Speros Drelles v. Metropolitan Life Insurance Com Pany, et al. ON APPEAL FROM THE UNITED STATES…

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 02-3724
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SPEROS DRELLES, et al,
Appellants,
v.
METROPOLITAN LIFE INSURANCE COM PANY, et al.
________________________
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF PENNSYLVANIA
District Court Judge: The Hon. Donetta W. Ambrose
(Misc. Docket No. 96-179)
___________
Argued: December 12, 2003
Before: AM BRO, FUENTES, and GARTH, Circuit Judges.
(Opinion Filed: January 12, 2004)
___________
David J. Manogue [ARGUED]
Joseph N. Kravec, Jr.
Specter Specter Evans & Manogue, P.C.
The 26th Floor
Koppers Building
Pittsburgh, PA 15219
Counsel for Appellee Specter Specter Evans & Manogue

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H. Reginald Belden, Jr.
Belden Law Firm
117 Main St.
Greensburg, PA 15601
Kenneth R. Behrend [ARGUED]
Behrend & Ernsberger, P.C.
Union National Bank Building
306 Fourth Ave.
Suite 300
Pittsburgh, PA 15222
Counsel for Appellants
_______________________
OPINION OF THE COURT
_______________________
FUENTES, Circuit Judge:
In December 1999, Metropolitan Life (“Metlife”) settled a Multi-District
Litigation federal class action (the “MDL” case) with plaintiffs who were represented by
the firm of Specter Specter Evans & M anogue (“Specter”). Following this settlement,
various litigants who had opted out of the class filed numerous lawsuits in state courts.
The opt-out litigants were represented in the course of the class action and are represented
in the state court proceedings by the firm of Behrend and Ernsberger (“Behrend”) . In
connection with the state lawsuits, Behrend requested tens of thousands of pages of
documents from Metlife as well as from a Document Depository established by the
District Court pursuant to Case Management Order (“CMO”) #4. Under CMO #4,

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Specter administered the Depository and was authorized to charge a fee. The specific
dispute here centers on Specter’s production of the discovery requested by Behrend and
Behrend’s failure to pay the document production fee of $41,831.
Based on Behrend’s refusal to pay, Specter filed a motion in the District Court to
enforce CMO #4 against Behrend. The District Court, relying on CMO #4, granted
Specter’s motion for payment of the fees. Behrend appeals from this Order. Because
CMO #4 authorizes the District Court to compel “any plaintiff obtaining documents from
. . . the document depository” to pay the reasonable cost of producing the documents, we
affirm.
I.
The facts relevant to this appeal are fairly straightforward. After the MDL
settlement, Behrend began representing opt-out plaintiffs in their individual suits filed in
Pennsylvania state courts against Metlife for allegedly improper sales practices. In July
2000, Allegheny County Common Pleas Judge Wettick granted a motion to compel
discovery made by Behrend, but explicitly gave Metlife the option of providing Behrend
the discovery directly or through the MDL case Document Depository. Metlife produced
some of the documents directly, but for the remainder referred Behrend to the Document
Depository, which was being administered by Specter per CMO #4. Specifically, CMO
#4 dictates that when counsel for a party to an opt-out suit requests documents from the
Depository, the opt-out party must pay Specter for production of such documents.

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1 Specter argues that the appeal is jurisdictionally infirm because it has been made in the
name of the opt-out plaintiffs, rather than Behrend itself. We are not persuaded by Specter’s
argument because Behrend has argued that the fees involved will be charged against the opt-out
plaintiffs, as the real parties-in-interest. See Deposit Guar. Nat’l Bank v. Roper, 445 U.S. 326,
333 (1980) (explaining that a “party aggrieved by a judgment or order of a district court may
exercise the statutory right to appeal”).
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As part of discovery in the state court lawsuits, Behrend asked Specter for
thousands of pages of documents. Specter produced them between August and December
2001 and then sent Behrend a bill for $41,831, a figure arrived at by billing 557.75
paralegal hours worked in retrieving the documents at $75/hour. Behrend believed that it
should not have had to pay the retrieval costs, and accordingly secured an order from
Judge Wettick that provided that Behrend should not bear the cost of document retrieval
from the Depository. Thereafter, Specter moved (as Plaintiff) in the District Court to
force Behrend (as Defendant) to pay Specter the $41,831 pursuant to CMO #4. Magistrate
Judge Benson granted the motion, and the District Court affirmed. Specifically, the
Magistrate Judge held that CMO #4 precluded Specter from bearing any of the cost of the
document retrieval, and that if Behrend wanted to be compensated by Metlife, it should
seek such compensation in the state court venue of the opt-out litigation.
II.
A.
Behrend argues that CMO #4 does not apply because the opt-out plaintiffs were
not bound by the M DL case or its settlement.1 Behrend alternatively asserts that the
Document Depository had already closed, and so its rules were no longer in effect.

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2 We have held in Drelles v. Metropolitan Life Ins. Co., Nos. 02-4037 & 02-4270, that the
opt-out plaintiffs are in no way bound by the class rulings.
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Behrend’s third contention is that the terms of CMO #4 itself exclude from its ambit
Behrend’s request for production. Finally, Behrend alleges that even if CMO #4 applies,
federalism concerns should have prevented the District Court from “contravening” Judge
Wettick’s order that the documents be produced at no cost to Behrend.
The arguments are unpersuasive. First, the fact that the opt-out plaintiffs are not
bound by the settlement is irrelevant here: the District Court has not made any rulings
hampering the opt-out plaintiffs’ options in their state court litigation, or foreclosing any
of their claims.2 Rather, the District Court has made a ruling on the application of CMO
#4 to a request for production of documents from the MDL Document Depository, and
nothing more. Behrend cites to a litany of cases in support of its contention that the opt-
out plaintiffs were not subject to the MDL or any of its orders. Those cases, however, all
deal with attempts to enjoin opt-out plaintiffs from taking certain actions in their state
court proceedings. The case before us is entirely different: it concerns the District
Court’s enforcement of its own case management directive.
Behrend’s next argument is that the Document Depository was closed in
December 2000, a year after the MDL case settled. Behrend relies on the Settlement
Agreement, which states: “One year after the Final Settlement Date (unless the time is
extended by agreement of the Parties), Plaintiffs and their counsel shall return to
Defendants’ Counsel all documents . . . produced by Defendants in this Action.”

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Appellee’s Ex. A at ¶ C. Specter responds that the parties did extend the time of the
depository. The continued existence of the Depository supports Specter’s assertion, as
does the fact that both Judge Wettick and the District Court recognized the Depository as
a present institution.
Behrend’s third argument is that CMO #4 does not apply to its document
production request because it was made in a state court action, not an action before the
District Court. CMO #4 provides that: “This Order shall apply to all actions against
Metropolitan Life Insurance Company . . . that have been or may thereafter be filed in,
removed to or transferred to this Court.” App. at 312a (emphasis added). Behrend
misreads the import of this passage. The passage refers to the creation of the Depository
from documents in the M DL litigation, not to subsequent use of the Depository. This is
made clear by the fact that CMO #4 § XII(B)(2) explicitly refers to dealing with
document requests from state-court plaintiffs, explaining that such plaintiffs must
determine their entitlement to documents in their state fora before retrieving those
documents from the Depository. In short, CMO #4 clearly encompasses document
requests by state-court plaintiffs.
Behrend’s final argument grounded in notions of federalism simply
mischaracterizes the proceedings in this case. Judge Wettick’s orders established three
things: 1) Behrend was entitled to certain documents from Metlife; 2) Metlife had the
option of referring Behrend to the depository; and 3) Behrend would not be responsible

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for the cost of production vis-a-vis Metlife. Judge Wettick’s order, however, did not (and
could not) have any effect on Specter, who was not a party to the state court litigation.
Once Behrend agreed to pursue its document request from the Depository, it implicitly
agreed to abide by CMO #4. As the Order clearly provides: “Counsel for any plaintiff
obtaining documents from Defendants or the document depository as set forth above shall
pay the expenses of [Specter] in producing the document . . . and shall be subject to the
Orders of this Court regarding the use of those documents.” CMO #4 § XII(C), App. at
322a (emphasis added). Thus, Behrend’s argument that the District Court lacked personal
and subject matter jurisdiction is wholly without merit.
In further support of its proposition that the District Court is improperly
interfering with its state-court litigation, Behrend cites to an order by the same District
Court Judge rejecting a prior motion filed by Behrend in one of its state-court opt-out
cases, Maleski, to compel Metlife to produce documents from the Document Depository.
In the Maleski case, Behrend asked the District Court to make a discovery ruling about
whether Behrend was entitled to production of certain documents. The District Court in
Maleski denied Behrend’s motion because it dealt wholly with evidentiary matters from
the state-court litigation and, moreover, CMO #4 § XII(C) itself dictated that the state
court must decide motions to compel. App. at 322a. In the case before us, in contrast, the
relevant inquiry is not the propriety of certain state-court discovery, but the proper use of
the Document Depository. Specter’s motion does not ask for any ruling that will affect

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3 These points are elaborations on the well-expressed opinion of the Magistrate Judge,
which was adopted by the District Court. App. at 167a-68a.
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the state-court proceedings, but merely that the Document Depository be administered
pursuant to CM O #4. Thus, Maleski is totally inapposite to the case before us.
Moreover, nothing in CMO #4 contradicts Judge Wettick’s rulings or
Pennsylvania law. CMO #4 simply dictates that Specter must be reimbursed for its
production by the requesting party; if Behrend in turn needs to be reimbursed for that cost
by Metlife, it can seek that reimbursement from Judge W ettick. In short, all of Behrend’s
attempts to show a federalism-based conflict lack merit.3 Accordingly, we affirm the
District Court’s Order enforcing CMO #4 in Specter’s favor.
B.
Behrend next argues that the District Court should have held a separate hearing to
decide whether Specter’s proposed $75 hourly rate was reasonable. Behrend observes
that recent Third Circuit caselaw holds that an evidentiary hearing is required when the
reasonable hourly rate for fees is disputed, and that failure to hold such a hearing is
reversible error. Smith v. Philadelphia Hous. Auth., 107 F.3d 223, 225 (3rd Cir. 1997);
accord Planned Parenthood of Cent. N.J. v. The Attorney Gen. of the State of N.J., 297
F.3d 253, n. 5 (3rd Cir. 2002); Lanni v. New Jersey, 259 F.3d 146, 149 (3rd Cir. 2001). A
prior case from the Third Circuit, however, holds that “failure to conduct an evidentiary
hearing . . . is not reversible error. . . . A hearing must be held only where the court
cannot fairly decide disputed questions of fact without it.” Blum v. Witco Chem. Corp.,

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4 Specter alleges that Behrend did not contest the reasonable hourly rate in the
proceedings below, but Specter is incorrect. While Behrend did not bring up the issue in
its original brief before the Magistrate Judge, Behrend did raise the issue in its motion
and subsequent amended motion. App. at 36a, 92a.
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829 F.2d 367, 377 (3rd Cir. 1987). It is well established that in a conflict between
decisions of different panels, the oldest one controls. E.g., Ryan v. Johnson, 115 F.3d
193, 198 (3rd Cir. 1997). Thus, the District Court’s failure to hold a hearing is not
automatically reversible error, but rather must be evaluated under Blum.
In this case, we discern no need for a hearing: the affidavits and briefs speak for
themselves, and there is no dispute as to how Specter or Behrend reached their proposed
hourly rates. The only disputed issue is whether Specter should have billed the document
retrieval time at a reduced paralegal rate or a file clerk rate, and that issue can be
adequately explored based on the arguments in the briefs.4
C.
Behrend argues that the $75 hourly paralegal rate was excessive because
document retrieval is file clerk labor, and file clerks generally are paid only $11/hr.
Behrend insists that the $75 rate results in an impermissible profit for Specter because the
document retrieval was too menial to qualify as bona fide legal work. Specter responds
that the $75 rate was already discounted from the normal paralegal rate of $125/hr, and so
was eminently reasonable. The Magistrate Judge agreed with Specter, and since Behrend
had not yet questioned the reasonableness of the hourly rate, the order addressed the issue

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in the following succinct fashion: “The court has reviewed that [sic] affidavits submitted
by the parties, and finds that the rate charged for paralegal work, $75 per hour, is
reasonable.” App. at 168a. Although Behrend contested the hourly rate in his objections,
the District Court summarily affirmed the M agistrate Judge without dealing specifically
with this new argument.
We affirm the $75 rate as well within the District Court’s discretion. We have
carefully examined the remainder of Behrend’s arguments and find them to be without
merit. Consequently, we affirm the District Court’s judgment in its entirety.
TO THE CLERK OF THE COURT:
Kindly file the foregoing Opinion.
/s/ Julio M. Fuentes
Circuit Judge

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