HomeMy WebLinkAbout1969-01-07; City Council; Resolution 15811
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- RESOLUTION NO. l5cf?/
PREAMBLE :
called entity, has previously authorized the Attorney
General of the State of California to institute on its
behalf one or more law suits under the Federal Antitrust
Laws which law suits were in fact filed against defendants
United States Steel Corporation, Smith-Scott Company, Inc.,
Kaiser Steel Corporation, United States Industries, Martin-
Marietta Corporat ion, United Concrete Pipe Corporation,
and Amerlcan Pipe and Construction Co.
2. Pursuant to court orders, similar actions
brought by the Federal Government and other plaintiffs in
the States of California, Oregon, Washington and Hawaii
were all coordinated before a single Federal District
Court Judge.
3: In 1967 the actions against all defendants,
with the exception of American Pipe and Construction Co.,
were settled and compromised on a lump sum basis, the pro-
ceeds being distributed amongst the varfous plaintiffs
pursuant to an agreement, all of which was duly approved
and ratified by entity ana approved by the Court.
4. A condition of the acceptance of said partial
settlement by certain plaintiffs not represented by the
Attorney General of the State of California was an agree-
ment by and between the plaintiffs concerning the conduct
of the litigation still remaining against, and the
allocation among plaintiffs of the expected recovery from
defendant American.
as the Western Associated Pipe Plaintiffs Organization
This agreement known to plaintiffs
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Compact provides, among other things, for (a) common
sharing of expenses; (b) the retention of a lead
counsel to prosecute and try all cases against the
remaining defendant American Pipe and Construction
Co. under the supervision of an Executive Committee
of the plaintiffs party to the compact; and (c) the
distribution of any recovery against American to
all plaintiffs proportionately to their verified
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transactions with American over the fourteen year
period 1950 through 1963.
5. On July 14, 1967, the Attorney General
of the State of California entered into such Compact,
hereinafter called WAPPO, on behalf of entity. Since
then, the agreements embodied in the WAPPO Compact have
been and are being carried out'with the Attorney General
of California as chairman of its Executive Committee.
6. Plaintiffs' counsel, acting through their
Executive Committee and lead counsel, have now negotiated
and reached agreement on the terms of a settlement and
compromise of the litigation with defendant American
Pipe and Construction Co., the terms of' which are more
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fully set out in the attached document entitled "MEMORANDUM
OF UNDERSTANDING FOR SETTIiZMENT OF WEST COAST PIPE CASES
BETWEEN ALL PLAINTIFFS AND AMERICAN PIPE AND CONSTRUCTION
COMPANY".
7. Such Memorandum of Understanding provides
for payment by American to all plaintiffs of the lump
sum amount of eight million five hundred thousand
dollars ($8,500,000) over a period of seven years
with interest.
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2.
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a NOW BE IT RESOLVED THAT:
A.
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The MEMORANDUM OF UNDERSTANDING FOR SETTLEMENT
-OF WEST COAST PIPE CASES BETWEEN ALL PLAINTIFFS AND
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5 AMERICAN PIPE AND CONSTRUCTION COMPANY and the Western
6 Associated Pipe Plaintiffs Organization Compact, copies
of which are attached hereto as Exhibits "I" and "III",
respectively, are hereby adopted, ratified and confirmed.
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The of entity is
hereby authorized to sign the release of claims against
the dei'endant and attached hereto as Exhibit "11" as the
official act of entity.
C.
The Attorney General of the State of California
is hereby authorized by entity to enter into a stipulation
dismissing this litigation with prejudice and without
costs and to take any and all other action which may be
required of this entity in order to effectuate and con-
summate the compromise and settlement provided for in said
Memorandum of Understanding and distribute any monies
received from defendant American Pipe and Construction Go.
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in accordance with said WAPPO Compact.
Adopted this yJ3 day of , 19&.
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MENORANDIM OF TNDERSTANDIXG FOB SETTLENEhT OF NEST COAST PiPE
CASES BETWEEN ALL PLAIhTIFFS AND A3ERICAN PIPE AX) CONSTRUCTION
COWANY .
Par ti e s :
The parties to this menorandum of understanding are the
Western Agsociatlon of Pipe Plaintiffs' Organization, hereafter
referred to as "WAPPO", and American Pipe and Construction
Company, hereafter referred to as "American. 11
Amount to be Paid:
American agre.es to pay to the fiscal agent designated by
WAPPO the sum of eight million five hundred thousand dollars
($8,500,000) payable as follows, to wit:
The sum of one million two hundred fifteen thousand two
hundred dollars ($1,215,200) on or be'fore January I, 1969, to
the fiscal agent designated by FYA??O wkic'n said sm shall be ~. ..
placed in either an interest-bezring savings accoznt or in the
purchase of a certizicate of deposit at the aption of WAPPO and'
which is to be returned eo Anericail in the evect of a failure -
to consummate this-settlement within nine months of the date
hereof.
million two huadred fifteen thousand two hundred dollars
($1,215,200) to the plaintlzfs until the- fiscal agent has received
certified copies af the orders of dismissal of all WAPPO Pipe Cass
Said fiscal agent shall not distribute the SUI of one
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Axnef-ican further agrees on or before January 1, 1969 to
deliver to said.fisca1 agent its promissory note In the s7m of
seven million two hundred eight-four thousand eight ?"red.
dollars ($7,284,800) payable to the order of said fiscal zgent
at its address in installments as shown on Exhibit "A" zr.6 bearing
interest at the rate of five percent (5%) per annuxi on the ..
declining balances of said rmte, said interest to be payzble at
# - EXHIBIT I, p. 1 of 5 -.
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the.saxe tlme principal papAer?tIs are required to be rnade here-
=der. Said note shall further provide that if any interest
is not paid as it becones &a, it shall be added to the principal
arid bear a like rate of interest. Said note shzll furcher
provide that if any payirient of either principal or interest:
is not made as it becomes due, the entire balance of said note
remaining unpaid shall becoxe and be immediately due and payable.
Said note shall also reserve to American the right to make pay-
menix on account of principal or interest in advance of their
due date without penalty.
that irr the event an action is corr,?lenced to collect said note
or ar,y part thereof, there shall be added to the judgxent for
any priixipal or interest founi? by the court to be due such
additional sm by way of attorneys' fees as to the court having
jurisdiction of szid cause shtll se25 reasonable, said attorneys'
Said note shall further 2rovide
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-- -*:- q * 9 fees to be due on the filizg or" a coqlaint.
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T n.-L= -- -2 3-7: -r i 0- i.7 ~ - , < :,t /--- - -.L- -4 _- -
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t# $& - /-- __. .
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American by Decenber 16, 1968 shall provide I?AF,;?O with copies
of any arid aL1 agreements or aaerdnmts thereto x~ith creditors
of American which authorizes the perfornance of this
-3 aLnorand-m of und-erstenZiEg zild shall be- in form and sdcstance
satisfactory to counsel. for lJA??O.
kATe?icm agrees that it ~7iiI provide such assistance in
verifying plaintiffs' transzctions as WPPO shall fron the to
tlme require. .
American and its attorneys agree that the appeal 05 a
Laxpyer zgainst the City of Szn Diego shall be d'-.-. is s ec!
by Decexber 16, 1968, .. and to trithdrzw nations by Amerlcz~
zltzcking the validity of VA??G, selection of special coxnsel
EXHIBIT I, -3 - - p. 2 of 5 -.
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City and
e a-
County of San Fraricisco, and all other pending motions
and challenges in the Western ?ipe Cases.
Anerican and its attorneys agree to execute a covenant in
a form satisfactory to \?ATP0 covenanting that American and its
attorneys shall not further attack in any manner the validity
of WQPO and the selection of special counsel by the State of
California.
Each plaintiff that is a signatory to WAPPO shall release
its claim against Anerican, and special counsel for WA??O
shall stipulate to dismissal with prejudice and without costs
of its action against American.
Protective Order:
No person attending the .meeting between counsel on Xovenber
20 and 21, 1968 concerning the sxbject matter of this nemorandum
.of understanding shall divulge the nature thsreof nor of any
of the subjects discussed thereat to any person whose
responsibilities or duties to one or nore of the parties herein-
dd not require thathe be consrzlted concerntng or inforxed of
said discussions in order for one or nore of said parties to
tzke zction with respect to any of ths. subjects discussed oil
szid dates, and no officer, eqloyee or agent of-any or' the
parties hereto shall disclose zny of the Ezoresaid subjects to
any othar person whose'responsibi1ities.o-r duties to one or
xore of the parties do not require such other'person to have
knowledge of such subjects in or&r for one or nore of said
parties to take action with respect thereto, until:
December 2, 1968, or one day following disrnissal of the
jury in the trial of Washington Public Power Systen Su?ply -
v. American, whichever is lster.
Consziimation of Settlemmt:
The settlement herein referred to resulted' from discusstons
betwzen counsel for plaintiffs arzd 2merican in proceedinzs
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before the Honorable Martin Pence concluded on Xovenber 21, 1968
in San Diego, California.
Course1 for the pzrties hereto each agree to recormend in
good fzith, without qualiZication, and with full measure of
sqport, the settlement set forth herein to their respective
client or clients, it being wderstood that ratification by
such clients is necessary.
In consideration of the payment of the settlenent amount
set forth in this memorandm of understznding, plaintiffs
shall deliver to Americzn duly executed releases and stipulations
to dismiss as above provided, together with duly adapted and
certified resolutions or equivalent documents. ratifying and
confirming this settlexa~t,
Americaa agrees to furnlsh-WAPPO with certified copies of
the resolution
bozrd of directors, arid certified copies of the resolution of
of h-erican TLpe arzd Cons:ruction Conpeny' s
Pi2e Linings, Inc. (the latter concernkg t5.e City of San ..
Diego litigation) authoriziilg Amricex's officers z~rd attorneys
to make this settlenent.
The- docuients- reze-rred to shall 3e. in such form as shall be
agreed to between 'EIATPO and Lierican. -.
Execution of -zhis Mc"rmd-~r:
This memoranda of urrierstanding nay be executed in any
~u332r of counteqarts with like effect as if all signatures
were on the origiqd.
DATED: November 21, 1968.
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January I, 1969 $I , 215 > 200
c April 1, 1969
July 1, 1969
October 1, 1969
505 , 800
505,800
505 , 800
505,800
505 , 830
Ja~uary I, 1970
April 1, 1990
July I, 1970
January E, 1971
July 1, 1971.
January 1, 1972
July 1, b972
Jawary 1, 1973
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505 , 800 !-
472,300
472 , 300
472,300
.4.72,300
472 ;3OO
472,300 July I, 1973
January I, E974
July 1, 197k
472,300
472,300 .
471,600 January I, 1975
'. Total $8,503,030
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EXii BIT "A"
p. 5 of 5 - EXHIBIT I
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REIXASE OF AMERICAN PIPE & CONSTRUCTION GO.
1.. This release is executed in favor of and for
the benefit of American Pipe & Construction Go., a California
corporation, together with its subsidiary and affiliated
companies and the present and former officers, directors, .,
employees and agents of American Pipe 8c Construction Co. and
its subsidiary and affiliated companies, including successors
by merger, the heirs, representatives, executors, adminis-
trators, successors and assigns thereof (he.reinafter designated
as "American").
2. This release is executed by c(m @/aJ2L523@J
11 hereinafter designated as Releasor".
3. This release concerns and relates to the
following products and services manufactured or supplied
by American: concrete or steel pipe or any other products
or services associated with the construction of pipelines
and other installations utilizing concrete or steel pipe,
including by way of illustration only and without limiting
the generality of the foregoing, the lining or coating of
new pipe, the rehabilitation of used pipe, both in place
11 11 and elsewhere, pipe lining materials such as Amerplate,
either separately or as a constituent part of pipe manu-
If factured by American or others, and specials" such as
manhole 'pipe.and fittings manufactured, sold by or supplied
by American (hereinafter designated It pipe products").
4. The period of time covered by this release is
prior to January 1, 1969, but includes nevertheless any
transactions between American and Releasor either directly
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1 or indirectly which transactions are still pending as of
2 January 1, 1969.
3 5. For and in consideration of the sum of One
4 Dollar ($1.00) and other valuable consideration paid by
5 American to Releasor, the receipt of which is hereby
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acknowledged, Releasor hereby forever releases, discharges
and acquits American of and from each, eve'ry and all claims,
controversies, actions, causes 0.f action, obligations or
liabilities of any nature whatsoever, now or hereafter
known, suspected or claimed, which Releasor or any of its
agents ever had, now has or hereafter can, shall or may
have or allege against American based upon allegations of
conspiracy, collusion, monopoly or attempted monopoly, which
might be asserted under the Clayton Act (15 USC, $$ 15 and
26), or under any other state or 'federal antitrust trade
regulation or similar law giving rights to relief under
the same or similar circumstances; and in connection with
the foregoing only, Releasor expressly waives the provisions
of Section 1542 of the Civil Code of the State of California,
reading :
"1542. (Certain Claims Not Affected by General Release.) not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.
A general release does
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25 6. Releasor warrants that the persons executing
26 this document on behalf of Releasor are fully authorized
27 so to do and Releasor makes such warranty in full knowledge
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28 that Releasee has no independent knowledge of the authority
29 or lack thereof of such persons but is relying upon
30 Releasor's warranty.
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2.
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1 7. Any claim, action or conhroversy concerning
2 this release shall be determined under the laws of the
3 State of California.
4 IN WITNESS WHEREOF, Releasor has caused this ,
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day Of-
& release to be executed this ,7
& C/q-I/LS@ (Full name of Releasor) c lry
h
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3.
. WESTERN ASSOCIATED PIPE
PLAINTIFFS' COMPACT
1. This Agreement is made and entered into this
14th day of July , 1967, by and between the parties
set forth on attached Exhibit "A. It
Background to and Pur-gose of Compact:
2. The parties have each for some time asserted
against defendant American Pipe and Construction Cozpany
(hereinafter usually called American") and others in
Federal Court complaints and causes of a@tion alleging
It
damage occasioned by activities in violation of the federal
. antitrust laws.
3., Certain of the parties are also asserting com-
plaints and causes of action of the same nature against
American Vitrified Products Co .' (hereinafter called "Amvit")
and certain of the parties are asserting eomplalnts and
causes of action of the same nature relatfng to in-place
pipe rehabilitation against Pipe Linings, Inc., a subsidiary
of defendant American.
4. The parties are in the process of effectuating
an agreement with certain other defendants in the above actLons
concerning the pipe transactions of said other defendants and
their respective liabilities wLth respect thereto and reserving
to the parties their causes of action against all other persons,
firms, and corporations, including American, Amvit and Pipe
Linings, Inc.
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5. The parties have been and are currently required
by the Courb in their handling, past and present, of this
mass of litigation (hereinafter collectively referred to as
the "Western Pipe Cases'' or the litigation") to
cooperate and to coordinate their respective activities through
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a single counsel and an attorneys' steering cotnmittee
a c- a
without any assurance of relative trial priority inter se
or of any specific degree of trial consolidation and to
proceed to collective and simultaneous preparation for
trial of all causes pending against American.
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6. It further appears from the volume of claims
? now asserted against American by the parties that successful
early trial of only some of said causes and execution of
judgment thereon could substantially prejudice the
collectibility of other claims of equivalent merit and equity.
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7. To achieve equity and parity of-right and
bearing in mind the ultimate equivalence of the public
'. interest in all meritorious claims, the parties intend by
this Compact to provide a contractual framework to accomplish,
among other things, t e following: 9
(a) Create an organization named and hereinafter called, "Western Asso- ciated Pipe Plaintiffs Organiza-
equate their diverse interests, sum their common interests and' decide on steps to be taken by the parties in the Western Pipe Cases;
Create an Executive Committee of WAPPO to oversee the day-to-day conduct of the Western Pipe Cases by special counsel;
Arrange for the engagement of quali- fied special counsel to conduct ,the Western Pipe Cases on 8 day-to-day basis until conclucied, subject to the supervision and control of Executive Committee;
Provide for the financing of the Western Pipe Cases and the appointment of a Financial Committee, composed of two trustees to handle and administer all financial provisions of this Compact;
-tion, It or, "WAPPO," which will
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(b)
(e)
(d)
(e) Provide for the distribution of pro- ceeds realized from the Western Pipe Cases among the parties on a pro rata basis in accord with the verified dollar magnitude of each party's clain; and
2.
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NOW, THEREFORE, in consideration of the foregoing
promises, recitals, objectives and purposes, and for other
valuable consideratim, the parties hereto mutually agree,
as' follows :
WAPPO : Organization, Membership, Powers and Duties, Voting, Procedures, Activities, Miscellaneous
8. There is hereby created the Western Associated
Pipe Plaintiffs Organization (WAPPO) whose membership
shall consist of each party to this Compact and each of
which parties shall be represented in WAPPO activities by
and act through a representative who is an attorney.
attorney may represent more than one party.
designate alternate representatives.)
This
(A party may
Each parlty hereby
delegates to its representative all necessary authority,
subject to reasonable reports, to carry out Compact, except
as to those matters expressly requiring party governing
body action.
.
9. WAPPO shall meet on the call, reasonably
noticed, of Executive Committee, special counsel, or of
35% of the votes of WAPPO members evaluated by the formal
(transaction basis) vote prescribed herein, +
10. Voting at WAPPO Meetings:
(a) Unless any representative requests
a formal transaction basis vote or this Compact elsewhere
so requires, representatives shall each vote on the matter
being considered, each representative to have only one
vote regardless of the number of par7ties he represents.
This shall be known as the "informal voting basis. If
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(b) Whenever a representative requests a
formal (transaction basis) vote or this Compact so requires,
the matter in question shall be determined by formal vote
and formal vote shall supplant informal vote on the same
matter if occurring at the same WAPPO meeting.
vote each representative's vote shall be weighted to reflect
inter party the % of dollar volume of the parties for whom
the representative votes and represents to all parties
volume (i.e. 100%) based on pipe acquisition transactions
of the parties from American as determined from the 8-year
verified transaction statements of Americah (Sept. 1, 1954
In a formal
dollar
- Aug. 3l,,1962, inc.) on file with the Bank of America
National Trust and Savings Association in San Francisco in
its capacity as agent in effectuating the agreements
referred to in paragraph 4, above.
(c) Any representative at any WAPPO meeting
may request either-an informal or formal vote on any matter
and if the request is seconded the vote shall be taken.
(a) Unless otherwise .specified herein, an
informal v0t.e shall be decided by a simple majority of
those present and voting; and a formal vote shall be
decided by 51% of the dollar volume present and voting.
11. Duties of WAPPO Representative:
Each member shall perform such litigation
tasks as are assigned to it by special counsel and/or the
Executive Committee or by majority WAPPO vote. Such tasks
are to be distributed as equitably as PO,, csible,
12, A quorum for WAPPO meetings shall be 51%
of the dollar value of the 8-year period American verif'i-
cattion skatements.
13, The designated WAPPO representatives of the
*partLes are set forth on Exhibit "A" opposite the name of
the party represented.
4.
e '% EXECUTIVE COMMITTEE: 0-
Organization, Membership, Powers and Duties, Voting Procedures, Miscellaneous,.
14. The Executive Committee shall consist of one
WAPPO representative from each of the following parties or
groups of parties:
(a) Pacific Northwest
(a)
(d) City of San Diego
%as Angelea County Flood Control District
- (e) Other California plaintiffs
Such representative may be removed by either the naming
party or by a 90% formal WAPPO vote but the succes;sor shall
be named by the naming party. A party may voluntarily resign
its right to designate a WAPPO Executive Committee representa-
tive, in which case a 51% formal WAPPO vote shall designate
the succeeding naming party. The members of the Executive
Committee and their alternates are set forth on attached
Exhibit "B." An alternate may vote in the absence of his '
principal.
15. The permanent Chairman of the Executive Committee
shall be the representative of the State of California.
16.' The Executive Committee shall meet as needed in
its or its chairman's discretion to carry out its duties and,
in addition, shall meet on call, reasonably noticed, of
special counsel.
17. Executive Committee meetings shall be limited to
its personnel, their aides as needed and the ex officio memberri
who shall be, however, without vote. Said ex officio members
are special counsel, his aides as needed and the members of
the Financial Committee established by this Compact.
18. Any WAPPO member may (but without vote) attend
Executive Committee meetings where his caze is under special
consideration or the meeting is with representatives of
American and his case is' under special consi.deration.
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19. Any WAPPO member may attend (but without
vote) any Executive Committee meeting where he is requested
to attend by a committee member, but such request shall be
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for cause ..
-. 20. Executive Committee, subject to the terms
,and conditions of this Compact, shall have full authority .
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. to supervise and control special counsel in his carrying out
of the day-to-day administration of the litigation.. Execu-
tive Ccmmittee shall report on its activity at WAPPO meetings .e
called as the litigation situation renders desirable.
still feasible, WAPPO may review and reverse Executive
Where
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Committee decisions by majority vote.
21, Reprssentatives of the Executive Committee
may attend such of- special counsel's meetings with repre-
sentative .of defendants 2s said cormittee chooses.
22. Voting at Executive Committee Meetings: -
All Executive Committee matters shall be determined in
Executive Committee meetings by a simple majority of the
members present, except those natters otherwise treated in
this Compact.
shall be three members unless the non-appearing members
waive a quorum.
*--
A quorum' for Executive Committee meetings
* 23. Executive Committee members shall be reimbursed
their reasonable travel and living expenses in attending
meetings of the Executive Committee duly called as-provided
in this Compact.
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SPECIAL COUNSEL:
Engagewnt or" - Basic Terns; Powers and Duties.
24. The provisionsof 'r this Cong~cc sL.?.~l.l cor.tro1 i
.over iize provisions of the ,contract or eng;?g:,";m2nk of specizl
counsel' and that contract shall so acknoi,s:l22.;s.
6.
- 0 25. The Executive Committee shall contract
behalf of WAPPO for the engagement of special counsel
sistent with the provisions of this Compact.
26. Special counsel shall be entitled to be reim- '
bursed for expenses incurred in carrying out his duties, as
follows: personal expenses such as transportation, hotel
and living expenses, and the usual expenses of litigation,
such as reporters' fees, deposition costs and handling of
documents may be incurred without prior approval by the
Executive Committee. Extraordinary expenses such as expert
witness fees or the employment of personnel, must be approved
in advance by the Executive Committee. Expenses will be
paid for'on a monthly basis based on statements thereof
submitted to and approved by the Executive Committee and
Finance Committee.
27. Special counsel shall receive for his services
his out-of-pocket expenses and 10% of amounts recovered from
American, American Vitrified, and Pipe Linings, Inc. in
concluding all the litigation against said defendants, after
first deducting the out-of-pocket expenses of WAPPO from
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such recovery. These shall include all joint WAPPO expenses
but not those of the individual members. Any awards of
attorneys' fees or costs shall be held and distributed by
the Finance Committee in the same manner as are proceeds of
settlement or judgment.
28. Special counsel shall not receive on account of
his 10% contingent fee more than $500,000 unless and until all
WAPPO causes of action against said defendants now on file or
subject to a motion to add in the litigation have been terminated.
29. Subject to this Compact, the day-to-day super-
vision and control of Executive Committee and the rendition
of adequate and timely reports to the Executive Committee,
special counsel shall have the duty, responsibility,
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Y and authority ta conduct the litigation to a final con-
. clusion on behalf'of all WAPPO members. Special counsel,
with majority Executive Committee approval, may determine
the trial priority stance of WAPPO before the judiciary.
30. Special counsel is not obligated to initiate
and conduct an appeal except as he is directed by the
Executive Committee, but shall be obligated to defend all
.. appeals.
FINANCE COP4MIITTEE
..
..
Organization, Membership, Powers and Duties. . &
31. There is hereby created the Finance Comiiittee
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of WAPPO, composeh of two individuals, Robert M.' Desky, Esq.
and John M. Burnett, Esq., who shall function vis-a-vis
WAPPO as trustees in the matters here set forth. *
32 - The Finance Committee shall'be the historical
successor .and hei? to the financial ad.ministrators of the
Association of Pipe Antitrust Plaintiffs (APAP), who . ,
arranged for and handled group finm-cing of the litigation
'.
prior to about July 1, -1967. .
33. The Finance Committee shall arrange for and
handle the funding of future litigation expenses and the
payment thereof.
expenses will be obtained from the parties comprising NAPPO
by means of' pro rata assessment based upon the American 8-
year verification statements. Such assessments shall be
proposed by the Finance Committen from tim to time in such
amounts as may be ne'cessary to provide a' fund for the payment
of anticipated expenses-of the lltigztion and shall be
approved by the members of 'rCA??O. . 2ch member of WAPPO
hereby agrses to pay approved asa5ssnents prongtly upon
demand.
Funds for the pabment of litigation
34. The Finance Committee is authorized to make
suitable arrangements for the safekeeping of all funds
received by them or subject to their order and to engage,
at WAPPO expense, clerical personnel as required in carrying
out their duties hereunder.
35. The Filzance Committee shall handle all financial
dealings with special counsel and the Executive Committee,
the payment of expenses and all other financial aspects of
the litigation.
arrangements. for and shall oversee the distribution of
proceeds of all recoveries contemplated herein.
Authority to- Negotiate Settlements, to Recommend Approval of Settlements, to Approve Settlements.
36e
The Finance Committee shall make the necessary
Except as hereinafter provided, special counsel
shall only be authorized to effect a negotiated settlement
of any cause or causes of action upon unanimous recommendation
of all members of the Executive Committee. In the event that
settlement of one or more causes of action, but less than
all, is to be negotiated, the recommendation of the attorney
or attorneys of record for the plaintiff or plaintiffs
involved shall also be secured. With respect to any case,
however, which is in the course of trial (i.e.., called for
trial by the clerk and on which hearings are currently pro-
ceeding prior to verdict, or in the instance of a court trial,
prior to submission of the cause for decision), special counsel
shall be authorized to effect a negotiated settlement of the
case at trial upon the recommendation of three out of five
members of the Executive Committee, provided that under such
circumstances the additional recommendation of the attorney or
attorneys of record for the plaintiff or plaintiffs whose
claims are being tried must also be secured. Notwith-
standing the foregoing provision, however, any settlement
which shall constitute a settlement of' the claims of
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all plaintifrfs aGainst one or' more defendants in the
Western States Pipe Cases must receive the unanimous re-
, cowendation of all members of the Executive Committee.
37. It is expressly agreed that no party shall
settle any-cause of action referred to herein in which it
is a plaintiff except in accordance with the provisions of
this Compact. . In the event; that any settlement is recom-
mended by special counsel and by the Executive Committee
in accordance with the provisions of the preceding paragraph
36, it is agreed on behalf of all attorneys of record for
WAPPO members that they, and each of then, will, in good
faith, reconunend approva. of such settlement to their public
agencies or superiors that they represent.
38. Notwithstanding alny other provision of this
Compact, the governing bodies of the parties hereto
expressly reserve the right to approve or disapprove any
settlement arfecting their respective causes of action.
This reservztion, however, shall' not be deeined to affect
the authority delegated by this Compact to WAPPO, the
Exec ut ive Commit tee and special counsel zs regards the
-day-to-day conduct of the litigation.
Distribution of Proceeds of Settlernznt and Judgmnts Obtained in th3 Litin2kion.
39 All monies recovered 2nd received from de-
fendents American, Amvit znd Pips LirzTngs, - LIC. as the pro-
ceeds of either a settlement negotiated and agreed upon or
a judgment rendered in the litigatinr, shall be trapsferred
im.nediately upon receipt to the order of the Finance Com-
mittee for deposit in a st~te or lnational bank designated
. by said Finance Cormittee, artd shall be distributed as pro-
' vided hereinafter. ..
mittee for deposit in a st~te or lnational bank designated
. by said Finance Cormittee, artd shall be distributed as pro-
' vided hereinafter. ..
10.
40. Proceed:: - Priority of Distribution. All
.proceeds received by the Finance Committee shall be dis-
bursed according to the following priorities:
(a) Fees of a bank, if any,'serving as a
depository, or agent for payment. .
(b) Other expenses of distribution.
(c) Reimbursement of all plaintiffs for the
litigation expenses advanced or paid by them to WAFPO pursuant
to assessments duly made in accordance with this Compact.
Payment to special counsel of the fees (a)
and expenses authorized in accordance with this Compact.
(e) The balance of the proceeds as provided
in paragraph 41.
41. Proceeds: Distribution of recoveries from
defendant American and Pipe Linings, Inc. After payment of the
expenses referred to in the preceding paragraph, the balance
' of the proceeds (hereinafter referred to as 11 net proceeds")
received from defendants American and Pipe Linings, Inc.,
whether by settlement or judgment in any cause of action
in the Western Pipe Cases sha.11 be distributed among all ,?
the parties to this Compact in proportion to the dollar
value that each party's pipe acquisition transactions from
American bears to the total transactions of all the parties,
using the transaction verification statements of American
for the 8-year period referred to in paragraph lO(b), above,
as supplemented' by the additional transaction verifications
required by court order of American for the periods January 1,
1950 through August 31, 1954, inclusive, and September 1,
1962 through December 31, 1963, inclusive, the aggregate of
all such periods being referred to herein as "the 13-year
period." Additionally, pipe rehabilitation transactions of
11.
khe City and County of San Francisco to a maximum of $3
million, and of the City of San Diego to a maximum of $1.25
ml;llion, if said entities or either of them are parties to
.. this Compact, will share .in the distribution of the net
proceeds that are the subject of this paragraph on the
.basis of 50% of the amounts of such transactions as verified
by American or Pipe Linings, Inc. within the said 13-year
period.
42. Proceeds: Distribution of recoveries from
All net proceeds, as dsfined herein, of the Uti- Amvit:
gation received from defendant Amvit, whether by settlement
or judgment, shall be distributed exclusively to the party
or parties who have specifically asserted complaigts and
causes of action against said defendant, in proportion to
the dollar value of the pipe acquisition transaction of
each such party, determined or verified in such manner as
may be agreed in writing by all of.said parties participating
in this distribution.
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43. Proceeds: Partial distribution. No partial
or interim distribution of proceec73 of any settlement or-
judgment or any combination thereof shall be made except by
. formal 75% vote of the parties to this Conpact. No such
partial or interim distribution shall bs made or calculated
until the partfes shall have been reimbursed in the amount
of the assessments previously paid to the Finance Committee
'for litigation expenses and until after special counsel fees
and other major litigation expensss then due and owing shall *
have been paid, or reserve for such payxents has b2en set
aside. The sum of a'l1 partial or interin distribution of
* net proceeds, as defined herein, shall z0-L exceed $5 million.
Part payments on account; of s?t?ciai couc^,sc-isr Fses should
be made as requested, based upon the cash rc-cei-ed and
I;!.
available for such payments, having in mind the priority
of payments specified in paragraph 40 above,
shall a tot'al of more than $500,000 be paid special counsel
until the termination of this litigation when all balances
. In no event
due shall be paid.
1
44, Proceeds: Extraordinary and final distribution.
Distribution of proceeds not accounted for by paragraph 43
above, shall be made only upon a 90% formal vote at a WAPPO
meeting, especially called to consider extraordinary or
final distribution. Prior to any final distribution meeting,
the Finance Committee shall take all steps necessary to
arrange for the payment of all WAPPO obligations and the
winding up of its fiscal affairs. Upon the completion of
final distribution of all proceeds of the litigation and the
rendering of its final report by the Finance Committee, WAPPO
and this Compact shall terminate,
45. Execution: This Compact may be executed in
counterpart by the parties thereto. I- .. .
IN WITNESS WHEREOF, the parties hereto have caused
these presents to be subscribed by their representatives duly
empowered so to do as of the day, month, and year hereinabove
first written by subscribing these presents on the spaces
provided on attached Exhibit "A," which is hereby made a
part hereof.
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