegals, and
law clerks.

                                38

Phase II trial inured to the benefit of all plaintiffs.  Thus, in

presenting the representative claims,  the lawyers were acting as

de facto PSC members.  It is only  logical, therefore, that their                  

compensation  for those services be drawn from the PSC's share of

the  fee Fund.   Since the record  is inadequate to  permit us to

place  a dollar  value  on these  services,  we leave  it to  the

district court to determine the amount of compensation due to the

non-PSC members who served as representative trial counsel during

the Phase II trial for their services in that capacity,  and then

to order that sum paid out of the PSC's share of the Fund.

VI.  CONCLUSION          VI.  CONCLUSION

          We  need  go  no further.    For  the  reasons we  have

expressed, we vacate the order allocating attorneys' fees; direct

that the  fee Fund be divided  equally among the PSC,  on the one

hand, and the IRPAS, on the  other hand; and remand for the entry

of a suitable decree and for  further proceedings consistent with

this opinion.  Costs shall be taxed in favor of the appellants.

          It is so ordered.                    It is so ordered.                                    

                                39
