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HomeMy WebLinkAboutReso 5015-1969 RESOLUTION NO. 5015 A RESOLUTION REGARDING WESTERN PIPE LINE CASES PREAMBLE: City of SQu~h San Franc.i~co, 1. a munlclPaA corporanlon , 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., Kaiser Steel Corporation, United States Industries, Martin- Marietta Corporat ion, United Concrete P~pe Corporation, and American Pipe and Construction Co. ?. 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 various plaintiffs pursuant to an agreement, all of which was duly approved and rstif~.ed by entity ano 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. This agreement known to plaintiffs as the Western Associated Pipe Plaintiffs Organization I · 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 v~covery against American to all plaintiffs proportionately to their verified transactions w~_th 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 WA?FO, on behalf of entity. Since then, the agreements embodied in the WAP?0 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 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 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. / NOW BE IT RESOLVED THAT: A. The MEMORANDUM OF UNDERSTANDING FOR SETTLEMENT OF WEST COAST PIPE CASES BETWEEN ALL PLAINTIFFS AND AM~Ri0AN Pi?~ AND 00N~TRU0~ION ~0MPANY and ~he Western Associated Pipe Plaintiffs Organization Compact, copies of which are attached hereto as Exhibits "I" and "III", respectively, are hereby adopted, ratified and confirmed. B. The Mayor of entity is hereby authorized to sign the release of claims against the defendant and attached hereto as Exhibit "II" 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 Co. in accordance with said WAPPO Compact. Adopted this 6th day of January , 196_~9. Frank//J. Bertucelli //"- ~o Mayor Arthur A. Rodondi City Clerk · I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a regular meeting held on the 6th day of January , 1969 , by the following vote: AYES, COUNCILMEN Frank j. Bertucelli, Patrick E. Ahem, Andrew Rocca and Warren Steinkamp NOES, " None ABSENT, " F. Frank Mammini ATTEST' eput¥ City Cl~erk ' MEMORANDUM OF UNDERSTANDING FOR SETTLE~NT OF WEST COAST PiPE CASES BETWEEN ALL PLAINTIFFS AND AMERICAN PIPE AND CONSTRUCTION CO~fPANY , Parties' The parties to this memorandum of under§tanding are the. Western A~sociation 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 ~ithin nine months of the date hereof. Said fiscal agent shall not'distribute the sum of one million two hundred fifteen thousand two hundred dollars ($1,2i5,200) to.the plaintiffs .until the fiscal agent has received certified copies of the orders of dismissal of all WAPPO Pipe Cass%s. American further agrees on or befor~ January 1, 1969 to deliver to sai~ fiscal agent its promissory note in the sum of seven ~.~illlon two hundred eight-four thousand eight hundred dollars ($7,284,800) payable to the order of said fiscal agent at it~ address in instalIments as shown on Exhibit "A" and bearing intere~t.at the rate of five percent (5%).per annum on the declining balances of.said note, said interest to be payable at o EXHIBIT I,'p. 1 of 5 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 paymefit of either principal or interest is not made as it becomes due, the~entire balance of said note remaining unpaid shall become-and be immediately due and payable. Said note ~hall 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 conm~enced 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' fees to be due on the filing of a complaint. A,v~,~a--~ American by December 16, 196'8 shall provide WAPPO with copies of any and all agreements o~ amendments thereto with creditors of Ame::ican which authorizes the performance of this memorandum of u=derstanding and shall be in form and substance . satis-~actory to counsel for WAPPO. American agrees .that it will providd such assistance in veri;,-~-o- pl'aintiffs' transactions as WAPPO shall from time to tim~ "~.qui?e. Ame'~'ican and its attorneys agree that the appeal of a ~axpayc~r against the City' of San Diego shall be dismissed by Dec~mb~r 16, 1968, and to withdraw .~otions by Ame-zican =ctacx.~g the validity of WAPPO, selection of special, cot:nsal by tl-,e 3tate of California, Amat'ican'~ settlefi~ent with -9 E~iII~',IT I, -- p. 2 of ' · Jill II ' 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 couns'el 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, 1968 concerning the subject matter of th. is 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' · d6 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 heret6 shall disclose any of the aforesaid subjects to · any other person'whose'responsibilities.or duties to one or more of the parties d6 not require such other person to have knowledge of such subjects in order for one. or more of said · parties to take action with respect thereto, until' Dece~ber 2, 1968, or one day following disr~issal of the jury in the trial of Washington public'Power S~stem Supply v. American, whichever is later. Consu~nation of Settlement: The settlement herein zefarred to resulted from discussions between counsel for plaintiffs and American in proceedings EX~IBIT I -3- p. 3 of 5 -. before the Honorable Martin Pence concluded on Nove~?.bsr 2]., 1968 in San Diego, Cal±fornia · Counsel for the parties hereto each agree to recommend in good faith, without qualification, and ~:it, h full measure of support, the settlement set forth herein to their respective client or clients, it being undergtood 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 American duly executed releases and stipulations to dismiss as ~ooove provided, together with duly adopted and certified resolutions or equivalent documents ratifying and confirming this settlement. American agrees to furnish WAPPO with certified copies of the resolution of Amez~ican Pipe and' Construction Company's boan~d of directors, and certified copies of the resolution of Pipe Linings, Inc. (the latter concerning the City of San Diego litigation) authorizing American's officers aid attorneys · to make this settlement. The documents =eferred to shall be in such form as. shall be agreed to between WAPPO and D~-aerican. Execution of this Memorandum: This memorandum of understanding may-be executed in any · number of counterparts with like effect as if all signatures ~ere ~)h the Original' DATED- November 21, 1968. :!· 0:~ WA~ PO: FOR X~:~-,'£C,2~:: ' ~ ' 'i Wm. H. ~erguson ;t., Geo~g.a W.,,'jansen ~': ~-' ' I /" ,. .,' ; ~) ... /,"' /,, ' . - ~"z, Al .-?- "' ' ~ -' ~ t ' / ,..~.~... ...... ~~ /~.-"- ...--~ .... .w., ..'y"~'. .,.;:-'.. -- .., ~:' · ' ..-. ,.. - ...... /.'. ,2.)': .... / . .... ,' :: / ' ..' ,' · .......... : ...... '.-' ./ ,, / . ~ k.... .' .,... : . ~ , _.- . ' ,--- ... 't / ._._ , ' , ...... , . "'-- . i' t, ;i~ .'. ~.. ~ / · .; './' ./--':~- ~ ,' / " / ~ .... "~ ".~ '"' ~' ~ ' ' /."~"v' ' "'~ ' '~ ...... .~ti .:.."..~-? ','/,/.. .... , ·~.. ~, ~ ~.~ / . .:.. - ' z ,/ sx.~ ~ .. ..... /~. ~". r,. 4 ~r" '1 'ill[ PAY~F£NT SCHEDULE (NOT iNCLUDING INTEREST) 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~l,' 1973 july 1, 1973 January I, 1974 July 1, 1974 January 1, 1975 Total $1,2].5,200 505,800 505,8OO 505,800 , 505,800 505,8O0 505,800 472,300 472,300' 472,300 472,300 472,300 472,300 472,300 472,300 471,600 $8,500,000 EXHIBIT I p..5 of 5 '1 '{i~ I[ ' RELEASE OF AMERICAN PIPE & CONSTRUCTION CO. 1. This release is executed in favor of and for the benefit of American Pipe & Construction Co., a California corporation, together with its subsidiary and affiliated companies and the present and former officers, directors, employees and agents of American Pipe & Construction Co. and its subsidiary and affiliated companies, including successors by merger, the heirs, representatives, executors, adminis- trators, successors and assigns thereof (hereinafter designated as "American"). 2. This release is executed by the City of South San Francisco, a municipal corporation, 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 and elsewhere, pipe lining materials such as "Amerplate," either separately or as a constituent part of pipe manu- factured by American or others, and "specials" such as manhole pipe and fittings manufactured, sold by or supplied by American (hereinafter designated "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 i · · "ill~ or indirectly which transactions are still pending as of January l, 1969. 5. For and in consideration of the sum of One Dollar ($1.00) and other valuable consideration paid by American to Releasor, the receipt of which is hereby acknowledged, Releasor hereby forever releases, discharges and acquits American of and from each, every and all claims, controversies, actions, muses of 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, rea ding: "1542. (Certain Claims Not Affected by General Release.) A general release does 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. 6. Releasor warrants that the persons executing this document on behalf of Releasor are fully authorized so to do and Releasor makes such warranty in full knowledge that Releasee has no independent knowledge of the authority or lack thereof of such persons but is relying upon Releasor's warranty. / · 7. Any claim, action or controversy concerning this release shall be determined under the laws of the State of California. IN WITNESS WHEREOF, Releasor has caused this 6th ~ day of January release to be executed this 19 69. CITY OF SOUTH SAN FRANCISCO, a municipal corporation (Full ~ame of ~eleasor) , Office Mayor Attesting Wttne ~ ' Office City Clerk . WESTERN ASSOCIATED PiPE · PLAINTIFFS' COMPACT 1. This Agreement is made and entered into this l~th day of July , 1967, by and between the parties set forth on attached Exhibit "A." Back,round to and Purpose of Compact: 2. The parties have each for some t~me asserted against defendant American Pipe and Construction Co..~pany (hereinafter usually called "American"), and otpers 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 act.ions 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 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 a single counsel and an attorneys' steering committee $ 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 partles~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. 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: (a) Create an organization named and hereinafter called, "Western Asso- ciated Pipe Plaintiffs' Organiza- ~tion," or, "WAPPO," 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) Crea'te an Executive Commit~ee of WAPPO to oversee the day-to-day conduct, of the Western Pipe Cases by special counsel; (c) Arrange for the engagement of quali- fied special counsel to conduct ~he Western Pipe Cases on ~ day-t6-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 NOW, THEREFORE, in consideration of the foregoing promises, recitals, objectives and purposes, and fo~ other valuable consideration, the parties hereto mutually agree, as follows: WAPPO: Organization, Membersht~p, Powers and Duties, _Voting, Procedures, Activities, Miscellaneous 8. There is hereby created t~e 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 requlrlng party governing · body action. 9. WAPP0 shall meet on the call, reasonably . noticed, of Executive Committee, special counsel, or of 35% of the votes of WAPP0 members evaluated by the formal (transaction basis) vote prescribed herein. lO. Voting at WAPP0 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 parties he represents. This shall be known as the "informal voting basis." (b) Whenever a representative requests s formal (transaction basis) vote or this Compact so requires, the matter in question Shall be determined by formal vote and formsl vote shall supplant informsl vote on the ssme matter if occurring at the same WAPPO meeting. In a formal vote each rel~resentStive'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., 100%) based on pipe acquisition trsnssctions 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 ss 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 vot. 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 WA?PO vote. Such tasks a~e to be distributed as equitably 8s possible. 12, A quorum for WAPPO meet.[ngs shall be 51% of the dollar value of the 8-year period American verifi- es tlon statements. 13, The designated WAP?O representatives of the pst, ties are set forth on Exhibit "A" opposite the name of the pax, ty represented. EX'ECUT'I~E COMMITTEE': Orgsni.z.ation, Membership, Powers and Duties,.. .Vo_t.inK Procedur.e..s, Misce!l.a,n.e.o.us.. ........ . _ . _ _ 14. The Executive Committee shell consist of one WAPPO representative from each of the following parties or groups of ps~ies: · (a) Pacific Northwest St$$e of C~llfornla Los Angeles County Flood Control District (d) City of San Diego (e) Other California plaintiffs Such representative may be removed by eithe~ the naming party or by s 90% forms1 WAPPO vote but the successor shell be named by the naming ps~ty. A party may voluntarily resign its right to designate 8 WAPPO Executive Committee represents- ~ive, i~1 which case 8 51% fo~m81 WAPPO vote she11 designate the suc,leeding naming ps~ty. 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 Chairmen of the Executive Committee shall be the representstlve of the State of California, 16.' The Executive Committee shall meet as needed in its or its chairman's discretion to csr2y out its duties snd, in addition, shall meet on c811, reasonably noticed, of speclsl counsel. lY. Executive Committee meetings sba11 be limited to its personnel, their sides 8s needed and the ex officio membe~ who shall be, however, without vote. Said ex officio members are specie1 counsel, his sides 'as needed and the members of the Financial Committee estsbllshed by this Compact. 18. Any WAPPO member may (but without vote) attend ~ecutive Committee meetings where his case is under special consideration or the meeting is with ~epFesentstives of American snd his case is unde~ special cons:1, derstion. 19. Any WAPP0 member may attend '(but without vote) any Executive Committee meeting where he is requested to attend by a committee member, but such reques~ shall be for cause .. · ~0..Executive Committee, subject to the terms· ~and conditions of this compact, sha~l have fu~l authority to supervise and control special counsel in his carrying out of the day-to-day administration of the ~itigation.~ Execu- · rive Committee shall report on its ~ctiv. ity at WAPPO meetings called as the Iltigatlon sitUation renders~desirab~e. Where sti~ feasible, WAPPO may review and reverse ExeCutive Committee dec~sions by majority vote. ~. Representatives of the Executive Committee may attend such of.~speclal counsel's meetings with rePre- sentative of defendants as said committee chooses. 22. Voting at Executive Committ'ee Meetings: A~l Executive Committee matters shall be determined in Executive Comml'ttee meetings by a slmp~e majority of bhe m~mbers present, except those matters otherwise treated in this Compact. A quorum: for Executive Committee meetings shal! be three members unless the non-appearing members waive a quorum. ~3. Executive Committee members shal~ be reimbursed their reasonable travel and living expenses in attending meetings of the Executive Committee du~y called as provided in this Compact. ~PECIAL COUNSEL: Engagement of - Basle Terms; Powers and Duties. 24. The provisions~f this Comp. act sho~ll control · over 6be'provisions 0£~the .contract of ~ngagement of special e0unsel' and that contract shall so ackn°,~led~e. 25. The Executive Committee shall contract, behalf of WAPPO for the engagement of special counsel sistent with the provisions of this Compact. P-6. 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 WAPP0 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, . 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 · o Organization; Membership, Powers and Duties. · 31. There is hereby created the Finance CoMmittee · . of WAPPO, ~compose'd 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' 8- . year verification statements. Such assessments shall'be · proposed by the FinanCe .Committee from time to time in such amounts'as' may be ne'cessary 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. all pla..intiF~s aga. lnst o~e or more defe~dat~ts 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 platntif£ except in accordance with the provisions o£ 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 beha. l£ o6 all attorneys of record for WAPPO members that they, a. nd each of them, will, in good fa]~th, recommen~_~ approva.! of such settlement to their Public agencies or superior~ 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 reservatlon, 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 Lini~]gs, Inc. as the pro- ceeds of either a settlement negotiated and agreed upon or a Judgment rendered in the litigatlnn shall be transferred immmedlately 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. .Prp,c.egds_.: ~Pr.lority 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 ss 8 depository, or 8Kent for payment. (b) Other expenses of distribution. (c) Reimbursement of all plaintiffs for the lltlgation expenses advanced or paid by them to WAPPO pursuant to assessments dul.¥ 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. Proceeds: Distribution of recoveries from defendant American .and .P_.tpe Linings, Inc. After payment of the expenses referred to in the preceding par@graph, the balance of the proceeds (hereinafter referred to as "net proceeds") received from defendants American and Pipe Linings, Inc., whether by settleme~.t or Judgment in 8ny cause of action in the Western Pipe Cases shall be distributed among 811 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 trsnsactlon verification statements of American for the 8-year period referred to in paragraph 10(b), above, . . as supplemented by the addltional 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 811 such periods being referred to herein ss "the 13-year period." Additionally, pipe rehabilitation transactions of 11. the City and County of San Francisco to a maximum of $3 million, and of t[le City of San Diego to a maximum of $1.25 million, .i.f said entities or either of them are pa~tie.s to this Compact, will share.in the distribution of the ne~ proceeds that are tile 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. ~2. Proceeds: Distribution of recoveries from Amvtt: All net proceeds, as defined herein, of the lltl- gation received from defendant Amvit~ whether by settlement · or ~udgment, shall be distributed exclusively to the party or parties who have specifically asserted complaints and causes of action against sa~c] de£end~nt, in proportion to the dollar value of ~he pipe acquJ, sition transaction of each such party, determined or verified in such manner as · may be agreed in wrl~ing by all of.said parties participating in this distribution. ~3. Proceeds: Partial distribution. No partial or interim distribution of proceeds of any settlement or ~udgment 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 cklculated un~il the parties shall have been z'eimbursed 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 ~eserve for such pa. yraents has been set · aside. The sum of a'll partial or interim distribution of neb proceeds, as defined herein, shall no~ exceed $5 million. Part payments on account of sp,3cial counsels' fees should be made as requested, based upon the cas}] received and 12. available for such payments, having in mind t,,he priority of payments specified in paragraph ;-~0 above. In no event shall a tot, al of more than $500,000 be paid special counsel until the termination of this l~tigatton when all balances due shall, be pa id. 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 distrlbut~_on. Prior to any final distribution meeting, the Finance Committee shall take ali. 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 Ftna.~]ce Committee, WAPPO and this Compact shall terminate. 45. Execution: Th~s Compact may ~e 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 year heretnabove first written by subscribing these presents on the spaces provided on attached Exhibit "h," which is hereby made a part hereof. 13. 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. B5. 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 aecessary 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 re'commendation of the attorney or attorneys of record for the plaintiff or plaintiffs involved sh~ll 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 ~ 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 e