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Shannon P. Duffy
The Legal Intelligencer
05-21-2007

In a ruling that effectively closes the books on more than a decade of antitrust lawsuits against office supply giant 3M, a federal judge has granted final approval of a class action settlement worth nearly $40 million and awarded more than $14.5 million in fees and expenses to the plaintiffs lawyers.

The $39.75 million settlement in Bradburn Parent/Teacher Store Inc. v. 3M -- a class action brought by direct purchasers and retailers -- came on the heels of a trio of settlements reached last year.

In a series of suits, a competitor and purchasers accused 3M -- the maker of Scotch tape and Post-It Notes -- of abusing its monopoly power in the market for transparent tape by driving a competitor out of business.

In August 2006, U.S. District Judge John R. Padova approved a $28.8 million settlement in Meijer Inc. v. 3M, a class action brought on behalf of large-volume retailers who were excluded from the Bradburn case. And court papers show that 3M also struck deals with two big retailers that had opted out of the Meijer case -- Kmart and Publix Supermarkets Inc.

All of those suits stemmed directly from a 1997 suit, LePage's Inc. v. 3M, which resulted in a $68 million verdict in 1999 and a finding that 3M had set out to monopolize the market for transparent tape.

LePage's, a competing supplier of tape, had accused 3M of using illegal tactics to drive it out of business.

To do so, the suit said, 3M offered "bundled" rebates to large retailers for reaching sales goals in several categories of 3M products. In reality, the suit said, the rebates could be earned only by removing LePage's products from their shelves.

At trial, LePage's had argued that it landed significant contracts to provide retailers such as Staples and Kmart with "private label" or store-brand tape, but lost those accounts when 3M offered the bundled rebates since they could be earned only if the retailers purchased targeted amounts of several 3M products.

The effect of the bundled rebate program, LePage's said, was to force the retailers to drop LePage's as a supplier.

A jury agreed and in an October 1999 verdict awarded LePage's $22,828,899 in damages -- a figure that was automatically trebled by Padova, for a total judgment of $68,486,697.

In the wake of LePage's victory, 3M was hit with a pair of class action suits brought by purchasers who alleged that its monopolistic conduct had driven up prices.

In court papers filed in the Bradburn case, the plaintiffs lawyers -- R. Stephen Berry, J. Daniel Leftwich and Gregory Baruch of Berry & Leftwich in Washington, D.C., and Charles M. Jones and Billy N. Jones of Jones Osteen & Jones in Hinesville, Ga. -- argued that the settlement was an excellent result that is likely to bring about few or no objections from the class members.

By recovering more than 40 percent of the class members' damages, the settlement is "in the top tier of antitrust settlements nationwide," the brief said.

The lawyers sought a fee award of $13.5 million, or 35 percent of the settlement fund, after their $1 million in litigation costs was subtracted.

Padova granted the request in full, finding that every factor weighed in favor of the requested fees.

The plaintiffs team, Padova noted, spent more than four years litigating the case, logging more than 9,000 hours in attorney time, and about 2,000 hours in paralegal time.

If paid at their normal billing rates for those 11,000 hours, Padova found that the lawyers would have earned more than $5.4 million. Therefore, he said, a fee award of $13.5 million results in a "multiplier" of about 2.5, a figure that is within the standard range for fee awards in similarly large class action settlements.

Padova also found that while a fee equal to 35 percent of the settlement fund is slightly higher than the typical request for one-third of the fund, the Bradburn team had earned it because the settlement recovered a "much higher" percentage of the class members' damages than most settlements do.