## Facts

- A December 31, 1986 fire at the San Juan Dupont Plaza Hotel led to extensive tort litigation consolidated in federal multidistrict proceedings.
- The district court appointed a Plaintiffs’ Steering Committee (PSC) to coordinate common work (discovery, trial planning, settlement strategy) while individually retained plaintiffs’ attorneys (IRPAs) handled client-specific tasks (communications, plaintiff discovery, damages work, and case-by-case settlement valuation).
- Collective efforts produced a settlement fund of approximately $220 million.
- The court set aside about $68 million from settlement proceeds as a common attorneys’ fee fund to be allocated among plaintiffs’ counsel.
- The district court initially allocated fees using an enhanced lodestar approach, awarding roughly 52% of the fee fund to PSC members for PSC work.
- On a prior appeal, the court of appeals required the district court to abandon lodestar and use a percentage-of-fund approach for allocating the common fee fund.
- On remand, the district court used a percentage-of-fund variant and allocated 70% of the fee fund to PSC work and 30% to IRPAs.
- Thirteen consolidated appeals followed, brought by attorneys challenging the remand allocation.

## Issues

1. Whether the procedures used to reallocate the fee fund denied the appealing attorneys due process.
2. Whether the district court erred in its method by using (or applying) a percentage-of-fund approach after remand.
3. Whether allocating 70% of the fee fund to PSC work and 30% to IRPAs was arbitrary, unreasonable, and an abuse of discretion.

## Decision

- The court of appeals rejected the due process challenge, finding the procedures adequate given the litigation’s history and the developed record.
- The court of appeals rejected the methodology challenge, holding that the percentage-of-fund approach complied with the prior mandate and was appropriate for a common-fund fee allocation.
- The court of appeals held that the 70/30 allocation was an abuse of discretion because it overstated PSC contributions relative to IRPA work in producing the settlement.
- The allocation order was vacated, and the court of appeals reconfigured the fee awards itself rather than remanding again.

## Legal Principles

- In common-fund litigation, courts may award and allocate attorneys’ fees using a percentage-of-fund method, especially where counsel’s combined efforts generated a defined fund.
- When multiple groups of plaintiffs’ counsel contribute (common-benefit leadership work and client-specific work), the court must allocate fees equitably based on the nature, quality, and relative value of each group’s contributions.
- Fee allocations are reviewed for abuse of discretion; an allocation may be reversed when the balance struck is arbitrary or unreasonable in light of the record.
- Under the mandate rule, a district court on remand must follow explicit appellate directions regarding fee methodology, and parties generally may not relitigate foreclosed methodological choices.

## Conclusion

The court of appeals upheld the process used to decide the fee allocation and the required percentage-of-fund methodology, but vacated the district court’s 70/30 split as an abuse of discretion and reallocated the common fee fund without further remand.


In re Thirteen Appeals Arising Out of the San Juan Dupont Plaza Hotel Fire Litig., 56 F.3d 295 (1st Cir. 1995)