Full opinion text
WYATT, District Judge. This is a petition by Harold E. Kohn (and by other counsel associated with him), attorney for plaintiffs in these class actions, for an order approving a fee of $2,000,000, to be paid by defendants to Kohn and his associates. The petition is undated but was submitted in open Court on January 24, 1972 in the presence of counsel for defendants and was at that time ordered by me to be filed and docketed. Mr. Kohn and counsel for defendants were heard on that occasion. Decision on the petition was reserved. Mr. Kohn is an experienced lawyer in antitrust matters; his office is in Philadelphia. He personally took the active part amongst the petitioners; he and his associate, Miss Korman (one of the petitioners) are known to me from their appearances before me; the other petitioners are not known to me and I am not personally aware of any relevant activity by them. A “Supplement to Petition”, also undated, was thereafter mailed to the Clerk and was received for filing on February 14, 1972. The caption of the petition shows three civil actions in which Kohn represents the plaintiffs. Apparently, notice of the petition was given to defendants only. When the petition was heard, only defendants were represented and had been notified. I. Commencement of the Actions Now Being Settled A. Commencement of Actions Before Verdict in the Criminal Case The extensive background of these three class actions and many similar actions need not be here reviewed in detail. It is described in my opinions in State of West Virginia v. Chas. Pfizer & Co., D.C., 314 F.Supp. 710, affirmed 2 Cir., 440 F.2d 1079 and in Hartford Hospital v. Chas. Pfizer & Co., D.C., 52 F.R.D. 131 (see on appeal from denial of motion to intervene, American Hospital Assn. v. Chas. Pfizer & Co., 2 Cir., 448 F.2d 790). For present purposes, the history may begin with the filing on August 17, 1961 of an indictment in this District naming Pfizer, Cyanamid and Bristol as defendants (61 Cr. 772) along with some individuals, whose motions to dismiss were subsequently granted (United States v. Chas. Pfizer & Co., D.C., 245 F.Supp. 801). The indictment charged violation of the antitrust laws in respect of broad spectrum antibiotic drugs. It was some time before any civil claim was asserted against defendants. In time, however, many similar civil actions were commenced. All of these actions not commenced in this District were transferred here by the Judicial Panel on Multidistrict Litigation. 1. In 1963, Premo Pharmaceutical Corporation (Premo), a drug business operating from New Jersey, began to import tetracycline from Italy. Pfizer on September 20, 1963 commenced an action for patent infringement against Premo in the United States District Court for the District of New Jersey (C.A. 766-63). Premo filed in that action a counterclaim asserting violation by Pfizer of the antitrust laws. Premo then retained a lawyer, Dennis, to assist patent counsel in prosecuting the counterclaim. 2. In the following year, 1964, Premo was low bidder for sales of tetracycline to the City of New York but, since Pfizer had threatened the City with a patent infringement suit if it bought from Premo, the City in buying from Premo required Premo to post an indemnity bond. By this time, Dennis had become a partner in the law firm of Dickstein, Shapiro & Galligan. Premo consulted this firm in connection with the furnishing of the indemnity bond to the City. In June 1964, Pfizer commenced an action in this Court against the City of New York and against the surety on Premo’s indemnity bond; the complaint alleged infringement of the Conover patent. This is an action still pending (64 Civ. 1742). The defendant City of New York retained as its counsel Dickstein, Shapiro & Galligan; on July 1, 1964, these lawyers filed an answer. This answer contained a counterclaim asserting a cause of action for treble damages against Pfizer, Cyanamid, Bristol, Squibb and Upjohn for violation of the antitrust laws. The counterclaim was based on the charges in the indictment and in substantial part is word for word copied from the indictment. The counterclaim did not set out any claim for a class. Mr. Shapiro and Mr. Galligan have not only been active in the City of New York action but, as will appear, have been active in many other actions involving antibiotic antitrust claims. 3. It was some time before any claim similar to that of the City of New York was asserted against defendants. (On July 13, 1964, Premo commenced an action in this Court (64 Civ. 2163) against the defendants other than Pfizer.) In November 1966, the Shapiro firm negotiated a settlement of the Premo litigation. A chief feature of the settlement was a license by Pfizer to Premo and two other companies to make, sell, etc. tetracycline. This license, according to Shapiro and as agreed implicitly by all other counsel for plaintiffs, marked the end of the claimed antitrust law violations. 4. On August 4, 1967, the State of Texas commenced an action in the Northern District of Texas (CA 3-2165; after transfer here, 68 Civ. 4375). The Shapiro firm was of counsel. This was the first action commenced by a plaintiff to assert treble damage antitrust claims against defendants. It was a class action for the State of Texas and all cities, counties, and other political subdivisions in Texas which had bought antibiotics during the relevant period. (City, county, and state entities are, in the context of these actions, often called “CCS” entities and the actions are often called “CCS” actions.) 5. In August 1967, Pfizer commenced a patent infringement action in the Central District of California (67-793-R; after transfer here, 68 Civ. 4541) against Benalen Corporation, a wholesale drug house. On August 24, 1967, Benalen filed an answer with a counterclaim for violation of the antitrust laws. The counterclaim as then filed did not state a claim for a class. On September 18, 1967, Benalen filed an amended counterclaim which did assert the antitrust claim for a class of all drug wholesalers in California who had bought and resold antibiotics at wholesale in the relevant period. This was the first civil antitrust claim asserted against defendants by a wholesale druggist. Counsel for Benalen have been Schwartz & Alschuler, for whom Benjamin F. Schwartz and Herbert A. Karzen have been principally engaged. 6. On September 18, 1967, Domaro, a California retail druggist, commenced an action against defendants in the Central District of California (67-1366-R; after transfer here, 68 Civ. 4542). The Schwartz firm represented Domaro. The claim was stated for a class of all retail druggists in California who bought and resold antibiotics at retail in the relevant period. This was the first civil antitrust claim asserted against defendants by a retail drug store. 7. On September 18, 1967, American Medical Enterprises, which had hospitals in California, commenced an action against defendants in the Central District of California (67-1365-R; after transfer here, 68 Civ. 4543). The Schwartz firm represented American Medical Enterprises. The claim was stated for a class of all private hospitals in California who bought and resold or dispensed antibiotics to their patients in the relevant period. This was the first civil antitrust claim asserted against defendants by a private hospital. 8. On October 23, 1967, trial of the indictment began in this Court before Judge Frankel. On October 25, 1967, the State of Florida commenced an action in this Court (67 Civ. 4143). The Shapiro firm was of counsel. The claim was for a class of all CCS entities in Florida which had bought antibiotics during the relevant period or had paid for antibiotics under welfare, old age or other relief programs. On December 29, 1967, the jury brought in a verdict of guilty against the three defendants named in the indictment. B. Commencement of Actions After Verdict in the Criminal Case Until the February 6, 1969 Settlement Offers of Defendants 9. On January 9, 1968, the State .of Wisconsin commenced an action in this Court (68 Civ. 91). The Shapiro firm was of counsel. The claim was for a class of all CCS entities in Wisconsin (including all entities supported in whole or part by state or local government funds) which had bought antibiotics during the relevant period or had paid for antibiotics under any welfare program. 10. On January 17, 1968, the State of Iowa commenced an action in the Southern District of Iowa (8-2130-C-2; after transfer here, 68 Civ. 4297). The attorneys for Iowa were the Attorney General and two of his assistants. (After January 6, 1969, Iowa was represented by the Shapiro firm which filed a notice of appearance on that date.) No claim for a class was stated. Iowa claimed damages as a result of purchases of antibiotics by its universities, mental and other hospitals, and correctional institutions. 11. On January 18, 1968, the City of Philadelphia and the City of Detroit commenced an action in the Eastern District of Pennsylvania (68-144; after transfer here, 68 Civ. 4298). The names of five individual attorneys, apparently all in private practice in Philadelphia, were first typed at the end of the complaint: Berger, Newberg, Montague, Schambelan, and Kohn in that order, described as “Special Counsel for Plaintiffs City of Philadelphia and City of Detroit”. Then followed the names of the City Solicitor of Philadelphia and of the Corporation Counsel and Chief Assistant Corporation Counsel of the City of Detroit. The only signature (manual) was that of Berger (Fed.R. Civ.P. 11). The naming of Kohn at the end of the complaint was his first recorded appearance on the scene; it was also the first such appearance of the others named. The claim was stated for a class of “all state and municipal governments, . . . agencies, authorities . . . in the United States” which had purchased antibiotics in the relevant period. It should be noted that this is the first assertion of a claim on behalf of a national class of CCS entities. Why the City of Detroit commenced an action in the Eastern District of Pennsylvania is puzzling. It would seem logical for Detroit to have commenced an action in the federal district court in Detroit. It would also seem logical for Detroit to have commenced an action in this Court; the indictment had been returned here, records and other data had been collected here, the first civil claim had been made here, and four of the five defendants had their principal offices here. The choice by the City of Detroit of the Eastern District of Pennsylvania is hard to explain; it must have been made for the reason that the Eastern District of Pennsylvania was the most convenient forum for the Philadelphia lawyers. 12. On January 19, 1968, the State of West Virginia commenced an action in this Court (68 Civ. 240). The Shapiro firm was of counsel, as was also Lee A. Freeman, Esq. of Chicago, who (as will appear) became active in many actions against defendants. The claim was stated for a class not only of CCS entities in West Virginia but of “all cities, counties, municipal and public corporations throughout the United States” which had bought antibiotics during the relevant period or had paid for antibiotics under any welfare program. It should be noted that this is the second assertion of a claim on behalf of a national class of CCS entities. 13. On January 22, 1968, the State of Illinois commenced an action in this Court (68 Civ. 273). Freeman was of counsel, as was also the Shapiro firm. The claim was for a class of all CCS entities in Illinois and was stated in substantially the same words as the Wisconsin claim. 14. On February 6, 1968, Cotier Drugs, Inc. commenced an action in the Northern District of Illinois (68 C 220; after transfer here, 68 Civ. 4322). The attorneys for plaintiffs were Lawrence Walner, Edward A. Berman, and others. The claim was for a class of “all retail drug stores in the United States” which had bought antibiotics in the relevant period. It should be noted that this is the first assertion of a claim on behalf of a national class of retail drug stores. 15. On February 7, 1968, the City of Boston commenced an action in the District of Massachusetts (68-105-G; after transfer here, 68 Civ. 4354). The attorneys for plaintiffs were the Corporation Counsel of Boston and Leo Schwartz, Esq., apparently a lawyer in private practice. No claim as stated for a class. Boston sued as a purchaser of antibiotics. 16. On February 8, 1968, Massachusetts commenced an action in the District of Massachusetts (68-116-G; after transfer here, 68 Civ. 4355). The names of the Attorney General and of one of his Assistants appeared on the complaint as attorneys for Massachusetts, but the complaint was evidently drafted by the Shapiro firm (and that firm on June 11, 1968 filed a “notice of appearance” in the action). The claim stated was for a class of all CCS entities in Massachusetts, except the City of Boston, which had bought antibiotics during the relevant period. Evidently it had been arranged that Massachusetts and Boston would bring separate actions, although neither the necessity nor the advantage in such duplication is easy to see. 17. On February 13, 1968, a motion of the County of Erie, New York, for leave to intervene as a plaintiff in the City of Philadelphia action (see (11) above) was filed in that action. No order on this motion was made until after February 6, 1969. 18. On February 23, 1968, Minnesota commenced an action in this Court (68 Civ. 735). The names of the Attorney General, of a Special Assistant, and of Irving Younger (then a member of the Bar of this Court and of New York and now a judge of the Civil Court) appeared on the complaint. The Shapiro firm filed a “notice of appearance” on February 26, 1968 which had been dated and served on February 23, 1968, the same day on which the complaint was filed. The claim was for a class of all CCS entities in Minnesota. 19. On February 28, 1968, Fort Pierce Memorial Hospital (of Fort Pierce, Florida) commenced an action in the Eastern District of Pennsylvania (68-452; after transfer here, 68 Civ. 4299). The same individual Philadelphia attorneys, who had been named in the City of Philadelphia action described above, were listed as attorneys for plaintiff hospital at the end of the complaint: Berger, Newberg, Montague, Sehambelan and Kohn in that order. The only signature (manual) was that of Berger. The claim was stated for a class of all non-profit hospitals in the United States. It should be noted (a) that this is the first assertion of a claim on behalf of a national class of private hospitals and (b) that the class did not include proprietary hospitals (that is, those operated for profit). Why a hospital in Florida should commence an action in the Eastern District of Pennsylvania is puzzling for the same reasons as indicated in (11) above. 20. On February 29, 1968, the State of New York commenced an action in this Court (68 Civ. 845). The names of the Attorney General and of three of his Assistants appeared on the complaint as attorneys for New York; apparently no outside attorney has been employed by New York. No claim for a class was stated. New York sued as a purchaser of antibiotics “for its state hospitals, state institutions and related tax-supported agencies” and as having paid for antibiotics under various welfare programs. 21. On March 15, 1968, Alabama commenced an action in this Court (68 Civ. 1099). The Shapiro firm was of counsel. The claim was for a class of all CCS entities in Alabama. 22. On March 26, 1968, Pennsylvania commenced an action in this Court (68 Civ. 1212). The names of the Attorney General and of Freeman appeared on the complaint. The Shapiro firm was also named of counsel. The claim was for a class of all city, county and public hospitals in Pennsylvania, except city hospitals in the City of Philadelphia. 23. Three actions were then commenced in this Court on the dates, by the States, and with the file numbers indicated: April 4, 1968 Louisiana 68 Civ. 1380 April 22, 1968 Mississippi 68 Civ. 1625 April 22, 1968 North Dakota 68 Civ. 1626 The Shapiro firm was of counsel in each action. The claim in each action was for a class of all CCS entities in the plaintiff state. 24. On April 25, 1968, Maryland commenced an action in the Northern District of Illinois (68 C 757; after transfer here, 68 Civ. 4324). The names at the end of the complaint were those of the Attorney General, of William L. Siskind (apparently a lawyer in private practice in Baltimore), and of Granvil I. Specks, Sheldon O. Collen, and Perry Goldberg (three lawyers in Chicago, of whom Specks and Goldberg have been active in this and other actions). The only signature (manual) was that of Goldberg. There was no claim for a class. Maryland sued as a purchaser of antibiotics. Why the State of Maryland should have commenced an action in the Northern District of Illinois is puzzling for the same reasons as indicated in (11) above. 25. On the same day — April 25, 1968 — the City of Baltimore also commenced an action in the Northern District of Illinois (68 C 758; after transfer here, 68 Civ. 4325). The names at the end of the complaint were those of the City Solicitor, of Siskind and of another Baltimore lawyer, and of the three Chicago lawyers: Specks, Collen, and Goldberg. The only signature (manual) was that of Goldberg. There was no claim for a class. Baltimore sued as a purchaser of antibiotics. Why Baltimore should have sued in the Northern District of Illinois is puzzling for the same reasons as indicated in (11) above. Moreover, it is not easy to see why separate and duplicating actions should have been brought by Maryland and by Baltimore; except for the names of the plaintiffs, the complaints in the two actions are word for word the same. 26. On May 2, 1968, the City of Memphis commenced an action in this Court (68 Civ. 1807). The Shapiro firm was of counsel. No claim for a class was stated. Memphis sued as a purchaser of antibiotics. 27. On May 6, 1968, New Mexico commenced an action in the Northern District of Illinois (68 C 822; after transfer here, 68 Civ. 4326). The names on the complaint were those of the Attorney General, of a lawyer in Albuquerque, and of the three Chicago lawyers: Specks, Collen, and Goldberg. There was no signature (manual) to the complaint (Fed. R.Civ.P. 11), apparently by inadvertence. The claim was for a class of “all purchasers of broad spectrum antibiotics . . . in the State of New Mexico.” It should be noted that this is the first assertion of a claim on behalf of a class broad enough to include consumers, those who are end users. Why New Mexico should have sued in the Northern District of Illinois is puzzling for the same reasons as indicated in (11) above. 28. On May 17, 1968, Ohio commenced an action in this Court (68 Civ. 2019). The Shapiro firm was of counsel. The claim was for a class of all CCS entities in Ohio. It should be noted at this point that the Judicial Panel on Multidistrict Litigation was appointed by the Chief Justice on May 31, 1968 (44 F.R.D. 389); the law had become effective on April 29, 1968 (28 U.S.C. § 1407). 29. On June 25, 1968, Connecticut commenced an action in the Northern District of Illinois (68 C 1181; after transfer here, 68 Civ. 4323). The names on the complaint were those of the Attorney General, of a lawyer in Hartford (apparently in private practice), and of the three Chicago lawyers: Specks, Collen, and Goldberg. There was no signature (manual). No claim for a class was stated. Connecticut sued as a purchaser of antibiotics. Why Connecticut should have sued in the Northern District of Illinois is puzzling for the same reasons indicated in (11) above. 30. On August 2, 1968, Indiana commenced an action in this Court (68 Civ. 3157). The complaint was signed (manually) by the Attorney General, by one of his assistants, by another person (apparently a lawyer in private practice), and by Freeman; it was also signed (manually) by Shapiro and the Shapiro firm was listed “of counsel”. Indiana sued not only on its own behalf as a purchaser of antibiotics but also for a class of “all city, county and public hospitals” in Indiana. 31. On August 8, 1968, the City and County of Denver commenced an action in the Northern District of Illinois (68 C 1478; after transfer here, 68 Civ. 4930). The names on the complaint were those of the City Attorney, of a lawyer and a law firm in Denver (apparently in private practice), and of the three Chicago lawyers : Specks, Collen, and Goldberg. The signature (manual) was by Specks. There was no claim for a class. The City and County of Denver sued as purchasers of antibiotics. Why the City and County of Denver should have sued in the Northern District of Illinois is puzzling for the same reasons indicated in .(11) above. 32. On August 15, 1968, Richardson Drug Co., Inc. and ten other retail drug stores in Massachusetts commenced an action in the District of Massachusetts (68-744-G; after transfer here, 68 Civ. 4537). The complaint was signed (manually) by Leo Schwartz and by Zamparelli and White, lawyers in private practice in Boston. The claim was for a class of retail druggists in Massachusetts (said to number about 6000) and of retail druggists “throughout the United States” (said to number about 100,000). 33. On August 22, 1968, New Jersey commenced an action in the Northern District of Illinois (68 C 1564; after transfer here, 68 Civ. 4929). The names on the complaint were those of the Attorney General, of his First Assistant, and of the three Chicago lawyers: Specks, Collen, and Goldberg. The signature (manual) was by Goldberg. The claim was for a class of all “governmental purchasers” of antibiotics in New Jersey. Why New Jersey should have sued in the Northern District of Illinois is puzzling for the same reasons indicated in (11) above. 34. On September 12, 1968, Ford Hopkins Company and Stineway Drug Company, two wholesale druggists (apparently in Illinois), nine retail drug stores in Illinois owned by them, and nine retail drug stores in Illinois independently owned, commenced an action in the Northern District of Illinois (68 C 1698; after transfer here, 68 Civ. 4931). The complaint was signed (manually) by Freeman and by Richard F. Levy (of the firm of Levy & Erens). (Mr. Freeman, by order filed April 11, 1969, was allowed to withdraw as an attorney for plaintiffs.) The claim was for a class of all “retail drug stores in the United States”. 35. On September 19, 1968, Associated Hospital Service of New York and twenty-four private hospitals in New York commenced an action in this Court (68 Civ. 3763). The name of Breed, Abbott & Morgan was on the complaint and the signature (manual) was by Bagdasarian. The claim was for a class of all private hospitals in New York and of “all hospital service corporations” in New York. 36. On September 30, 1968, Cedars of Lebanon Hospital, a private hospital in Miami, commenced an action in the Southern District of Florida (68-1131; after transfer here, 69 Civ. 1637). The name of Kelly, Black, Black & Kenny was on the complaint and the signature (manual) was by Michael Nachwalter. The claim was for a class of all private hospitals in Florida. 37. On October 21,1968, Alpine Pharmacy, Inc., a retail drug store in Illinois, and another retail drug store in that State, commenced an action in the Northern District of Illinois (68 C 1952; after transfer here, 69 Civ. 559). The complaint was signed (manually) by Jerome S. Wald, a Chicago lawyer. The claim was for a class of all “independent retail druggists” in the United States. On October 21, 1968, the Judicial Panel on Multidistrict Litigation transferred all the then pending antibiotic antitrust actions (or all those of which the Panel was then aware) to this District for pretrial purposes (Antibiotic Drugs, In re Jud.Pan.Mult.Lit., 295 F.Supp. 1402). 38. On October 24, 1968, Lee’s Prescription Shops, Inc. (operating retail drug stores in Florida), Plantation General Hospital, Inc., and North Miami General Hospital, Inc. (two private hospitals in Florida) commenced an action in the Southern District of Florida (68-1224; after transfer here, 69 Civ. 1638). The name of Sager, Silverman & Bodne was on the complaint and the signature (manual) was by Silverman. The claim was said to be for a class of “all persons, businesses, institutions or other entities whose activities require that they purchase” antibiotics for resale “through pharmacies or dispensaries to the public at the direction or order of licensed physicians”. This language is not very clear but it seems to refer to retail drug stores selling antibiotics against prescriptions. In the complaint is also an “alternative designation of class action”, in which the two hospital plaintiffs state that they represent “all hospitals so similarly situated” and the drug store plaintiff states that it represents “all pharmacies so similarly situated”. 39. On October 28, 1968, South Dakota commenced an action in the District of South Dakota (68-104C; after transfer here, 69 Civ. 205). The names on the complaint were those of the Attorney General and two Special Assistants; at some point (probably after transfer of the action here) the Shapiro firm became of counsel for South Dakota. The claim was for a class of all CCS entities in South Dakota. 40. On October 30,1968, Lee’s Prescription Shops, Inc., Plantation General Hospital, Inc., and North Miami General Hospital, Inc. caused a summons to be issued out of the Circuit Court of the Eleventh Judicial Circuit of Florida in Dade County. Their complaint had apparently been filed on the same day. The name of Sager, Silverman & Bodne was on the complaint and apparently there was a manual signature by Silverman. The claim was based on Florida statutes and “the common law against trusts in restraint of trade”. The claim was for the same class and had the same “alternative designation of class action” as in the action commenced by the same plaintiffs a few days earlier in the federal court in Florida and described in (38) above. The defendants promptly removed the action (for diversity of citizenship) from the state court to the federal court in Florida (where its file number became 68-1340; after transfer here, 69 Civ. 1639). 41. On November 12, 1968, Kentucky commenced an action in this Court (68 Civ. 4453). The Shapiro firm was of counsel. The claim was for a class of all CCS entities in Kentucky; also as parens patriae for “all individual consumers” in Kentucky; also for a class of “all individual consumers” in Kentucky. It should be noted that this is the first assertion of a parens patriae claim, also the first assertion of a claim for a class of “individual consumers” (reference is made to (27) above and to the broad class described in the New Mexico action). Complaints in actions commenced after that of Kentucky generally stated claims for a class of consumers; complaints in the earlier actions were amended (after the February 6, 1969 offers) to state such claims. 42. On December 6, 1968, New Hampshire commenced an action in this Court (68 Civ. 4878). The complaint was signed (manually) by the Attorney General and by Freeman; it was also signed (manually) by Shapiro and the Shapiro firm was listed “of counsel”. New Hampshire sued not only for itself but for a class of “all city, county and public hospitals” in New Hampshire; also as parens patriae for “all individual consumers” in New Hampshire; also for a class of “all individual consumers” in New Hampshire. 43. On December 9, 1968, Jackson Hospital and Clinic, Inc. (a private non-profit hospital in Montgomery, Alabama) and Professional Center, Inc. (a private proprietary hospital in Montgomery, Alabama) commenced an action in the Middle District of Alabama (2809-N; after transfer here, 69 Civ. 1480). The names of Steiner, Crum & Baker and of Carl W. Bear were on the complaint as attorneys for plaintiffs; there were manual signatures of four attorneys. The claim was stated for a class of all private non-profit hospitals in Alabama and for a second class of all private proprietary hospitals in Alabama. 44. On December 13, 1968, Hospital Service Corporation of Rhode Island (a nonprofit hospital service corporation in Rhode Island) and ten private hospitals in Rhode Island commenced an action in this Court (68 Civ. 4971). Breed, Abbott & Morgan were shown on the complaint as attorneys for plaintiffs; the manual signature was that of Robert J. Bagdasarian. The claim was stated for a class of all hospitals in Rhode Island “not operated by the local, state or federal government” (this would seem to include all private hospitals, non-profit and proprietary) and Hospital Service Corporation of Rhode Island, which was said to have reimbursed hospitals for their purchases of antibiotics. 45. On December 20, 1968, Arkansas commenced an action in the Eastern District of Arkansas (LR 68 C 254; after transfer here, 69 Civ. 778). The complaint was signed (manually) by the Attorney General of Arkansas and by two of his Assistants. The claim was stated to be as parens patriae for all “individual consumers” in Arkansas and for a class of all CCS entities in Arkansas and “all individual consumers” within that State. 46. On December 23, 1968, The County of Maricopa (Arizona) commenced an action in the District of Arizona (Civ. 6961; after transfer here, 69 Civ. 1698). Harrison, Strick & Myers were named as attorneys for plaintiff; the manual signature was that of Mark I. Harrison. The claim was stated for a class of all CCS entities in Arizona. 47. On December 23, 1968, Oklahoma commenced an action in this Court (68 Civ. 5096). The complaint was signed (manually) by the Attorney General, by a Special Counsel in Oklahoma, and by Shapiro; the Shapiro firm was stated to be of counsel. The claim was stated to be as parens patriae for all “individual consumers” in Oklahoma and for a class of all CCS entities in Oklahoma and “all individual consumers” within that State. 48. On December 23, 1968, Rhode Island commenced an action in this Court (68 Civ. 5112). The complaint was signed (manually) by the Attorney General of Rhode Island, by one of his Assistants, and by Shapiro; the Shapiro firm was stated to be of counsel. The claim was stated to be as parens patriae for all “individual consumers” in Rhode Island and for a class of all CCS entities in Rhode Island and “all individual consumers” within that State. 49. On December 23, 1968, the Commonwealth of Puerto Rico commenced an action in the District of Puerto Rico (869-68; after transfer here, 69 Civ. 806). The complaint was signed (manually) by the Attorney General of Puerto Rico, by one of his Assistants, by an attorney in the Department of Justice, and by Robert E. Sher (an attorney in Washington, D. C.). The claim was stated for a class of CCS entities in Puerto Rico and of “all individual consumers” there. 50. Under date of December 24, 1968, Berger and Montague — two lawyers associated with Kohn — wrote to the Clerk of this Court, enclosing motion of the Cities of Cleveland and Akron, Ohio, and a separate motion of the State of Delaware for leave to intervene as plaintiffs in the City of Philadelphia action (see (11) above). No order on either motion was made until after February 6,1969. 51. On December 26, 1968, Arizona Foundation for Neurology and Psychiatry and eight other private hospitals in Arizona commenced an action in the District of Arizona (Civ. 6967; after transfer here, 69 Civ. 1697). The complaint showed Sullivan and Mahoney and Harrison, Strick & Myers as attorneys for plaintiffs ; the manual signature was by William P. Mahoney, Jr. The claim was stated for a class of all private hospitals in Arizona. 52. On December 26, 1968, Virginia commenced an action in this Court (68 Civ. 5140) . The complaint was signed (manually) by the Attorney General of Virginia, by two of his Assistants, and by Shapiro; the Shapiro firm was stated to be of counsel. The claim was stated to be as parens patriae for all “individual consumers” in Virginia and for a class of all CCS entities in Virginia and “all individual consumers” within that State. 53. On December 26, 1968, Colorado commenced an action in this Court (68 Civ. 5141) . The complaint was signed (manually) by the Attorney General of Colorado, by his Deputy, by Freeman (as Special Assistant Attorney General), and by Galligan (of the Shapiro firm). The claim was stated to be as parens patriae for “all individual consumers” in Colorado and for a class of all city, county and public hospitals in Colorado and for another class of “all individual consumers” in that State. 54. On December 27, 1968, DeKoven Drug Co., Inc. and ten others named as plaintiffs commenced an action in the Northern District of Illinois (68 C 2478; after transfer here, 69 Civ. 896). Presumably the plaintiffs were all engaged in the wholesale or retail selling of drugs but no description of their business was given. There are no manual signatures to the complaint (Fed.R.Civ.P. 11). At the end of the complaint appear the names of James P. Chapman and James B. Sloan, with addresses in Chicago. The claim is not specifically stated to be for a class but plaintiffs are stated to sue as representative “of all other persons in the United States of America similarly situated” and it is assumed that a class action was intended. Since it is not stated how “situated” the plaintiffs were, it is not possible further to define the class attempted to be stated. 55. On December 27, 1968, Christian Hospital of St. Louis (a private non-profit hospital in St. Louis, Missouri) and two other private hospitals in St. Louis commenced an action in the Eastern District of Missouri (68 C 546; after transfer here, 69 Civ. 758). The complaint showed Foster, Vogel & Stroh as attorneys for plaintiffs; the manual signature was that of John H. Stroh. The claim was stated for a class of “all private hospitals” in Missouri. 56. On December 27, 1968, South Carolina commenced an action in the District of South Carolina (68-1078; after transfer here, 69 Civ. 777). The complaint showed as attorneys for plaintiffs the Attorney General of South Carolina and one of his Assistants; the manual signature was that of the Assistant, M. J. Bowen, Jr. The claim was stated for a class of all CCS entities in South Carolina. 56a. On December 27, 1968, Massachusetts Blue Cross, Inc., Lynn Hospital, and fifteen other private hospitals commenced an action in the District of Massachusetts (68-1193-C; after transfer here, 69 Civ. 832). The names of Herbert P. Wilkins, Daniel O. Mahoney, and David F. Cavers, Jr. were typed at the end of the complaint as attorneys for plaintiffs; the manual signature was by Mr. Cavers. It was stated that Palmer & Dodge and Charles J. Dunn were of counsel to plaintiffs. The hospital plaintiffs asserted a claim for a class of all privately owned hospitals in Massachusetts, whether nonprofit or proprietary. 57. On December 30, 1968, St. Luke’s Hospital (a private non-profit hospital in Duluth, Minnesota) and four other private hospitals in Minnesota commenced an action in the District of Minnesota (68 Civ. 408; after transfer here, 69 Civ. 1555). The complaint showed Chestnut, Jones, Brooks, Kennedy & Burkard and also Cochrane & Bresnahan as attorneys for plaintiffs; the manual signatures were by Jack L. Chestnut and John A. Cochrane. The claim was stated for a class of all private hospitals in Minnesota (non-profit or proprietary). 58. On December 30, 1968, Clark County Hospital Association, Inc. (operating a “general hospital”, apparently private, in Winchester, Kentucky) and Kentucky Hospital Association, Inc. (an association of Kentucky hospitals) commenced an action in the Eastern District of Kentucky (No. 1946; after transfer here, 69 Civ. 768). The complaint showed O’Shaughnessy & Endieott as attorneys for plaintiffs; the manual signature was by R. Coleman Endieott. The action is said in the complaint to be a class action. The class is not defined but plaintiffs state that they sue as “representative of all hospitals similarly situated in Kentucky”. 59. On December 30, 1968, Missouri commenced an action in this Court (68 Civ. 5180). The complaint was signed (manually) by the Attorney General of Missouri, by a Special Counsel in Missouri, and by Shapiro; the Shapiro firm was stated to be of counsel. The claim was stated to be as parens patriae for all “individual consumers” in Missouri and for a class of all CCS entities in Missouri and “all individual consumers” within that State. 60. On December 31, 1968, Bethesda Hospital Association (a private hospital in Zanesville, Ohio) commenced an action in the Southern District of Ohio (68-406; after transfer here, 69 Civ. 782). The complaint showed Graham and Graham as attorneys for plaintiff; the manual signature was by James F. Graham. The claim was stated for a class of private non-profit hospitals in Ohio. 61. On January 7, 1969, Herbert Beins doing business as Waverly Drugs (a retail drug store in Waverly, Ohio) and another commenced an action in the Southern District of Ohio (6973; after transfer here, 69 Civ. 902). The complaint showed Peck, Shaffer & Williams as attorneys for plaintiffs; the manual signature was by William B. Shaffer, Jr. The claim was stated for a class of all “retail drug store owners” in Ohio. 62. On January 14, 1969, Beekman-Downtown Hospital (a private hospital in New York City) and thirty-five other private hospitals in New York commenced an action in this.Court (69 Civ. 135). The complaint showed Shea Gallop Climenko & Gould as attorneys for plaintiffs; the manual signature was by Jesse Climenko. The action was not for any class. 63. On January 15, 1969, Georgia commenced an action in this Court (69 Civ. 153). The complaint was signed (manually) by the Attorney General of Georgia, by one of his Assistants, by a lawyer in private practice in Georgia, and by Shapiro; the Shapiro firm was stated to be of counsel. The claim was stated to be as parens patriae for all “individual consumers” in Georgia and for a class of all CCS entities in Georgia and “all individual consumers” within that State. 64. On January 21, 1969, Idaho commenced an action in the Northern District of Illinois (69 C 121; after transfer here, 69 Civ. 897). The complaint showed the Attorney General of Idaho, and Specks, Collen, and Goldberg as attorneys for plaintiff; the manual signature was by Goldberg. The claim was stated for a class of all CCS entities (“governmental purchasers”) in Idaho. Why Idaho should have sued in the Northern District of Illinois is puzzling for the same reasons as indicated in (11) above. 65. On January 29, 1969, Michigan commenced an action in the Northern District of Illinois (69 C 179; after transfer here, 69 Civ. 898). The complaint is signed (manually) by the Attorney General of Michigan, by one of his Assistants, and by Freeman (as Special Counsel). The claim was stated as parens patriae for “all individual consumers” and for a class of all city, county, and public hospitals in Michigan and for another class of “all individual consumers” in that State. Why Michigan should have sued in the Northern District of Illinois is puzzling for the same reasons as indicated in (11) above. 66. On February 3, 1969, Nashville (Tennessee) and Davidson County (in which Nashville is located) commenced an action in the Northern District of Illinois (69 C 210; after transfer here, 69 Civ. 899). The complaint was signed (manually) by the Director of Law, by the Deputy Metropolitan Attorney, and by Freeman (as Special Counsel). The claim was stated for a class of all city, county, and public hospitals in Tennessee and for a further class of “all individual consumers” in that State. Why Nashville and Davidson County should have sued in the Northern District of Illinois is puzzling for the same reasons as indicated in (11) above. 67. On February 3, 1969, Wyoming commenced an action in the Northern District of Illinois (69 C 215; after transfer here, 69 Civ. 900). The complaint showed the Attorney General of Wyoming, Specks, Collen, and Goldberg as attorneys for plaintiff; the manual signature was by Goldberg. The claim was stated for a class of all CCS entities (“governmental purchasers”) in Wyoming. Why Wyoming should have sued in the Northern District of Illinois is puzzling for the same reasons as indicated in (11) above. 68. On February 5, 1969, the City of Chicago commenced an action in the Northern District of Illinois (69 C 232; after transfer here, 69 Civ. 901). The complaint was signed by the Corporation Counsel, by one of his Assistants, and by Freeman (as Special Assistant Corporation Counsel). The claim is stated for the City as a purchaser and also for “all individual consumers” in Chicago. 69. On February 6, 1969, Peterson’s Pharmacy, Inc. (apparently a retail drug store in Minnesota) and nine other retail druggists in Minnesota commenced an action in the District of Minnesota (69 Civ. 44; after transfer here, 69 Civ. 1554). The complaint showed Mastor, Mattson, Hart & Serán and Chestnut, Jones, Brooks, Kennedy & Burkard and Cochrane & Bresnahan as attorneys for plaintiffs; the manual signatures were by Robert W. Mattson, Jack L. Chestnut and John A. Cochrane. The claim was stated for a class of all retail druggists in Minnesota. II. Summary of the Actions Commenced Through February 6, 1969 The class actions commenced through February 6, 1969 and with which we are concerned may be divided into three groups: (A) by CCS entities, for public hospitals and in a number of actions for individual consumers; (B) by retail and wholesale druggists for a class of retail and wholesale druggists; and (C) by private hospitals for a class of private hospitals, both non-profit and proprietary. A. Actions by CCS Entities By February 6, 1969, 44 actions had been commenced by CCS entities (one of which was by way of counterclaim). Shapiro represented the largest number of these, twenty: Alabama, Florida, Georgia, Iowa, Kentucky, Louisiana, Massachusetts, Minnesota, Mississippi, Missouri, North Dakota, Ohio, Oklahoma, Rhode Island, South Dakota, Texas, Virginia and Wisconsin; Cities of New York (counterclaim plaintiff) and Memphis. Freeman represented plaintiffs in nine of the CCS actions: Colorado, Illinois, Indiana, Michigan, New Hampshire, Pennsylvania, West Virginia; City of Chicago; Metropolitan Government of Nashville and Davidson County. Goldberg represented plaintiffs in eight of the CCS actions: Connecticut, Idaho, Maryland, New Jersey, New Mexico, and Wyoming; City and County of Denver; Mayor and City Council of Baltimore. Kohn represented the plaintiffs in one of the CCS actions, that commenced by the City of Philadelphia and City of Detroit (see (11) above). The State of Delaware, the County of Erie (New York), and the Cities of Cleveland and Akron, Ohio, had moved to intervene in this action. In three of the CCS actions — those by Arkansas, New York, and South Carolina — the plaintiffs were represented by their respective Attorneys General. In the remaining three of the CCS actions — those by Boston, Maricopa County and Puerto Rico — -the plaintiffs were represented by private counsel. B. Actions by Wholesale and Retail Druggists By February 6, 1969, eleven actions had been commenced by retail drug stores and by wholesale druggists (one of which was by way of counterclaim). The Ben Schwartz firm represented the plaintiff in one action and the counterclaiming defendant in another action. Two of the actions, those begun in or removed to the Southern District of Florida, were duplicative. In the other actions, separate privately retained attorneys represented the plaintiffs in each action. Freeman represented the plaintiff in one such action (see (33) above), but withdrew by permission in an order filed April 11, 1969. Leo Schwartz represented the plaintiff in one such action; he also represented the City of Boston, a plaintiff in one of 'the CCS actions (see (15) above). Except as indicated, no lawyer for a plaintiff in the actions by druggists was acting for a plaintiff in a CCS action. Kohn — who represented plaintiffs in one CCS action — later appeared for plaintiffs in a class action for retail drug stores commenced on March 26, 1969 (see (83) within). C. Actions by Private Hospitals By February 6, 1969, fifteen actions had been commenced by private hospitals. One of these (see (60) above) did not state any claim for a class. Two of the actions, those begun in or removed to the Southern District of Florida, were duplicative. They also combined in one action claims for a class of drug stores and for a class of private hospitals; these claims were later severed from each other. Kohn represented plaintiffs in one of the private hospital actions (see (19) above). III. Negotiation of the February 6, 1969 Settlement Offers of Defendants The defendants made and announced their settlement offers on February 6, 1969. There were two separate offers: (1) an offer of $100,000,000 in settlement of all claims of CCS entities, wholesalers, retailers, and individual consumers; and (2) an offer of $20,000,000 in settlement of all claims of private hospitals, of all claims of entities who reimbursed private hospitals, and of all other claims (except those covered by the $100,000,000 offer). It seems reasonably clear that the $100,000,000 offer was principally negotiated by Shapiro (and Galligan is understood to be included in a reference to Shapiro), with considerable assistance from Freeman, and with some assistance from Goldberg and Kohn. • The impression made by Kohn’s petition is that he alone negotiated the settlement offers, that he was forced by defendants to keep the negotiations confidential from other counsel for plaintiffs, that Kohn proposed the technique of settlement, and that in September 1968 “counsel for defendants informed [Kohn] they had decided his proposals were feasible and had been favorably considered by them” (petition, p. 7). This impression is not believed to be in accord with the facts. While Kohn may have greatly helped to induce defendants to make the settlement offers, others also helped to achieve this result and the contributions of others, notably Shapiro and Freeman, are believed to have been greater than that of Kohn. Kohn appears to have begun settlement discussions with Stewart (of counsel to Pfizer) on February 28, 1968 and to have continued these during the months through September 1968. Kohn appears to have concentrated on Pfizer. Shapiro began to discuss settlement with McDonald (of counsel to Cyanamid) on April 12, 1968 and to have continued such talks through September 1968. Shapiro appears to have concentrated on Cyanamid. A major obstacle to settlement was raised by Cyanamid counsel with Shapiro. This was the effect on the “passing-on” defense of the decision in Hanover Shoe, Inc. v. United Shoe Mach. Corp., 392 U.S. 481, 88 S.Ct. 2224, 20 L.Ed.2d 1231, handed down on June 17, 1968. This caused Cyanamid to fear claims of wholesale and retail druggists and to insist not only that these be specifically included in any settlement but that their impact be diminished. It was Shapiro who overcame this obstacle. In September 1968, he developed theories of law supporting claims of the CCS entities as parens patriae for individual consumers in their areas and by such CCS entities as class representatives for a class of individual consumers. A memorandum on these theories was sent by Shapiro to Cyanamid counsel under date of October 8, 1968. These theories have also already been noted in the action commenced by Kentucky on November 12, 1968 (see (41) above); they appeared in other actions commenced thereafter and they appeared by amendment in actions earlier commenced. See in this connection Hawaii v. Standard Oil Co. of Calif., 405 U.S. 251, 92 S.Ct. 885, 31 L.Ed.2d 184 (1972). Kohn appears to have proposed one settlement offer by defendants of all the claims, of whatever character — CCS entities, wholesalers, retailers, consumers, private hospitals and every other kind of claimant; according to Shapiro, this was “the concept of a global settlement” (Dec. 1, 1971 affidavit, p. 44). Shapiro, Freeman and others opposed this; they insisted that there should be a separate settlement with CCS entities. What evolved was something different from the Kohn “global settlement” and not quite what Shapiro and Freeman were urging. The $100,000,000 offer was for all CCS, wholesaler, retailer and consumer claims; the $20,000,000 offer was for all private hospital and all other claims. Information about the settlement negotiations from the side of the defendants comes from an affidavit, sworn to March 19, 1970, of Roy W. McDonald, Esq., of counsel to Cyanamid. Mr. McDonald says that the settlement meetings in which he and his firm participated were “predominantly” with Shapiro and Galligan, that Freeman was present “on numerous occasions”, that Goldberg and Kohn were present “at some of these meetings”, and that Goldberg and Kohn were each present “at one or more conferences with defense counsel” at which Shapiro, Galligan and Freeman were not present. Mr. McDonald further tells us that between October 15, 1968 and February 1, 1969 there were 15 meetings about settlement with Shapiro and Galligan, that Freeman was present at 10 of these, that Kohn was present at 3, and that Goldberg was present at 2; McDonald also says that there were “three additional meetings” with Kohn (presumably it was at these meetings that the agreement between defendants and Kohn was worked out). According to Kohn, “counsel for defendants” in September 1968 agreed that Kohn could inform Shapiro of the “progress of the negotiations” and invite Shapiro to join in “the settlement” for his (Shapiro’s) clients. If this is a suggestion that there was a “settlement” in September 1968 and that Kohn had caused it, the suggestion must be rejected in both aspects. It may be that in or shortly after September 1968, there was a merger of the Kohn-Pfizer and Shapiro-Cyanamid negotiations. Beginning October 15, 1968, the negotiations for settlement were both broader and more intense; these ended in the February 6, 1969 offers. It does appear to be true that the $20,000,000 offer to private hospital and all other claimants was worked out between defendants on the one side and Kohn alone on the other. Of those then engaged in settlement negotiations with defendants, only Kohn represented private hospital plaintiffs in a pending action. Shapiro, Freeman and Goldberg represented no private hospital plaintiffs. Defendants apparently made no attempt to discuss settlement with any lawyer for any private hospital plaintiff except Kohn, who represented the plaintiffs in one action. There were then pending ten other actions in which the counsel for plaintiffs were lawyers other than Kohn. These plaintiffs indeed purported to represent classes more narrowly defined than that set out in the complaint in the action in which Kohn was counsel. The Kohn actions defined the class as all private non-profit hospitals in the United States (proprietary hospitals were not included). The other actions defined their classes to include private hospitals within a single state. That Kohn single-handedly negotiated the $20,000,000 settlement offer with defendants does not, however, suggest a generous treatment of his present petition. In the first place, as will later be seen, the $20,000,000 offer was rejected by counsel for all other plaintiffs, by American Hospital Association and by leading members of the class who were not then plaintiffs. In the second place, counsel other than Kohn later succeeded in negotiating a far better settlement offer from defendants than Kohn had done. And finally the efforts of Kohn were clouded by his simultaneous negotiation with defendants for. a fee agreement for himself. IV. The Agreement Between The Defendants and Kohn A. The Agreement Itself While defendants were conducting the negotiations which resulted in the two February 6, 1969 settlement offers, they were at the same time negotiating a separate agreement with Kohn, attorney for class representatives in class actions, for payment by defendants of fees to Kohn. On the afternoon of Monday, February 3, 1969, I had a meeting with counsel for defendants and counsel for a number of plaintiffs — certainly all the more active counsel for plaintiffs were there. It is probable that counsel for private hospital plaintiffs, other than Kohn and Ben Schwartz, were not present. The meeting was not public; the doors of the courtroom were locked; there was no reporter; and the press was not invited. The reason for the secrecy, as told to me and as I now remember it, was simply that the defendants were about decided to make their settlement offers but until they were firmly decided and had agreed on the text of the offers, they did not want any publicity because it might be premature. Under these explanations, I permitted the meeting to take place with the conditions described. The offers expected to be made were then generally explained and I was also told of the agreement by defendants to pay Kohn the “fair and reasonable” value of his services. The fee agreement with Kohn is contained in a letter to him dated February 6, 1969, signed by counsel for defendants. The letter recites that Kohn, beginning in February 1968, had “made suggestions for plans of settlement” and that the two offers made on February 6, 1969 were “incorporating several” of the “suggestions” of Kohn. The letter then refers to the February 6, 1969 settlement offers and states that if “a settlement is ultimately achieved substantially in accordance therewith”, the defendants will pay Kohn “the fair and reasonable value” of his services. The letter continues that if the “sum” for the “fair and reasonable” value of Kohn’s services could not be “mutually agreed upon”, then it was to be “determined by the Court”. A copy of the February 6, 1969 letter to Kohn was sent to me on the same date by counsel to one of the defendants. The present petition is based on the February 6, 1969 letter agreement. It may be noted that, as will hereafter be seen, settlement was not “achieved” in accordance with the February 6, 1969 settlement offers because the $20,000,000 offer, due to the efforts of counsel for plaintiffs other than Kohn, had to be raised and changed. On this petition, the defendants make no point that the settlement as raised and changed was not “substantially” in accordance with the February 6, 1969 settlement offers. B. Why The Agreement Was Made When considering the fee agreement with Kohn, speculation as to its motivation is inevitable. There were four lawyers for plaintiffs who were negotiating with defendants for a settlement before February 6, 1969: Shapiro, Freeman, Goldberg, and Kohn. Why should defendants agree to pay fees only to Kohn? There was no similar agreement made with any lawyer for any other plaintiff. The explanation for defendants as given at the January 24, 1972 hearing was that Kohn “intended to make a claim that his services in the negotiations had benefited the entire group” (SM 38), that is, it was believed that Kohn would ask for a fee allowance in all of the class actions (whether he was counsel in the action or not), probably urging the theory of Sprague v. Ticonic National Bank, 307 U.S. 161, 59 S.Ct. 777, 83 L.Ed. 1184 (1939). The defendants say that they were fearful that the assertion of such a claim by Kohn would “make it difficult” for defendants “to attract to the settlement” (SM 38) the plaintiffs in the pending actions. By promising themselves to pay Kohn the fair and reasonable value of his services, they prevented the assertion by him of any such counsel fee claim. This explanation is accepted as showing a major motivating factor. Counsel other than Kohn (that is, Shapiro, Freeman and Goldberg) had substantial clients and were counsel in actions where the class funds, from which their allowances would come, would be substantial; counsel fee claims from them in other actions than those in which they appeared must have seemed unlikely. Kohn, on the other hand, represented less significant plaintiffs in only one CCS action and at that time (on and before February 6, 1969) represented plaintiffs in only one private hospital action; Kohn would therefore have a much stronger incentive than the other three negotiating lawyers to make counsel fee claims in actions other than those in which he appeared. But there must have been, perhaps unconsciously, a further motive on behalf of defendants for the Kohn agreement. The defendants were trying to settle the private hospital claims; Kohn represented plaintiffs in a private hospital action stating claims for a national class of private non-profit hospitals and was the only lawyer for hospital plaintiffs with whom defendants were negotiating. If Kohn as counsel for the potential private hospital class agreed with defendants on the $20,-000,000 figure, a settlement on that basis might be achieved. Undoubtedly, agreement by Kohn on such a settlement figure could more easily be secured if Kohn had a guarantee that defendants would be answerable for his fees. At the same time, Kohn must have felt that a judge would be more generous in fixing the amount of fees to him if such amount were payable by defendants and did not in any way diminish the recovery of class members. Thus, the fee agreement was designed to secure the cooperation of Kohn. C. Propriety of the Agreement Between Defendants and Kohn The fee agreement between Kohn and defendants raises somewhat disturbing questions, as I have already indicated at one or more hearings. Kohn was acting on behalf of a class. There had not yet been a determination that the actions in which he appeared as counsel could be maintained as class actions. (Fed.R.Civ.P. 23(c) (1)). But he still was negotiating for class members. At the same time, he was negotiating an agreement by which defendants would pay his fees. This seems to involve some conflict of interest. True, the amount of the fee to Kohn was not fixed nor even discussed with defendants. The parties apparently felt that this circumstance eliminated any question of conflict of interest. But it does not appear entirely to do so. A plaintiff’s lawyer who has an agreement that defendants will pay his fees has a strong motive so to conduct himself that defendants will not question or oppose the amount for which he ultimately applies as a fee. I have referred to this question in an unreported opinion filed January 24, 1969 in Josephson v. Campbell (68 Civ. 1356, 68 Civ. 1455). See also Saylor v. Lindsley, 456 F.2d 896 (2d Cir. 1972). In the case at bar, there is nothing to indicate that the parties were conscious of any conflict of interest or self-interest which would affect the result. But the procedure seems wrong in principle and ought to be discouraged. Moreover, however high-minded the parties may be, the appearances are frequently unfortunate. The scholarly Corporation Counsel of the City of New York in a letter to the Court condemns such an agreement as that with Kohn on the ground that it is wrong in principle; he points out that some may feel that, except for such a fee agreement, the class recovery would be larger. In the case at bar, as will be seen, all counsel for private hospital plaintiffs except Kohn rejected the $20,000,000 offer. Kohn alone supported acceptance of the $20,000,000 offer. While doubtless this represented his sincere conviction, those so disposed could easily suspect that the fee agreement affected his judgment. Und