HomeMy WebLinkAbout6919 - Antitrust Litigation•
RESOLUTION N0. 6919
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH AUTHORIZING THE ATTORNEY GENERAL
OF THE STATE OF CALIFORNIA TO SETTLE AND COMPROMISE
CERTAIN ANTITRUST LITIGATION WITH THE AMERICAN PIPE
AND CONSTRUCTION CO. ON BEHALF OF THE CITY OF
NEWPORT BEACH
WHEREAS, the City of Newport Beach, hereafter 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., Raiser Steel Corporation, United States
Industries, Martin- Marietta Corporation, United Concrete Pipe
Corporation, and American Pipe and Construction Co.; and
WHEREAS, 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; and
WHEREAS, 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 proceeds being distributed
amongst the various plaintiffs pursuant to an agreement, all of
which was duly approved and ratified by entity and approved by the
Court; and
WHEREAS, 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 agreement 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. This agreement known to.
plaintiffs as the Western Associated Pipe Plaintiffs Organtzation
Compact provides, among other things, for (a) common sharing of
expenses; (b) the retention of a lead counsel to prosecute and try
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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
1 to their verified transactions with American over the fourteen
year period 1950 through 1963; and
WHEREAS, 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 Execu-
tive Committee; and
WHEREAS, 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 fully set out in the attached document
entitled "MEMORANDUM OF UNDERSTANDING FOR SETTLEMENT OF WEST COAST
PIPE CASES BETWEEN ALL PLAINTIFFS AND AMERICAN PIPE AND CONSTRUCT-
ION COMPANY "; and
WHEREAS, 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;
NOW, THEREFORE, BE IT RESOLVED that:
1. The "MEMORANDUM OF UNDERSTANDING FOR SETTLEMENT OF
WEST COAST PIPE CASES BETWEEN ALL PLAINTIFFS AND AMERICAN PIPE
AND CONSTRUCTION COMPANY' and the Western Associated Pipe
Plaintiffs Organization Compact, copies of which are attached
• hereto as Exhibits "I" and "III ", respectively, are hereby adopted,
ratified and confirmed;
2. The Mayor of entity is hereby authorized to sign the
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release of claims against the defendant, attached hereto as Exhibit
"II ", as the official act of entity;
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3. 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 consummate the compromise and settlement provided
for in said Memorandum of Understanding and distribute any monies
received from defendant American Pipe and Construction Co. in
accordance with said wAPPO Compact.
ADOPTED this 137- day of ST a v.7.e y , 1969.
ATTESTo
4
81ty Clerk
!F!E^ A-I 7- 1- ANAL
F `z� -- - - ---- -
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COF THE CITY 61NEWPCRT BEACH
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1/6/69
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MEMORANDUM OF UNDERSTANDING FOR SETTLE 2Ni OF WEST COAST PIPE
CASES BETWEEN ALL PLAINTIFFS AND A=ICAN PIPE AND CONSTRUCTION
COKPANY
Parties:
The parties to this memorandum of understanding are the
Western Association of Pipe Plaintiffs` Organization, hereafter
referred to as "WAPPO ", and American Pipe and Construction
Company, hereafter referred to as "American."
Amount to be Paid:
American agrees 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 before January 1, 1969, to
the fiscal agent designated by WAPPO which said sum shall be
placed in either an interest- bearing savings account or in the
purchase of a certificate of deposit at the option of WAPPO and
which is to be returned to American in the event of a failure
to consummate this settlement within nine months of the date
hereof. Said fiscal agent shall not distribute the sum of one
million two hundred fifteen thousand two hundred dollars
($1,215,200) to.the plaintiffs until the - fiscal agent has received
certified copies of the orders of dismissal of all WAPPO Pipe Cass
American further agrees on or before January 1, 1969 to
deliver to said fiscal agent its promissory note in the sum of
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seven million two hundred eight -four thousand eight hundred. j
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dollars ($7,284,800) payable to the order of said fiscal agent
at its address -in installments as shown on Exhibit "A" and bearing)
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interest at the rate of five percent (5%) per annum on the i
declining balances of said note, said interest to be payable at j
EXHIBIT I, p. 1 of 5
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the same time principal payments are required to be made here-
under. Said note shall further provide that if any interest
is not paid as it becomes due, it shall.be added to the principal
and bear a like rate of interest. Said note shall further
provide that if any payment of either principal or interest
is not made as it becomes due, the entire balance of said note
remaining unpaid shall become and be inunediately due and payable.
Said note shall also reserve to American the right to make pay-
ments on account of principal or interest in advance of their
due date without penalty. Said note shall further provide
that in the event an action is commenced to collect said note
or any part thereof, there shall be added to the judgment for
any principal or interest found by the court to be due such
additional sum by way of attorneys' "fees as to the court having
jurisdiction of said cause shall seem reasonable, said attorneys'
Zees to
be due on the
filing of a
complaint. -�
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American by December 16, 1968 shall provide WAPPO with copies
of any and all agreements or amendments thereto with creditors
of American which- authorizes the performance of this
n:.= morandum of understanding' a-nd snail be in form and substance
satisfactory to counsel for VAPPO.
r`_:mrican agrees that it will provide such' assistance in
ve_`N744nu plaintiffs' t "_ari.^,actloils as WAPPO shall from time to
time
American and its attorneys agree that the appeal of a
taxpayer against the City o£ can Diego shall be dis:::isse
by Dece':Der 16, 1968, and to ejithdraw motions by American
att?..Cki-64 tine validity of t�'A� _'O; selection of s ccial co;._.sal
rzy the State of i,211£ornia, S settlen:rrit wi"h the
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City and County of San Francisco, and all other pending motions
and challenges in the Western Pipe Cases.
American and its attorneys agree to execute a covenant in
a form satisfactory to WAPPO covenanting that American and its
attorneys shall not further attack in any manner the validity
of WAPPO and the selection of special counsel by the State.of
California.
Each plaintiff that is a signatory to WAPPO shall 'release
its claim against American, and special counsel for WAPPO
shall stipulate to dismissal with prejudice and without costs
of.its action against American.
Protective Order:
No person attending the meeting between counsel on November
20 and 21, 1965 concerning the subject matter of this memorandum
of understanding shall divulge the nature thereof nor of any
of the subjects discussed thereat to any person whose
responsibilities or duties to one or more of the parties herein
do not require that he be consulted concerning or informed of
said discussions in order for one or more of said parties to
take action with respect to any of the subjects discussed on
said dates, and no officer, employee or agent of.any of the
parties hereto shall disclose any of the aforesaid subjects to
any ogler person-whose responsibilities or duties to one or
more of the parties do not require such other person to have
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nowledge of such subjects in order for' one or more of said
parties to take action with respect thereto, until:
Dec'.:mber 2, 1968, or one day followi.ig dismissal of t--:e
jury 14A the trial of Washington Public Power System Supply
v. American, whichever is later.
Cons ; umn. -ation of Settlement:
i.t.e settlement herein rei.ireG t0 resulted �_OIIl d iscussions i
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between. counsel for plaint_ =is a.d American iri uroceadings
EXHIBIT I -3- p. 3 of 5
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before the Honorable Martin Pence concluded on Nove 1b2r 21, 1968
in Satz Diego, Califorr-_a.
Counsel for the parties hereto each agree to recomr -.lend In
good faith, without qualification, and with full measure of
Support, the settlement set forth herein to their respective
client or clients, it being understood that ratification by
such clients is necessary.
In consideration of the payment of the settlement amount
set forth in this memorandum of understanding, plaintiffs
shall deliver to Arerican duly executed -releases and stipulations
to dismiss as ..above provided, together with duly adopted and
certified resolutions or equivalent documents ratifying and
confirming this settlement.
American agrees to furnish WAPPO with certified conies of
the resolution of American-' ipe and. Construction COI:'pany's
board o' directors, and certified copies of the resolution of
Pipe Linings, Inc. (the latter concerning the City of San
Diego litigation) authorizing American's officers and attorneys
to make this settlement,
The documents referred to Shall be in such form as Shall be
agreed to between WAPPO and P.raerican.
Execution of this Memorandum:
This memorand-±•n of understanding may be executed in any
number of counteraarts. with like effect as if all signatures
were on the original.
i' DATED: November 21, 1968.
FOR +: ;APPO:- FO:
17i:. H. Ferguson I-iS en %
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�/ EXFIIBIT I 4 of 5
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All .1
PAYMENT SCHED TLE (NOl _N-CLUDINC
January 1, 1969
• April 1, 1969
July 1, 1969
October 1, 1969
January 1, 1970
April 1, 1970
July 1, 1970
January 1, 1971
July 1, 1971
January 1, 1972
July 1, 1972
January 1, 1973
July 1, 1973
January 1, 1974
July 1, 1974
January 1, 1975
EXHIBIT I
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Total
EXFII i 1 ': `"
$1,215,200
505,800
505,800
505,500
500,500
505,800
505,800
472,300
472,300
472,300
472,300
472;300
472,300
472,300
472,300
471,600
58,500,000
p. 5 of 5
1 RELEASE OF AMERICAN PIPE & CONSTRUCTION CO.
RPA
3 1. This release is executed in favor of and for
4 the benefit of American Pipe & Construction Co., a California
5 corporation, together with its subsidiary and affiliated
' 6 companies and the present and former officers, directors,
7 employees and agents of American Pipe & Construction Co. and
8 its subsidiary and affiliated companies, including successors
9 by merger, the heirs, representatives, executors, adminis-
10 trators, successors and assigns thereof (hereinafter designated
11 as "American ").
12 2. This release is executed by the City of Newport
13 Beach
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15 hereinafter designated as "Releasor ".
16 3. This release concerns and relates to the
17 following products and services manufactured or supplied
18 by American: concrete or steel pipe or any other products
19 or services associated with the construction of pipelines
20 and other installations utilizing concrete or steel pipe,
21 including by way of illustration only and without limiting
22 the generality of the foregoing, the lining or coating of
23 new pipe, the rehabilitation of used pipe, both in place
24 and elsewhere, pipe lining materials such as "Amerplate,"
25 either separately or as a constituent part of pipe manu-
26 factured by American or others; and "specials" such as
27 manhole pipe and fittings manufactured, sold by or supplied
28 by American (hereinafter designated "pipe products ").
29 4. The period of time covered by this release is
30 prior to January 1, 1969, but includes nevertheless any
31 transactions between American and Releasor either directly
1.
EXN1B17 11
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
6 acknowledged, Releasor hereby forever releases, discharges
7 and acquits American of and from each, every and all claims,
8 controversies, actions, causes of action, obligations or
9 liabilities of any nature whatsoever, now or hereafter
10 known, suspected or claimed, which Releasor or any of its
11 agents ever had, now has or hereafter can, shall or may
12 have or allege against American based upon allegations of
13 conspiracy, collusion, monopoly or attempted monopoly, which
14 might be asserted under the Clayton Act (15 USC, §§ 15 and
15 26), or under any other state or federal antitrust trade
16 regulation or similar law giving rights to relief under
17 the same or similar circumstances; and in connection with
18 the foregoing only, Releasor expressly waives the provisions
19 of Section 1542 of the Civil Code of the State of California,
20 reading:
21 "1542. (Certain Claims Not Affected by
General Release.) A general release does
22 not extend to claims which the creditor
does not know or suspect to exist in his
23 favor at the time of executing the release,
which if known by him must have materially
24 affected his settlement with the debtor."
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
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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1 7. Any claim, action or controversy concerning
2 this release shall be determined under the laws of the
3 State of California.
4 IN WITNESS WHEREOF, Releasor has caused this-
5 release to be executed this dg rn day of Z,,,Ay„,!pg y ,
6 19_&IL.
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8 CITY OF NEWPORT BEACH (Full _-
name of Releasor
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10 BY
oreen riarsnaLz
11 Office Mayor
12 Attesting Witness
ra ag s
13 Office City Clerk
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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."
Background to and Purpose of Compact:
2. The parties have each for some time asserted
against defendant American Pipe and Construction Company
(hereinafter usually called "American "), and others in
Federal Court complaints and causes of action alleging
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 complaints and
causes of action of the same nature relating 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 actions
concerning the pipe transactions of said other defendants and
their respective liabilities with 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.
5, The parties have been and are currently required
by the Court 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
a single counsel and an attorneys' steering committee
1.
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.
6. It further appears from the volume of claims
now asserted against American by the parties that successful
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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.
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, tY6 following:
(a) Create an organization named and
hereinafter called, "Western Asso-
ciated Pipe Plaintiffs' Orga.niza-
tion," or, NAM," which will
equate their diverse interests,
sum their common interests and'
decide on steps to be taken by
the parties in the Western Pipe
Cases;
(b) Create an Executive Committee of
WAPPO to oversee the day -to -day
conduct of the Western Pipe Cases
by special counsel;
(c) Arrange for the engagement of qua.li-
fied special counsel to conduct the
Western Pipe Cases on 'a day-to-day
basis until concluded, subject
to the supervision and control of
Executive Committee;
(d) 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;
(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 claim;
and
2,
f
NOW, THEREFORE, in consideration of the foregoing
promises, recitals, objectives and purposes, and for other
valuable consideration, 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. This
attorney may represent more than one party. (A party may
designate alternate representatives.) Each party 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 panties he represents.
This shall be known as the "informal voting basis."
(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. In a formal
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' dollar
volume (i.e., 1000 based on pipe acquisition transactions
of the parties from American as determined from the 8 -year
verified transaction statements of American (Sept. 1, 1954
- Aug. 31,1962, 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.
(d) Unless otherwise.specified herein, an
informal vote 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 possible.
12. A quorum for WAPPO meetings shall be 51%
of the dollar value of the 8 -year period American verifi-
cation statements,
13, The designated WAPPO representatives of the
parties are set forth on Exhibit "A" opposite the name of
the party represented.
4.
A•
EXECUTIVE COMMITTEE:
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
(b) StStO Of Californi8
(o) Los Angeles County Flood Control District
(d) City of San Diego
(e) Other California plaintiffs
Such representative may be removed by either the naming
party or by a 90% formal WAPPO vote but the successor 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 members
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 case is under special
consideration or the meeting is with representatives of
American and his case is under special consideration.
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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
for cause
20. .Executive Committee, subject to the terms
and conditions of this Compact, shall have full authority
to supervise and control special counsel in his carrying out
of the day -to -day administration of the litigation.._' Execu-
tive Committee _shall-report on its acts \rity at WAPPO. meetings
called as the litigation situation renders desirable. Where
still feasible, WAPPO may review and reverse Executive
Committee Aecisions by majority vote.
21. Representatives of the Executive Committee
may attend such of-special counsel's meetings with repre-
sentative of defendants as said committee chooses.
22. Voting at Executive Committee Meetings:
All Executive Committee matters shall be determined in
Exe.cutive.Committee meetings by a simple majority of the
members present, except those matters otherwise treated in
this Compact. :A quorum'for Executive Committee meetings
shall be three members unless the non - appearing members
waive a quorum.
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.
SPECIAL COUNSEL:
Engagement of - Basic Terms;
Powers and Duties.
24. The provision
s�Pi this Compact sP?:a11 control
over the provisions of the contract of enoavenent of special
.counsel and that contract shall so ackno%"led e.
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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
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,
7.
and authority to 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 COMMITTEE
Organization, Membership, Powers
and Duties.
31. There is hereby created the Finance Committee.
of WAPPO, composed 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 heir to the financial administrators of the
Association of Pipe Antitrust Plaintiffs (APAP), who
arranged for and handled group financing 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. Funds for the payment of litigation
expenses will be obtained from the parties comprising WAPPO
by means of pro rata assessment based upon the American 3-
year verification statements. Such assessments shall be
proposed by the Finance Committee from time to time in such
amounts as may be necessary to provide a fund for the payment
of anticipated expenses -of the litigation and shall be
approved by the members of ' WAPPO. Each member of WAPPO
hereby agrees to pay approved assessments promptly upon,`
demand.
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 Finance 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. The Finance Committee shall make the necessary
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.
36. 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
M
all plaintiffs against one or more defendants in the
Western States Pipe Cases must receive the unanimous re-
commendation 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 them, will, in good
faith, recommend approval of such settlement to their public
agencies or superiors that they represent.
38. Notwithstanding any other provision of this
Compact, the governing bodies of the parties hereto
expressly reserve the right to approve or disapprove any
settlement affecting their respective causes of action.
This reservation, however, shall not be deemed to affect
the authority delegated by this Compact to WAPPO, the
Executive Committee and special counsel as regards the
day -to -day conduct of.the 'litigation.
Distribution of Proceeds of Settlement and
Judgments Obtained in the Litigation.
39• All monies recovered and received from de
fendents American, Amvit and Pipe Linings, Inc: as the pro-
ceeds of either a settlement negotiated and agreed upon or
a judgment rendered in the litigatinn shall be transferred
immediately upon receipt to the order of the Finance Com-
mittee for deposit in a state or national bank designated
by said Finance.Committee, and shall be distributed as pro -
vided hereinafter.
10.
40. Proceeds: Prioritv 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 WAPPO pursuant
to assessments duly made in accordance with this Compact.
(d) Payment to special counsel of the fees
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 "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 shall 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 10(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
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the 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
million, 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
Amvit' All net proceeds, as defined herein, of the liti-
gation received from defendant Amvit, whether by settlement
or judgment, shall be distributed exclusively to the party
or parties.who have specifically asserted complaints 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..
43. Proceeds: Partial distribution. No partial
or interim distribution of proceeds of any settlement or_
judgment or any combination thereof shall be made except by
formal 75% vote of the parties.to this Compact. No such
Partial or interim distribution shall be made or_ calculated
until the parties 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 expenses then due and owing shall
have been paid, or reserve for such payments has been set
aside.. The sum of.all partial or interim distribution of
net proceeds, as defined herein, shall not exceed $5 million.
Part payments on account of special counsels' fees should
be made as requested, based upon the cash received and
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a
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available for such payments, having in mind the priority
of payments specified in paragraph 40 above. In no event
shall a total of more than $500,000 be paid special counsel
until the termination of this litigation when all balances
due shall be paid.
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.
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 yea.r.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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