Full opinion text
ORDER RICHARD C. FREEMAN, District Judge. This multidistrict antitrust class action is presently before the court on plaintiffs’ motion seeking approval of a proposed settlement of the litigation, Rule 23(e), Fed.R. Civ.P. Attendant to this evaluation, the State of California, a class member objecting to the settlement proposal, has moved to reopen discovery on the issue of damages and has requested the court’s appointment of an expert to aid resolution of conflicting economic opinion evidence. Additionally, in the event that settlement is approved, plaintiffs’ counsel have filed a joint petition for recovery of fees and expenses. Also if the settlement were approved, the court would schedule preparation, briefing, and argument of a plan of distribution of the settlement fund. As preliminaries to our review and evaluation of the settlement, the court will offer: (1) a brief recapitulation of the proceedings to date; and (2) a short description of the affected industry. I. FACTUAL AND PROCEDURAL BACKGROUND On June 21, 1977, a federal grand jury sitting in the Northern District of Georgia returned indictments charging two corporations, Brink’s, Inc. and Wells Fargo Armored Car Service Corp. and six corporate officers, with violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. United States v. Brink’s, Inc., et al., Cr. No. 77-207A (N.D.Ga.); United States v. Edgar A. Jones, et al., Cr. No. 77-208A (N.D.Ga.). In particular, the indictments charged the defendants with combining and conspiring during a period from early 1968 through August 1975 in order to allocate customers and to rig bids and price quotations. These violations, it was alleged, had the effect of restraining trade and artificially inflating prices of armored car services. On April 21, 1978, the defendants’ pleas of nolo contendere to the charges contained in the two indictments were accepted and approved. Defendant Wells Fargo appealed, but the Fifth Circuit affirmed the judgment, United States v. Wells Fargo Armored Car Service Corp., 587 F.2d 782 (5th Cir. 1979). On June 21, 1977, simultaneous with the return of the indictments, the Government filed a civil enforcement action against the two corporate defendants and thereby sought to enjoin defendants’ continuing or future violations of the Sherman Act, United States v. Brink’s, Inc., et al., C.A. No. 77-1027A (N.D.Ga.). Predictably, within sixty days of the Government’s initiation of the criminal and civil enforcement actions several private parties and states attorneys general filed treble damage actions, 15 U.S.C. § 15, against Brink’s, Wells Fargo, and a third armored car service, Purolator Security, Inc. The civil complaints filed in this and other district courts tracked the language of the criminal indictment and charged defendants with unlawful market allocation and bid-rigging practices from 1968 through 1975. Many of the plaintiffs sought relief on behalf of a statewide or nationwide class of the defendants’ customers. Defendant Wells Fargo petitioned the Judicial Panel on Multidistrict Litigation for identification and transfer of all the civil actions to a single forum pursuant to 28 U.S.C. § 1407. On November 16, 1977, the Judicial Panel granted the Wells Fargo petition and transferred all then pending actions to this court for coordinated or consolidated discovery and pretrial purposes. In re Armored Car Antitrust Litigation, 441 F.Supp. 921 (Jud.Pan.Mult.Lit.1977). The instant litigation is the assembly of seventeen private treble damage actions either originally filed in or subsequently transferred to this district. The Government’s civil enforcement suit has proceeded at all times independent of the coordinated private actions.' Sixteen of the seventeen private actions now seek the court’s approval of their settlement. Immediately before the First Principal Pretrial Conference in this litigation, see Manual for Complex Litigation, Part 1, § 1.00 (rev. ed. 1977), the parties entered settlement negotiations. After approximately two months of negotiating and caucusing, a bargain was struck, with the defendants offering $11.8 million (representing contributions of $5,653,333 from Brink’s, $2,346,667 from Wells Fargo, and $3,800,000 from Purolator Security) in exchange for civil peace for a ten-year period from the plaintiffs. The court, on April 3, 1978, entered Settlement Order No. 1 which tentatively approved the settlors’ proposal, conditionally certified the class of claimants, and formally authorized notification of the class. The conditional class for settlement was defined as: All plaintiffs and all purchasers from any armored car company (not limited to Brink’s, Incorporated, Wells Fargo Armored Service Corporation or Purolator Security, Inc.) or its affiliates of armored car and related services, including coin sorting and wrapping, preparation and distribution of payrolls and air and ground courier services, from January 1, 1968 to February 21, 1978 (including banking institutions which have been furnished by others with armored car and said related services and which have legally recognizable claims against defendants based on the allegations and assertions in the consolidated actions which relate to alleged violations of Federal or State antitrust law in the provision of armored car or related services), excluding only the United States Government, its agencies, departments and instrumentalities, whether corporate or otherwise; the twelve Federal Reserve Banks, in-eluding their branches; and the defendants, their affiliates, parents, and subsidiaries. Although the settlement period runs from January 1, 1968 to February 21, 1978, the parties acknowledge a statute of limitations period from June 21, 1973 to August 31, 1975, absent a showing of fraudulent concealment (and no fraudulent concealment has been alleged). On May 19, 1978, plaintiffs’ representatives mailed 175,000 printed notices and entered advertisements in eleven newspapers across the country, announcing the settlement proposal. The notices identified the named plaintiffs and defendants, recited the complaint allegations, defined the conditional class, and described the amount and terms of settlement. The announcement scheduled a series of 4-6 week deadlines for filing: (i) requests for exclusion from the class, Rule 23(b)(3), Fed.R.Civ.P.; (ii) sworn statements of purchases, and (iii) notices of intention to appear and object at a hearing to review the settlement proposal. The court concluded in the April 1978 order that such notice was “the best notice practicable under the circumstances . . . ” Rule 23(c)(2), Fed.R.Civ.P. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950). The noticed deadlines have now lapsed, the proponents and four objectors have filed written memoranda, and the court has convened two hearings to determine the fairness, adequacy, and reasonableness of the settlement proposal. The first hearing, on September 18,1978, was adjourned upon a finding that the proponents’ “attempted support of the settlement was patently insufficient.” Order entered September 20, 1978, at 1. See In re Armored Car Antitrust Litigation, 462 F.Supp. 394, 395 (Jud.Pan.Mult.Lit.1978). The court cautioned that the settlement could not be approved without the tender of reliable economic data in justification of the proposal amount. See Manual for Complex Litigation, Part 1, § 1.46 (rev. ed. 1977). Plaintiffs thereafter filed an economic supplement to their original memorandum. Included with the supplement were: Affidavit of Myer Rashish (plaintiffs’ economic expert); Affidavit of David I. Shapiro (plaintiffs’ counsel’s account of the negotiations); Exhibit A — sample customer price histories of the three defendants; Exhibit B — sample customer contracts of three defendants; Exhibit C — affidavits of selected officers of the three defendants; Exhibit D — schedules of economic data tabulating or graphing defendants’ revenues and profits on company-wide, local branch, and various competitive market bases; Exhibit E— report of federal and state regulation of the three defendants; Exhibit F — report of the changing geographic markets of the three defendants over the settlement period; and Exhibit G — balance sheets itemizing the net income and net worth of the three defendants. Defendant Purolator Security also filed a memorandum in support of approval of the settlement based on the economic data introduced in the affidavit of its president, William Steele, contained in Plaintiffs’ Exhibit C. The State of California and the Atlantic Richfield Company, two of the four original objectors, renewed and amplified their opposition to the settlement proposal in light of plaintiffs’ economic supplement. , The objections to the settlement may be grouped as charges: that the agreement was hasty and premature; that the notice to class members was inadequate; that the class is improperly drawn; that the proposal lacks reliable economic support; and that the settlement fund amount is insufficient. These objections will be considered in our review of the fairness, adequacy, and reasonableness of the settlement. Additional categories of objections have been lodged against the form, content, and amount of the attorneys’ fee petition. These latter challenges will be entertained in our separate review of the fee petition, infra. Continuing the procedural history of this litigation, a second hearing on the proposed settlement was held on January 25, 1979. At the second hearing, exhibits of economic data and affidavits of economists, corporate officers, and lead counsel were proffered and admitted into evidence, expert testimony was elicited and cross-examined, and proponents’ and objectors’ arguments were heard. The primary matter of fairness, adequacy, and reasonableness of the settlement was taken under advisement upon announcement that the instant order, a final approval or disapproval of the settlement, would issue after thorough review of all the evidence and argument. II. THE ARMORED CAR INDUSTRY As a second predicate to our review, the settling parties have urged that a familiarity with the nature of the armored car industry will aid an appreciation of the settlement herein. At trial, plaintiffs would bear the burden of proving defendants’ antitrust violations and the resultant injury which they suffered. Plaintiffs would also need to establish the difficult prerequisites of a class action, Rule 23, Fed.R.Civ.P., in order to proceed on behalf of the intended nationwide class. It is argued that these tasks become formidable indeed when the affected industry is the armored car trade because: a nonhomogeneous service rather than a fungible commodity is offered; a finely fragmented market is presented; and decentralized decision-making is common. Plaintiffs’ Exhibit C: Affidavits of A. Schossow, Brink’s general manager; T. Jordan, Wells Fargo assistant vice-president; and W. Steele, Purolator Security president. All of these characteristics so complicate the trade as to make proof of violation and impact through comparative price data arguably insurmountable. The service offered by the defendants is tailored to fit individual customer needs. Customizing the service includes considerations of: the amount and type of valuable to be transported, the level of liability coverage to be assumed, the hour and frequency of pick-ups, and the need for additional assistance (such as, coin sorting and wrapping, check cashing, or safe rental and installation). See Plaintiff’s Exhibits A and B (prices paid and contracts executed). As the terms of individual service vary, so too do the prices charged on each account. Comparisons of accounts and invoices therefore provide no meaningful measures of liability or damage. Prices vary as a function of the constellation of services requested but they also vary to reflect the status and health of the defendants in a given market. Within a single market locale, the price charged different customers, and even the same customer owning several branches, may vary depending on the density and profitability of the defendants’ service routes. If several customers line a single route, the fixed costs of labor, fuel, and vehicle use may be shared. But if a customer or a particular branch office is not convenient to an existing service route and a new route must be mapped, the fixed costs will be borne by the customer and the armored car company. Attempts at price comparisons within a single market then become useless gestures. As the price charged varies within a given market, it also varies among markets. The local labor conditions or collective bargaining agreements may greatly affect prices charged from market to market. Brink’s alone was signatory to 124 separate collective bargaining agreements in 1977. The geography and demography of a market may influence costs and pricing. State public service commissions, while not regulating armored car service prices, do regulate entry of providers into local markets and thus affect competition. Plaintiffs’ Exhibit E. Finally, the autonomy of local service centers may account for further variations in pricing. In 1976 Brink’s maintained 160 branch offices, Wells Fargo divided into 103 branches, and Purolator Security had 55 profit centers. The managers and sales representatives in these terminal centers held nearly free rein to negotiate customer contracts and to set service prices. This catalogue of variables, all characteristic of the industry, arguably render usual price comparisons meaningless and tend to confound plaintiffs’ prima facie proof of antitrust liability and impact. In light of the above-described progress in this litigation and mindful of the industry’s idiosyncracies, the court may now begin the review of the proposed settlement. III. FAIRNESS, ADEQUACY, AND REASONABLENESS OF THE SETTLEMENT Settlement agreements are “highly favored in the law and will be upheld whenever possible because they are a means of amicably resolving doubts and preventing lawsuits.” ... In class actions this policy must be coupled with the two-fold requirement that (1) there is no fraud or collusion in arriving at the settlement and (2) the settlement is fair, adequate and reasonable . Miller v. Republic National Life Insurance Co., 559 F.2d 426, 428-29 (5th Cir. 1977). In a class action the court is charged as an overseer of the rights of unnamed passive members of the class and must therefore evaluate settlement proposals with circumspection. Rule 23(e), Fed.R.Civ.P. The facets of our circumspection may be enumerated as: (1) the circumstances of the settlement; (2) the complexity, expense, and possible duration of the litigation; (3) the present stage of the proceedings; (4) the risks of establishing liability; (5) the risks of proving damages; (6) the risks of maintaining the action as a class action through trial; (7) the range of reasonableness of the settlement fund relative to the best possible recovery; (8) the range of reasonableness of the settlement fund relative to the risks posed in this litigation; (9) the ability of the defendants to withstand a greater judgment; and (10) the reaction of the class to the settlement proposal. Miller v. Republic National Life Insurance Co., supra; City of Detroit v. Grinnell Corp. [“Grinnell I’’], 495 F.2d 448 (2d Cir. 1974). See Manual for Complex Litigation, Part 1, § 1.46 (rev. ed. 1977). The proponents of the settlement, of course, bear the burden of proving that the proposal should be approved. Grunin v. International House of Pancakes, 513 F.2d 114, 123 (8th Cir. 1975), cert. denied, 423 U.S. 864, 96 S.Ct. 124, 46 L.Ed.2d 93 (1975). They should be put to a rigorous test but should not be required to stage a mini-trial on the merits, the event which settlement aims to preclude. Newman v. Stein, 464 F.2d 689, 692 (2d Cir. 1972). The court’s review need not reach ultimate conclusions of fact and law in the underlying action, Grinnell I, 495 F.2d at 456, 462; rather, our task is one of balancing probabilities and likelihoods in an evaluation of the settlement proposal. Young v. Katz, 447 F.2d 431 (5th Cir. 1971). See also Protective Committee v. Anderson, 390 U.S. 414, 88 S.Ct. 1157, 20 L.Ed.2d 1 (1968). Similarly, we should be reluctant to interpose our business judgment for that of the settlors; rather, “[the] litigants should be encouraged to determine their respective rights between themselves.” Cotton v. Hinton, 559 F.2d 1326, 1331 (5th Cir. 1977). See Florida Trailer & Equipment Co. v. Deal, 284 F.2d 567, 571 (5th Cir. 1960). Mindful of these principles, the court’s review of the proponents’ and objectors’ evidence and argument may proceed seriatim through the sometimes overlapping fairness criteria. 1. Circumstances of the Settlement. Our review under this first criterion investigates whether the settlement negotiations were conducted in an adversarial or collusive manner. No objector charges any fraud or collusion. Atlantic Richfield argues that the negotiations may have been hasty and premature, and California suggests that the plaintiffs’ bargainers may have opened the negotiations lower than they should have. In essence, the objectors contend that a more favorable compromise might have otherwise been struck. Our evaluation of the settlement proposal is a measurement of fairness, adequacy, and reasonableness, not of optima. The court acknowledges the extensive experience of counsel for plaintiffs and defendants in antitrust litigation and must accede to their business judgment in this review. Flinn v. FMC Corp., 528 F.2d 1169 (4th Cir. 1975). The proponents of the settlement have detailed a chronology of proposals, bargaining, caucuses, and counter-proposals throughout the negotiations. Affidavit of David I. Shapiro. See also Plaintiffs’ Exhibit C, Affidavit of William Steele, Pres, of Purolator Security. Plaintiffs argue that the timing of their settlement overtures just prior to the court’s first pretrial conference was critical. It was speculated that the court at the preliminary conference would direct discovery on the limited issue of class certification and that plaintiffs’ initial investigation revealed that the strength of their bargaining position would diminish after such discovery. They thereupon contend that a deferral of the negotiations would have lessened the settlement prospects and amount. Plaintiffs’ opening offer, $19 million, approximated 5% of defendants’ sales during the June 21,1973 to August 31,1975 statute of limitations period. Counsel had studied a correlation of settlement amount to percentage of sales in a number of similar antitrust cases and chose an ample starting figure which would allow room for later bargaining. When an agreement was finally executed, the settlement fund of $11.8 million represented 3.88% of defendants’ sales for the limitations period and thus fell among the more generous recoveries counsel had studied. While the proponents of the settlement have not persuaded nor even attempted to persuade the court in the preeminence or efficacy of any particular strategy, they have established the fact that the negotiations were conducted at arms length and in the best interests of the plaintiff class. The objectors’ challenges have been investigated, cf. In re General Motors Corp. Engine Interchange Litigation, 594 F.2d 1106 (7th Cir. 1979) (abuse of discretion not to review conduct of and hear objections to the settlement negotiations), and have been answered. 2. Complexity, expense, possible duration of the litigation: The few objectors must concede that this multidistrict antitrust litigation will require complicated, expensive, and lengthy prosecution. If this litigation progressed to its full term, it would daresay outlive many of us. The costs of litigation might very well consume any final recovery, earning only a Pyrrhic victory for the survivors. If the litigation could not proceed on behalf of a nationwide class and was instead split into 50 statewide actions, or 500 market locale prosecutions, or 5-50,000 individual plaintiff lawsuits, the burden on the judiciary and the time taken from all others before the court would be enormous. See Grinnell I, 495 F.2d at 467. These factors all favor acceptance of the settlement proposal. 3. Stage of the proceedings: The litigation is in its infancy and the greatest savings of time and expense relative to full-term prosecution are now recoverable. However, as the objectors argue, this is also the time when the least is known about the prospects of full-term litigation. The objectors charge that the settlement was hastily entered into and was precipitously foisted upon the unwary class. They assail any settlement before an opportunity for formal discovery. Plaintiffs’ initial discovery attempts were stayed by our order entered October 13, 1977, pending a decision on transfer of the cases by the Judicial Panel for Multidistrict Litigation. They were also slowed in their investigation by the magistrate’s sealing of the Bill of Particulars in the criminal actions. Once settlement was proposed and before an agreement was executed, teams of plaintiffs’ counsel reviewed the mass of Grand Jury documents. Further, once we adjourned the first fairness hearing for want of supporting economic data, the parties engaged in extensive informal and cooperative discovery. The objectors are not satisfied but seek wider and more formal discovery. We now have a compendium of documentary evidence and a selection of testimonial evidence upon which to evaluate the settlement. The fact that this material was produced informally and cooperatively is not a failing but is a recommendation for the settlement. See Cotton v. Hinton, 559 F.2d 1326, 1332 (5th Cir. 1977). This material, under protective seal upon defendants’ motion, see Order entered October 20, 1978, has been made accessible and available to the objectors. The fact that this material was compiled informally or cooperatively does not alter its reliability or thoroughness. Although these antitrust actions are in their infancy, “the desired quantum of information necessary to achieve a settlement. . . . ” Cotton v. Hinton, 559 F.2d at 1332, has been reached. Because this stage of the litigation affords the greatest returns and yet, under the circumstances, does not compromise the necessary amount of supportive data, settlement appears to be favored. 4. Risks of establishing liability : The strength or weakness of plaintiffs’ case is of course crucial to a determination of adequacy of a settlement. Protective Committee v. Anderson, 390 U.S. 414, 88 S.Ct. 1157, 20 L.Ed.2d 1 (1968). Assaying the strength of the claims requires a consideration of the required proof in a treble damage action. While proof under Section 1 of the Sherman Act, 15 U.S.C. § 1, requires only proof of a violation of the Act, civil recovery under Section 4 of the Clayton Act, 15 U.S.C. § 15, demands 2-part proof of liability and damages. To establish liability under Section 4, the civil plaintiff must prove: (1) a violation and (2) an impact on plaintiff. State of Alabama v. Blue Bird Body Co., 573 F.2d 309, 317 (5th Cir. 1978). The “impact”, sometimes referred to as the “fact of damage” or “causal link”, id., has been declared “the sine qua non for stating a cause of action.” Shumate & Co. v. National Association of Securities Dealers, Inc., 509 F.2d 147, 152 (5th Cir. 1975). Plaintiffs contend that while proof of a violation by a nationwide conspiracy would be difficult, proof of nationwide impact would be nearly impossible. California, as an objector, responds contending that plaintiffs protest too much and that from local, limited investigation violation and impact are readily apparent. At the outset the court notes that plaintiffs herein are not armed with prima facie proof of defendants’ violation of the federal antitrust laws. A similar circumstance was presented in Lindy Bros. Builders, Inc. v. American Radiator & Standard Corp., 382 F.Supp. 999 (E.D.Pa.1974), vacated and remanded, 540 F.2d 102 (3d Cir. 1976): Thus, this was not a case where plaintiffs received from the government on a silver platter the evidence necessary to prove their claims against the three convicted defendants, much less against the thirteen which had entered pleas of nolo contendere. Substantial problems of proof were present as to both liability and damages. 382 F.Supp. at 1016. Brinks and Wells Fargo pleaded nolo contendere to conspiracy charges of market allocation and bid-rigging from 1968 through 1975. These charges were echoed in plaintiffs’ civil complaints. Purolator Security pled nolo contendere to similar charges but limited to a conspiracy in the city of Detroit for a 10-month period, 1974-75. The nolo contendere pleas, unlike guilty pleas or verdicts, are not accorded the status of prima facie evidence of a violation in subsequent civil actions, 15 U.S.C. § 16(a). Lindy Brothers Builders, Inc. v. American Radiator & Standard Sanitary Corp. [“Lindy I”], 487 F.2d 161 (3d Cir. 1973). Lacking this automatic proof, plaintiffs would have to adduce their own evidence to build proof of a Sherman Act violation. Plaintiffs do not contend that the proof of a pervasive conspiracy would be impossible, merely difficult, in light of the fragmented market and discontinuous violations, and thus a risk of litigation which would have to be countenanced. Defendant Purolator Security argues that proof of a violation would be impossible. Cf. Liebman v. J. W. Petersen Coal & Oil Co., 73 F.R.D. 531, 535 (N.D.Ill.1973) (prima facie case readily established and probability of liability was substantial). The court need delve no further into this first part of the liability proof than to ascertain that some risk is involved, as the second part of plaintiffs’ proof, by all appearances, would be decidedly difficult. Plaintiffs must establish in the second part of their liability proof that defendants’ violation of the Sherman Act caused them harm. In a casebook instance of price-fixing involving a fungible product peddled in the same or similar markets to standardized categories of consumers, the proof of impact can nearly be presumed from the overcharge. See e.g., In re Sugar Industry Antitrust Litigation, 73 F.R.D. 322 (E.D.Pa.1976). Here, however, the charges are of market allocation and bid-rigging in the sale of a service in variant markets to nonhomogeneous buyers. The circumstances created by the very nature of the industry do not lend themselves to a generalized proof; rather, regional or individual evidence of impact might ultimately be required. See State of Alabama v. Blue Bird Body Co., 573 F.2d at 322 (5th Cir. 1978); Windham v. American Brands, Inc., 565 F.2d 59 (4th Cir. 1977) (class certification to be denied upon a finding that neither the products nor the purchasers were fungible). California, as an objector, points to the apparent uniformity of bids and prices submitted to its political subdivisions and predicts that similar patterns may emerge in other markets. The court has previously ruled that the conspiracy causing artificially inflated prices in California appears to be a different conspiracy from the one here in issue as it allegedly involves only codefendant Brink’s acting in concert with other armored car services not parties to this litigation. Order entered December 4, 1978. Therefore, plaintiffs’ proof of liability may not be impossible, as defendants would boast, but it is, upon our review, uncertain. 5. Risk of establishing damages : If, as we have found, plaintiffs face a substantial risk in proving defendants’ liability, that is, in demonstrating “violation” and “impact,” they then must also admit to an uncertainty in establishing damages. This uncertainty results from the apparently sporadic conduct of the alleged conspiracy and from the idiosyncracies of the armored car industry itself. The wages of the conspiracy may have ebbed and flowed with the entry or exit of other competitors in a particular market area. See Plaintiffs’ Exhibit F (Defendants’ market expansion and contraction during the pertinent period). Prices of armored car services, see Part II, infra, are functions of multiple variables rendering market-to-market and even customer-to-customer comparisons meaningless. Establishing damages might therefore require difficult temporal and individualized proof of injury. While damages need not be established with precision, they may not be merely speculated. Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251, 264, 66 S.Ct. 574, 90 L.Ed. 652 (1946). The risk and expense in establishing damages must therefore also be countenanced in evaluation of the settlement. 6. Risks of maintaining action as a class action : The questions of whether plaintiffs could have certified a nationwide class of customers and, if so, whether such certification could have survived the litigation are not easily answered. Assuming plaintiffs could satisfy the requirements of numerosity, commonality, typicality, and representativeness of Rule 23(a), they would still face the rigorous test of demonstrating the predominance of common questions of law and .fact in the action and the superiority of proceeding as a class rather than individually in the action, Rule 23(b)(3), Fed.R.Civ.P. The predominance of issues and the manageability of the action must be determined upon an application of relevant law to the unique circumstances presented in any action. In private antitrust actions charging price fixing in the trade of a fungible product, see e. g., In re Sugar Antitrust Litigation, 73 F.R.D. 322 (E.D.Pa.1976), the superiority and manageability of the action as a class action may be more readily apparent. But in antitrust actions charging other violations, or involving nonfungible products, or concerning disparate consumers, the fitness of a class action becomes less certain. For example, in Windham v. American Brands, Inc., 565 F.2d 59 (4th Cir. 1977) (en banc), the trial court’s refusal to certify a class was held not abusive of discretion when it appeared that sales of various grades of tobacco at several markets over four marketing seasons would require mini-trials or individualized proof of impact and damage. See also Chestnut Fleet Rentals, Inc. v. Hertz Corp., 72 F.R.D. 541 (E.D.Pa.1976) (class certification denied as “fact of damage” would have to be established on an airport-by-airport basis); In re Transit Co. Antitrust Litigation, 67 F.R.D. 59 (W.D.Mo.1975) (class certification denied as five defendants and 1400 leasing agreements were involved). Yet in In re Master Key Antitrust Litigation, 70 F.R.D. 23 (D.Conn.), appeal dismissed, 528 F.2d 5 (2d Cir. 1975), the sale of building lock and key hardware to numerous government entities in variant markets did not pretermit class certification as generalized impact and injury could be presumed from the alleged overcharges. See also Shelter Realty Corp. v. Allied Maintenance Corp., 75 F.R.D. 34 (S.D.N.Y.1977) (class certification granted in an antitrust action charging market allocation and bid-rigging of building maintenance services when court noted a fungibility of the providers, if not of the services, and a possibility of formulary damages). See generally Developments in the Law — Class Actions, 89 Harv.L.Rev. 1318, 1362-65 (1976). Plaintiffs would attempt to draw analogies from the latter line of cases and to disassociate themselves from the former. This admittedly difficult task has recently been greatly encumbered. After the proposed settlement agreement had been executed and the court’s first settlement order had issued, the Fifth Circuit reversed a trial court’s certification of a class in a contagiously similar private antitrust action, Alabama v. Blue Bird Body Co., 573 F.2d 309 (5th Cir. 1978). The plaintiffs in Blue Bird charged the defendants with violative price fixing and market allocation in the school bus manufacturing industry. The trial court had certified a nationwide and a statewide class of claimants. The appellate court reversed the nationwide certification and remanded the case, opining that the lack of any nationwide impact evidence precluded prosecution on such basis. In strikingly apt terms, the court described the peculiarities of the case and the affected industry: [Tjhis particular litigation might not fit into the category of a “classic” antitrust price-fixing conspiracy where all legal and factual issues relating to the conspiracy are uniformly related to all those allegedly harmed. Rather, in this case neither the products involved nor the purchasers appear to be standardized. The plaintiffs’ class includes different sizes of governmental buyers, operating under different conditions throughout the United States, and the products involved, while commonly known as school bus bodies, apparently differ in many respects and have been marketed under various arrangements at different times, [footnote omitted] 573 F.2d at 322. In re Armored Car Litigation shares many of the peculiar attributes cited in Blue Bird. See Plaintiffs’ Exhibits B (sample contracts), C (affidavits of defendants’ officers), and D (schedules of defendants’ revenues and profits). The plaintiffs would, of course, seek to distinguish the facts and holding in Blue Bird from the circumstances presented herein. They would argue that a nationwide conspiracy was practiced in the armored car industry and that its impact although sporadic and uneven was felt in all markets. The proof would be difficult, if not impossible as defendants portend. The objectors have argued that if maintenance of the action as a class action would be so problematic then perhaps it should proceed in subclasses or separate individual actions. Perhaps this would, in fact, be the result if the litigation proceeded and did not stop short at settlement. But at this moment and upon all the arguments and facts presented, the court perceives no individual injustice if the action is settled on the basis of the nationwide class which was conditionally certified, Settlement Order No. 1, entered April 3, 1978. California as an objector claiming substantial injury had maintained that its recovery would be unfairly diminished by a forced sharing of the fund with less seriously injured class members. The court, however, has already found that the special plight of the State of California was more probably caused by an unrelated West Coast conspiracy. Order entered December 4, 1978, at 3. California’s claims under such a conspiracy may not be compromised by the settlement herein. Id. See Zenith v. Hazeltine Research, Inc., 401 U.S. 321, 342-48, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971). Upon all the foregoing considerations, it appears that plaintiffs’ risks of maintaining the action as a class action throughout the litigation would be great and that settlement at this time would be opportune. 7. Range of reasonableness of the settlement fund in light of the best possible recovery: In order to assess the adequacy of a particular settlement fund, the court needs some idea of the relative bounds, first, of best possible recovery and, second, of probable recovery with regard to the risks inherent in the litigation. Measuring these bounds does not imply that they set the limits of permissible recovery in settlement. The fact that a proposed settlement may only amount to a fraction of the potential recovery does not, in and of itself, mean that the proposed settlement is grossly inadequate and should be disapproved. Grinnell I, 495 F.2d at 455. See Harry Lewis v. Great American Mortgage Investors, et al., C.A. No. 75-591 and W. R. Morgan, et al. v. Great American Mortgage Investors, et al., C.A. No. 75-769 (N.D.Ga. May 11, 1978) (Freeman, J.) (approving class action settlement paying 1% of claims); Helfand v. New America Fund, Inc., 64 F.R.D. 86 (E.D.Pa.1974) (approving class action settlement granting payment of 5% of claims); In re Four Seasons Securities Laws Litigation, 58 F.R.D. 19 (W.D.Okla.1972) (approving class action settlement affording approximately 8% recovery on claims); Sunrise Toyota v. Toyota Motor Co., [1973-1] Trade Cases (CCH) ¶ 74,398, at 93,821 (S.D.N.Y.1973) (approving class action settlement authorizing no damage award). Instead, these estimated ranges of possible recovery merely serve as reference points in the court’s evaluation of the presented settlement offer. The court requires reliable economic data in order to assay the fairness, adequacy, and reasonableness of the settlement proposal. No single formula of damage calculation is prescribed or possible in antitrust actions. What is necessary is “ ‘a just and reasonable estimate of the damage[s] based on relevant data.’ ” Hobart Brothers Co. v. Malcolm T. Gilland, Inc., 471 F.2d 894, 902 (5th Cir. 1973) quoting from Bigelow v. RKO Pictures, Inc., 327 U.S. 251, 264, 66 S.Ct. 574, 90 L.Ed. 652 (1946). “The essential thing is that the plaintiff develop a theory about how the amount of injury can be measured and introduce the data necessary to make the estimate.” L. Sullivan, Handbook of the Law of Antitrust 786 (1977). Plaintiffs have now supplied and introduced into evidence reams of economic data; their economic expert has analyzed the data and has projected an estimate of damages. Plaintiffs postulate a range of $8,523,032 to $16,741,670 (with an average of $11,871,366) in damages for the statute of limitations period, June 21, 1973-August 31, 1975. The settlement fund of $11,800,-000 falls comfortably within this projected possible damage range. The Atlantic Rich-field Company, a class member, has indirectly objected to plaintiffs’ damage projection by complaining that it is not grounded upon any “formal” discovery. The State of California objects: (i) to the use of profits rather than prices as a basis for plaintiffs’ estimate of damages; (ii) to the methodology of the profit analysis; and (iii) to the computation employed in this analysis. Plaintiffs’ estimates and the objectors’ challenges have been thoroughly considered by the court; the estimates have been deemed reliable and the challenges have been found wanting. A brief overview of plaintiffs’ derivation of the ranges of possible damage and of their answers to the objectors’ charges, however, is warranted in this final order. The plaintiffs’ economic expert, Myer Rashish, perused sample contracts, Plaintiffs’ Exhibit A, and purportedly representative price histories, Plaintiffs’ Exhibit B, of defendants’ customers. These contracts had been selected at random from categories of defendants’ customers, the categories assigned by the size of the account, Plaintiffs’ Exhibit C. Mr. Rashish concluded and the objectors concede that this “price data” is meaningless and unuseable. Because of the very nature of the industry, a sale of an individualized service subject to local negotiations under variable market conditions, see Part II, supra, a classic comparison of conspiracy and non-conspiracy prices to estimate damages was not practicable in plaintiffs’ expert’s opinion. The plaintiffs thereupon sought to determine whether an estimate of damages could be projected from a different base of information. Although plaintiffs conceded that price comparisons would be necessary in a proof of damages at trial, they theorized that some other analysis might provide the requisite range of damage estimates for settlement approval. Profit information was readily available and upon initial and continued examination, plaintiffs postulated that profit data could serve as the surrogate for the lacking price information. This hypothesis of a close but not exact relationship of profit and price assumes that anticompetitive conspiracies are entered into and maintained for the purpose of turning greater profits and that the increase in profits roughly reflects the injury suffered by a class of customers. The court finds the hypothesis sound and the assumption trustworthy in formulating an estimate of damages for review of a settlement proposal. California objects and adamantly argues that only prices may form the basis for an estimate of damages. California unrealistically adheres to this objection in the face of insupportable odds. Meaningful price data have simply been unavailable in this industry. The objector proposes that the search for the data has been incomplete and suggests that a proper analysis might require collection and tabulation of price histories of every customer in every village, hamlet, and town. Testimony of Robert Springer, January 25, 1979, hearing, Tr. at 57. The objector predicts, however, that a thorough compilation of this data in a few cities may produce statistics that would suggest a pattern of price increase which could be extrapolated to other cities. But even a detailed collection of price histories for some cities would be a monumental and costly undertaking. It can only be assumed that a substantial portion, if not all, of the settlement fund would be consumed in such an effort. Common sense demands that a reliable substitute, if available as herein, must be pursued to ensure protection of the class of claimants. California’s theoretical dissatisfaction with a profit study to estimate damages must be quelled in the best interests of the class. California’s motion to reopen discovery on the issue of damages must accordingly be DENIED. Proceeding then to a review of the profit study, plaintiffs’ economist sought in four separate analyses to compare the during and post-conspiracy profit margins. In his four approaches, he sought to isolate that portion of the profit margin differential which could be attributed to the conspiracy rather than to unrelated variables. Plaintiffs’ expert does not pretend that these analyses are precise but instead suggests that they will produce a reliable range of possible damages, the reliability commensurate with the roughness of the available data. California, upon its own expert’s review of the plaintiffs’ four approaches, objects again to the use of profits rather than prices as a base, and also to the methodology and computation of plaintiffs’ analyses. The objector urges that profits will underestimate damages in a conspiracy because the costs of policing the conspiracy will deflate profits and because noncompetitive trading is a “narcotic” to efficiency and profit-making, see United States v. Aluminum Co., 148 F.2d 416, 427 (2d Cir. 1945). California’s expert has opined that with these alleged errors damages may be twice (Objector’s Response to the Economic Supplement, at 15), four times (Objector’s Response to Plaintiffs’ Reply, at 2), or even ten times (January 25, 1979 Hearing, Testimony of R. Springer, at Tr. 51) the $11.8 million reached by plaintiffs’ analyses. California asked the Court to appoint its own expert to review the analyses and criticisms. The Manual for Complex Litigation, Part 1, § 3.40 (rev.ed.1977), specifically allows court appointment of an expert when: the parties’ experts have offered conflicting or irreconciliable opinions or when any well-recognized school of thought is not represented in the opinions proposed to be offered or when a court-appointed expert would facilitate understanding of the technical issues involved or under circumstances in which a court-appointed expert might be necessary or desirable. See also Rule 706, Fed.R.Evid. The Manual suggests that although appointment of a court’s expert should be “the exception rather than the rule . . .,” the appointment exception may lie when the parties’ experts disagree on the theory, as opposed to the factual basis, for their opinions. This exception, it is argued, is presented in the dispute at hand because while California may object to alleged errors of plaintiffs’ profits analysis, it primarily assails plaintiffs’ choice of profits as a measure to assay the settlement fund. The plaintiffs challenged California’s request as unprecedented, Plaintiffs’ Reply, at 4; defendant Purolator Security opposed the request as unnecessarily delaying, Purolator Memorandum, at 32. The court concludes that a court-appointed expert will not be necessary or desirable in this instance. Although California has attempted to obscure simple calculations with clouds of algebra, our task is clear and is not complex. The court at this juncture need only be assured by reliable economic data that the settlement proposal is fair, adequate, and reasonable. The court has already rejected California’s challenge to the use of price comparisons. The proponents need only supply an educated estimate of damage ranges. We are convinced that has been done and will not authorize decimation of the settlement fund in order to pinpoint the claimed injury. The objector’s challenges to the method and calculation, see infra, are found similarly wanting. A court-appointed expert would not be helpful under these circumstances. California’s request should therefore be DENIED. The challenged approaches of plaintiffs’ expert, Myer Rashish, may be briefly reviewed. In his study of profits, Mr. Rashish performed four different analyses of the profit data, Plaintifs’ Exhibit D, with each analysis stated in terms of a profit differential comparing conspiracy and post-conspiracy profits. Assuming, but not accepting, profits as the currency of the study, the objector has proceeded to challenge each of the four phases of plaintiffs’ expert’s analysis as both invalid in theory and flawed in execution. Rashish Analysis # 1— An examination of the average profit margins of the three defendants in the fifty largest cities in the United States during the 1968-75 conspiracy years was compared with the similar average for the 1976-77 post-conspiracy years. The examiner noted a marked decline in the profit margin in the post-conspiracy years. The differential, expressed as a percentage of sales, was approximately 3.0, unweighted, and 6.0, weighted. “Weighting” considers each profit margin in light of the volume of business done by each conspirator in each of the fifty cities, that is, it determines whether the market was shared equally (Vs, Vs, Vs) or unequally by the three codefendants and then “weights” the profit according to the market share. The examiner selected the midpoint, 4.5, between the unweighted 3.0 and weighted 6.0 (not knowing which more accurately reflected the profit differential in this industry) and multiplied 4.5 times $304,394,000, defendants’ total sales to class members for the two year statute of limitations period June 21, 1973 — August 31, 1975. The conclusion drawn from this approach estimates damages between $9,131,-820 and $18,263,640, or at an average of $13,697,730. California challenges this result contending that only the 6.0% weighted profit differential has meaning and that the unweighted figure will tend to understate damages. California, using this 6% figure, estimates that damages for the statute of limitations period should be approximately $18,000,000. Rashish Analysis # 2— The overall profits of the three defendants in the conspiracy and post-conspiracy years were studied, making an adjustment for any profit trend attributable to other variables, such as a predictable profit decline associated with a generally faltering national economy. The examiner identified a general downward trend in profits in 1972-75 during the conspiracy. He expressed this trend as an average decline for the years, -1.2%, and then projected this trend line for two years beyond the conspiracy, giving an expected profit margin of 8.9% in the non-conspiracy years. The actual average profit margin for the non-conspiracy years was 6.1%. Thus a differential of 2.8% of sales might hypothetically represent profits due to the conspiracy alone. This differential was translated into an estimate of damages of $8,523,032 for the statutory period. California complained that the data have been unfairly manipulated to leave out the peak year 1971. Using this year, the objector arrived at a differential of 4.9% and damages of $14,920,000. Mr. Rashish replied that he was not unjustly manipulating the figures but was instead attempting to spot trends. He reran his analysis using an average profit margin decline derived from a study of all the conspiracy years, 1968-75, and arrived at a differential of 2.7% or damages of $8,228,638 for the limitations period. Rashish Analysis # 3— A comparison was made between the armored car industry and the trucking industry, a close but not perfect analogy, to determine damages during the conspiracy period. To account for the differences in the industries, a comparison was first drawn between the average trucking profit margins, 5.0%, and the defendants’ average profits in the post-conspiracy years, 7.5%, revealing a 2.5% profits margin difference between the two industries. The expert then examined the average defendants’ profit margin for the conspiracy years,' 13.0%, subtracted the trucking industry profit margin, 5.0%, and adjusted this figure by the 2.5% difference attributable to industry differences (i. e., (13%-5.0%)— 2.5%) to arrive at 5.5% as a statement of defendants’ ill-gotten gains during the conspiracy years. This percentage equalled an estimated $16,741,670 in damages for the fourteen-month period. California challenged the choice of the trucking industry, a highly regulated business, as an analog for a comparative analysis. Further, the objector noted that the benefits of the conspiracy were not completely purged in the post-conspiracy years. Because all effects were not purged, these years would not provide a perfect competitive norm, and therefore use of profit margin differences for these years would arguably tend to understate damages. California suggested that the best use of a bad analog would be an unadjusted comparison of defendants’ armored car conspiracy profits, 13%, and trucking industry profits, 5%. This comparison resulted in an 8% profit margin differential and yielded estimated aggregate damages of $24,350,000. Rashish Analysis # 4— A comparison was studied of conspiracy and post-conspiracy profit margins in markets in which defendants competed with each other and in markets where they did not. Such an analysis predicts that the profit margin differential will be greater in those categories of markets where more than one defendant did business because it was in those markets where they could conspire to allocate routes and customers or to rig bids. Comparing the during and post-conspiracy profit margin differentials for the two categories of markets in which more than one defendant did business resulted in an average differential of 4.5% or estimated damages of $13,697,730. California challenged the meaning of this comparison, contending that weighted and unweighted data had been carelessly mixed. California made no estimate of damages of its own under this approach. Mr. Rashish replied, showing that only weighted averages were used, and then performed an additional calculation comparing profit margin differentials in markets with other defendants with those from markets with no competition from a codefendant. This calculation was an attempt to adjust the previous result for variables attributable to something other than the conspiracy. Comparing these sets of market categories resulted in a new identification of the profit margin due to the conspiracy, 2.9%, or an estimated $8,827,427 in damages for the statute of limitations period. A tabular summary of the estimated damages for the statute of limitations period, using the four Rashish approaches, reveals: California’s Plaintiff’s estimate estimate $18,000,000 $13,697,730 Rashish Analysis # 1 $14,920,000 $ 8,523,032 Rashish Analysis #2 $24,350,000 $16,741,670 Rashish Analysis #3 Unknown $13,697,730 and recalculated at $ 8,827,427 Rashish Analysis # 4 Plaintiffs’ average estimated best possible recovery for the statute of limitations period equals approximately $13.7 million or approximately $11.8 million when Rashish Analysis # 4 is recalculated. The objector’s range of estimates runs from $15 to $24 million. The settlement fund of the proposal is set at $11.8 million plus interest. If the plaintiffs’ attempt to produce a reliable economic estimate of best possible recovery were accepted, the settlement proposal amount would fall comfortably within considerations of fairness, adequacy, and reasonableness. The court concludes that plaintiffs have finally supplied reliable economic data justifying the settlement amount. We state no opinion as to whether these are the best available data and the most reliable analyses, only that they are acceptable and rational means of estimating damages under the circumstances presented. On the basis that these estimates of the optimum recovery coincide with the proposal offer, settlement of the litigation is clearly favored. 8. Range of reasonableness of the settlement fund in light of the risks posed in litigation : If the settlement fund falls comfortably within a range of estimates of the best possible recovery, it must a fortiori fall within or beyond the bounds of likely recovery under the circumstances of the litigation. In a review of a settlement proposal “[t]he most important factor is the strength of the case for plaintiffs on the merits, balanced against the amount offered in settlement.” West Virginia v. Charles Pfizer & Co., 440 F.2d 1079, 1085 (2d Cir. 1971). See Protective Committee v. Anderson, 390 U.S. 414, 424-25, 88 S.Ct. 1157, 20 L.Ed.2d 1 (1968); Young v. Katz, 447 F.2d 431, 434 (5th Cir. 1971); Florida Trailer & Equipment Co. v. Deal, 284 F.2d 567, 571 (5th Cir. 1960). We have previously determined that the risks of prosecuting this action, if not insurmountable, are at least severe. The estimates of likely recovery would therefore be mere fractions of the $8-16 million range of best possible recovery. If all of California’s doomsaying were realized, that is, that plaintiffs’ estimates understate damages two, four, or even ten-fold, the settlement fund of $11.8 million would still appear more than ample in the face of these substantial risks. The court again reminds that the test is of fairness, adequacy, and reasonableness of an amount offered today in the early stages of litigation, and that: there is no reason, at least in theory, why a satisfactory settlement could not amount to a hundredth or even a thousandth part of a single percent of the potential recovery. Grinnell I, 495 F.2d at 455 n.2. Under such scrutiny, the settlement offer is certainly sufficient. 9. The ability of the defendants to withstand a greater judgment: The Second Circuit in Grinnell I explained the importance and underpinnings of this consideration. Appellants have cited no authority for the proposition that the defendants’ ability to pay is an improper consideration when approving a settlement offer. Likewise, we are unable to find any such authority. Common sense seems to dictate the necessity, to say nothing of the propriety, of such a consideration. In fact, all available authority defies appellants’ analysis. According to the United States Supreme Court: “Further, the judge should form an educated estimate of the complexity, expense and likely duration of such litigation, the possible difficulties of collecting on any judgment which might be obtained, and all other factors relevant to a full and fair assessment of the wisdom of the proposed compromise.” Protective Committee v. Anderson, supra, 890 U.S. at 424-25, 88 S.Ct. at 1163. 495 F.2d at 467 (emphasis in original). A settlement amount which would plunge the defendants into immediate bankruptcy would not serve the best interests of the class of claimants. Although a defendant should be compelled to disgorge his ill-gotten gains for violation of the federal antitrust laws, see Liebman v. J. W. Petersen Coal & Oil Co., 73 F.R.D. at 536, this mandate becomes less forceful when questions of violation and gain go unanswered. The court then looks to the defendants’ ability to pay in weighing the strengths of the case and the potential bounds of injury. An officer of defendant Brink’s testified that the Brink’s contribution to the settlement fund and the criminal fines previously imposed approximate its 1977 corporate earnings and equal one and one-half years’ shareholders’ dividends. Plaintiffs’ Exhibit G, Affidavit of A. Tolan. The Wells Fargo contribution exceeds its 1977 net operating income. Plaintiffs’ Exhibit G. Purolator Security’s president declares that its share in the fund together with the costs of satisfying the civil and criminal charges greatly exceeds the company’s net profit for 1975, 1976, and 1977 combined. Id., Affidavit of W. Steele. The codefendants’ balance sheets, Plaintiffs’ Exhibit G, affirm these declarations and suggest that the fund approaches the limit of their ability to pay. 10. Reaction of the class to the settlement proposal: A report and supplemental report on the interim administration of the proposed settlement relate that in response to the approximately 175,000 notices of settlement and to the ten national newspaper announcements, a total of 7,952 claims and 213 requests for exclusion from the class have been filed. Of the four objections originally lodged against the settlement, one, the objection of the State of Ohio, challenged only the attorneys’ fee petition, and another, that of the Central Penn National Bank, was not renewed after the plaintiffs’ submission of their economic supplement to their original memorandum in support of the settlement. Upon these reports, 99.975% of the class of claimants may be viewed as supporting the settlement and thereby favoring the court’s approval of the proposal. Cf. Cotton v. Hinton, 559 F.2d at 1331 (settlement proposal approved although more than half of the class appeared to object to the proposal). The court, however, must be reluctant to place undue reliance on the claimants’ apparent acquiescence. In some cases, class acquiescence may be explained either as the individual members’ unwillingness to expend the time and money necessary to file and pursue objections or as a failure of the settlement notice adequately to describe the terms and conditions of the proposal. The court finds that these explanations should not be presumed herein and that silence should be deemed consent. The members of the instant class, customers of armored car services, are predominately governmental subdivisions or large private corporations, such as banks, department stores, and grocery store chains. They are not private individuals, such as hotel guests or automobile or fuel purchasers. Compare State of West Virginia v. Chas. Pfizer & Co., 314 F.Supp. 710 (S.D.N.Y.1970), aff’d, 440 F.2d 1079 (2d Cir.), cert. denied, 404 U.S. 871, 92 S.Ct. 81, 30 L.Ed.2d 115 (1971) (class composed of public and private institutions which purchased antibiotics) with In re Hotel Charges, 500 F.2d 86 (9th Cir. 1974) (class composed of hotel guests improperly surcharged for telephone calls); In re General Motors Corp. Engine Interchange Litigation, 594 F.2d at 1106 (class claimants were individual car purchasers); and Liebman v. J. W. Petersen Coal & Oil Co., 63 F.R.D. 684 (N.D.Ill.1974) (class members were individual purchasers of coal in the Chicago area). The instant plaintiff class members are expected to be capable of marshalling the resources necessary for an objection. Failure to interpose objections may then be read as affirmance of the settlement proposal. The court has already concluded that the notice published in this litigation was appropriate and adequate. Settlement Order No. 1, entered April 3, 1978, at 5. The notice described the foundations of the litigation, detailed the terms of settleme